MINERALOGY PTY LTD -v- SINO IRON PTY LTD [2021] WASC 45 (24 February 2021)

The key point presently, however, is that the two MRSLAs entered in 2006, are very obviously long term agreements spanning potentially 30 years' duration, or more. They envisage, objectively assessed of course, a first construction phase of mining infrastructure, to establish an ore processing plant at Area A at Cape Preston prior to the following envisaged production of 'Product' (as defined in MRSLA cl 8.2(a)). The construction phase to establish the processing plant at a greenfields mining location and any delays associated with getting that plant established to the point of readiness to generate Product for offshore shipment, are obviously now all events of the somewhat distant past as regard the ongoing performances of the two MRSLAs.

1. Those reasons also address, in a peripheral way, MRSLA cl 20.4, cl 20.5 and cl 20.6, commencing at [157] and following.
2. From that summary of prior litigious disputes around the MRSLAs as have been already conducted within this court, it may be seen that various MRSLA provisions have already received intensive constructional scrutiny. So also has a further and related written agreement perfected between (amongst others) Mineralogy and CITIC, through another written instrument, known as the Fortescue Coordination Deed, executed on 22 October 2008 (the FCD).[2] By the FCD, CITIC essentially guaranteed the performance of the MRSLAs by Sino Iron and Korean Steel.
3. In the Royalty Component B Proceeding there was an invoked reliance by Mineralogy upon guarantee provisions of the FCD which were a subject of my reasons in Mineralogy [No 16] at [782] - [815] and then, under my subsequent further reasons in that proceeding, Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 17] [2018] WASC 8 (Mineralogy [No 17]) (delivered 12 January 2018) at [24] - [26] and [28].
4. It may be appreciated, therefore, that since 2012 various provisions of the MRSLAs and the FCD have already been the subject of a deal of local curial scrutiny concerning and resolving disputed contractual interpretations involving aspects of various clauses within those two instruments, both at primary and appellate level.

1. The present action is a further, but distinct contractual dispute over other MRSLA terms, this time over the issue of payments into a Site Remediation Fund, which is addressed under the MRSLAs. The action by Mineralogy was commenced in this court under Mineralogy's writ on 22 October 2018. What is essentially an interpretive dispute over the true meaning of further MRSLA provisions, carries with it discrete and wholly unique issues requiring further consideration by the court.
2. As is firmly established, Mineralogy is the owner of mining tenements on which there is an operating magnetite iron ore mine at Cape Preston in the north of Western Australia. By the two MRSLAs, Mineralogy granted Sino Iron and Korean Steel rights to mine for magnetite ore at Cape Preston. However, as with most mining activities, some onerous remediation work will be required to be undertaken by the mining participants, to ensure the mine area is left post mining in an acceptable condition as ore extraction ends and mining works are concluded.
3. As I will come to explain in greater detail later in the reasons, this dispute arises out of obligations on Mineralogy and on Sino Iron/Korean Steel concerning the funding of the remediation work at the greenfields mine location in question.
4. Ultimately, Mineralogy is directly responsible in law to the State for the remediation of these mine areas as its tenements. However, the provisions of each MRSLA then require that Sino Iron and Korean Steel must carry out themselves the required remediation work as a result of their activities. The cost of doing so is Sino Iron and Korean Steel's contractual obligation under the MRSLAs. It is the need for a payment of funds to pay for that remediation work when due into a Site Remediation Fund at the behest of Mineralogy under the MRSLAs which is at the heart of this dispute.

1. It will be helpful at the outset to see the final relief sought by the parties under Mineralogy's claim and, correspondingly, under the counterclaim of Sino Iron and Korean Steel.
2. To that end, I record that there was a significant adjustment to the pleadings of Mineralogy on the fifth day of the trial, which was subsequently responded to afterwards by the CITIC defendants. That resulted in the final pleadings being Mineralogy's amended statement of claim of 20 November 2020 (ASOC) and the CITIC defendants' further amended defence and counterclaim of the same day (FADC).

1. Under the final iteration of Mineralogy's ASOC the relief sought is as identified under pars 80 through 88, as follows:

1. The sum of $529,378,207.
2. Alternatively, an order that CITIC, Sino and Korean pay $529,378,207 into the Site Remediation Fund within 30 days of the date of making this order.
3. Alternatively, an order that CITIC, Sino and Korean pay such amount as determined by the Court into the Site Remediation Fund that provides reasonable security for Sino's and Korean's Site Remediation Obligations.
4. An order restraining CITIC, Sino and Korean from undertaking any Sino and Korean Activities until such time as the amounts described above are paid in full.
5. A declaration that CITIC, Sino and Korean are obliged to pay $529,378,207 into the Site Remediation Fund, alternatively such amount as determined by Court into the Site Remediation Fund that provides reasonable security for Sino's and Korean's Site Remediation Obligations.
6. Damages.
7. Interest.
8. Costs.
9. Such other orders as the Court deems appropriate.
10. As is evident under the claim as identified under par 80 of Mineralogy's prayer for relief, it pursues a liquidated sum said to be due to it against all three defendants. Against CITIC, it is evident from pars 67 through 78 of Mineralogy's ASOC, that it relies to that end upon guarantee obligations of CITIC under the FCD, particularly by cl 11.6(c) and cl 11.5(b).
11. In reference to Sino Iron and Korean Steel, Mineralogy's claim for a liquidated sum of $529,378,207 is identified at par 54 of the ASOC - which in turn refers to pars 18 - 20 and 31 - 53. The liquidated amount claimed is identified under par 50, as the contended subject of Mineralogy's letter to CITIC Pacific Mining Management Pty Ltd (CPM) of 16 April 2018. There is no controversy that CPM is CITIC's agent, concerning Sino Iron's and Korean Steel's activities. It may also be seen by reference to the preceding ASOC par 48, that exactly the same sum is said to have been a subject of an estimate by an expert in the management of mine closures and the costings for such exercises. This is Mr Michael (Mike) Slight of Mike Slight & Associates. Mineralogy says Mr Slight was engaged by it to provide an estimate of the costs and liabilities to be incurred in respect of 'Site Remediation Work'.
12. Later in the reasons I set out a significant component of Mineralogy's letter to CPM of 16 April 2018, given it is still the original basis for the alleged debt claim as raised against Sino Iron and Korean Steel.
13. However, as a result of the amendments eventually made by my leave to Mineralogy's statement of claim on day five of the trial, new pleas under pars 51A, 51B and 51C were then added to the ASOC - so as to raise an alternative basis for the same debt claim. The new pleas directed an alternative reliance upon Mineralogy's separate notices as given by letters separately to Sino Iron and to Korean Steel of 21 May 2018 (with each as well copied to CITIC), notifying of Mineralogy's asserted determination regarding respective shares of demanded contributions into the Site Remediation Fund (effectively, as half of the $529,378,207 amount from each of Sino Iron and Korean Steel).
14. I also point out that by par 54 of Mineralogy's ASOC, it is contended that the liquidated sum was due by Sino Iron and Korean Steel as at 22 October 2018. But a basis for that chosen due date is not there revealed.
15. The further relief seen as sought by Mineralogy under ASOC by par 81 (in the alternative), in relation to Mineralogy's claiming of the very same amount, looks to be the subject of pleas under pars 55 through 60 of Mineralogy's ASOC. They appear under the heading 'Specific Performance of Sino's and Korean's Obligations'. Problematic nomenclature of 'specific performance' is used towards these obligations under ASOC pars 56, 57 and 60.
16. As clearly noted, the respective MRSLAs were first perfected in 2006, then later varied. Clearly, those agreements have since been intensively performed thereafter and in very significant respects by all the parties. Thus, language of 'specific performance' used towards a remedy sought by Mineralogy under par 81 looks to be inapt - see the MCP decision at [76] - [82]. A better description would be to characterise the equitable relief sought as a mandatory final injunctive order - compelling the three defendants under final orders of the court to render the identified payment sum to the Site Remediation Fund within 30 days.
17. An alternative money claim is also seen made by Mineralogy under ASOC par 82 - this time by reference to it seeking an order of the court as regards the three defendants paying 'such amount as determined by the Court into the Site Remediation Fund'. Such claim displays what is a pursuit of, in effect, fallback relief by Mineralogy, by it asking the court, in effect, to render its own determination as to an amount that 'provides reasonable security' for Sino Iron's and Korean Steel's site remediation obligations. That looks to emerge out of alternate pleas seen under par 60 of Mineralogy's ASOC.
18. Further relief is seen claimed under par 83, where Mineralogy seeks as well a negative injunction to be issued, against the defendants 'from undertaking any Sino and Korean Activities until such time as the amounts described above are paid in full'. Sino's and Korean's Activities are defined terms in the MRSLA. Such relief would obviously be problematic for the present trial circumstances in 2020. No submissions were made on behalf of Mineralogy during the trial concerning a serious pursuit of such an injunctive restraint. I do not propose to consider that issue further, other than to observe that such relief in the wider circumstances of the ongoing operations at Cape Preston involving these parties, would be inappropriate. Such relief, however, appears to be the subject matter of pleas under ASOC pars 61 through 63 of Mineralogy's ASOC.
19. Further relief sought by Mineralogy under par 84 seeks declarations against all defendants, either as to the liquidated amount identified, or 'alternatively such amount as determined by the Court'. Such claimed declaratory relief looks to be the subject of ASOC pleas under pars 64 through 66.

1. All three (3) defendants flatly resist Mineralogy's claims towards the ASOC issues canvassed at this trial. But Sino Iron and Korean Steel (not CITIC) also pursue a counterclaim against Mineralogy. This begins at par 89 of the FADC. The essential counterclaim relief sought by Sino Iron and Korean Steel under their prayers for relief reads:

1. Orders appointing a new trustee, in place of Mineralogy for the Site Remediation Fund trust account.
2. Orders requiring the new trustee, alternatively Mineralogy, to:
   1. execute a formal trust deed to govern the Site Remediation Fund trust account;
   2. further or alternatively, establish an account for the Site Remediation Fund which is designated as a trust account.

1. Declarations that, for the purpose of clause 20.6(e) of the Sino Iron and Korean Agreements, the annual charge to be made by Sino Iron and Korean Steel in the Operating Year commencing on 1 July 2018 is $6 million or such other amount as the Court determines is a reasonably satisfactory annual charge for the Operating Year commencing on 1 July 2018, determined in accordance with clause 20.6(e) of the Sino and Korean Agreements.

1. Declarations that the Purported September 2010 Notification, the Purported December 2017 Notification, the Purported April 2018 Notification, the Purported May 2018 Notices, the Purported August 2018 Notice, the Purported September 2018 Demand, the Purported October 2018 Demand and the Purported October 2018 Notification are invalid and of no effect.

[For the purposes of the ASOC trial exercise in relation to so‑called 'Purported' September 2010 and December 2017 Notifications mentioned above, no reliance, other than as background, looks to be placed upon par D from a debt liability creation perspective, by Mineralogy. However, as explained earlier, Mineralogy does rely upon its April 2018, further and alternatively on its May 2018, notifications and notices, to ground its debt claim put against the CITIC defendants.]

1. Declarations that Mineralogy has failed to act in good faith towards Sino Iron and Korean Steel in relation to the performance of the Sino and Korean Agreements, and has thereby breached clause 37.4 of the Sino and Korean Agreements, as pleaded in paragraphs 51(b)(xv) and 74(b)(xxiii) above.
2. Costs.
3. Such further or other orders as the Court thinks fit.

1. Relief claimed from this court under the counterclaim, by the appointing of a new trustee in place of Mineralogy by Sino and Korean, sees reliance grounded upon the court's inherent jurisdiction to replace a trustee when expedient but, as seen from the counterclaim plea at FADC par 100(c), also relying on s 77(1) of the Trustees Act 1962 (WA).
2. As may also be seen from pars 90 through 98 of the counterclaim, a significant component of the material facts contended for relate to Mineralogy's alleged conduct in, around or concerning some other contractual agreements Mineralogy had entered with each of Sino Iron and Korean Steel - referred to as 'Facilities Deeds' of 26 October 2001, as subsequently varied.
3. In brief, the terms of the Facilities Deeds had provided for Mineralogy to open an account styled 'Port Palmer Operations' (see par 92 of the counterclaim) with the National Australia Bank (the NAB) referred to as an 'Administrative Fund Bank Account'. Part of the counterclaim contentions directed against Mineralogy to support its ordered removal as the Site Remediation Fund trustee under each MRSLA, relates to transfers of amounts of $10 million and $2,167,165.60. Those amounts were drawn by Mineralogy against the Administrative Fund Bank Account under two cheques in those respective amounts that were signed by Mr Clive Palmer (director of Mineralogy) and made payable respectively to Cosmo Developments Pty Ltd and Media Circus Network Pty Ltd respectively (referred to as the First and Second Payments). This same conduct has already been the subject of litigation now determined in the Supreme Court of Queensland known as the 'Cosmo Proceeding'. I will return to this conduct later in the reasons.
4. Sino Iron's and Korean Steel's contentions under par 98 of the counterclaim, is that the First and Second Payments:

(a) were not a use of the administrative fund for any of the purposes identified in clause 5 of the Facilities Deeds; and

(b) were made in breach of Mineralogy's obligations in clause 5 of the Facilities Deeds to use the Administrative Fund only for the purposes identified in that clause.

1. Such prior dealings by Mineralogy with the Administrative Fund Bank Account under the Facilities Deeds are essentially relied upon by Sino Iron and Korean Steel as conduct now rendering it to be expedient and in the best interests of the beneficiaries of any Site Remediation Fund trust account, that this court remove Mineralogy and to instead then appoint a new trustee (see par 100 of the counterclaim) over that trust.
2. With that truncated description of the parties' rival relief claims as pursued under their respective primary pleadings, I can turn to mention five relatively self-evident matters of directional importance to the reasons.

1. Five relatively obvious matters may conveniently be isolated and identified at the outset. This can be accomplished in relatively brief terms.
2. First, at the time of the trial during November 2020, the two MRSLAs (in which cl 20.5 and cl 20.6 were in controversy) both remained operative and on foot. All MRSLA provisions remained fully enforceable in these long term contractual agreements which continue to bind all parties to stipulated performance obligations as elaborately stated therein for each of the MRSLA contractual participants. That same observation applies as regards the FCD, insofar as CITIC's continuing guarantee obligations are concerned, towards the obligations of its corporate subsidiary entities, namely, Sino Iron and Korean Steel.
3. Second, to adopt somewhat abbreviated nomenclature frequently applied around an interpretive exercise these days towards a wholly written instrument, the task of a court under a required contractual interpretation exercise calls for an examination of the relevant text, context and 'objectively ascertained' purpose of the parties; see my reasons in Van Duren v Hammond & Roberts [2019] WASC 246 at [56]. In that process, when dealing with the terms of a wholly written agreement that is a commercial instrument (a description the MRSLAs plainly satisfy) there needs to be afforded a sensible commercial meaning applied consistently towards the text the parties have chosen to use. It is the case, of course, as between typical commercial contracting parties, that their individual commercial objectives may well diverge, in terms of each participant seeking to advance their own respective commercial interests and to position themselves to gain maximum commercial advantage. Reasonable objective minds may differ over a contended commercial advantage or disadvantage under a perfected contract. But in the end, there is only one true meaning applicable for the text under consideration. See Black Box Control Pty Ltd v TerraVision Pty Ltd [2016] WASCA 219 and principles there collected concerning construction of contract principles at [42], particularly at [42(9)].
4. Third, in the court's task it must apply what are well established principles towards the contractual interpretation of commercial instruments under Australian law, such as, for instance, the classic observations by Gibbs J in Australian Broadcasting Commission v Australian Performing Rights Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109. A court, in striving to arrive at a sensible commercial meaning overall towards the parties' agreed chosen terminology evaluated objectively, where possible, will seek to find a role or function for all words as utilised by the parties in an attempt to afford them all a sensible level of utility when evaluated holistically in the overall scheme of the complete instrument as so evaluated.
5. Fourth, the meaning of text under scrutiny within each MRSLA must necessarily be evaluated at the time the parties perfected their contractual bargain (not later in time as their bargain implementation problems emerge). For the MRSLAs, their perfections were in March 2006 - now almost 15 years ago. The MRSLA textual provisions are not to be interpreted ex post facto in light of subsequent events or problematic issues which emerge. The proper temporal focus from an interpretation exercise perspective, as regards ascertaining true meaning of text, must therefore be scrupulously directed at the time when the parties perfected their bargain, not thereafter.
6. Fifth, as has already been exposed under some previous interpretive excursions conducted by this court at both primary and appellate levels towards the very same MRSLAs, they will each be seen to be heavily laden with a number of key definitions used towards MRSLA terms or phrases, then needing to be subsequently deployed throughout the text of each MRSLA instrument. Consequently, those chosen MRSLA definitions will need to be remembered, then picked up and incorporated into the text of the various clauses, where a utilised definition is applicable, so that, in the end, an overall assimilated meaning consistent with a utilisation of a chosen definition, will be achieved.
7. There are numerous key MRSLA definitions all bearing on the present constructional exercise. To avoid unduly cluttering the reasons with all such MRSLA definitions, I have chosen to locate as many of them as possible within the attached Schedule A to the reasons. As an attempted aid, where a key definition is first seen in these reasons, at that point, I endeavour to highlight a MRSLA use of the definition by using bold type - to identify the deployed definition and so, to alert a reader to keep the definition in mind in the interpretive process.
8. I have also set out in Schedule A the full text of MRSLA cl 20, so that the subclauses 20.5 and 20.6 can be seen there in their overall cl 20 context (and the definitions used therein).

1. With the benefit of those introductory observations, it is now possible to move to expose the controversial text of MRSLA cl 20.4, cl 20.5 and cl 20.6.
2. As some introduction to them all, I first endeavour to expose a little more of the battleground for the current trial controversy. It arises around the Site Remediation Fund, seen defined then described in cl 20.6.
3. Non-exclusively, I highlight the following six matters around the Site Remediation Fund in a context of the present interpretive dispute.
4. First, on 16 April 2018, Mineralogy by Mr Clive Palmer sent a letter to CPM.[3] The letter required that an amount of $529,378,207 be paid by Sino Iron and Korean Steel into the Site Remediation Fund. As will be seen, that money demand, numerically, was temporally proximate to Mineralogy's receipt the very same day of a report prepared for Mineralogy by Mr Slight.
5. Prior to 16 April 2018, as between Mineralogy, Sino Iron, Korean Steel and CITIC, the issue of contributions towards a Site Remediation Fund had been extensively canvassed under passing communications going back to 2010 - but without any substantive agreement ever being reached.
6. After Mineralogy's April 2018 Notice, Sino Iron and Korean Steel (and CITIC) responded - and all firmly declined to offer anything towards then the Site Remediation Fund. That was two days later - on a basis that Mineralogy's April 2018 Notice was 'invalid'.[4]
7. Subsequently, at 21 May 2018, Mineralogy issued a further, but more elaborate notice, this time to each of Sino Iron and Korean Steel now requiring them each then to pay 50% of the as earlier nominated amount of 16 April 2018 within 14 days.[5] But again there was expressed disagreement. Nothing was offered then. This action was then commenced by Mineralogy during October 2018.
8. Subsequently, Sino Iron and Korean Steel, during 2018, have made an open offer to Mineralogy to pay an annual amount of approximately $6 million into a properly constituted Site Remediation Fund account.[6] A further open offer was made by the CITIC defendants in October 2019, this time that Sino Iron and Korean Steel each pay $8 million into the Site Remediation Fund for the years 2016 - 2021.[7] Both offers were rejected.
9. Second, when viewing cl 20.6 in that subclauses surrounding setting in each MRSLA, it will be helpful if particular attention is directed towards a feature as is expressly identified under cl 20.6(c) - for the maintenance of the Site Remediation Fund in a separate interest‑bearing trust account, to be controlled by Mineralogy as trustee 'and which will be designated as a trust account.'
10. The requirement for a 'designated' trust account as seen expressed under cl 20.6(c), has divided the parties since at least April 2018 over the requirements of such an obligation.
11. Mineralogy indeed opened an account with the NAB in 2014 (NAB account). It is into that bank account that Mineralogy has sought to have Sino Iron and Korean Steel render Site Remediation Fund payments. But the CITIC defendants contend that this NAB account does not, in fact, properly carry or exhibit the designated character of being the required interest‑bearing account, as is expressed by MRSLA cl 20.6(c). They say fundamentally that this account is not in any way an account that is designated by the NAB as being a trust account. They say it has never been so designated by the NAB. Mineralogy contends to the contrary. It says the NAB account that it opened in 2014 is a MRSLA cl 20.6(c) compliant account. The divide is another area of fundamental disagreement.
12. If the objection of the CITIC defendants is correct as to the NAB account not ever being properly 'designated' as a trust account, then it must follow that no legal obligation to render a payment into such a non‑compliant (with MRSLA cl 20.6(c)) account has yet arisen. Consequently, Mineralogy's April or May 2018 Notices and its resulting debt claims, as are put against Sino Iron and Korean Steel (and necessarily so correlatively against CITIC, as guarantor obligations under the FCD) would all fail - on that non-compliant account basis alone. I turn back to this key issue later in the reasons.
13. Third, if it is ascertained that there subsists, or if, at some point in the future, that Mineralogy does then cause there to be established a properly designated and cl 20.6(c) compliant trust account, then another and more substantive constructional choice also still divides the parties and this further issue presents for resolution in this trial as well.
14. This is the essential divide over the true meaning of the words seen used in cl 20.6(e)(ii), towards the contractual criteria required to be considered by Mineralogy, in reaching its determination as to the amount of the 'annual charge', that Mineralogy is contractually empowered to issue against Sino Iron and Korean Steel under MRSLA cl 20.6(f).
15. As will be seen, the terminology of MRSLA cl 20.6(e) is explicit, in relation to a need for a determination by Mineralogy of an annual charge to be reached by Mineralogy 'having regard to' the as nominated conjoint criteria then seen specified under (e)(i) and (e)(ii).
16. The fundamental issue of interpretive controversy arising at this point as between the parties emerges out of cl 20.6(e)(ii). Does the subclause refer to the criteria of a division by the 'number of years remaining until Mine Closure' (a defined term). The text sees the parties at odds over the implications for the annual charge and for the amount to be contributed to the fund each year by Sino Iron and Korean Steel. Mineralogy contends its annual charge contributions should be paid as an 'up front', essentially as a lump sum payment of the entire Site Remediation Costs, then to be adjusted as necessary over subsequent years. But the CITIC defendants contend that the annual charge is to be by incremental and aggregating series payments of Site Remediation Costs made annually over time, until Mine Closure.
17. As an attempted illustration of this key interpretive divide, I hypothesise a situation of a projected period until Mine Closure being assessed by Mineralogy at a point in time as being, say, some 30 years off. On that basis, consider a best prevailing estimate assessment towards Site Remediation Costs rendered by Mineralogy at, say, $300 million (of course, a gross over‑simplification). On that hypothesis of facts, would Sino Iron and Korean Steel be permitted under the terms of MRSLA cl 20.6(e) properly understood, to each render their annual contributions to the Site Remediation Fund of $5 million each, over the as assessed remaining 30 years of mine life (ie, $5 million x 30 years x 2 = $300 million)? Of course, some adjustments to the annual charges as a result of changes to the level of the assessed Site Remediation Costs amount would need from time to time to be incorporated each year's annual determination. Or, as Mineralogy contends, must all the $300 million be contributed up front in a lump sum (ie, $150 million each) as the first annual charge, in order to immediately constitute an accessible Site Remediation Fund of money capable of being accessed and drawn upon, if or when needed from then on to meet the full costs of Site Remediation Work. Mineralogy says this is the preferred interpretive approach, since it will provide for certainty and real and effective security for it, in particular, to meet the possible contingency of remediating at an earlier than expected Mine Closure - such as would happen on any unforeseen permanent Mine Closure circumstance arising sooner than otherwise anticipated by reason of, say, hypothetical operator insolvency, or upon some other unexpected earlier intervening event bringing about an earlier than anticipated permanent mine closure.
18. Fourth, obviously, and as was observed upon by Edelman J as long ago as 2013 (in Mineralogy [2013]). See also his Honour's subsequent Federal Court reasons (Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 6] [2015] FCA 825; (2015) 329 ALR 1) and which were then affirmed by the Full Federal Court (Mineralogy Pty Ltd v Sino Iron Pty Ltd [2017] FCAFC 55, especially at [197], [222] and [375]), the MRSLAs must always be viewed within their contextual place under the apex of the Iron Ore Processing (Mineralogy Pty Ltd) Agreement (State Agreement) which was given force by the Iron Ore Processing (Mineralogy) Pty Ltd Agreement Act 2002 (WA) (State Agreement Act). Those overriding State Agreement commitments see Mineralogy as the holder of various tenements and mining leases granted to it by the State of Western Australia. Those tenements in turn were then made available by Mineralogy to Sino Iron and Korean Steel under their respective MRSLAs for the purpose of their contractual exploitation under the MRSLAs, in the pursuit of magnetite iron ore so as eventually to generate 'Product' (defined as 'Products'). Because Mineralogy is the tenement holder from the State it, of course, carries primary site rehabilitation and remediation exposure obligations to the State - albeit both Sino Iron and Korean Steel are also named co‑proponents under the State Agreement.
19. Fifth, whilst Mineralogy carries direct remediation exposure to the State as the Mining Lease tenement holder under ultimate site remediation obligations to rehabilitate the Mining Areas, when mining is at an end, nevertheless, by the MRSLAs, Mineralogy, in effect, has contractually redirected those rehabilitation obligations as the subject of a 'back to back' transfer, across to Sino Iron and Korean Steel (guaranteed by CITIC). This can be seen explicitly at MRSLA cl 20.4.
20. For circumstances in which Mineralogy's ongoing rehabilitation exposure to the State is contractually shifted downwards to Sino Iron and Korean Steel under the MRSLA bargains, Mineralogy emphasises by its construction approach its primary exposure and so, a need to hold full funding certainty and security. This, it says, will be achieved by constituting an accessible and viable fund of all money needed in the Site Remediation Fund -thereby delivering Mineralogy the required level of secured protection for its primary remediation exposures to the State and not only at the time of the projected end of mining, but also, viably at hand under the event of any unforeseen earlier permanent mine closure remediation exposure for Mineralogy - if that event were to transpire.
21. Sixth, as will be seen from the terms of cl 20.6(c), the Site Remediation Fund, whilst to be maintained in a separate interest‑bearing trust account, is also to be 'controlled by Mineralogy as trustee'.
22. As now mentioned, within this trial, the counterclaim advanced by two of the three CITIC defendants, seeks relief from the court to the end of having Mineralogy removed and replaced as the trustee of the Site Remediation Fund account. The counterclaim to that end invokes the inherent jurisdiction of the court over trustees, as well as s 77(1) of the Trustees Act (WA).
23. Discretionary equitable relief by way of a removal of Mineralogy as trustee of the Site Remediation Fund is strongly advanced, notwithstanding Sino Iron and Korean Steel's refusals to pay any funds to date to the account that was opened with the NAB by Mineralogy back in 2014. Beyond the obstacles as already discussed, it is put as well that this refusal is justified on a basis that to date no operative or enforceable annual charge for a specified Operating Year has yet been validly issued by Mineralogy, either to Sino Iron or to Korean Steel.

The key text in each MRSLA as to the Site Remediation Fund

1. With those early observations in mind as orientation (the full text of cl 20 being found in Schedule A) the text of MRSLA subclauses 20.4, 20.5 and 20.6 can now be exposed, in terms (with my own emphasis in bold to highlight MRSLA defined terms to be imported):

...

20.4 Site Remediation Work

(a) As and when required by Legal Requirements, Sino will carry out all Site Remediation Work that may be required as a result of Sino's Activities. All Site Remediation Work must meet Legal Requirements.

(b) Following Mine Closure, Sino will remove and dispose of all Sino's Project Facilities in accordance with Legal Requirements, and will carry out all necessary Site Remediation Work. Sino will comply, and will continue to comply, with all ongoing Legal Requirements relating to Site Remediation Work on areas affected by Sino's Activities.

20.5 Mineralogy may require security

Mineralogy may from time to time require Sino to provide reasonable security for the performance of its obligations under this Clause 20. Such security will be provided in the form of a Site Remediation Fund.

20.6 Site Remediation Fund

(a) In order to make provision and to provide security for payment of future Site Remediation Costs as they become payable, Mineralogy will establish a Site Remediation Fund, and Sino will make payments into the Site Remediation Fund in the manner set out in this clause.

(b) The Site Remediation Fund is intended to provide security and certainty for the benefit of Sino, and for Mineralogy as the holder of the Mining Lease, that sufficient funds will be available at Mine Closure to meet Site Remediation Costs.

(c) The Site Remediation Fund will be maintained in a separate interest-bearing trust account controlled by Mineralogy as trustee, and which will be designated as a trust account. The interest earned on funds in the Site Remediation Fund will be retained in the Site Remediation Fund.

(d) The Site Remediation Fund may be used solely for the purpose of paying Site Remediation Costs as they become payable. The Site Remediation Fund may not be used or accessed for any other purpose.

(e) For each Operating Year, Mineralogy will determine an annual charge on account of future Site Remediation Costs to be made by Sino in that Operating Year. The amount of the annual charge is to be determined by Mineralogy, having regard to:

(i) Mineralogy's best prevailing estimate of the amount of future Site Remediation Costs, and the amount (if any) already contributed by Sino into the Site Remediation Fund; and

(ii) the number of years remaining until Mine Closure.

(f) At least 30 days prior to commencement of each Operating Year, Mineralogy will notify Sino of its annual charge in respect of the forthcoming Operating Year.

1. To accord with standard pre-trial case management directions, by my orders of 3 September 2020 (although subsequently varied), I required the parties to exchange their respective (sourced) chronologies of fact contended for prior to trial. The exchange was intended to, first, identify all common facts as agreed between the parties but, second, to identify any controversial facts the parties required a resolution upon at the trial.
2. I duly received Mineralogy's 'draft' chronology for the trial of 9 November 2020, spanning some 29 pages and extending over the period 23 June 1993 to 31 August 2020 (exhibit 14). I then received the CITIC defendants' 13 November 2020 response to Mineralogy's draft chronology spanning 10 pages (exhibit 15).[8] The CITIC defendants' chronology was divided into two parts - the first being for events concerned with Mineralogy's primary and alternate debt claims, and the second being events relating to the CITIC defendants' counterclaim.
3. In the end result, there appeared very little contention over any of the underlying contended facts seen specified in each respective chronology. Overwhelmingly, the majority of the facts contended for under both chronologies were and can be verified from tendered documents found as sub-exhibited in the Trial Bundle (exhibit 1). I find that all such facts are established.
4. Nevertheless, as a formal exercise in fact finding if ever required, I shall include a formal chronology of found facts for trial as Schedule B to the reasons. In doing that, it is more convenient to use the facts assembled under the CITIC defendants' chronology, which is the more concise of the two versions. I have also amended and revised that chronology somewhat in places to add sometimes extra document source references, or to remove tendentious terminology.
5. It must also go without saying that, primarily, the contents of tendered documents (as referenced to various facts) speak for themselves - and the facts are not tempered by the parties' attempted characterisation of the documents' content. Nevertheless, the brief summary of the 'Event' as included in the chronology to be found in Schedule B may be helpful for orientation and navigation purposes.
6. But it is unnecessary and diverting to set out in Schedule B any facts as included in the CITIC defendants' chronology relating to the counterclaim - given the other conclusions I have reached upon the ultimate demerits of the counterclaim. For formal fact finding purposes, if ever necessary, the facts as contended for in exhibit 15 towards the counterclaim may be taken as having been proved - by reference to the various documentary sources as identified and relied upon to that end.
7. All facts in the as submitted chronologies therefore stand for the future - should they be required further. These substantive reasons, however, direct themselves essentially to the fundamental and more distilled issues of contractual interpretation that present and are required to be resolved in relation to Site Remediation Fund issues which, as seen, arise particularly around cl 20.5 and cl 20.6 within each MRSLA.

1. Prior to turning to the precise issues in dispute, I also need to render some further observations as to the documentary evidence submitted in the trial.
2. Although a portion of the trial was concerned with the evidence from both non-expert and expert witnesses, the overwhelming evidence relied upon by the parties within the trial was documentary.
3. The trial was conducted as an e-Trial. The total size of the electronic documents provided to the court approached 6.00 GB. File types included Word documents, PDFs and Excel spreadsheets and image files and included documents such as emails, letters, reports (internal and external), maps, images, copies of websites and social media, and banking documents.
4. The parties' electronic trial bundle was accepted as exhibit 1. Within exhibit 1, as explained by the index and table that is exhibit 12, the documents adduced and tendered, effectively, all by consent (with some intentional sequential gaps) range between sub-exhibits 1.0001 through to 1.1109.
5. Formally, all electronic documents carry a sub-exhibit number. They also display a source identifier in terms of their unique electronic designation. So, a preface commencing 'MPL' to a source identifier indicates the document is sourced from the plaintiff, Mineralogy. Likewise, a source identifier commencing 'CPM' indicates that the electronic document is sourced from the CITIC defendants.
6. The commencing 'SUB', as a source identifier, indicates the document has been obtained on subpoena.
7. These reasons will refer to exhibits by reference to their source identifier in order to facilitate a more ready electronic access as required - as well as their formalised exhibit number for ease. I would also note some documents are marked 'Confidential' at the request of the parties. These documents were not publicly displayed at the trial and will not be accessible to third parties without leave of the court.
8. Exhibit 12 is the final version of the trial exhibit list, containing a tabulated sub-exhibit list of exhibit 1, and spanning some 31 pages. In total, some 728 documents were tendered.
9. Exhibits 2 through to 7 (7A and 7B) then comprise the lay witness statements tendered at trial by the respective parties - either through a witness, or where cross‑examination was not required, by consent.
10. Exhibits 9A and 9B comprise two expert reports for Mineralogy by its site remediation mining expert, Mr Mike Slight, the former being his first report of 27 August 2020 and the latter his responsive report of 23 October 2020.
11. The CITIC defendants' expert site remediation mining expert submitted at trial was from Mr Michael Cramer. Mr Cramer provided his expert report of 23 October 2020. It became exhibit 10.
12. Shortly before the trial Mr Slight and Mr Cramer participated in a facilitated expert conclave - with a view to then providing an agreed joint expert memorandum exposing their distilled areas of substantive expert agreement or disagreement. A Joint Expert Memorandum of Messrs Slight and Cramer, dated 15 November 2020, became exhibit 11. Later in the reasons I set that memorandum out in full.
13. After evidence in trial was completed, Mr Cramer, by a letter, clarified, as I had allowed, that some of his evidence concerning a correction to his report which, with the benefit of some post trial digestion time, Mr Cramer was able to confirm and accept. This letter became exhibit 13A. There followed an email from the solicitors for Mineralogy confirming they were content for the letter to be brought to the court's attention: see exhibit 13B.
14. Exhibits 14 and 15 comprise the already mentioned respective chronologies of Mineralogy and the CITIC defendants, filed in accordance with my pre-trial directions for their exchange.
15. I can now turn to the submitted trial evidence of the parties' respective witnesses.

The parties' non-expert witnesses at trial Mineralogy

1. Mineralogy adduced evidence at the trial from two witnesses by witness statement. These were the witness statements of Mr Nui Bruce Harris and Mr Michael Mashayanyika.

1. Mr Harris's witness statement was produced to be read into evidence for Mineralogy without need for any cross‑examination. It became exhibit 2. There were no objections to Mr Harris's witness statement. Consequently, all this evidence is uncontroversial at the trial and is accepted.
2. In summary, Mr Harris is an employee of Mineralogy. His statement relates he has been employed in various capacities with Mineralogy for a period in excess of 10 years. Mr Harris has over 30 years' experience with coal and minerals mining and the construction industry. He has experience as a project manager and chief executive officer for a variety of mining businesses, having worked on mine and rail projects and some port projects. He holds a graduate diploma in surveying (obtained in 1986), is a registered mine surveyor (registered 1990) and obtained a Bachelor of Science majoring in surveying from the Queensland Institute of Technology in 1992.
3. Mr Harris was authorised by Mineralogy to provide the information in his witness statement on behalf of his employer. Mr Harris explains that he has a thorough understanding of the Mineralogy group's iron ore projects. He had access to the books of Mineralogy and has had that access since he commenced his role with Mineralogy over a decade ago.
4. At pars 9 - 11 of his witness statement Mr Harris provides formal information in the way of the various company searches undertaken with the Australian Securities and Investment Commission (ASIC) in respect of various entities, including Sino Iron, Sino Iron Holdings Pty Ltd (Sino Iron Holdings), Korean Steel, Balmoral Iron Holdings Pty Ltd (Balmoral Iron Holdings) and CPM.
5. Mr Harris has also undertaken a search of the companies register for CITIC (formerly known as CITIC Pacific Ltd). That search was undertaken for CITIC as a corporation registered for the Hong Kong Special Administrative Region.
6. Explaining the CITIC corporate holding structure around various corporate entities, Mr Harris explains a pyramid-like structure, which ultimately sees CITIC as the ultimate holding company of the various entities mentioned, including for CPM. He relates that Korean Steel and Sino Iron were former subsidiary companies of Mineralogy, but then, that Mineralogy had sold all of its shareholding in Sino Iron to Sino Iron Holdings on 6 July 2006. Furthermore, Mr Harris explains that on 22 October 2008 Mineralogy sold off 100% of its shareholding in Korean Steel to Balmoral Iron Holdings. Both holding corporations are ultimately subsidiaries of CITIC.
7. Commencing at par 12, Mr Harris identifies a series of mining tenements in respect of which Mineralogy is the registered holder. The tenements include miscellaneous licence 08/20, mining leases 08/123 through 08/125, mining leases 08/264 through 08/266 and general purpose leases G08/52 through G08/54. At par 13, Mr Harris explains the location of these tenements is identified on a map prepared by Whelans Surveyors.[9]
8. In the context of site remediation obligations applicable to these tenements Mr Harris, under his par 15, assembles in tabular fashion his as undertaken extraction of various conditions said to be applicable to each of the different tenements. For instance, at par 15(a), in relation to miscellaneous licence 08/20, by Condition 5 Mr Harris identifies there the obligation of Mineralogy to the effect:

All topsoil that may be removed ahead of pipelaying operations to be stockpiled for replacement in accordance with the directions of the Inspector.

1. By Condition 3 in the same miscellaneous licence, terms and conditions contained within Statement No 000635 as issued by the Minister for the Environment on 20 October 2003 are identified.
2. Mr Harris then identifies multiple and various conditions applicable to the different mining tenements, for instance, obligations in relation to the capping, filling or otherwise making safe of all surface holes drilled for the purposes of exploration or the determination of ore reserves, obligations in respect of the separate stockpiling for replacement after backfilling or completion of operations in relation to all topsoil removed ahead of Mining Operations, the removal of all buildings and structures at the completion of operations to the extent of them being demolished or buried to the satisfaction of the Director, Environmental Division of the Department of Industry and Resources and the like. There are also extensive reporting obligations identified (for instance, see Condition 14 to General Purpose Lease 08/54) concerning project operations, mine site environmental management and rehabilitation work undertaken in the previous 12 months and proposed operations and management plans and rehabilitation programmes for the following 12 months. That is a reporting obligation to the Executive Director, Environmental Division DMP.
3. Under pars 16 and 17 Mr Harris explains a series of sublease agreements that Mineralogy entered with various subsidiary corporations in the period between 25 October and 21 November 2001. In this period, mining subleases were entered into with Sino Iron (under its prior name of Bellswater Pty Ltd). Bellswater later changed its name to Sino Iron, on 8 March 2005. Subleases were also entered with Korean Steel and Balmoral Iron at the same time. On 21 November 2001, a sublease was entered with International Minerals Pty Ltd (International Minerals).
4. Under pars 18 and 19 Mr Harris explains that a State Agreement as entered between the State of Western Australia and Mineralogy, Sino Iron and Korean Steel, was ratified by an Act of Parliament that was assented to on 24 September 2002. This is the earlier mentioned State Agreement Act.
5. Under pars 20 through 23 of his statement Mr Harris then identifies a Joint Development Agreement (JDA) of 12 March 2005 entered into between Mineralogy, Mineralogy Mine Management Pty Ltd, International Minerals, Balmoral Iron and Sino Iron. He explains that at that time each of the companies (other than International Minerals) were subsidiaries of Mineralogy. The purpose of the JDA is explained at par 21 by Mr Harris - by reference to what is outlined by the recitals of the JDA. Mr Harris relates by his pars 21 and 22, and in uncontroversial terms, that:

... Mineralogy had granted, through the Subleases described above, rights to mine magnetite iron ore to several of its subsidiaries which were party to the JDA, but the extraction of the ore pursuant to those rights required a single open cut operation. The JDA, accordingly, sought to coordinate the manner in which the mining rights granted under the Subleases were to be exercised, including through the use of a 'Manager' which was initially to be Mineralogy Mine Management Pty Ltd.

Schedule 1 to the JDA included an allocation of 'Mine Costs' among each of the companies participating in the mining operations.

1. By his par 22 Mr Harris explains that part of the 'Mine Costs' were 'Site Remediation Costs'. He further explains that cl 5 of schedule 1 to the JDA had said that security was to be provided for Site Remediation Costs by the establishment of a 'Site Remediation Fund'. This reference would appear to be the earliest in time documentary identification of such a fund being established. However, Mr Harris explains, based upon his review of Mineralogy's books and records, that he is not aware of any payments ever having been made by any of the parties to a JDA fund.

1. At pars 24 through 29, Mr Harris explains that a series of 2005 mining right and site lease agreements entered into between Mineralogy (not to be confused with the subsequent 2006 MRSLAs). The first is referred to as a 'First Sino MRSLA' of 11 May 2005.[10] Similarly, on 27 May 2005 Mineralogy entered a mining right and site lease agreement with Korean Steel, being substantially identical to the First Sino MRSLA, save for references to Sino Iron were instead references to Korean Steel (First Korean MRSLA).[11]
2. Mr Harris observes at his par 26 that the First Sino MRSLA, amongst other things:

(a) was a variation and restatement of and so, had replaced the Sino sublease of 25 October 2001 (referring to cl 2.1 of the First Sino MRSLA);

(b) that Sino Iron was granted certain rights by Mineralogy with respect to the mining of magnetite iron ore, although such rights were to be 'in accordance with the JDA' (cl 4.2) and subject to the terms and conditions identified, including terms and conditions in the JDA (cl 4.3); and

(c) by cl 18.5 of the First Sino MRSLA, that Mineralogy could require Sino Iron to provide reasonable security for the performance of its obligations to carry out 'Site Remediation Work' in the form of a Site Remediation Fund as provided for in the JDA.

1. For current purposes, the First Sino MRSLA would appear to display a manifestation of a proposed fund to be established for site remediation work - this time on the basis of its establishment for a purpose of providing 'reasonable security' for the performance of such obligations. The First Korean MRSLA contained similar recitals and terms to the First Sino MRSLA.
2. Mr Harris next relates (at par 29) that on 11 May 2005 Mineralogy had also entered into a mining right and site lease agreement with Balmoral Iron, which he refers to as the 'Balmoral MRSLA'.[12] The recitals in terms of the Balmoral MRSLA area substantially identical to those contained in the First Sino MRSLA.

The second MRSLAs and CITIC's acquisition of Sino Iron and Korean Steel

1. At pars 30 through 37 of his statement Mr Harris explains that the First Sino and Korean MRSLAs were further varied and restated under later agreement documents of 21 March 2006, referred to respectively as the 'Second Sino MRSLA'[13] and the 'Second Korean MRSLA'[14] - being the MRSLAs with which this trial is concerned, albeit before their subsequent variations.
2. On the same day, there was a variation and restatement of the Mining Right and Site Lease Agreement with Balmoral, referred to as the 'Second Balmoral MRSLA', and again, containing substantially identical terms as those in the Second Sino and Korean MRSLAs.
3. Summarising the emergences of the Second Sino and Second Korean MRSLAs, Mr Harris relates (par 32):

(a) the 2006 MRSLAs were a variation and restatement of and so, effectively replaced the First Sino and First Korean MRSLAs (cl 2.1);

(b) a granting of certain rights to Sino Iron and Korean Steel by Mineralogy was no longer to be in accordance with or subject to the terms of the JDA; and

(c) nonetheless, cl 20.5 and 20.6 in each MRSLA enabled Mineralogy to require a provision of reasonable security for the performance of Sino Iron and Korean Steel's obligations to carry out Site Remediation Work on the basis of such security being provided in the form of a Site Remediation Fund.

1. At par 33(a), Mr Harris explains that on 31 March 2006 Mineralogy, Sino Iron, Sino Iron Holdings and CITIC entered into a takeover agreement (Sino Takeover Agreement).[15] By the Sino Takeover Agreement, Sino Iron Holdings agreed to acquire all the issued share capital in Sino Iron (remembering Sino Iron Holdings was a subsidiary of CITIC as its ultimate holding company).
2. Likewise, a similar takeover agreement was entered into between Mineralogy, Balmoral Iron, Balmoral Iron Holdings and CITIC and pursuant to which Balmoral Iron Holdings agreed to acquire all of the issued share capital in Balmoral (Balmoral Takeover Agreement).[16] However, as Mr Harris explains at his par 36, CITIC did not, in the end, proceed with the acquisition of Balmoral under the Balmoral Takeover Agreement. As he relates, in due course a different takeover arrangement was implemented instead and by which, on 27 October 2007, the earlier Balmoral Takeover Agreement was then terminated. In its place, on 1 November 2007, Mineralogy, Korean Steel, Balmoral Iron Holdings, CITIC and various other parties all then entered into a fresh takeover agreement.[17] Under this later agreement Balmoral Iron Holdings (ultimately a subsidiary of CITIC) agreed then to acquire all of the issued share capital in Korean Steel.
3. As explained by Mr Harris at par 33(d) on 31 March 2006, Mineralogy and Sino Iron later entered into a deed of variation which rendered some minor amendments to the Second Sino MRSLA (of 21 March 2006).[18]
4. Mr Harris also explained by his par 33(c) that the parties to the JDA, together with the purchasing entities of Sino Iron and Balmoral Iron (at that time) entered into an agreement then suspending the operation of the JDA.[19]
5. Mr Harris relates at par 34 that by cl 7.3(d) of the Sino and Balmoral Takeover Agreements:

... Mineralogy, with effect from 'Completion', conditionally assigned all of its rights, title and interest under the JDA to CITIC, but that if CITIC did not exercise a certain option by a certain time, such right, title and interest was to be reassigned back to Mineralogy.

1. By par 35, Mr Harris explains that a completion in respect of the sale of shares by Mineralogy in its then subsidiary Sino Iron to Sino Iron Holdings duly came to be completed on 6 July 2006. Consequently, Sino Iron then became a subsidiary of CITIC on and from that date.
2. At par 37, Mr Harris explains that in or about February 2007 another subsidiary of CITIC, namely, CPM was appointed by Sino Iron and Korean Steel to manage the day to day operations of their mining activities under the Second Sino and Second Korean MRSLAs.
3. At pars 38 through 42 of his witness statement Mr Harris then explains certain events in 2008 concerning the MRSLAs and the FCD.
4. Concerning the Second Sino MRSLA (entered 21 March 2006, but varied in minor respects on 28 March 2006) Mr Harris relates that this agreement was further amended (completion under the Sino Takeover Agreement having now occurred on 6 July 2006) under a deed of amendment of 8 January 2008.[20] He observes, however, that cl 20.5 and cl 20.6 in the Second Sino MRSLA were not the subject of any amendments.
5. In relation to Korean Steel, Mr Harris explains that on 22 October 2008 a takeover by Balmoral Iron Holdings was completed. On that day, Korean Steel from then ultimately became, like Sino Iron before it, a subsidiary of CITIC.
6. Two further matters of significance occurred on 22 October 2008. First, as Mr Harris explains at par 40(a), Mineralogy and Korean Steel entered into a deed of amendment to amend the Second Korean MRSLA.[21] The amendments were consistent with the amendments made to the Second Sino MRSLA at 8 January 2008.
7. Second, on this day, Mineralogy, CITIC, Sino Iron and Korean Steel all then entered into the FCD.[22]
8. By reference to cl 2 of the FCD, Mr Harris explains at par 41 that the parties had:

... agreed that the JDA would be suspended and eventually, subject to certain conditions, terminated, with CITIC or its nominee taking on the responsibility for coordinating the activities of Sino Iron and Korean Steel and each of CITIC, Sino Iron and Korean Steel being solely responsible for all 'Mine Costs' incurred.

1. Finally, Mr Harris relates that subsequent to 22 October 2008 there have been no further amendments made to the Second Sino and the Korean MRSLAs - being the key documents whose clauses are under consideration and at issue in this trial.

Project proposals and annual environmental reports

1. Mr Harris, at par 43, proceeds to explain that under the State Agreement, Mineralogy as proponent, and Sino Iron and Korean Steel as co‑proponents, had submitted a number of project proposals relating to mining activities to be undertaken by Sino Iron and Korean Steel. Mr Harris identifies five such proposals spanning the period 2 May 2008 through to 6 January 2010. All of the proposals are identified as having been approved.
2. At par 43(f) Mr Harris identifies proposals which are the subject, variously, of Ministerial Statement 635, Ministerial Statement 882, Ministerial Statement 823, Ministerial Statement 827 or Ministerial Statement 1066. He says that the last proposal by reference to Ministerial Statement 1066 was a proposal in the name of Sino Iron and Korean Steel only. Regarding the subpar 43(f) proposals, Mr Harris does not indicate as to whether they have been approved or otherwise.
3. By his par 44, Mr Harris refers to two of the submitted project proposals - as the Second Sino Iron concentrate proposal (approved 6 January 2010)[23] and the Second Korean Steel concentrate proposal (also approved 6 January 2010).[24] Mr Harris relates that cl 3.6 of each proposal provides under the heading 'Rehabilitation and Closure', in the following terms:

A Preliminary Decommissioning and Closure management plan has been approved by the EPA. Progressive rehabilitation in accordance with the WRL and TSF Management Plans will take place on the waste rock landforms and the TSF. The WRL and TSF areas located on Plans B, C and D are rehabilitated footprints allowing for re-working of the gradient and batter angles to produce a final form. The WRL and TSF will be built to include a buffer of approximately 50 m at relevant tenement boundaries.

1. Under his par 45, Mr Harris then identifies across the years 2009 - 2010 advancing through to 2018 - 2019, the annual environment reports as were prepared by CPM relating to mining activities as undertaken by Sino Iron and Korean Steel. Mineralogy had submitted those reports annually to the Department of Mines and Petroleum. The 10 annual reports as identified by Mr Harris are referenced to the identified electronic documents found in the trial book.

First requests concerning the Site Remediation Fund by Mineralogy

1. Commencing at par 46 Mr Harris relates a series of communications emanating from Mineralogy extending back to 11 May 2010, concerning a meeting between CPM and Mineralogy of 10 February 2010.[25] During that meeting it is said that the Site Remediation Fund was discussed and some further information was requested from CPM by Mineralogy at that time. Further correspondence from Mineralogy of 11 June 2010 to CITIC and then Mineralogy's further communication of 8 September 2010 to CPM is identified by Mr Harris at par 48, where Mineralogy had required CPM to deposit $200 million as a site remediation payment.[26]
2. At par 49, Mr Harris identifies a series of communications by letter or email correspondence from Mineralogy to either CPM or CITIC and then, to the responses received to those communications across a period 13 September 2010 to 18 January 2012. As related by Mr Harris, this is essentially background. No suggestion is made in the trial that any of this correspondence constituted a notification by Mineralogy to either Sino Iron or Korean Steel of an annual charge notification that had issued in accordance with the requirements of MRSLA cl 20.6(e) or (f).
3. At pars 50 and 51 Mr Harris then relates that the NAB account was opened by Mineralogy in April 2014. He says:
   1. In April 2014, Mineralogy established a bank account with the National Australia Bank under the name 'Mineralogy Pty Ltd Remediation Account'.
   2. On 11 April 2014, Mr Joel Borgeaud of HopgoodGanim (solicitors for Mineralogy at the time) sent an email to Allens, the solicitors for CITIC, Sino Iron, Korean Steel and CPM, advising of the establishment of Site Remediation Fund (MPL.001.001.3051 [exhibit 1.0343].)

Given its forensic importance, I will refer specifically to the full content of the 11 April 2014 communication later in the reasons.

1. Under pars 52 through 57 of his witness statement, Mr Harris relates various other matters, including Mineralogy's receipt at 10 July 2017 of a letter from the solicitors for the CITIC defendants, Allens, warning, he says, amongst other things, of a 'suspension of the defendants' mining activities in the second half of 2017.'[27]
2. At par 53 of his witness statement, Mr Harris refers to a statement by a Mr Chang Zhenming, the chairman of CITIC on 29 August 2017, by way of letter to CITIC shareholders warning of an adverse development potentially jeopardising or leading to the suspension of Sino and Korean Activities.[28] Mr Harris also identifies a communication from Allens to Mineralogy, referring to a potential suspension 'or cessation of activities by Sino Iron and Korean Steel' as at 13 November 2017.[29]
3. At par 55, Mr Harris notes the delivery of my reasons for decision on 24 November 2017 in Mineralogy [No 16].
4. Then at par 56 he refers to a letter from CPM to Mineralogy of 18 December 2017 making, according to Mr Harris, 'representations as to the potential suspension or cessation of activities by Sino Iron and Korean Steel.'[30] Mr Harris also relates at par 57, a 31 January 2018 statement to the press by CPM entitled 'CITIC appeals judgment in fight to secure Sino Iron's future' and an extract therein to the effect that 'among other things, that the risks identified in the Chairman's letter (described in paragraph 53 above) "remained real".'[31] All this material is relied upon by Mineralogy in terms of supporting its argument about a need for certainty and security as regards it holding available funds for undertaking, if needed, potential early Site Remediation Work. However, albeit uncontroversial, I note in passing that none of the matters as identified by Mr Harris under his pars 52 through 57 of his witness statement, on my assessment, engage against the MRSLA definition of a Mine Closure.
5. Mine Closure is there defined as 'Mine Closure means the permanent cessation of operations at the Mine' (my emphasis). The word 'Mine' is defined as, 'Mine means the open-cut mine to be developed within the Mine Area by Sino and/or other Mine Participants for the mining and extraction of Magnetite Ore.' The term 'Mine Closure' is significant within each MRSLA as regards cl 20. In particular, in subclause 20.6 and in subclause 20.6(e)(ii), which refers to an input factor that is described in terms as 'the number of years remaining until Mine Closure.'
6. On close examination, none of the matters as identified by Mr Harris under his pars 52 through 57 would, in my assessment, sufficiently engage with the concept of a permanent cessation, or with a threatened permanent cessation of 'operations'. A suspension or temporary suspension of Mining Activities is, of course, a wholly different notion to the permanent cessation of such activities. Against that of course the argument will be made that the materials as collected at this part of Mr Harris' witness statement are still relevant to the prospects of a risk of a permanent cessation following on, in the aftermath of some initial temporary cessation. I will accept this evidence as relevant to be weighed in that respect, in relation to arguments about long-term risks of a permanent early cessation of mining activities.
7. Commencing at par 58 of his witness statement, Mr Harris now identifies Mineralogy's exchanges with CPM or CITIC, by correspondence exchanged between December 2017 and April 2018, concerning the making of payments into a Site Remediation Fund and Mineralogy's requests for information said to be relevant towards it determining an amount to be paid into such a fund. I note each of the 14 items by way of correspondence or communication under subparagraphs 58(a) through (n) across the period 27 December 2017 to 9 April 2018, including Mineralogy's communications seeking to arrange a site visit in late March 2018.
8. At pars 59 and 60 of his witness statement, Mr Harris identifies an email communication of 7 February 2018,[32] under which Mineralogy sought to engage Mr Mike Slight and '... requesting him to provide an estimate of costs of remediating the areas the subject of Sino Iron's and Korean Steel's mining activities', and then, Mr Slight's response with a proposal concerning the provision of such an estimate on 10 February 2018.[33]
9. Mr Harris now relates, relevantly to Mineralogy's primary debt claim against Sino Iron, Korean Steel and CITIC in this action, at pars 61 through 63, in the following terms:
   1. On 16 April 2018, Mineralogy received from Mike Slight a report entitled Mineralogy Pty Ltd Cape Preston Project Remediation Estimate Report of Mike Slight (2018 Slight Report), which estimated the Site Remediation Costs based on the then-current disturbance at $529,378,207 (MPL.001.001.3866 [exhibit 1.0666]).
   2. Later on 16 April 2018, Mineralogy sent a letter to CPM giving notice of its determination for Sino Iron and Korean Steel to pay $529,378,207 into the Site Remediation Fund (2018 Determination) (MPL.001.001.3866 [exhibit 1.0666]).
   3. On 18 April 2018, CPM responded to Mineralogy's 2018 Determination stating, in effect, that neither Sino Iron nor Korean Steel would make payments into the Site Remediation Fund (MPL.001.001.3884 [exhibit 1.0679]).
10. Those 16 - 18 April 2018 communications feature heavily as the basis for Mineralogy's originally pleaded arguments seeking to establish a Site Remediation Fund payment obligation - arising as a result and in quantum exceeding a demand for over half a billion dollars, at that time.
11. Mr Harris relates that at 18 April 2018, Mr Slight advised Mineralogy that his provided estimate '... was based on the disturbance footprint as at 30 June 2017 and as per the 2017 Annual Environmental Report, and did not estimate the total disturbance footprint to be expected at the end of the mine life' (par 64).
12. Mr Harris' witness statement then refers to Mineralogy's communication to Sino Iron, Korean Steel, CITIC and CPM of 21 May 2018,[34] followed by CPM's response of 31 May 2018 refuting then any legal obligation in the CITIC defendants to render payments into the Site Remediation Fund by a reference to the 2018 Determination of Mineralogy (par 65)[35]. He also refers to Mineralogy's reply communication of 1 June 2018 (par 66).[36] Essentially, however, the parties remain in fundamental disagreement over the validity and enforceability of Mineralogy's entitlement to such funds from any of the CITIC defendants at that time.
13. Mr Harris then relates further communications as between Mineralogy and Allens, on behalf of the CITIC defendants, spanning across June and July 2018 (par 67). There is no dispute over any of these communications being sent and received. Plainly, however, their legal significance is thoroughly disputed, as regards all contended liabilities, which are in issue.
14. At par 70 Mr Harris relates that on 5 September 2018[37] at letter was received by Mineralogy from Allens on behalf of the CITIC defendants in which Mr Harris relates that it was proposed '... among other things, that the defendants would pay $6 million into the Site Remediation Fund subject to certain conditions.'
15. At par 71 of his witness statement, Mr Harris relates a further demand by Mineralogy against CITIC as to the contended defaults of Sino Iron and Korean Steel in making site remediation payments as demanded. Mineralogy's demand had referred to cl 11(b) of the FCD and CITIC's contended obligation to cause its subsidiaries (Sino Iron and Korean Steel) to perform their obligations under the current MRSLAs and to render payments into the Site Remediation Fund in accordance with Mineralogy's determination.
16. At par 72 of his witness statement, Mr Harris relates a further communication from CPM of 28 September 2018 indicating uncertainty '... regarding the continuity of operations at the "Sino Iron Project", being the defendants' mining activities, including under the Sino MRSLA and Korean MRSLA.'[38] [Again if it matters I do not assess this communication as indicating any looming permanent cessation of mining activities for the purposes of assessing a potential engagement against the definition of Mine Closure in each MRSLA.]
17. At par 73 of his witness statement, Mr Harris then relates a 2 October 2018 demand issued upon CITIC by Mineralogy under cl 11.5(b) of the FCD - as regards unperformed obligations as contended against Sino Iron and Korean Steel by reference to a failure to make payments into the Site Remediation Fund in accordance with the 2018 Determination.[39] Again, all this was put in dispute, as was conveyed by Allens by letter of 11 October 2018,[40] to which Mineralogy then responded under its own letter of 12 October 2018.[41] There is no need to descend into the details of all this correspondence. Essentially, the parties remain in firm dispute over these issues.
18. At par 75 of his statement, Mr Harris relates further communications as between Mineralogy and Allens, on behalf of the CITIC defendants, by further correspondence towards the Site Remediation Fund over the period of 18 October 2018 and 5 November 2018 - referring to some eight items of passing correspondence in that period. Again it is unnecessary to descend into their details.
19. As related by Mr Harris at par 76 of his witness statement, no payments at 24 July 2020 had been received into the Site Remediation Fund from any of Sino Iron, Korean Steel, CITIC or CPM. That remained the position at the trial.
20. Mr Harris then explains at par 77 that '[f]rom my review of Mineralogy's books and records, I am not aware of any communication from the State of Western Australia stating that the disturbance at the Port of Cape Preston is not required to be remediated.' At par 78 he continues, 'by a disturbance at the port of Cape Preston, I am referring to structures and works undertaken and built by the CITIC defendants in that area including the breakwater, port causeway, laydown area, materials offloading facility wharf, service wharf, causeway conveyor and barge loader'. That evidence is relevant to an aspect of disagreement that emerged as between the parties' rival remediation experts concerning the provisioning of a cost estimate to undertake such remediation work at the Port of Cape Preston. I return to address this dispute of issue later in the reasons.
21. That concludes my summary of Mr Harris' evidence, remembering again that his statement was accepted without any need for him to be cross‑examined. Essentially, this evidence stands as uncontradicted. At the end of the day, the real issue is as its intended deployment. Along the way I have attempted to identify some areas of arising disputation in the trial to which such evidence might be potentially relevant, other than as background.

1. Mineralogy's other witness was Mr Michael Mashayanyika. Mr Mashayanyika had also provided a witness statement of 24 July 2020 and which, after he confirmed that its contents were true and correct, was accepted as exhibit 3 at the trial. Unlike for Mr Harris, this witness was required for a brief cross-examination on his witness statement. Mr Mashayanyika was cross-examined over a Microsoft Teams link from court sitting in Perth to his location in Brisbane.
2. By exhibit 3, Mr Mashayanyika explains that he is currently employed by Mineralogy as its Chief Financial Officer (CFO). He is based in Brisbane and has held that position since September 2016. Prior to that he had been engaged as Director of Finance for Palmer Coolum Resort Pty Ltd, from January 2014 until September 2016. Prior to that Mr Mashayanyika had been Internal Audit Manager for Queensland Nickel Pty Ltd from May 2013 to January 2014. He is a qualified Chartered Accountant and Certified Internal Auditor (par 2).
3. As Mineralogy's CFO, Mr Mashayanyika was responsible for overseeing the financial records of Mineralogy. He reports directly to its board of directors. Mr Mashayanyika identified a number of books and records to which he had access through his role as Mineralogy's CFO and further to other correspondence both sent and received by Mineralogy.
4. Commencing at par 6 of his witness statement, Mr Mashayanyika relates some facts around Mineralogy's opening of a NAB account on or about 10 April 2014 titled 'Mineralogy Pty Ltd Remediation Account'. The account, he says, was opened by Mr Brett Delaney on behalf of Mineralogy. Mr Delaney was then the Accounts Manager for Mineralogy, but has not been employed by Mineralogy since 3 July 2015. Mr Mashayanyika refers then to an NAB statement for this account dated 30 April 2014, pointing out the bank statement shows the opening date of the account as 10 April 2014.[42]
5. At par 8, Mr Mashayanyika attempts to provide evidence about the subjective intent behind the establishment of the NAB account, as regards it receiving and holding payments by the CITIC defendants. However I can give little weight to Mr Mashayanyika's attempted relating of Mineralogy's intent at 10 April 2014. Clearly, Mr Mashayanyika was not personally involved in the opening of this NAB account at the time.
6. At par 9, Mr Mashayanyika relates that on 11 April 2014 Mineralogy's then solicitors, HopgoodGanim, sent an email to the solicitors for the defendants, Allens, notifying Sino Iron and Korean Steel of the establishment of the Site Remediation Fund. Mr Mashayanyika refers specifically to document MPL.001.001.3051, exhibit 1.0343 (to which Mr Harris had also referred). This email read:

Dear Colleagues

Further to paragraph 3(d)(i) of our letter of yesterday, 10 April 2014, we advise that the account details for the Site Remediation Fund established by our client are as follows:

Name of Account: Mineralogy Pty Ltd - Remediation

Institution: NAB

Account Number: [REDACTED] 6708

BSB Number [REDACTED]

Regards

Joel Borgeaud

1. At par 10 of his witness statement, Mr Mashayanyika relates that around May 2018 (some four years after) he contacted Mr Ben Sali of NAB '... to inquire as to whether the Account [being the NAB account opened on behalf of Mineralogy 10 April 2014] might be set up as a formal trust account.'
2. The reference to 'formal trust account' is not otherwise explained by Mr Mashayanyika. The inference of course is that as at May 2018 the NAB account was not a 'formal trust account'.
3. At par 11 of his witness statement, Mr Mashayanyika then relates to a telephone conversation of 21 May 2018 that he had with Mr Philip Ingle of the NAB. In his witness statement, Mr Mashayanyika does not describe the positions or roles of either Mr Ben Sali or Mr Philip Ingle. These persons are simply referred to NAB related persons. That omission is negatively significant, in that I am unable to ascertain their levels of relevant seniority within the NAB or, indeed, to gauge their competence or authority as regards rendering communications that were reliable or authoritative on behalf of that bank.
4. Returning to par 11, Mr Mashayanyika relates his phone conversation with Mr Ingle '... where we discussed my request for the Account to be set up as a trust account.' Pausing there, an inference that I will draw is that Mr Mashayanyika is suggesting that having previously spoken to Mr Ben Sali (as related under par 10) Mr Mashayanyika was later dealing with someone else upon the same issue, namely Mr Ingle. Mr Mashayanyika then continues 'I recall that, during that [telephone] conversation, Mr Ingle had said words to the effect of the following: ...' Mr Mashayanyika then related the words that he said he remembers Mr Ingle in effect uttering to him at the time. However, legal objection was taken by the CITIC defendants as to the content of the words as they are attributed to Mr Ingle by Mr Mashayanyika - on the basis that if the content is being relied upon for its truth then that evidence is inadmissible, as it is hearsay evidence.
5. Given that hearsay objection, it was then submitted for Mineralogy that the as related words were being led only for the purpose of establishing that such words had been said at the time to Mr Mashayanyika by Mr Ingle - and so, not for establishing the truth of their content (ts 305 - 306). On that limited basis, the evidence was so adduced.
6. Nevertheless, my assessment is that if the as related words are not being relied upon for the truth of their content, then it is difficult to see any other level of forensic utility in their adducement. My assessment then is that even if led for a limited purpose of establishing that some such words were then uttered to Mr Mashayanyika (which may be accepted), that such evidence is remains, essentially, irrelevant, or at best of almost negligible weight in the trial.
7. As related under italics, the words as they were attributed by Mr Mashayanyika to Mr Ingle, of on or about 21 May 2018, were in these terms (par 11):

The only organisations, such as law firms and real estate agents, that are required by statute to have a statutory trust account are capable of having a 'statutory trust account' with the bank. For accounts for private trusts, being every other trust that is not an express statutory trust account, the trust just holds as regular account with the bank.

1. Mr Ingle of the NAB was not called as a witness at the trial. Nor was any other representative of the NAB called at the trial to give evidence concerning trust accounts operated with it by private trustees. The first line of the words as attributed to Mr Ingle in any in event relating to statutory trust accounts present as being irrelevant for a further reason as well. This trial is not concerned at all with a statutory trust account. Beyond that, the as related second sentence above presents as both unclear and disjointed.
2. In any event, Mr Mashayanyika by his par 12 then relates '[f]ollowing that conversation, Mr Ingle sent to me by way of email further details of the Account'. The document referred to is MPL.001.002.0075, exhibit 1.0712. It reads:

Hello Michael and thanks for your time on the telephone this afternoon.

Here are the details of the account

Account name: MINERALOGY PTY LTD REMEDIATION ACCOUNT

Account BSB & number: [REDACTED] 6708

Credit Interest Rate structure:

Tiered (Interest paid on whole balance over threshold) calculated on daily balance, paid monthly

From $1 to $1,000,000 RBA Cash Rate less 0.50% - currently 1.00%

From $1,000,001 to $2,000,000 - RBA Cash Rate less 0.25% - currently 1.25%

From 2,000,001 and over - RBA Cash Rate less 0.00% - currently 1.50%

Account Fees:

Base account fee of $20 per month (waived when minimum credit balance is maintained above $5,000)

Transaction Fees: $0.30 per transaction (first 50 transactions per month are free)

Account opening date: 11 April 2014

Account operating authority (unconfirmed): Clive Frederick Palmer solely to sign (I cannot locate the original account authority which should have been obtained at establishment. Please arrange for attached Account Authority Card to be signed.)

Account status: Stopped to Debit Operations (Stop will be removed on receipt of signed Account Authority Card).

Please let me know if you have any further questions.

Regards,

Philip Ingle

Transaction Solutions, Corporations & Institutional Banking

National Australia Bank Limited

1. The potential relevance of this evidence goes to a crucial issue in dispute in the trial.
2. The disputed issue, of course, relates to the MRSLA cl 20.6(c) which says that the 'Site Remediation Fund will be maintained in a separate interest-bearing trust account controlled by Mineralogy as trustee, and which will be designated as a trust account ...'
3. A contended lack of designation as a trust account in respect of the NAB account as was opened in 2014 by Mineralogy is the issue dividing the parties.
4. At par 13 Mr Mashayanyika relates that he had checked the balance of the account with the NAB prior to signing his witness statement (that was on 24 July 2020). At the time Mr Mashayanyika related by his statement that '[f]rom reviewing the transaction history on the Account, I see that no payments have been made into the Account by any of the defendants at any time.' However, during the trial in November 2020, Mr Mashayanyika had sought to resile somewhat from that statement, indicating that upon further review he had discovered that an amount of $25 had been deposited into the account in 2018 (ts 309 - 310). I accept, factually, that this is the correct position for the account.
5. The relevance of all that regarding $25 emerges later, concerning rival arguments over whether in fact any funds of the CITIC defendants have ever been held on trust in this account. It is clear, however, that whatever the reason for the making of a $25 payment in 2018 (which event otherwise remains wholly unexplained under Mr Mashayanyika's evidence) this $25 amount had certainly not been paid by Sino Iron or Korean Steel by way of a response by Sino Iron or Korean Steel to them being notified by Mineralogy of some annual charge (of $25, or otherwise) in respect of a forthcoming 'Operating Year', by reference to MRSLA cl 20.6(f).
6. From the trial evidence Sino Iron made the $25 deposit on 12 December 2018.[43] The basis upon which the $25 amount was paid in 2018 remains a mystery.
7. Mr Mashayanyika concluded his witness statement observing in relation to the NAB account that 'Mineralogy deposits money into the Account itself from time to time in order to meet the bank fees, which are $20 per month while the Account balance remains below $5000' (par 13).
8. Mr Mashayanyika's evidence-in-chief, subject to the observations that I have now rendered along the way, was satisfactory. It can be accepted to the extent it is relevant. Mr Mashayanyika was then briefly cross-examined by senior counsel for the CITIC defendants - see ts 310 - 313. Mr Mashayanyika was asked about the directors of Mineralogy which, as at 24 July 2020, had included Mr Clive Palmer.
9. Cross-examination elicited that at that time Mr Mashayanyika was also a director and was a member of Mineralogy's board, he having been appointed only on 4 November 2020 (ts 311). Mr Mashayanyika said that he was appointed to the board of Mineralogy at the request of Mr Palmer (ts 312).
10. Mr Mashayanyika related that Ms Anna Palmer was also appointed a board member on 4 November 2020 (ts 312). Another board member was appointed on 9 November 2020. Mr Mashayanyika identified the person as a Mr Dominic Martino (ts 312).
11. Also identified as being then a director of Mineralogy was another employee of Mineralogy, a Ms Baljeet Singh (ts 312).
12. Mr Mashayanyika was briefly re‑examined towards providing information as to the qualifications of Mr Martino, who, it emerged then, is a chartered accountant and ex Deloitte partner. Ms Anna Palmer is a chartered accountant and holds a law degree, as does Ms Baljeet Singh, who Mr Mashayanyika understood was a solicitor (ts 314).
13. That concluded the non-expert witness evidence led on behalf of Mineralogy at the trial.

1. Evidence for the CITIC defendants' non-expert witnesses at the trial was also adduced by way of witness statements.

1. The first of these was under a witness statement of Ms Yueh-Shin Eleanor Chen. Ms Chen's witness statement of 24 July 2020 was admitted. It became exhibit 4. Nevertheless, some evidence in that witness statement under pars 5, 8, 9 and 10 was not then adduced as her statement was formally read at trial (see ts 307 - 308).
2. Ms Chen's short statement then essentially described her work as a law graduate at Allens. At 14 July 2020, Ms Chen accessed certain website pages concerning a Palmer United Party - which she electronically printed to PDF files (identifying some six electronic documents under par 3).
3. Under par 4 of Ms Chen's statement, she relates on 14 July 2020 she printed to a PDF file the Commonwealth of Australia Government Notices Gazette concerning a notice of 5 August 2013 relating to the 'Issue of writs for election of Members of the House of Representatives and of Senators to represent the Australian Capital Territory and Northern Territory'. In effect, Ms Chen was referring to a document concerning the timing of the 2013 federal election.
4. At par 6 Ms Chen said she printed to a PDF file a web page from the website for the entity, Waratah Coal.
5. Finally, under par 7, Ms Chen related that she printed to PDF files web pages from a Blue Star Line website, incorporating some six electronic documents concerning that corporation and its published activities regarding a building of a Titanic replica in Australia. There is no need to elaborate on any of this information. It is presumably relied upon by the CITIC defendants as a component of the context for their arguments about the suitability of Mineralogy to continue as a trustee of a Site Remediation Fund under their counterclaim.

1. The CITIC defendants' next witness was Ms Emma Annamarie Boogaerdt, a law graduate with Allens based in Perth. Ms Boogaerdt's three statements of 24 July 2020, 14 August 2020 and 29 September 2020 respectively, were adduced and received as exhibits 5A, 5B and 5C. She was not required for cross‑examination. Essentially, her statements provided only more documentary information in the nature of historical company searches for Mineralogy and for related corporations,[44] information downloaded from the NAB website on 12 August 2020,[45] and documents downloaded also on 12 August 2020 from the Environmental Protection Authority of Western Australia (EPA) website relating to the Cape Preston East - Multi-Commodity Export Facility and the Cape Preston East Iron Ore Export Facility.[46] Ms Boogaerdt's affidavit attached a PDF file downloaded on 12 August 2020 concerning Ministerial Statement 1149 by the State Minister for Environment on 6 August 2020 titled 'Statement To Change The Implementation Conditions Applying To A Proposal'.[47]
2. Ms Boogaerdt also related that she had printed to a PDF file a web page from the website of the Environmental Protection Authority (EPA) relating to a Sino Iron Mine Continuation Proposal,[48] and from the same website downloaded a copy of the Sino Iron Mine Continuation Proposal Referral Form, supporting document - Part 5.[49] This document contains, she related, a Sino Iron Project Conceptual Closure Plan dated January 2017 (see page 111 of the PDF).
3. Ms Boogaerdt's third statement, exhibit 5C, attached copies of subpoenaed documents from the NAB, concerning the 'Mineralogy Pty Ltd Remediation Account', including the NAB's covering letter of 11 September 2020 answering that document production subpoena.[50] The documents produced by answer to that subpoena are identified and tabulated under Ms Boogaerdt's statement, duly identifying some 86 documents, mostly comprising 'Remediation Account bank' statements spanning the period 30 April 2014 through to 31 August 2020.
4. The CITIC defendants' three (3) other non-expert trial witnesses, namely, Mr Silavecky, Ms Rifici and Mr Blaxill, were cross-examined by senior counsel for Mineralogy. I turn to recount and deal with each of their evidence below.

1. Mr Sten Silavecky was called on behalf of the CITIC defendants. His witness statement of 24 July 2020 became exhibit 8. Mr Silavecky gave his evidence remotely and was cross-examined via a Microsoft Teams link to the court from his location in Melbourne, where he is the Senior Manager, Structured Finance & Property for Equity Trustees Ltd.
2. Essentially, the purpose of Mr Silavecky's evidence was to advance a potential substitute or replacement trustee, in lieu of Mineralogy, for the purpose of the CITIC defendants' counterclaim relief. It was contended, in effect, that Equity Trustees would be a suitable replacement, as a trustee of controlled funds in the Site Remediation Fund account. At 23 July 2020, Equity Trustees had indicated by correspondence to Allens that Equity Trustees was appropriately qualified and would be prepared to act as an independent trustee of the Site Remediation Fund.[51] Paragraph 5(c) of Mr Silavecky's witness statement relates that Equity Trustees currently held more than $AUD100 billion in assets under management administration and supervision, with more than 135 investment managers and employing over 250 staff. I address some aspects of Mr Silavecky's evidence later, including aspects of cross‑examination, in the context of the counterclaim.

1. The next witness called by the CITIC defendants who was required for cross‑examination was Ms Melanie Lee Rifici. Ms Rifici's witness statement of 14 August 2020 was admitted and received as exhibit 6.
2. Ms Rifici is a qualified lawyer employed as a Senior Associate at Allens, based in Perth.
3. Ms Rifici's evidence‑in‑chief provided through her witness statement, at pars 4 - 6 was essentially directed at proving a file note that she had prepared after she had attended personally at a meeting on 25 May 2018 held at the CITIC offices at 45 St Georges Terrace, Perth.
4. She relates at par 5 that this was for a meeting that had been attended as well by Mr Mike Slight, Mr Chris Spielvogel of Mineralogy, Mr Matthew Horton of CITIC Pacific Mining, Mr Malcolm Northey of CPM, and Mr Bruce Watson of CPM.
5. At par 6 of her statement, Ms Rifici referred to the file note prepared by her following the meeting. She said of it:
   1. Following the Meeting, I prepared a file note of the Meeting. A true copy of that file note is at CPM.629.019.0337.
6. Cross-examination of Ms Rifici was primarily directed towards the preparations underlying her file note and her professional work for the CITIC defendants.[52] Ms Rifici attended at court at Perth in person for the purpose of providing her evidence. She was cross‑examined over a Microsoft Teams link by senior counsel for Mineralogy - with Mineralogy's entire legal team located (under COVID-19 circumstances) in Canberra and participating in the trial remotely over that link.

1. A significant part of the cross‑examination of Ms Rifici saw questions directed to her concerning her knowledge of a project group within CITIC known as the Fulcrum group, which Ms Rifici answered had been ' ... set up to deal with correspondence and any disputes, etcetera, between CITIC and Mineralogy' (ts 320).
2. Ms Rifici answered affirmatively to a number of questions set out below as put to her by Mineralogy's senior counsel about the Fulcrum group (ts 320 - 321):

And do you understand that part of its task is to manage that relationship with Mineralogy?---Yes. That's correct.

And do you understand that part of its task is also to try and alter the existing contractual arrangements with Mineralogy?---Yes.

All right. And that's because CITIC - or Sino and Korean - consider that the present contractual arrangements they have don't suit them.

Objection was taken to the question, inter alia, upon the basis of legal professional privilege. After some arguments on each side, I did not uphold the objection (ts 321).

1. Nevertheless, after that, the question was put again in slightly revised terms (ts 322):

And the reason that Sino and Korean wanted the contractual arrangements changed with Mineralogy was because they did not consider that those contracts suited them?---I'm not sure that's entirely correct. I think there are - our client considers there were a number of problems with the documents and that's - - -

1. Ms Rifici referred to her clients' perceived problems with documents, including vagueness or enforceability issues, as well as construction issues, leading to a further question to her from senior counsel for Mineralogy (ts 322):

Sure. But they're not the difficulties you're talking about. The difficulties you're talking about is the commercial terms are ones that Sino and Korean consider are unsatisfactory. That's correct, isn't it?---Yes.

1. Ms Rifici was then asked about her involvement in providing written or other (legal) advices from time to time to executives with Korean and Sino who were part of the Fulcrum group (ts 322). She accepted she had provided such advices, effectively, on a frequent basis over a number of prior years. I do not assess or infer anything sinister in relation to Ms Rifici having provided legal advice from time to time whilst a legal representative of Allens to Allens' clients.

1. The ensuing cross‑examination of Ms Rifici from ts 323 and following was directed at the circumstances leading to her creation of her file note of the meeting of 25 May 2018. This interrogation particularly concerned the circumstances in which the final content of file note had ultimately been settled - given a contention by Mineralogy that there had been input for it received from the client (CITIC) as regards an initial first iteration file note. The upshot of all this was that Ms Rifici came to accept under questioning that a representative of CITIC had been shown what was her first iteration of the file note and that representative had had the opportunity to contribute towards the final iteration (ts 331). The content of what had actually been contributed towards the final iteration by CITIC representatives was not at this time able to be elucidated. I confirmed this to be so under my concluding question to Ms Rifici at ts 335.
2. Albeit it would have been more accurate and preferable for Ms Rifici to have pointed out in her statement that there had been some client input to the final iteration of her file note of the 25 May 2018 meeting, I do not at the end draw any adverse inferences against Ms Rifici by reason of that omission or, for that matter, against the accurateness of the contents of her file note in its final iteration, as it came to be tendered at trial.[53] I assess the omission to be innocently overlooked.
3. My assessment of this evidence is that the final iteration of Ms Rifici's file note had been, indeed, settled upon by her after receiving the input of the client. Although she was not asked the question directly, I infer that the final version of the file note after that input remained in accord with Ms Rifici's recollection and her understanding at the time of what had occurred at the meeting - which she had attended effectively as an observer. I infer Ms Rifici would not have put her file note before the court as she has at par 6 of her witness statement had she not been satisfied with the accuracy and reliability of its content. It was not directly put to Ms Rifici that she had proffered to the court as reliable a file note under circumstances where it contained anything Ms Rifici was not satisfied was a reliable and accurate record of what she recalled had been discussed at that meeting.
4. Scrutinising the evidence on this issue very carefully, at the end, I accept that Ms Rifici's evidence as to her file note in its final iteration and put to the court is, to the extent that it is relevant, a reliable record of what occurred at the meeting. (So also for that matter did Mineralogy's expert, Mr Mike Slight, when the note was put to him - see ts 416). This, of course, all relates, in the end, to the rival expert trial evidence and, in particular, to the expert evidence of Mineralogy's site remediation mining engineer, Mr Mike Slight. For his part, when Mr Slight gave evidence as to this same meeting (ts 416 - 418), I did not divine anything inconsistent with the content of the 25 May 2018 file note as prepared by Ms Rifici that carries any forensic significance to trial issues.

Mineralogy's submissions upon Ms Rifici's evidence and the Fulcrum group approach

1. During the course of senior counsel for Mineralogy's closing submissions, it appeared then that much was sought to be made by Mineralogy of what allegedly had emerged out of Ms Rifici's evidence concerning an existence or objectives of the Fulcrum group. In particular, the admission elicited in cross‑examination from Ms Rifici about difficulties with the commercial terms of Sino Iron and Korean Steel's agreements with Mineralogy was heavily emphasised as suggesting something rather sinister (see ts 597).
2. However, I did not and do not draw any such sinister inferences from this evidence or, indeed, from any of the limited trial evidence concerning the Fulcrum group. As I indicated in my dialogue with senior counsel for the CITIC defendants during closing submissions, I do not infer anything sinister around the fact of a contracting party's desire to renegotiate over, or to revise or to amend the terms of an existing arrangement (ts 568). An issue of possible concern about such objectives might emerge, if some illegitimate or unlawful means had been suggested or resolved upon to further that end. However, I saw nothing to support such a conclusion by way of inference or otherwise from out of the evidence put before me in this trial.
3. There was a document relied upon by Mineralogy suggesting, it was put, a nefarious intent towards the renegotiation of contracts.[54] The document consists of an internal Excel spreadsheet or worksheet of CITIC, which looks to be an internal CITIC document with the heading 'CITIC Risk Management Library' and displaying inputs that are seen written in both English and Chinese. In the worksheet titled 'Risk Assessment' column F is seen headed, 'Second Degree Risk Definition' and reads in general and non-specific terms.
4. Included in the worksheet is a sentence directed towards legal risk. Part of the risk seen as referred to is administrative liability or criminal liability risk. But nothing tangible emerges out of that, on my assessment. At column H, under a heading 'Risk Elements' (for reference only - being an English translation of the [Chinese] written column G) there is seen an input at cell H119 as follows:

Legal Dispute Prevention Mechanism Risk

Civil or criminal suit to deal with the risk Business Partners Debt Transfer Risks (row 89)

1. But again, that is simply all too broad and non‑specific, by my assessment, to be of any present forensic significance. Further seen along row 119 at column AE, under a heading, 'Commentary and description of risk management status', the worksheet input reads (cell AE119):

Risks are currently being adequately managed. CPM has a dedicated Special Projects Team to manage the major litigations with Mineralogy.

1. Again, I would assess that statement as both bland and wholly benign. Likewise, cell AG119 reads in generic terms as regards an establishment of a specialised legal team. I assess that as equally benign. Indeed, I would be very surprised if there were not specialised legal terms in place for parties on both sides of this litigation - given these parties profligate other litigation commitments as against each other. Likewise, for column AI119, I assess that as equally benign.
2. Consequently, the endeavour of Mineralogy to suggest some sinister background underlying conspiracy involving the Fulcrum group as it was established by the CITIC defendants and towards some illegitimate or unlawful end directed against Mineralogy, in my view, is unsupportable. Ultimately, I assess it to be an irrelevant distraction in the present litigation.

1. The final non-expert witness for the CITIC defendants was Mr Charles Philip Blaxill, a litigation partner at Allens, also based in Perth. His witness statements of 24 July 2020 and 30 September 2020 were adduced and received as exhibits 7A and 7B, respectively.
2. A number of objections were initially taken against Mr Blaxill's first witness statement, exhibit 7A, and which essentially referred to many electronic documents. At the end, none of those objections were pressed, albeit some documents identified commencing at par 6 of exhibit 7A, were essentially said by Mineralogy to be irrelevant. All of this material, as I apprehended it, goes potentially to the CITIC defendants' counterclaim.
3. Much of Mr Blaxill's first witness statement concerns the Cosmo Proceeding, an action run out of the Supreme Court of Queensland (proceeding 6791 of 2014) against Mr Palmer and Cosmo Developments Pty Ltd (Cosmo). Only Mr Palmer and Cosmo (ie, not Mineralogy) were participants as defendants in the Cosmo Proceeding in the Supreme Court of Queensland.
4. As has been briefly touched upon, the Cosmo Proceeding concerned two payments occasioned by Mr Palmer from out of a designated Administrative Fund into which Sino Iron and Korean Steel were required to make contributions. There were limited and identified purposes for which moneys in the Administrative Fund could be used. It was alleged by Sino Iron and Korean Steel that two payments out of the Fund occasioned by Mr Palmer were improper. Those funds were then being held on trust by Mineralogy. Sino Iron and is had sought declarations against Mr Palmer and Cosmo in relation to the two payments out of the Fund. It is notable that Sino Iron's and Korean Steel's case had relied entirely upon proving that the funds in the Administrative Fund had been held on trust. The Supreme Court of Queensland concluded after a trial that the funds were not held on trust.
5. There were no objections to Mr Blaxill's second witness statement, exhibit 7B other than to the receipt of an interim award referred to at par 14 made in arbitral proceedings heard on 12 and 13 May 2014, together with the arbitrator's reasons.
6. Those arbitral proceedings were initially referred to in Mr Blaxill's first witness statement at par 4, where he had explained that the arbitrations were between Sino Iron and Korean Steel respectively, as against Mineralogy, although the arbitrations were eventually consolidated.
7. In an interlocutory ruling made during the course of the trial before me, I rejected the attempt of the CITIC defendants to tender evidence of the interim awards by the arbitral panel in those arbitral proceedings. My ruling was that the interim awards were essentially irrelevant to issues with which I was concerned in the present litigation, chiefly and relevantly the CITIC defendants' counterclaim seeking a removal of Mineralogy as trustee (see closed court ts 2 - 6 on 19 November 2020).
8. The theme of Mr Blaxill's cross‑examination undertaken by senior counsel for Mineralogy (conducted by Microsoft Teams) was exclusively concerned with the counterclaim of the CITIC defendants. Part of the cross‑examination was conducted in camera - closed court (see the closed court ts 7 - 10 on 19 November 2020).
9. A basis for the CITIC defendants' counterclaim is the conduct of Mineralogy evaluated by the Cosmo Proceeding and by the arbitral proceedings. However, in my view, it is neither appropriate nor viable for this court in a context of counterclaim arguments over the suitability of Mineralogy to remain as a trustee of the Site Remediation Fund, to descend into and attempt to pick apart other aspects of disputes already arbitrated or litigated at great length elsewhere.
10. If there had been an adverse final finding determined against Mineralogy, or on a relevant issue which was a subject of a res judicata, or of an issue estoppel that was established under the force of an arbitral award or by a final judicial determination of a superior court, that would be one thing. But that is not what was being attempted here. The genre of evidence sought to be relied upon around Cosmo and other issues tied to the Administrative Fund, established under different contractual arrangements (albeit essentially between the same contractual participants) from the Cosmo Proceeding is simply not, on my assessment, helpful or productive towards the present counterclaim issues.

1. The only features of significance for this trial I would identify from out of the Cosmo Proceeding in the Supreme Court of Queensland are three matters addressed in the reasons for decision of Jackson J: see Sino Iron Pty Ltd v Palmer [No 3] [2015] QSC 94; (2015) 2 Qd R 574 (delivered 4 May 2015).
2. First, is his Honour's conclusion seen at [109] in terms:

In my view, it follows that the Administrative Fund contributions made to the bank account were not held on trust by Mineralogy, because the contractual obligations of Mineralogy did not extend to an obligation not to deposit into and thereby mix other moneys in the bank account.

1. On the basis of that determination, the action against Mr Palmer and Cosmo failed. The orders of Justice Jackson are not found reported in the authorised Queensland Report but they are recorded on the cover page of the unreported version ([2015] QSC 94). His Honour's orders confirm the plaintiffs' (Sino Iron and Korean Steel) claim was dismissed. This is supplemented at [15] of his Honour's reasons:

Only if I find that the challenged payments were made from funds held on trust, the defendants made three other concessions ...

His Honour, of course, found that the funds were not held on trust.

1. Second, and correlatively, the findings of Jackson J at first instance spanning his Honour's reasons at [110] - [144], are all essentially obiter findings - given his Honour's primary conclusion as to the Administrative Fund contributions not being held on trust by Mineralogy.
2. No appeal looks to have been taken against Jackson J's dismissal determination in that action.
3. Thirdly, however, I point to Jackson J's observations at [145] which, in my respectful view, are wise and insightful. Having concluded what were ultimately the obiter determinations at up to [144], his Honour said this at [145]:

In view of those findings, it is unnecessary for me to go further. It is not necessary to make a specific finding of dishonest or fraudulent design by Mineralogy, through the first defendant [ie, Mr Palmer], or of dishonest assistance with knowledge by the first defendant. There are reasons why, in my view, I should not do so. First, such findings could cause significant reputational damage to the first defendant, but they are not necessary in order to resolve the liability of the first or second defendants as a matter of fact and law. Second, the way in which this case has been conducted does admit of the possibility that the plaintiffs seek not only to obtain the relief claimed in the proceeding, but also to embarrass the first defendant at the same time.

1. The second concluding sentence observation above is instructive. They confirm my resolve to quarantine all this material.
2. In the end, I reject the invitation of the CITIC defendants to re‑examine all over again, and from a distance, without all the pleadings or points of claim, the events and circumstances which have occurred around the Administrative Fund. The invitation, in effect, was to embark upon a third examination of those events again, by reference to their contended relevance towards the counterclaim. But that excursion is not, on my assessment, forensically feasible, or justified here. It may be remembered, of course, that the relief as sought under the present counterclaim of the CITIC defendants, is ultimately discretionary relief. The invitation to turn over yet again those already now well trodden arbitrated or litigated facts for a third time for a purpose of turning up material to be used to support a removal and replacement of Mineralogy as trustee of the Site Remediation Fund, on my assessment, should not be allowed.
3. Having now laid out the disputants' respective non-expert evidence at the trial, I can turn back to the first significant issue between the parties - the proper construction of MRSLA cl 20.6.

Construction of Commercial Contracts - Principles

1. The principles concerning the construction of commercial contracts (such as the MRSLA) were never in any dispute at this trial. They have been discussed frequently. I mentioned them earlier in passing.
2. Nevertheless, I refer to my reasons in Mineralogy [No 16] at [297] - [306] where I outlined general principles towards a task of contractual construction. It is unnecessary to set those principles out in full again. This is particularly so when those statements of principle were not challenged on appeal - see Sino Iron Pty Ltd v Mineralogy Pty Ltd [2019] WASCA 80 at [295].
3. I also refer to my reasons in Hughes v St Barbara Mines Ltd [No 4] [2010] WASC 160 at [594] - [595], where I cite well remembered observations by Gibbs J in Australian Broadcasting Commission v Australian Performing Right Association Ltd, 109 - 110:

It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequence which appear to be capricious, unreasonable, inconvenient or unjust, 'even though the construction adopted is not the most obvious, or the most grammatically accurate', to use the words from an earlier authority cited in Locke v Dunlop (1888) 39 Ch 387, 393, which, although spoken in relation to a will, are applicable to the construction of written instruments generally; see also Bottomley's Case [1880] UKLawRpCh 258; (1880) 16 Ch D 681, 686. Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument. Finally, the statement of Lord Wright in Hillas & Co Ltd v Arcos Ltd [1932] UKHL 2; (1932) 147 LT 503, 514, that the court should construe commercial contracts 'fairly and broadly, without being too astute or subtle in finding defects', should not, in my opinion, be understood as limited to documents drawn by businessmen for themselves and without legal assistance (cf Upper Hunger County District Council v Australian Chilling and Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429, 327).

1. There are also, of course, the more recent and comprehensive observations of the Court of Appeal in Black Box Control at [42] and so, the 11 principles listed therein to which I earlier referred.

Early interpretive observations concerning the text of MRSLA cl 20.4, 20.5 and 20.6

1. As I have now outlined, through recounting the evidence of Mr Harris, there was something of an evolutionary journey preceding the perfection of each of the MRSLAs, as sub-lease agreements in 2001, then to 2005 'First MRSLAs', then to a restatement in March 2006 and later still, by further amendments (in light of takeovers by CITIC) of 31 July 2008 (Sino Iron) and at 22 October 2008 (Korean Steel). Remembering all that background, I can proceed now to render some interpretive observations upon the key MRSLA text at issue presently, noting, of course, that cl 38.8 in each MRSLA provides that headings used in each agreement 'are for convenience only, and do not affect interpretation'. I bear that direction in mind.

1. Turning first to MRSLA cl 20.4 and to subpars (a) and (b) therein, the significance in the utilised MRSLA definitions is immediately apparent. The terms 'Legal Requirements', 'Site Remediation Work', 'Sino's Activities', 'Mine Closure' and 'Sino's Project Facilities', all carry significant inputs towards ultimately understanding the workings of the overall MRSLA remediation regime.
2. I can render two observations of emphasis at the outset. First, the breadth of the term 'Legal Requirements' as defined, extends both to present or future obligations which could arise from multiple potential sources.
3. A second and greater point of emphasis, however, is that the performing of all this work itself, ie, the Site Remediation Work (as defined), is promised to be carried out by Sino Iron and Korean Steel and so, not by Mineralogy (cl 20.4(a)).
4. Site Remediation Work as defined in each MRSLA extends not only to the meeting of Legal Requirements, but also to the meeting of 'good industry practices'.
5. Again, I would point out in relation to the term 'Mine Closure' used under cl 20.4(b), that this as defined term addresses the event of a permanent cessation of operations at the Mine. I render that observation in light of references from time to time in the trial evidence to some suggested possible 'temporary' mine closures, or as to 'suspensions' of Sino Iron's and Korean Steel's mining activities. But such speculated upon possible interruptions to mining, were not final enough in character to engage with the MRSLA concept of Mine Closure, as it is so defined. The word 'permanent' used in the deployed definition of 'Mine Closure', in the phrase 'permanent cessation of operations', is a clear and significant temporal indicator as to what does and what does not engage with the phenomenon of a MRSLA envisaged Mine Closure event.
6. I also highlight the defined MRSLA term, 'Sino's Project Facilities', as used under cl 20.4(b) and the potential breadth of its application and engagement across diverse potential geographic areas, including the Mine Area, Site Lease Area, under the Facilities Deed in the Access Areas or elsewhere within the Project Area.
7. I must divert briefly to contextually compare and contrast within cl 20 its even earlier subclauses cl 20.1 (Environmental Approvals), cl 20.2 (Legal Requirements) and cl 20.3 (Bonds - required by government authorities). They all present as relatively narrow in their subject matter and reach. However, by contrast, the cl 20.4 Site Remediation Work as promised obligations by Sino Iron and Korean Steel under subpars (a) and (b), look much more broadly expressed. They lend themselves to being seen as in the character of obligations of a potentially huge financial magnitude and as obligations required to be carried out in the long term - well into the future over the life of the Mining Operations. Such promised obligations of their very nature display themselves commercially as carrying some element of future financial risk, in terms of ensuring the accessibility to ongoing available funds to pay for their performance when needed into the future and, thus, leading to a correlative reasonable security obligation being attached to support those future commitments being funded.
8. The breadth of the Site Remediation Works definition in each MRSLA sees it extend to cover the purpose built Cape Preston Port infrastructure as was established by Sino Iron and Korean Steel as part of this overall project endeavour. Another of the many issues arising at the trial, and about which the parties' rival site remediation experts strongly disagree, is over whether a Site Remediation Costs assessment exercise for the required Site Remediation Work either should or should not pick up provision for the projected costs for removing at Mine Closure, the whole now established port, harbour causeway and associated infrastructure which have been constructed at great cost as export infrastructure for this project at Cape Preston. Their retention would support large cargo ships continuing to berth, load and to receive for export shipment the bulk quantities of processed Product at this specifically constructed port at Cape Preston to support these parties' operations under their greenfields project endeavour. A potential future infrastructure gain for the State of Western Australia by keeping open and usable all the port infrastructure intact with associated benefits longer term from such billion dollar capital works, presents as a prima facie attractive outcome. Transfer of these established port facilities to the State, rather than their removal, would of course then alleviate the MRSLA parties from obligations to otherwise incur what would be the significant expense needed to remove all those works and to pay for that work to be done at Mine Closure.
9. On the other hand, the MRSLA cl 20.4 contractual obligation as it is framed does look to require a wholesale removal and remediation exercise towards everything that has been built ('all Sino's Project Facilities'). That would extend to removing the port, harbour causeway and associated infrastructure.
10. The question then is ought such future port removal expenditure be provided for within the Site Remediation Fund, or not? Mineralogy's expert thought so, unless, in effect, some legally enforceable commitment from the State or a State entity had committed otherwise. That, of course, has not yet matured despite some hopeful noises suggesting possible future interest in the facilities. The CITIC defendants' expert did not think such final costing provision was needed for port removal expenditure at the end of operations.
11. The port infrastructure issue is keenly disputed. It delivers at the end a difference between the experts of roughly about $100 million, in future budgeted funding needed to achieve that end port infrastructure removal object at Mine Closure. I turn back to this issue in some greater detail later.

1. As to cl 20.5, this provision obviously needs to be read very closely with the immediately following cl 20.6.
2. By way of an early observation only, I would highlight the permissive character of Mineralogy's entitlement vis-à-vis Sino Iron and Korean Steel under cl 20.5, by use of the word 'may'. In other words, it does not necessarily follow that Mineralogy must or will require a provision of (reasonable) security from either Sino Iron or Korean Steel. Mineralogy 'may' well do that. But it is not bound to do so.
3. Next, I note what is the temporal character of the as deployed phrase 'from time to time', within cl 20.5. That phrase gains in significance when it is aligned with ensuing cl 20.6(e) and (f), as encountered in due course, concerning the funding arrangements to be followed for the Site Remediation Fund, introduced by cl 20.5.
4. Next, I observe upon the use of the term 'reasonable security'. That phrase stands in some degree of contrast, perhaps, to terminology that might otherwise have simply referred to a requirement for a provision of 'security', by unqualified terms. Use of the word 'reasonable' obviously provides some brake against what I would otherwise assess to an unfettered scope for Mineralogy to call for the payment of any level of security.
5. On my assessment, the use of the word 'reasonable' in cl 20.5 was an imposition of an objective standard. And properly understood, the reasonableness of the security to be provided would extend not merely to its quantum. The same reasonableness qualification would extend as well to the form under which it must be provided, when required. What is reasonable security is later found effectively spelt out under specified criteria, both as to quantum and to form for a Site Remediation Fund regime more elaborately laid down under the ensuing cl 20.6. Contractual adherence to the cl 20.6 regime laid down will then realise what would then be reasonable security.
6. Next, I note the cl 20.5 nominated object for which the reasonable security is to be provided - namely for 'the performance of its obligations under this clause 20'. The word 'its', seen used as regards those obligations, must be read to be a reference, correctly understood, to Sino Iron or Korean Steel, as the case may be, and not to Mineralogy. That assessment was not controversial at the trial (see ts 177 - 178).
7. Seen in overall MRSLA context, the performance obligations under cl 20.5 for Sino Iron and Korean Steel were earlier exposed under cl 20.4(a) as concerning either Sino Iron or Korean Steel (by each respective MRSLA) seen as promised there towards carrying out all the Site Remediation Work (as defined), 'that may be required', as a result of 'Sino's Activities' or 'Korean's Activities' - under the respective MRSLA.
8. Next, I observe that cl 20.5 advances to expressly identify how the reasonable security is to be provided, if it is required by Mineralogy - namely, 'in the form of a Site Remediation Fund'. That concept for a provided fund of money, also a defined MRSLA term, is ultimately seen to crystallise in the requirements under cl 20.6. And, as is revealed at cl 20.6(a), the form by which such reasonable security is provided, is by Sino Iron's and Korean Steel's respective obligations under each MRSLA, by which each 'will make payments into the Site Remediation Fund'.
9. The cl 20.6(a) obligation to render 'payments' (of money) may be contrasted from within the MRSLA itself to the earlier seen cl 20.3 third party security like obligation, towards that envisaged provision seen there, of 'bonds', if required by Government Authorities in respect of Sino's Activities (or, of course, Korean's Activities). Clearly, the cl 20.6(a) objective intent underlying the Site Remediation Fund was to be different security to a bond - by the payment of money to provide the envisaged security.
10. Before leaving cl 20.5, I must note that a hefty degree of the constructional argument emphasis at trial by Mineralogy addressed cl 20.5 on a basis it was an obligation to provide security and certainty for the benefit, primarily, for Mineralogy. In a sense, there is, of course, an undoubted benefit seen for Mineralogy - by it obtaining solid financial assuredness from money held, that Sino Iron and Korean Steel have contributed funds to an account to be accessed when needed to pay for the performing of their promised MRSLA Site Remediation Work obligations into the future. Such a fund of money would be comforting, given that Mineralogy as the legal holder of the mining tenements by the State Agreement, is itself primarily and remains itself exposed to rehabilitation obligations to the State, or to relevant governmental authorities, upon a hypothetical future event, say, that Sino Iron and Korean Steel do not themselves then carry out in full, their contractually promised (to Mineralogy) cl 20.4(a) Site Remediation Work under the MRSLAs.
11. A discernible objective purpose then for Mineralogy securing its own ongoing future remediation obligation legal exposure to the State, as regards any possible future remediation performance defaults into the future, is apparent and should be fully acknowledged. But beyond that obvious truth, the words of cl 20.5 also say, clearly enough, that the reasonable security is provided for the performance of Sino Iron's and Korean Steel's obligations under MRSLA cl 20. Having funds available to perform the work in the future is also beneficial to Sino Iron and Korean Steel. The ensuing cl 20.6(b) says that in terms. If performance of Site Remediation Work obligations are secured by available and held funds then, of course, Mineralogy's default exposure is correlatively protected. Mineralogy is clearly a beneficiary of the promise to that extent. But so also are its MRSLA participant partners.
12. Clause 20.5 needs to be read closely with ensuing cl 20.6(b), as regards what is a specified plurality of objects as the identified beneficiaries of an establishment of a Site Remediation Fund. The objects extend beyond merely serving the security and certainty interests of Mineralogy, alone.

1. Towards MRSLA cl 20.6(a), I highlight the following aspects of the subclause.
2. A use of the MRSLA definition of 'Site Remediation Costs', by reference to the defined term 'Site Remediation Work', is evident. The term 'Site Remediation Costs' by its MRSLA definition, means 'costs and liabilities incurred in respect of Site Remediation Work'. Clearly enough, the required security payment is not merely to be provided upon a basis of the costs and liabilities, once they are incurred.
3. The importance of the word 'future', seen used as within cl 20.6(a) and preceding the defined phrase 'Site Remediation Costs' is evident. The word 'future' is also found used in the first line of cl 20.6(e) and then again, even later in cl 20.6(e)(i), always towards the noun 'Site Remediation Costs'.
4. Next to be noticed is the cl 20.6(a) deployed phrase 'as they become payable'. An expansive scale of future potential MRSLA Site Remediation Costs (as defined), when undertaken by reference to the definition of 'Site Remediation Work', opens up potential for very considerable funds to be needed in future to meet the work end (as defined) across the course of Sino Iron's and Korean Steel's Activities and, indeed, even expenditures needed at times well before a Mine Closure. That is particularly so in order to implement and pay for any yearly progressive remediation work, being, effectively, Site Remediation Works carried out along the way in any Operating Year and so, obviously, to be performed prior to Mine Closure.
5. Mineralogy's submissions make much of the undoubted need to have proper funding provision made, from a security perspective, in relation to meeting the ongoing yearly costs of almost inevitably to be needed progressive remediation funds. Progressive remediation is widely accepted as being a matter of good industry practice - as regards following a sensible and contemporary approach to the overall decommissioning of a mine site. I accept that ongoing remediation imperative is a relevant funding consideration. No-one really suggested otherwise at the trial. Clearly, the expenditures to be made out of Site Remediation Costs will not all be left to be paid out at the end of mine life upon a permanent Mine Closure.
6. The term 'progressive remediation' is not found used anywhere within cl 20. But I do accept the concept was live in Australia as a surrounding circumstance and mutually well known when the two MRSLAs of 2006 were perfected. The concept forms an important part of underlying remediation activities in a forthcoming Operating Year and would clearly be embraced under the broad definition of 'Site Remediation Work' and thereby also in the allied MRSLA definition of 'Site Remediation Costs'.
7. During the course of arguments, a relatively uncontroversial, but helpful, example of site remediation was referred to by senior counsel for Mineralogy (ts 96 - 97). This was by reference to the as perfected situation of where a tailings dam at site reaches full capacity. A no longer utilisable tailings dam then becomes ready for its remediation, even though mining activities at site likely remain as ongoing and will be continuing apace for years to follow. A fresh replacement tailings dam facility is then used, or may be constructed, to meet an ongoing need for a tailings dam replacement facility. But the old tailings dam which has reached capacity can, and probably should, be remediated sooner, at the earlier point, well prior to any permanent cessation of mining activities at Mine Closure. Obviously, some funds will be needed to be held in the Site Remediation Fund for forthcoming Operating Year to enable such progressive remediation work to be carried out then and paid for then, so sooner rather than later. All of that may be readily accepted in context.
8. In short then, some progressively deployable remediation funds will probably be needed to be called upon and expended from time to time in a looming Operating Year, well before Mine Closure. Expenditures to that progressive remediation end would 'become payable' when needed and paid out of and thereby consumed from out of the Site Remediation Fund - at a time possibly well prior to an eventual Mine Closure.
9. I do accept that the proper interpretation of Site Remediation Costs would need to accommodate access to sufficient funds that are available from out of the Site Remediation Fund, so as to meet any required progressive remediation costs or liabilities as they are incurred and then 'become payable' in an Operating Year that is encountered before Mine Closure.
10. Otherwise by reference to the features of cl 20.6(a), I note that it displays the express obligation of Mineralogy to establish a Site Remediation Fund. There appears to be no controversy over this feature at trial. Mineralogy fully accepts that job as its obligation. But Mineralogy says it did just that in 2014, by the NAB account it caused to be opened at that time.
11. I deal with that issue in greater detail shortly, particularly the intersection of events around Mineralogy's April 2014 establishment of a NAB account, measured against the express requirements of cl 20.6(c) for a 'trust' account.

1. This subclause addresses the as expressed intent of all MRSLA parties underlying the establishment of a Site Remediation Fund.
2. This is seen to be expressed in terms of a provision of 'security and certainty for the benefit of Sino, ...'. A comma seen following the reference to 'Sino' (or 'Korean'), carries some dividing and isolating significance, in my view, to what follows next, directed at Mineralogy.
3. The security and certainty to be provided is ultimately, as expressed, said to be to the end 'that sufficient funds will be available at Mine Closure to meet Site Remediation Costs'. The temporal focus aspect of that funding availability being specified to be at Mine Closure, bearing in mind 'Mine Closure' has already been seen to be defined as being the permanent cessation of operations at the Mine, is a textual indicator, in my view, towards a sufficiency objective, as regards holding enough funding, predominantly, at the point of a cessation of mining at the site. That is not to say that some level of funds will also need to be held, so as to be deployed earlier for progressive remediation expenditure when undertaken. But the emphasis is longer term.
4. To that extent, there is some element of tension as between cl 20.6(a) and (b), in relation to the utilised phrase as already seen in cl 20.6(a) 'as they become payable', particularly when a real prospect of some progressive remediation costs being incurred over the life of the mine, prior to permanent cessation, is to be necessarily encompassed.
5. The expressed object under the cl 20.6(b), by reference first to Sino Iron (or Korean Steel) is seen as stipulated, prior to a following reference to the benefit, as well, for Mineralogy. That following benefit reference made to Mineralogy under (b), is 'as the holder of the Mining Lease' (defined as 'Mining Leases'). The language overall tends to indicate, I find, that the intended benefit for Mineralogy as envisaged is the security and certainty that it will derivatively obtain and enjoy by the remediation funds being available when required for the meeting the obligations of Sino Iron and Korean Steel for them to fund their cl 20.4 Site Remediation Cost obligations, as and when they do become payable. An active implementation of that Site Remediation Work objective by Sino Iron and Korean Steel will, in turn, correlatively see Mineralogy, by that work being done, be protected from its default remediation exposure to the State (or other governmental authorities) as holder of the Mining Lease. The contrary is the case were the required contractually promised Site Remediation Work ultimately not to be performed by Sino Iron and Korean Steel.
6. The protection of Mineralogy objective from remediation exposures environment, cl 20.6(b), when read with cl 20.5, grates somewhat inconsistently, against Mineralogy's basal interpretive contention, that the priority object of these arrangements was, in effect, primarily for its own benefit - as regards protecting it against default exposures. That object is most certainly one important part of the benefits of a Site Remediation Fund. But I do not accept the Site Remediation Fund was to be established for Mineralogy's exclusive benefit. The mutual benefit of having such a fund in place is clearly enough expressed by cl 20.6(b) first, for Sino Iron and Korean Steel, so that the funds are available when required to fund required remediation works, then for Mineralogy.
7. The temporal focus of the expressed intent to an object that sufficient funds be available at Mine Closure is another clue, by my assessment, towards unlocking the correct meaning of cl 20.6(e), once it is further exposed.
8. As I have now discussed, the MRSLA definition of 'Mine Closure' is tied to a permanent cessation of operations at the mine. The detected sentiment assists in rejecting one of Mineralogy's key interpretive policy contentions - to the effect the Site Remediation Fund must always and at all times hold sufficient funds to protect Mineralogy from exposure - in the event of some unforeseen early closure or a shutdown of Mining Operations, such as might be theoretically occasioned on the insolvency of Sino Iron or Korean Steel, or upon some intervening adverse economic reason such as, for instance, an unexpected unattractiveness of magnetite iron ore to China in the future.
9. The content of the deployed phrase 'at Mine Closure' in relation to the availability of sufficient funds points against that as the primary objective of the Site Remediation Fund, in my view.

1. Maintenance of the Site Remediation Fund, once it is established by Mineralogy, is the subject of this subclause.
2. Significance toward a true understanding of the meaning of this clause arises out of its two express references to a 'trust account' and then, the further reference to control of that account by Mineralogy 'as trustee'.
3. One of the fundamental issues in the trial arises by reference to the NAB account and then, to Mineralogy's attempts to require Sino Iron and Korean Steel to make payments into that same NAB account during April and May 2018. An aspect of the dispute is over whether or not that NAB account opened in Mineralogy's name was ever sufficiently enough 'designated as a trust account' (my emphasis), as is expressly required by cl 20.6(c). The NAB account itself did not exhibit and still does not carry such an overt trust designation. The NAB account does not even refer to Mineralogy as being a trustee of that account. But Mineralogy says that all this may be explained and, essentially, does not matter towards meeting the requirements of cl 20.6(c).
4. On the other hand, the CITIC defendants contend that the requirements of cl 20.6(c) were essential requirements - which were in place to be vitally protective to the overall objective of a one purpose only regime for the Site Remediation Fund. They say, in effect, that Mineralogy's failure ever to meet the requirement of overtly designating this NAB account as a 'trust account', is legally fatal to the validity of Mineralogy's debt claims, grounded on either of its April and May 2018 Notices. As I later explain, ultimately I must agree with the CITIC defendants' submissions in this respect. That, of course, does not mean that a further demand for payment into a compliant trust account, so designated, cannot be validly issued by Mineralogy for a subsequent Operating Year, as I will also come to discuss.
5. Reference seen in cl 20.6(c) to 'interest earned on funds in the Site Remediation Fund' being retained is, essentially, straightforward and uncontroversial. Minor subsidiary arguments emerge, however, in terms of taking account of interest, in a context of an exercise under cl 20.6(e) discussed below.

1. This subclause textually reinforces the embedded cl 20.6 notion of funds in the Site Remediation Fund being designated as sole purpose funds, to be held on a trust, to the end of paying Site Remediation Costs when 'they become payable'.
2. The conclusion clearly emerges from the textual phrase 'may be used solely for the purpose of paying Site Remediation Costs as they become payable'.
3. Again the deployed phrase 'as they become payable' will be noted. Its utilisation at subcl (d) is not, as I would assess, inconsistent with the observed utilisation of the same phrase in subcl (a). The heavily protected character of these funds presents as a matter of emphasis, in the second sentence of subcl (d), under the observed prohibition not only against another use of such funds, but also against them being 'accessed for any other purpose' (my emphasis).

1. The ensuing and concluding subclauses 20.6(e) and (f) clearly need to be read and assessed to operate together. The two subclauses may be viewed as the expressly chosen implementation machinery under which Mineralogy may, from time to time, render its determination of an 'annual charge', to be paid then by Sino Iron and Korean Steel into the Site Remediation Fund.
2. A first matter to be noticed is the deployed concept of the MRSLA defined term, 'Operating Year'. Albeit found collected with other key MRSLA definitions in Schedule A to these reasons, it is worth repeating it here, given its overall importance. The term 'Operating Year', as so defined, means:

[E]ach period of 12 months commencing 1 July. The first Operating Year will be the period commencing on the date of this Agreement [which was 21 March 2006] and ending on the next 30 June.

1. In practical terms then, an Operating Year(s) for the purposes of cl 20.6(f) will span a period 1 July through to 30 June of the ensuing calendar year. Hence, for the purposes of meeting a payment obligation under cl 20.6(f), in a situation where Mineralogy does seek to require Sino Iron or Korean Steel to render payments into the Site Remediation Fund, Mineralogy under cl 20.6(f) must first 'notify' Sino Iron and/or Korean Steel of its (ie, Mineralogy's) 'annual charge in respect of the forthcoming Operating Year'. In practice, Mineralogy would need to notify each of Sino Iron and Korean Steel individually (under each MRSLA) at no later than by 31 May of a particular calendar year concerning the amount of a determined annual charge as is levied by Mineralogy in respect of an ensuing Operating Year (ie, commencing on the following 1 July date).

1. Interestingly, nothing in cl 20.6(f) or, indeed, for that matter, in anything within cl 20.6 or, indeed, with all of cl 20 or, indeed, within any part of the MRSLAs, read as a whole, expressly says when the obligation of Sino Iron and Korean Steel to render the payment of the annual charge arises after a cl 20.6(f) notification of an annual charge for an Operating Year. That silence is ripe for the breeding of controversy. Senior counsel for Mineralogy contended that the obligation to pay must arise on 1 July, at the beginning of the Operating Year for which any annual charge notification has earlier been given (ts 609). On the other hand, senior counsel for the CITIC defendants contends that Sino Iron and Korean Steel enjoy the opportunity to render their payments of the annual charge at any time during an ensuing Operating Year to which the charge is applicable. This would mean the payment obligation would be met only by no later than the end of the Operating Year - in respect of which an earlier notification was given, ie, by 30 June, which is the last day of any Operating Year for which an annual charge was notified.
2. An answer to precisely when payment is to be made is a matter of the overall interpretation of the MRSLAs as commercial instruments as a whole. Even so, the question is not an easy one to resolve. The available assessment criteria is sparse. In the end, I am driven, essentially by implication, to a conclusion that the annual charge payment as between these commercial parties, acting reasonably, should be met within a reasonable time of a notification. Bearing in mind that a notification should be issued by Mineralogy, at the latest, no later than 30 days before the commencement of each Operating Year, and also noting that a very significant sum(s) of money might well be called for as payable, a reasonable time for the payment to be made to the Site Remediation Fund, would be no later than after six months into that Operating Year, ie, by 31 December of the Operating Year. Within the present trial, however, I doubt that much turns on that timing of the required payment assessment, given greater and more intense disputations elsewhere.

1. With a quick excursion across cl 20 of the MRSLAs now undertaken, it is now possible to direct the interpretive exercise back towards the more critically disputed aspects of cl 20.6(e) at trial. This is where the essential fiscal battleground chiefly lies as between the parties - over the most significant monetary dispute arising in the present trial. This dispute arises, essentially, over and around the interpretive meaning and function of cl 20.6(e)(ii) which, on a conjoint basis after (e)(i), refers to 'the number of years remaining until Mine Closure'.
2. Before confronting cl 20.6(e)(i) and (ii), however, there are some earlier features to see around cl 20.6(e) I must draw to some attention.
3. First, I note the introductory cl 20.6(e) chapeau words 'For each Operating Year'. They, of course, should be evaluated in the neighbouring context of preceding cl 20.5, which allows (but does not require) Mineralogy to require reasonable security from time to time for the performance of MRSLA cl 20 obligations by Sino Iron or Korean Steel.
4. Part of an underlying practical problem of application (not interpretation) here, as is evident by the pleadings in this action, is that the first formal attempt by Mineralogy to raise any annual charge(s) under cl 20.6(e) as against either of Sino Iron and Korean Steel, only occurred at April or May 2018. By then, of course, the two MRSLAs perfected at 21 March 2006 had been being performed on each side for some 12 years. Hence, there may well have been either 11 or 12 preceding Operating Years in which an annual charge might have been formally notified by Mineralogy, but was not. No event of substance before April and May 2018 was relied upon at this trial as regards any earlier creating of a potentially payable and enforceable annual charge under cl 20.6(e). Of course, as a green fields start-up venture to generate product from the processing of extracted Magnetite Ore at Cape Preston, a production of Product in terms of the overall open cut mining operation being conducted jointly for Sino Iron and Korean Steel at the Mine Areas only really commenced after all the preparatory work and delays during 2013 (see Mineralogy [No 16] at [10], [592] and [771]).
5. At the present trial it was not suggested by the CITIC defendants that a failure by Mineralogy to render an earlier determination(s) as to an annual charge for preceding Operating Years before 2018 could inhibit the subsequent raising by Mineralogy of an annual charge in a subsequent Operating Year. Nor, indeed, as I understood the position, is there any dispute that an annual charge first rendered validly for an Operating Year may not take account of the forecasted cost of all Site Remediation Work that is required - under an assessment that takes account of what has been carried out in the past (if anything), but then looks forward to all of the remediation work still required, viewed at the later point when the annual charge is being determined.
6. In short, were Mineralogy's attempts to date at the issuing of valid annual charges in April or May 2018 assessed to have failed, on the basis that, say, they did not then properly or fully engage with the contractual criteria under cl 20.6(e), nevertheless, the setback is only temporary. It would not inhibit Mineralogy from trying again for a subsequent Operating Year. One battle may well be lost over the validity of earlier attempted annual charge notifications. But the war would not be lost, given an opportunity to try again in an ensuing Operating Year. The opportunity for Mineralogy to try again later is a relevant consideration, particularly as regards assessing a fall‑back construction contention seen in Mineralogy's ASOC prayer for relief. That aspect of relief effectively asks the court to rehabilitate Mineralogy's position itself, were the attempted 2018 annual charges Mineralogy issued under its April and May 2018 Notices assessed ultimately to fail to occasion any legal to render payments liability in Sino Iron and Korean Steel - by reason, say, for disengagement with the cl 20.6(e) required contractual criteria so as to validly issue such an annual charge at those times. However, it is for Mineralogy, not for the court, to issue contractually conforming annual charges and notifications under cl 20.6(e) and (f), applying the chosen contractual criteria the MRSLA parties agreed upon for themselves. Mineralogy still holds opportunities into the future to address any past annual charge defects, by issuing freshly conforming annual charges for later Operating Years. Hence, it will not be necessary for the court to enter a bloody enough arena.
7. Advancing, however, past the cl 20.6(e) introductory reference to the term 'Operating Year', it will be noticed that it is only Mineralogy who will 'determine' the annual charge. The entitlement to 'determine' coalesces with a subsequent reference, as seen in the second sentence of the chapeau to subcl (e), as to the amount of the annual charge being 'determined by Mineralogy'. Significantly, however, a determination by Mineralogy of an annual charge for an Operating Year, is not a determination that is left wholly at large under subcl (e). Rather, it is a determination that is seen to be controlled by the words 'having regard to'. Those words introduce ensuing cl 20.6(e) provisions under the conjoint (i) and (ii). They deliver key criteria that must be given proper attention by Mineralogy in any determination decisions.
8. I will return to the conjoint (e)(i) and (ii) criteria as seen specified in due course. Before that, however, I advance within (e) a little more, to see that the annual charge as determined by Mineralogy is a charge that is 'on account of future Site Remediation Costs'. Hence, a Mineralogy determination is to be made not by reference to Site Remediation Costs incurred already as costs or liabilities. Rather, it is to be 'on account of future Site Remediation Costs'. The word 'future' is important and must be given some work function to perform under the overall interpretive exercise. The reference to 'future' costs coalesces with the earlier seen use of the same word at the first line of cl 20.6(a).
9. Next, I observe upon the deployed phrase, 'to be made', seen used in reference to Sino Iron or Korean Steel, 'in that Operating Year'. I assess those words 'to be made' as being a somewhat inelegant reference to the annual charge levied against Sino Iron or Korean Steel for a forthcoming Operating Year, rather than as a more limiting reference to an assessment of the future Site Remediation Costs - assessed only by reference to the projected remediation work to be carried out by Sino Iron or Korean Steel in an ensuing Operating Year.
10. Working out the quantitative level of a forthcoming Operating Year's future Site Remediation Costs, by reference to the definition of Site Remediation Work (with all that entails) ultimately directs some attention to a possible decommissioning of the mine and to a shutdown and cessation of Mining Operations, consistently with the defined concept of Mine Closure. I am also influenced by a potential difficulty in reliably arriving at an annual charge only by reference to what is a somewhat artificial notion of work to be conducted in an Operating Year.
11. That is not to say that any forthcoming and actually planned works - in terms of projected progressive remediation steps in the ensuing 12 months, would not be part of and relevant to the task. But the scope of the projection of cost task is greater. Here, I would draw attention to (it will be found at Schedule A) the provisions of MRSLA cl 20.7 and its reference to an environmental management plan, particularly at subcl (f) thereof, in terms of the annual obligation of Sino Iron and Korean Steel -to review environmental management performance against their environmental management plan and provide a report to Mineralogy upon matters as there identified.
12. Significant contention arises over the second sentence of cl 20.6(e). Here, I first identify within the terminology of 'the amount' for the annual charge, a reference to quantum.
13. I repeat that the words 'having regard to', in relation to the determination of Mineralogy, on my assessment, are controlling criteria. If they are not considered factors under Mineralogy's undertaken evaluations conducted in the reaching of its determination of an annual charge, then that is an omission which cannot be excused.
14. Absent consideration of that criteria, Mineralogy's determination of an annual charge would be inconsistent with the very basis upon which it is afforded the right to render such determinations and thereby so as to impose a valid payment obligation upon Sino Iron and Korean Steel. Within this overall context, an express good faith obligation is, of course, always applicable, as between Mineralogy and Sino Iron and Korean Steel. This is found under MRSLA cl 37.4, as regards each party acting in good faith towards one another in relation to the performance of the MRSLA agreement. That is not without significance. Mineralogy would not be exhibiting the required degree of good faith if, say, it ignored or deviated away from the controlling criteria, seen as set down under cl 20.6(e)(i) and (ii).

Best prevailing estimate and amount already contributed

1. I venture next to cl 20.6(e)(i) and there to its reference to Mineralogy's 'best prevailing estimate' of an amount of future Site Remediation Costs. I observe that the word 'estimate' indicates scope for a somewhat imprecise monetary projection as to the future costs, noticing again the word 'future' precedes reference to 'Site Remediation Costs' in (e)(i).
2. The word 'prevailing' carries with it a notion that the estimate by Mineralogy be contemporaneous with the most relevant up to date information that is available to Mineralogy at the time for the purposes of the fiscal estimation exercise towards Site Remediation Costs.
3. So too does the word 'best', which carries with it, on my assessment, the sentiment of the allowance for some necessary degree of honest estimation. Nevertheless, this must also be a future projection exercise towards costs by Mineralogy. Given the nature of what is required, a sufficiently honest cost projection would almost certainly carry with it, on my assessment, the need for input by some appropriate expert assistance, obtained from a person or persons well qualified in the specialised field of mine site remediation and its costing. A person with the experience of Mr Mike Slight, Mineralogy's 2018, also its trial expert, would, on my view, be both appropriate and sufficient. So too would the expertise of the CITIC defendants' own trial expert, Mr Cramer, who also presented as entirely well qualified to assist in reaching a determination based upon Mineralogy's (but, ultimately, not the expert's) best prevailing estimate.
4. One further component in par (e)(i) is more understandable - in terms of the specified regard that must be had under Mineralogy's determination of amounts, if any, already contributed by Sino Iron or Korean Steel into the Site Remediation Fund. The concept seen to be envisaged under this component of (e)(i), would see due account taken of the prior financial contributions under earlier annual charges issued by Mineralogy for prior Operating Years by Sino Iron and Korean Steel (respectively) and held then in the Site Remediation Fund. The notion of that account is consistent with an assessment of each Operating Year's annual charge being duly revised and adjusted in each following year - in the process of determining by Mineralogy of the forthcoming Operating Year's annual charge.
5. In present factual circumstances, however, as a matter of application, and factually, currently, it is the case that amounts to date contributed, as prior annual charges by Sino Iron and Korean Steel, given the ongoing disputation which has prevailed, is, in fact, $0. That fact, of course, does not influence the MRSLA interpretive exercise that is always focused at March 2006, when each MRSLA was perfected. As already seen, however, Sino Iron and Korean Steel did offer presently, on an open basis, $AUD8 million, payable as to $AUD4 million each, as I assess matters, for the 2018/2019 Operating Year. Mineralogy, on the other hand, seeks roughly $AUD530 million taken together. Hence, the parties remain a little apart, quantitatively, over the true level of an appropriately determined 2018/2019 Operating Year annual charge.

1. The even more critical interpretive issue, however, is around the correct interpretation of the ensuing and conjoint reference under (e)(ii) to 'the number of years remaining until Mine Closure'.
2. Before I render any further observations in this quarter, I should first turn to canvass the parties' rival submissions over this highly contentious issue of meaning.

The parties' submissions on the construction of cl 20.6(e) The dispute

1. There was no constructional disagreement of principle between the parties at the trial, that some active work function must be afforded to the words and in cl 20.6(e)(ii) under the contractual interpretation exercise. For Mineralogy, this work is merely a consideration under its determination of an annual charge.
2. The CITIC defendants contend that the true work done by the controlling (e)(ii) criteria, is straightforward. In effect, they say (e)(ii) provides the denominator in a fractional division calculation that must be followed in determining an enforceable annual charge. Hence, the figure as assessed as Mineralogy's best prevailing estimate (call this amount '$A') after the subtraction of any $ amount(s) already contributed to the Site Remediation Fund (amount '$B') under (e)(i), at the end is to be divided by the number of years that is assessed as remaining until Mine Closure (amount of years 'C').
3. Essentially then, the numerator future Site Remediation Costs amount, as is determined by Mineralogy must then be divided by an assessed years remaining until the envisaged time of the permanent cessation of operations at the mine. This reflects the expression of an ($A - $B)/C years fractional calculation.
4. In simple illustration, say the number of years to Mine Closure were assessed at no later than 31 May 2018 to have been 25 years, that then is aligned with Mineralogy's best prevailing monetary estimate as to future Site Remediation Costs also made at that time of say, $500 million. Let it be also assumed, as is the case in fact here, that the $0 had contributed to the Site Remediation Fund (i.e. $B = $0). The CITIC defendants submit that what must then follow is a divisional exercise of the $A - $B amount of money, being of say $(500 million - $0)/C (=25). The calculation would at the end determine an annual charge of $20 million ($10 million by each of Sino Iron and Korean Steel) to be payable in the forthcoming 2018/2019 MRSLA Operating Year.
5. I return in due course to the submissions underpinning the CITIC defendants' position shortly. However, it is first helpful to see Mineralogy's submissions as to its rival construction position.

1. Mineralogy opened its case on a basis that when construed in its overall surrounding context and taking proper account its objective purpose, the true construction of cl 20.6(e), did not require that Mineralogy conduct a division by the remaining years exercise, as the CITIC defendants advocate in determining the annual charge. Rather, for at least five reasons, as articulated, Mineralogy advocated for a full 'lump sum' payment.
2. First, a construction that involves the divisional exercise by remaining years until mine closure, would not says Mineralogy, produce a result delivering the security and certainty that Mineralogy advocates must be provided to it and as it says is manifest under cl 20.6(b) the object of the exercise.
3. Second, and correlatively, accepting that all the Site Remediation Costs as projected by estimate, will not only be incurred at or after Mine Closure, Mineralogy says that a division exercise by the remaining years, would not allow for the certainty that progressive remediation costs become payable 'as they become payable' (cl 20.6(a)). Certainty can only be achieved if the full amount is paid into and held in the Site Remediation Fund.
4. Third, Mineralogy argues that at the time the MRSLA cl 20.5 and cl 20.6 were agreed upon in 2006, a common practice in the Australian mining industry was for forms of security to be paid 'up front' for all costs of remediating current or imminent disturbances. Reliance to that end is placed on exhibit 9A, being the August 2020 Slight Report at pars 79 ‑ 89.
5. Fourth, towards the text of cl 20.6, Mineralogy submits that if the true (objective) intent was for such the division of years exercise, then the text of the MRSLA would have said exactly that so, rather than using the more passive phrase 'have regard to'. Mineralogy says all it is required to do by those words is to consider in its evaluation the remaining years until Mine Closure - as one of the multiple considerations in mind when it is arriving at its best prevailing estimate. In particular, Mineralogy says that such consideration goes towards 'whether the amount presently in the [Site Remediation Fund] is sufficient to ensure that adequate funds will be available to meet all Site Remediation Costs that are to be incurred in the future'.[55]
6. Finally, Mineralogy submits that its contended construction makes the greater commercial sense. If as is accepted, Mineralogy is exposed to risk, but unlike Sino Iron and Korean Steel, Mineralogy does not have the opportunity to exploit the land, and further, Mineralogy has no control over what happens with the tenement land (which will certainly need to be remediated at some point), it is said that a reasonable business person would not allow themselves to be exposed to such a liability, possibly caused by another, without the sufficient and fail proof security of the money being in place. Again, if it was intended that cl 20.6(e)(ii) required a division by remaining years exercise, as advocated by the CITIC defendants, then Mineralogy says that the parties would have used much clearer language to indicate this result. However, the mere use of the bland text have 'regard to' means, as proffered by Mineralogy, 'thinking about or looking carefully at that thing'.[56]

1. Returning to the CITIC defendants' constructional position over this key clash in more detail, they advocate the construction of cl 20.6(e) to be preferred is one whereby the annual charge is paid into the Site Remediation Fund which reflects incremental (yearly) contributions by Sino Iron and Korean Steel.
2. Emphasis is placed on the descriptor 'annual' charge, in the opening line of cl 20.6(e) and also for a need for Mineralogy to make a determination as to that charge for each Operating Year - ie an annual determination. There is also strong direction from the fact that one of the (three) considerations that Mineralogy must bring to 'account' is how much has already been paid into the Site Remediation Fund.
3. Further to this end, the CITIC defendants argue that the purpose or object of the Site Remediation Fund is for 'reasonable' security to be available at Mine Closure, that object being achieved by the incremental regular contributions to the Site Remediation Fund over the course of the Project. The CITIC defendants also argue that the construction advocated by Mineralogy carries no commercial sense. On the Mineralogy interpretation, the CITIC defendants say that all that would happen is that there would be one payment of several hundred million dollars as the first annual charge payment in the first 'Operating Year', but subsequently thereafter, no further payments unless there was some variation factor in a later annual determination. It is argued such a 'pre‑payment' outcome is inconsistent with the overall language of cl 20.6.
4. Mineralogy's approach, it is correlatively said, could lead to an over‑accumulation of funds in the Site Remediation Fund - to which there is no mechanism for retrieval of any excess funds. Given that Sino Iron or Korean Steel might theoretically transfer their interests in the Project, say to a third party, under cl 31.1 of the MRSLA, the CITIC defendants contend that if it was a true intent that a very large pre‑payment amount be paid upfront and early into to the Site Remediation Fund, there would surely also be some avenue included to allow for the excess of the amount paid to be refunded to Sino Iron and/or Korean Steel. However, given that avenue is not explicitly included in the MRSLAs, a construction that would allow for the situation of such an over‑payment into the Site Remediation Fund ought not be preferred. The undesirable outcome is avoided of course, under their rival accumulative construction.
5. However, against this, Mineralogy argues in response, that a surplus of funds held in the Site Remediation Fund is a hypothetical problem that would bear upon both constructions, equally.[57] Mineralogy says that even if money is to be progressively added to the Site Remediation Fund over time, it is still entirely possible that the Site Remediation Costs at any point in time will be less than what is actually held in the Site Remediation Fund (due say to developments in improved technology or changes in the circumstances of the remediation that is required). Given this, Mineralogy says that more traditional or orthodox trust arguments in terms of a returning of surplus funds out of an express purpose trust where the purpose has failed or altered, would become applicable then, and should govern any situation of there being an excess of funds in the Site Remediation Fund. To this end, Mineralogy relies on Australasian Conference Association Ltd v Mainline Constructions Pty Ltd (in liq) [1978] HCA 45; (1978) 141 CLR 335.
6. By a contextual neighbourhood view of the MRSLAs, the CITIC defendants point to cl 20.7, which requires Sino Iron and Korean Steel to prepare yearly environmental management plans and report annually to Mineralogy (cl 20.7(f)). That exercise they say signals that Site Remediation Work will develop along with that, as would the best prevailing estimate. The reality, they say, is that the Project itself develops and evolves over time, and so, a steady accumulation of funds will ensure that the Site Remediation Fund will remain 'in sync' with the costs of remediation.[58] An accumulative annual charge will produce a more commercially sensible outcome whereby there is a means of ensuring that funds held in the Site Remediation Fund remain in sync with the Site Remediation Works and Site Remediation Costs.
7. At a more general level, the CITIC defendants argue that Mineralogy's construction of cl 20.6(e) presents as commercially unreasonable - by way of it requiring the pre-payment of (on the case of Mineralogy's April 2018 Determination) some $500 million, which would then be 'locked away' for a duration of the mine - potentially being 30 to 60 years.[59] This, they say, does not align with common-sense practice. Such an upfront payment arrangement would be, at best, a rarity in the Australian mining industry. They argue the contrary position of progressive contribution of funds into an accumulating trust fund over the time and over the operation of a Project, is the regime that is recognised in the industry.[60]
8. The CITIC defendants submit that Mineralogy substituted (incorrectly) an understanding of the provision for 'reasonable' security ‑ to a provision by Sino and Korean of 'perfect' or 'full' security. They also say Mineralogy has also erroneously conflated a reading for there to be sufficient funds at 'Mine Closure' to there being sufficient funds 'at all times'.
9. They also argue that under Mineralogy's rival construction, it will leave insufficient work for cl 20.6(e)(ii) to perform. It is submitted that the work purposes that Mineralogy attempted to ascribe to the subclause, in fact, still left no real work to be done by the words.[61]
10. That summarises for my purposes, the parties' rival positions over the issue of the true interpretation cl 20.6(e)(ii). I will return of course to resolve this in due course and render my determination on the proper construction of the clause.

1. I now turn to the second main issue in dispute between the parties.
2. The dispute is over whether or not the April 2018 Determination of Mineralogy is or was valid.[62] Mineralogy submits that the Determination was valid, so that the CITIC defendants were required to respond to the Determination by paying over the required amount into the Site Remediation Fund. In opposition, the CITIC defendants deny that the April 2018 Determination was valid - attacking it on various grounds.

1. The first aspect of the dispute concerns the scope of review that may be applied to the April 2018 Determination by Mineralogy, or if, in fact, it may be reviewed at all.
2. Mineralogy argues the base criterion by which the April 2018 Determination must be considered is whether Mineralogy acted honestly in producing that Determination. It says that all it was required to do for the Determination to be valid, was for it to 'have honestly approached the task of considering its best prevailing estimate of Site Remediation Costs, the amount (if any) already paid into the Fund and the number of years remaining until Mine Closure'.[63]
3. A rival stance is put by the CITIC defendants, who argue that a necessary consideration of 'reasonableness' (vis-à-vis security) must be imported into any determination. They submit Mineralogy must, for any such determination to be valid, provide its 'best prevailing estimate'. Such an estimate cannot fit that character, if the Site Remediation Costs upon which an estimate (or determination) is premised, are unreasonable. As will be seen, much of the CITIC defendants' attack as put against the April 2018 Determination stems from arguments that the inclusion of the costs reached by Mr Slight displays at least a, or in other cases a 'manifest', level of unreasonableness.
4. The CITIC defendants argue that even if it is not accepted that as a matter of true construction of the MRSLAs that Mineralogy was required to 'exercise its powers to determine and notify the annual charge reasonably after making relevant enquiries',[64] that such a term would still be implied ad hoc into the contract (the MRSLAs) upon the principles explained by BP Refinery (WesternPort) Pty Ltd v Shire of Hastings (1977) 180 CLR 266. They further argue that additional case authorities require that the exercise of issuing a determination carry a necessary requirement of reasonableness - distinct from a requirement of honesty.[65]
5. In particular, they argue the exercise of issuing a Determination is analogous to a valuation exercise.[66] To this, they draw observations of Ipp J from WMC Resources Ltd v Leighton Contractors Pty Ltd (1990) 20 WAR 489 (WMC) at [16] (Kennedy and White JJ agreeing). Ipp J identified two broad categories of contractual valuation exercise. It is submitted by the CITIC defendants that MRSLA cl 20.5 and cl 20.6 fall firmly into the first category - being where, for a contractual exercise, there is one uniquely correct value. That value is to be arrived upon by reference to objective criteria, against which a given valuation may be assessed as correct or incorrect (see WMC at [18]). If the value arrived upon is incorrect, then the valuation is in breach of the contract. The CITIC defendants say that it is the inability of Mineralogy to set any level of security (for an annual charge) it chooses, which so firmly places MRSLA cl 20.5 and cl 20.6 (and hence the April 2018 Determination) into that WMC category. This category (as opposed to the second category described by Ipp J in WMC), is readily reviewable by a court.
6. As it is submitted by the CITIC defendants, '[r]easonableness provides guidance as to whether the estimate is the best prevailing estimate in the circumstance, which necessarily requires relevant enquires to be made, and for critical engagement in the assessment process'.[67]
7. Given such scope for review by a court of the April 2018 Determination, the CITIC defendants then submit, with reliance on conclusions of Gleeson JA in a NSW Court of Appeal decision Hannover Life Re of Australasia Ltd v Jones [2017] NSWCA 233 at [121], that that the role of the court in determining validity is to, in essence, look at the estimate and determine if it was open for Mineralogy, acting fairly and reasonably, to have proffered that estimate as its 'best prevailing estimate'.[68]
8. By reply to this argument, Mineralogy counter-contends that MRSLA cl 20.5 and cl 20.6 fall firmly outside Ipp J's first category, as discussed in WMC. Although it is agreed that a first category of evaluation is one where there is no discretion allowed to a valuer and under which, ordinarily, there is only one correct value, Mineralogy says this is not the correct assessment towards cl 20.5 and cl 20.6. Mineralogy says instead that the estimate it must produce under cl 20.6 is not 'the' best prevailing estimate (an objective character). Rather, it is only Mineralogy's own best prevailing estimate.[69] That estimate, it says, inevitably must contain a number of uncertainties and complexities, over which reasonable minds may differ. Further, it is put that unlike for Ipp J's first WMC category, there is no precise mathematical valuation formula to apply here, to reach an estimate for an annual charge. As a result, Mineralogy advocates instead that MRSLA cl 20.5 and cl 20.6 would instead fit better under Ipp J's second category, as described at WMC at [23], namely as:

Valuations may involve making decisions where no fixed or readily available standard criteria exist. There may be several possible methods of assessing value, each giving widely different results, but each being reasonable. Many subsidiary factors relevant to the valuation may be uncertain, many contingencies may have to be taken into account, wide ranges of legitimate decisions may apply, and opinions may legitimately differ as to virtually all of the relevant issues.

1. Mineralogy points to various other factors to further emphasise the element of its discretion and the inability to utilise a fixed equation to reach the estimate. These include:

(a) the different levels of remediation cost estimates as were received between 2016 - 2018 from various experts as to the disturbance levels - including AECOM's 2016 estimate,[70] Mr Slight's 2018 estimate,[71] AECOM's revised 2018 estimate (taking into account Liberty Industrial's estimate)[72] and then, Mr Cramer's estimate;

(b) the inability even for the rival experts at the trial to identify a common formula to be used; and

(c) the fact cl 20.6 does not fall for reference under the MRSLA provision for the resolution of disputes by an expert under MRSLA cl 33.

1. Therefore, Mineralogy submits that its April 2018 Determination fits squarely into Ipp J's WMC second category, being an exercise that involves an element of discretion. Consequently, all that was required for the April 2018 Determination to be valid was for it to comply with the contract (ie, the MRSLA) and for it to have been made, honestly. Hence, the scope for review by a court would not permit an estimate to be set aside merely because of some error made in reaching the determination. To this end, Mineralogy also refers to observations of the Victorian Court of Appeal in Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [No 3] [2013] VSCA 179; (2013) 41 VR 636 at [14] - [22] (Maxwell P, Ashley and Redlich JJA agreeing).

1. Before proceeding further to explain the parties' position as to the substance of the Determination, I should note the rival positions of the parties upon the form of the notice of the Determination and to the notices under cl 20.6(f), generally.
2. Mineralogy contends that other than providing for it to notify Sino Iron/Korean Steel of an annual charge at least 30 days prior to the commencement of the Operating Year, that cl 20.6(f) does not specify the form in which the notice must be given. Hence, it says that its 16 April 2018 letter met the requirement.[73] This is particularly so given a past lead up context of much correspondence on the topic passing between the parties.[74]
3. Mineralogy also says that there can be no doubt that the notice it gave on 16 April 2018 constituted a valid notice, particularly assessed in the context of the CITIC defendants' response to its letter only two days later, and which referred to the 'purported determination' of the 16 April 2018 letter.[75]
4. Were that position not to be accepted as regards the 16 April 2018 letter being in correct form, Mineralogy alternatively contends that its subsequent letters of 21 May 2018 rectify any issues of form.[76]
5. In response, senior counsel for the CITIC defendants did raise a point as to whether the letter of 16 April 2018 in fact could serve as a valid notice (ts 268 - 269). However, the point of form was not a strongly contested aspect of the CITIC defendants' attack on the April 2018 Determination - rather, the attacks concerned alleged defects in the content of the Determination.

1. The first basis upon which the CITIC defendants attack the April 2018 Determination is that it fails to comply with MRSLA cl 20.6(e)(ii), with its estimate not having any proper regard to the number of years remaining until Mine Closure.
2. Mineralogy's primary contention is that a proper construction of the clause does not require any such divisional exercise. However, the CITIC defendants argue that Mineralogy proceeds on an alternative ground that its estimate regards Mine Closure as being 'imminent'.[77] The CITIC defendants argue this contention must be rejected on a number of grounds.
3. First, there is nothing, the CITIC defendants say, emanating from themselves to suggest Mine Closure was 'imminent'. Second, that position does not align with a position as adopted by Mineralogy elsewhere - for example in an August 2017 Valuation Report concerning Royalty Component B, under which it instructed its expert to assume, as the expert duly did, that 'the Product shipped ... for the next 25 years in [the expert's] calculations'.[78] Finally, the CITIC defendants point to Mr Cramer's observation that Mr Slight's estimate was inconsistent with any imminent closure.[79]

1. A significant portion of the CITIC defendants' argument rests on the basis that Mr Slight's 2018 report which was adopted by Mineralogy under its April 2018 Determination was made in haste and without key information.
2. The thrust of their argument appears to be that there was insufficient time for Mr Slight to have obtained instructions and all the information he needed to produce a satisfactory report. In support of this contention they rely on:

(a) the amount of time Mr Slight initially claimed he would need to produce the report (80 hours).[80] However, they suggest that the evidence shows that whilst preparing his report, Mr Slight was also engaged in other work concerning other projects or activities, such as driving across Australia. Further, they appear to suggest that Mr Slight was asked to sign off on a report in a quick manner, so as to satisfy Mineralogy and Mr Palmer's needs. Mr Slight had informed Mineralogy that he had spent 52 hours on the report;[81]

(b) the inclusion of the cost of removing the port and causeway by Mr Slight, after being requested to add that cost assessment by Mineralogy and Mr Palmer;[82]

(c) a failed non‑visit to site in March 2018. Although a visit had been requested to be arranged by Mineralogy, in order for Mr Slight to physically view the site, after those visit arrangements were made, Mineralogy representatives and Mr Slight had then failed to attend the site.[83] Mr Slight did later on attend the site in 2019. However, this meant he had not physically seen the site when he had earlier submitted his April 2018 report; and

(d) there being no meeting between CITIC representatives and Mr Slight. Whilst arrangements were attempted to be made, as things eventuated, Mr Slight did not meet with any CITIC representatives prior to his first report being submitted. The CITIC defendants identify this as important, as Mr Slight had himself later identified that there was a deficiency in the information he required to complete his report which he would have been able to obtain through a meeting with CITIC representatives.[84]

1. The cumulative effect of all the above is said by the CITIC defendants to be, at best, that Mr Slight's report constituted a 'first pass estimate' (ts 404, ts 449). The CITIC defendants say this, combined with the fact that Mineralogy had sent its April 2018 Determination the same day, within mere hours after receiving Mr Slight's 2018 report, does not constitute Mineralogy properly discharging its obligations under cl 20.6(e).

1. The CITIC defendants then, in effect, launched a further attack on the April 2018 Determination, on the basis that it was not reasonable for that estimate to have been reached. Their base contention is that given a number of suggested fundamental flaws in Mr Slight's report, it was not reasonable for Mineralogy to simply adopt it (as may be inferred) without any independent scrutiny, analysis or by Mineralogy applying itself to the required task of cl 20.6(e)(i), to have regard to its 'best prevailing estimate' in providing the April 2018 Determination.[85] To this end, they proceed to highlight six 'most significant' errors.
2. First, the inclusion of the costs of removing the port, breakwater and causeway.[86] This again stems from the question of whether at Mine Closure all that infrastructure would indeed then be required to be removed by the governmental authorities responsible. The CITIC defendants say that the material available (to Mineralogy) had suggested that it was not reasonable to assume that removal would be required. They point to the CITIC defendants' January 2017 Conceptual Closure Plan, which was provided to the State in February 2017 and was published on the EPA website and was provided to Mineralogy in December 2017, as part of the Mining Continuation Proposals.[87]
3. Mr Slight included an estimate of over $55 million (not including owner's management costs) for this removal task, which the CITIC defendants say is manifestly unreasonable for Mineralogy to have included in the estimate - on the (unreasonable) assumption those facilities would need to be removed in the future. Much is made of the fact that Mr Slight had admitted to not have made any direct enquiries about this infrastructure (ts 426 - 429) and that he had only included its removal cost in his estimate after he had been asked to do that by Mr Palmer (ts 424 - 425).
4. Second is the inclusion in the estimate for removal of an 'accommodation village' and which in his evidence Mr Slight confirmed as being to the Camp 123 (ts 420). That estimate totalled over $10 million. The factual contention as regards this Camp 123 is that the camp had been transferred back to Mineralogy in 2013 (including assets) and so, Mineralogy had never required the CITIC defendants to undertake any remediation work over that area (as could have been required under MRSLA cl 13.4). The CITIC defendants then say that it is manifestly unreasonable for this cost to be included and for them to be required to pay for that remediation work given the transfer.
5. Third, Mr Slight had included a 'contingency' of $105 million in his estimate which is said to have been justified, on a basis that MRSLA cl 20 had called for a 'financial assurance' estimate (as opposed to a 'financial liability' estimate). The CITIC defendants' essential argument is that a financial liability estimate (as is of the kind as is required by the International Financial Reporting Standards and which does not include a contingency) should instead have been utilised by Mr Slight. They say the use of this approach and an inclusion of a contingency amount cannot be sustained by the bland appeal to 'uncertainty', as Mineralogy has done.[88] The determination of an 'annual charge' is said to be inconsistent with the provision of an up-front contingency, rendering its inclusion within the April 2018 Determination as unreasonable.
6. Fourth, the CITIC defendants challenge Mr Slight's inclusion of nearly $23 million worth of demolition costs. They say Mr Slight had later admitted that he has substantially overestimated how much infrastructure would need to be demolished, as he recognised after his site visit in 2019. This is said to further support the unreasonableness assessment of Mineralogy's approach to the April 2018 Determination.
7. Fifth, there are said to be numerous input calculation errors by Mr Slight.[89] These included a larger than actual mine pit size, inclusion of a borefield outside the tenement area, inconsistent dimensions for waste rock dumps and tailings storage facility, failure to take into account progressive rehabilitation undertaken by the CITIC defendants, and other miscellaneous calculation errors.
8. Finally, it was said that the above errors led to Mr Slight significantly overestimating the owner's management costs by nearly some $53 million.
9. As a result of the above 'fundamental' errors, the CITIC defendants say that not only was it unreasonable for Mineralogy to simply adopt Mr Slight's estimate as its own 'best prevailing estimate', but also that by excising the amounts of all those unreasonable inclusions, a revised estimate should follow and so, reduced from $529 million downwards to $285 million, as is seen in the Cramer Report.[90]

1. Mineralogy says that its April 2018 Determination complied with cl 20.6(e) and was made honestly. First, they say that the Determination complied with the first sentence of the clause, as they submit it should be properly construed.
2. Second, it is put that it rendered a 'best prevailing estimate', as the figure in the Determination adopted from Mr Slight's 2018 report. Mineralogy disputes any criticism directed at it for its estimate, arguing its estimate met the plain meaning for what a 'best prevailing estimate' requires. Further, Mineralogy says that even the CITIC expert, Mr Cramer, has acknowledged that the phenomenon of a perfect estimate does not exist. And even if that was possible, that is not what is required by cl 20.6(e). It also disputes any suggestion it did not render its own best prevailing estimate, due to it engaging Mr Slight and by using his estimate.
3. Thirdly, Mineralogy says that it did have regard to the amount that had been paid into the Site Remediation Fund - being $0. As such, it was not required to make any adjustments to the Determination
4. Finally, the Determination is said to have had regard to the number of years remaining until Mine Closure. Mineralogy also says that even if a divisional exercise by remaining years was required by cl 20.6(e)(ii), nevertheless, the April 2018 Determination was still made in accordance with that, as a Mine Closure was then imminent. Given various factors (including the Chairman's letter to shareholders of August 2017,[91] and the tailings dams nearing (or reaching capacity) it was open, it is put, for Mineralogy to require the full estimated costs of remediation to be paid into the Site Remediation Fund.

1. Despite Mineralogy's strong opposition to this position, it also contends alternatively, that even if objective reasonableness is the standard by which the April 2018 Determination is open to review, its Determination still meets the standard.
2. Mineralogy disputes the primary attack by the CITIC defendants that Mr Slight had insufficient information and had not completed a site visit when he completed his 2018 report. They note that although Mr Slight did concede that further information and the ability to complete a site visit would have been helpful, he did not consider the information that he had available when completing his report to be insufficient to complete the task (ts 515). Mineralogy also emphasises that both Mr Slight and Mr Cramer had stated there was no such thing as a 'perfect' estimate, particularly at this stage of the mine's life. Further, they point to Mr Slight's estimate only increasing after he subsequently had received additional information and had attended by a site visit.
3. Mineralogy also says that in any event, it was required to have regard to a best prevailing estimate, which it says means a best estimate that can be reached in prevailing circumstances. It says there are two key circumstances which render the estimate as Mineralogy's best.
4. First, Mineralogy says Mr Slight in fact did have available to him significant amounts of information (listed in the August 2020 Slight Report at Appendix B) including:

(a) area photos of the mine site showing the mine features and infrastructure;

(d) the Preliminary Decommissioning and Closure Plan; and

(e) a wealth of knowledge and experience from his previous estimates.

1. Mineralogy also points to circumstances surrounding the April 2018 Determination, a history which they detail from 2010 onwards.[92] It appears that Mineralogy considers that after issuing requests for relevant information from the CITIC defendants, it was met with resistance and an impasse between the parties until late 2017. Essentially, Mineralogy seems to be suggesting that it was not able to obtain from CITIC any greater information so as to have a fuller or perhaps a 'better' estimate. Mineralogy also submits towards an alternative background to the factual circumstances that had surrounded the failed scheduled site visit in March 2018, suggesting that against a backdrop of the history between the parties why a party (Mineralogy) would not then proceed on a site visit.[93]

1. Mineralogy disputes all suggestions it is not reasonable to include a contingency amount - either on the basis that it is required as forming part of having 'regard' to the remaining years until Mine Closure or, alternatively, that it is reasonable to include a contingency in a cl 20.6(e) estimate. It is pointed out that both experts recognise that contingencies are commonplace in site remediation estimates.[94] Mineralogy also says that little attention should be paid to the rationale behind why a financial provision (as opposed to a financial assurance) estimate should be favoured. The greater emphasis by Mineralogy is directed, however, to its contention that it says that the true purpose of MRSLA cl 20.6 is to provide 'security and certainty' so that there will be sufficient funds available at Mine Closure. Mineralogy says it is inconsistent with that purpose by having a Site Remediation Fund, to leave itself exposed to risk, without any contingency.

1. Mineralogy says that it was not unreasonable for it to not have included a discount in its Determination. Mineralogy points to the AusIMM Cost Estimation Handbook (2012).[95] Mineralogy also says that any evidence of Mr Cramer as to a discount rate can only go as high as suggesting that a discount rate should be 'factored into account, but there is no evidence as to what evidence would be reasonable in these circumstances'.[96] As such, a court, it is said, could not find the Determination unreasonable on that basis.

1. Mineralogy also says it was reasonable to include the estimated remediation cost of the entirety of the port and Camp 123 in the Determination. It maintains that the area of the port carries remediation obligations over it to remove all infrastructure that is not permitted to remain: see the Preliminary Decommissioning and Closure Plan.[97] Other mine closure plans prepared by or for CPM, which do not have any regulatory force of the kind applicable to the Preliminary Decommissioning and Closure Plan, similarly lack any certainty as to whether or not the port infrastructure can remain in place: see 2011 Conceptual Mine Closure Plan[98] and Ramp‑Up Plan.[99] Mineralogy also says that regardless of the likelihood of whether the port will remain, it was in any event legitimately open to Mineralogy to require security to address the possibility of this removal obligation arising. Again, Mineralogy points to a need for 'security and certainty'.
2. Mineralogy adds that any argument over the passage of legislation concerning the port does not itself reliably enough indicate any intention of the State to excuse obligations to remediate the port by the previous owner.
3. Mineralogy says that even though Camp 123 had been transferred to it in 2013, under the MRSLA cl 13.4(a), Sino Iron and Korean Steel were still required to remediate the camp until 26 September 2018. Therefore, as the April 2018 Determination came before that time, it was reasonable for Mineralogy to require security in that respect to be provided.

1. As regards the attack against the inclusion of this cost in the estimate, Mineralogy says that it is not even apparent that Mr Slight included this area in his estimate. In any event, it also says it would be proper and reasonable to include that section as part of the 'Access Areas' as defined in MRSLA cl 12.1.

1. Mineralogy dismisses any attack on Mr Slight's demolishment cost estimate, saying his estimate was not that far out of proportion to that by Liberty Industrials, and was closer to that estimate than the CITIC defendants' AECOM estimate. Mineralogy says that it cannot be said that this aspect of the estimate is therefore unreasonable.

1. Against the contention that Mineralogy's Determination was unreasonable because Mr Slight's 2018 report contained differences in calculations or assumptions, Mineralogy says that any minor errors are not a sufficient basis to render complex and multifaceted estimates, as being unreasonable. And again, Mineralogy identifies that striving for numerical perfection in an estimate, is ultimately, impossible. To this end, Mineralogy also identifies that it has alleged Mr Cramer had also made a number of errors in his report.
2. In all those circumstances, Mineralogy says that it was open to Mr Slight to render the expert estimate he did and for it then to have adopted that estimate.
3. Having now canvassed, albeit briefly, the parties' base submissions, I can move first to render my conclusions on the potential reviewability of a cl 20.6(e) determination by Mineralogy.

Clause 20.6(e) The reviewability of determination by Mineralogy

1. In the first place, I would observe on my reading of Ipp J's reasons in WMC that the decision does not suggest Ipp J was seeking there to lay down any inflexible or universally applicable taxonomy of categorisations to be applied across all genres of contract law concerning contractual determinations made by contracting parties. The particular issue arising in that appeal concerned a need for a valuation towards work conducted under a construction contract which, essentially, had largely left the assessment to a valuer and with very little criteria for implementing the task at hand.
2. However, these are somewhat different factual circumstances to WMC. There is no valuation being undertaken. I accept the force of most of what Mineralogy submits by its plenary submission concerning the (non) reviewability by a court of its cl 20.6(e) determination, as regards a notified annual charge for an Operating Year. Nevertheless, there are undoubtedly the as fixed cl 20.6(e) contractual criteria seen within the MRSLA contract as identified. They obviously must be respected and followed in the process of the reaching any end determination, when carried out by Mineralogy towards fixing any communicated annual charge that is to be notified and rendered to Sino Iron and Korean Steel respectively, for a forthcoming Operating Year, under cl 20.6(f).
3. On my assessment, the numerical dollar figure making up the input $A (Mineralogy's best prevailing estimate of future Site Operating Costs to be made within the next Operating Year) by reason of its very character, is not a curially reviewable assessment, as long as the dollar input figure used by way of a best prevailing estimate by Mineralogy, was reached honestly by Mineralogy.
4. The same cannot be said concerning the $B subtractable amount. That is no estimate. It is a more fixed input by item $B of the formula - for any amounts already paid into the Site Remediation Fund to be brought to account in the process.
5. Here, of course, there is no present factual debate over the numerical $B input amount, given the failures to date to pay anything by reason of the total deadlock over this Site Remediation Fund issue at all times post‑March 2006. But in principle, a numerical $B figure should be a fixed and ascertainable input amount in the calculation, that is either right or wrong. For present circumstances, it just so happens in 2021 that the current $B amount is $0.

1. The accompanying debate, however, concerns a disputed denominator approach to be used as a fractional calculation, namely, by dividing C years remaining until Mine Closure. The division approach by C (remaining years), of course, would be the task of Mineralogy, under its determination. That is not work for any engaged expert for the purposes of Mineralogy reaching its best prevailing estimate in terms of the input factor $A for the Operating Year at hand.
2. As a matter of ascertaining the overall true meaning of MRSLA cl 20.6(e), my end view is that there must be found a methodological requirement upon Mineralogy whilst determining the annual charge (if any) for an Operating Year - to engage properly with the chosen contractual criteria, as has been specified in MRSLA cl 20.6(e). This will require Mineralogy to have regard as well to, and so, to ascertain the input C and then, for Mineralogy to divide the numerator money sum of the cl 20.6(e)(i) fraction ($A - $B) by those years. Only a fractional approach by dividing the $A - $B numerical amount so derived by the remaining number of years (ie, C) in my assessment will afford the proper level of force and effect to the deployed text of cl 20.6(e)(ii). That construction is also a more commercial one for a long term (potentially) project. No surrounding circumstance sufficiently intrudes to detract from that greater textual direction. Part of the present problems arise, I fear, because the annual charge task is only approached rather late - ie, in 2018, after the project then has been on foot for some years. Had earlier incremental annual charges been rendered and paid earlier, then by now a monetarily significant fund should already have been held in the Site Remediation Fund. Of course that feature does not affect the true construction of the 2006 MRSLAs which is focused at the time of their 2006 perfections, not later on, as problems of implementation emerge. Mineralogy's counter arguments about the true meaning of the words in cl 20.6(e)(ii) as canvassed earlier are ultimately, just not persuasive. The division by C years is the only viable true meaning that is acceptable in my end view.
3. Moreover, I do not assess the C year divisional exercise requirement to carry any significant range of discretion for Mineralogy, akin to that under (e)(i) concerning Mineralogy's 'best prevailing estimate' in regard to determining numerator factor $A under the determination task. True enough, some work will obviously need to be done for Mineralogy to honestly ascertain as a matter of forward projection the years remaining to Mine Closure. And of course input C, as a divisional input, may alter over time, depending on better information becoming available. But based on its contemporary information about mining operations, Mineralogy must then honestly ascertain the remaining years, so as then, to divide the numerator ascertained money by those (remaining) years.
4. Having determined major theoretical disputes of construction between the parties over cl 20.6(e) and (f), I now turn to address the rival expert evidence led at trial as to the quantum of the Determination.

1. Each of the parties adduced expert evidence at the trial.

1. For Mineralogy, it relied upon the expert reports of its site remediation mining engineer, Mr Mike Slight. Mr Slight's involvement in the April 2018 Determination has been sufficiently explained already.
2. For the purposes of the trial, the two expert reports of Mr Slight are relied upon. The first is his report of 27 August 2020, found at annexure MS‑01 to Mr Slight's affidavit affirmed 28 August 2020. That affidavit and report by Mr Slight became exhibit 9A at the trial.
3. Mr Slight's first report relied on at trial (exhibit 9A) not only canvasses matters concerning Mr Slight's ascertainment work during 2018 towards the eventual generation of his 16 April 2018 report for Mineralogy. That report advances further, to effectively repeat another cost estimation exercise for 2019, and then again for 2020.
4. The CITIC defendants' expert report by Mr Michael Cramer from Accent Environmental Pty Ltd on 9 October 2020, became exhibit 10.
5. In turn, Mr Slight's second report (exhibit 9B) had provided a review of Mr Cramer's report. This was of 23 October 2020.
6. Prior to trial, I had issued case management orders for the two experts to meet and to confer in the absence of their lawyers - with a view to preparing a joint memorandum for trial. The purpose of such a memorandum was to identify the experts' areas of agreement, then also, the key areas of disagreement as between the two mining engineers.
7. Again, an engagement of an expert conclave process before the trial, conducted and facilitated by the Principal Registrar of this court, has proved of great utility - in terms of significantly narrowing the true issues that arise and remain to divide the two experts. Following the conclave the experts had prepared a Joint Expert Memorandum of 15 November 2020. It became exhibit 11. Shortly below, I propose to set out the terms of that Joint Expert Memorandum, since its content will record the ultimately narrowed issues of remaining disputation as between the two experts.

1. Across part of the fourth and the entire fifth day of the trial, the experts participated in what was a concurrent evidence session during the trial. In somewhat unusual COVID-19 induced circumstances, Mr Slight was present in person at court in Perth, with Mr Cramer participating by a Microsoft Teams video-link from Melbourne with the CITIC defendants' senior counsel present in court in Perth and Mineralogy's senior counsel also participating by a Microsoft Teams video-link from Canberra. The process was entirely workable and satisfactory by that technology.
2. During the session each expert spoke to their respective reports and then was questioned and cross‑examined by respective senior counsel for each side. In the process, I also posed some questions to each of the experts.
3. The concurrent evidence taking exercise, on my assessment, was of considerable utility, albeit conducted remotely in part. First, as is apparent from the Joint Expert Memorandum and the evidence at trial, there was a good deal of underlying agreement between the two experts. Second, I assessed through the exercise that each of the two experts to be eminently well qualified in their remediation fields. That was apparent from the outset of the concurrent session with each of Mr Slight and Mr Cramer acknowledging the other's expertise (ts 373 - 374). Third, the concurrent exercise revealed there were no real challenges as between the two experts towards the underlying materials that each had used and relied upon in forming the basis of their respective reports, as referred to by each of them (ts 374). No time was therefore wasted embarking upon formal proof exercises towards any contentious underlying materials that had been relied upon for the purposes of reaching such opinions. Fourth, in respect of the four key areas where the experts did still disagree, as was summarised by the Joint Expert Memorandum, the basis upon which each expert had reached their differing conclusion was helpfully focused upon and was explained.
4. By my end assessment, the rival views of both experts that still persist are both respectable opinions. My assessment is that both experts are highly qualified, obviously competent and, undoubtedly, were honest in the opinions which they have expressed and delivered.
5. The reasons for the divergences increases as between the two experts, were apparent. Their professional mutual co-operation towards a production of the Joint Expert Memorandum illustrated their respective integrity and reasonableness.
6. For present purposes then, I will proceed next by incorporating relevant portions from the Joint Expert Memorandum dated 15 November 2020:[100]

EXPERT CONCLAVE - CIV 2840 of 2018 | Mineralogy Pty Ltd v Sino Iron Pty Ltd & Ors

Joint Memorandum of Mr Slight and Mr Cramer

15 November 2020

This joint memorandum has been prepared by Mr Slight and Mr Cramer following an expert conclave held on 13 November 2020. The memorandum draws upon the information contained in the April 2018 Slight Report, the August 2020 Slight Report, the October 2020 Cramer Report and the October 2020 Slight Report (see Schedule 1). Our original instructions and qualifications are set out in those documents.

The memorandum has been prepared following the expert conclave to narrow the issues in respect of which we agree, partly agree or disagree.

2.1 Most applicable type of remediation cost estimate

Two key terms are used in this memorandum to describe different types of remediation (or closure) cost estimates. These terms are defined as follows based on International Council on Mining and Metals (ICMM) definitions:

• Financial assurance (regulators) closure cost estimate ‑ used by the regulator to establish a, bond, bank guarantee, cash, or other financial mechanism as required by the regulation in place at the time. A financial assurance estimate includes contingency and excludes discounting.
• Financial liability closure cost estimate[101] - an estimate used for financial (including tax) accounting purposes and is normally not used for regulatory cost estimates or financial assurance but required under financial liability accounting obligations and reporting principles. A financial liability estimate excludes contingency and includes discounting.

A summary of these two types of closure cost estimates along with other common estimate types is provided in Schedule 2, taken from ICMM.

Mr Slight's view is that the remediation fund should ensure security and certainty to all parties and that sufficient funds will be available to meet the site remediation costs at all times and is best met by a financial assurance cost estimation method. This is because:

1. Under a financial assurance system, cash or a form of 'liquid' funds is always available to undertake the remediation works whenever required as well as providing access to sufficient funds when required.
2. A financial assurance cost method best represents the full cost for all known activities required to remediate the site as it exists, including planning, execution of the works and post‑closure monitoring and maintenance, and allows for uncertainty within the estimate for any other activities not necessarily accounted for within the estimate with the addition of a contingency allowance (see discussion below).

1. A financial assurance is standard regulatory practice across all state Jurisdictions within Australia except Western Australia and provides security and certainty to the State (and the community).

1. The site remediation fund aligns with the fundamental objective of a Financial Assurance which is to ensure that the financial burden of the closure and remediation of a mining project is always available at any time and not borne by any other party, such as the State when the company(s) does not or cannot fulfil its obligations.
2. The financial assurance method will provide certainty and security to both parties and ultimately to the State (and the community) by ensuring that the full amount of funds are always available to undertake the remediation works at any time during the mine's life or as they become payable.

In Mr Cramer's opinion, the most appropriate basis for developing a 'best prevailing estimate' of remediation costs, as required under Clause 20 of the MRSLAs, is a financial liability closure cost estimate. This is because:

1. Such an estimate is consistent with the stringent financial reporting requirements of a liability as set out in International Accounting Standard 37 (IAS 37). If such an estimate is suitable for accurately and transparently informing the market and investors as to the remediation liability of a mining operation, then it is suitable as a basis for determining payments into the Site Remediation Fund.
2. A financial liability closure cost estimate assumes that the proposed end of mine life is reached and the project proceeds down a path of orderly, planned closure. It provides a sound basis for the orderly provisioning of funds to cover progressive rehabilitation during operations and final decommissioning and remediation at the end of mine life.

1. In contrast, a financial assurance cost estimate, such as that proposed by Mr Slight, is designed to mitigate the risk to the State of an unplanned closure prior to the proposed end of mine life leaving unfunded remediation costs. Financial assurance is almost never provided in the form of cash (except in some circumstances for smaller mining operations) due to the financial impost cash payments place on companies. Financial assurance is typically provided in the form of a bank guarantee or other non‑cash surety.

2.2 Whether contingency should be included

Mr Slight considers that the remediation estimate must include a contingency (as required for a financial assurance) to allow for those items not already accounted for in the estimate, such as those not known about when preparing the estimate (and therefore not included) and other cost impacts still to be determined and due to other unknown influencing facts (eg environmental, physical, chemical, regulatory etc). Mr Slight has suggested the following potential additional factors that will impact on the estimate and assumed to be allowed for in the contingency.

1. Earthworks costs for the tailing's storage facility including:
   • The final rock cover thickness over the tailings.
   • Whether sufficient cover rock materials will be available without the need to excavate additional rock from new disturbance areas and subsequent additional remediation costs of that new disturbance.
   • Where the rock materials might be located and the likely impact on the haulage costs.
   • Whether it will be physically possible to mechanically place the rock materials on the tailings surface.
2. Groundwater impacts associated with the tailing's storage facility (which currently leads) including:
   • The likely long-term impact on the environment around the tailing's storage facility and potential for additional remediation costs to repair any damage to the surrounding vegetation and soils.
   • The long-term seepage water management strategy including pumping and disposal location of the seepage water and the likely costs associated with this activity.

1. Decontamination of all infrastructure to ensure that it can be safely handed over to a demolition contractor.
   • This cost has not been included within the Liberty Industrial estimate or within Mr Slight's current remediation estimate.
   • Preparation of decommissioning plans to safely de‑energize and isolate all energy sources (power, water compressed air etc.) associated with all facilities.
   • Decontamination including wash down, clean-up and removal of all asbestos (dust and slurry) materials across all facilities.

1. The quantity of the generated and dispersed (asbestos) contamination materials from the open pit mining operations, crushing, stockpiling and processing of ore, tailings storage, magnetic product storage and handling facilities at the port facilities is not clearly defined along with the likely release of contaminates into the marine environment at the barge loading and stockyard facilities.
2. Whether sufficient funds have been set aside by Sino to meet all employee entitlements including their accrued annual and long service leave, and any likely redundancy and termination entitlements at closure of the mine.
3. There are no costs in the remediation estimate to ensure continued payment of all tenement holding obligation costs during the almost 17-year closure and post closure periods.

Mr Cramer considers that contingency should be excluded from the remediation estimate as:

1. Contingency is not included in a financial liability closure cost estimate, which is based on a best estimate of liability and, under IAS 37, should avoid the 'creation of excessive provisions'.
2. Payment into the site remediation fund is undertaken annually allowing the amount in the fund to be progressively adjusted as understanding of the remediation liability evolves (due to operational experience, effectiveness of progressive rehabilitation, the findings of technical studies, etc.) and the cost uncertainty progressively reduces. This negates the need for contingency.

1. The risk of unplanned closure for which contingency would be relevant is typically covered by non-cash forms of surety such as bank guarantees, not by cash payments such as are required for the Site Remediation Fund.

2.3 Whether discounting should be included

Mr Slight's view is that the remediation estimate should not be discounted to a net present value due to the following:

1. A net present value will represent significant underestimation of the full cost to remediate the site if the site were to close in the near term, nor will it reflect the likely full cost of the remediation of the site when the site reaches its full size and extent over its potential 30 plus year mine life.
2. A net present value discount rate should not apply to the remediation estimate where the full extent of remediation required has not been determined or fully known nor where the risks and uncertainties are not well understood, such as is the case with the Sino Project as it will inevitably lead to a significant underestimation of the full cost to remediate.

1. Discounting of a financial assurance cost estimate is not permitted within the any of the State Jurisdictions that require financial assurances to be established.

1. Sudden closure of mining operations is not uncommon in Australia and often become abandoned and left to the State to remediate; this is the main reason why discounting of financial assurances is not permitted. Note that there are currently estimated to be 14,000 abandoned mine features across Western Australia generating a significant financial burden on the State (and community).
2. The funds for site remediation are to be deposited into an interest bearing trust account and the interest accruing against these funds remains in the Site Remediation Fund thus allowing for any time value of money and ensures that any impact from inflation will be accounted for in the fund over the life of the mine.
3. The Fund is also to be reviewed and updated annually to ensure full funding of the remediation is always available within the interest‑bearing account during the mine life should the rates of interest of inflation change.
4. The Fund should be considered as a working capital fund for expensing against any remediation that might be undertaken progressively during the mine life and will allow for costs to be paid when activities are completed or if the mine closes earlier than expected.

Mr Cramer considers that discounting should be included in the remediation cost estimate as:

1. In a financial liability cost estimate, cash flow is discounted to arrive at a net present value (NPV) provision. This is required due to recognition of the 'time value of money', which is an important financial principle based on the concept that a current day sum of money is worth more than the identical sum in the future due to its potential earning capacity.
2. As the Site Remediation Fund is provisioning for future rehabilitation costs, discounting should be applied to the cost estimate.

1. The trust fund is interest‑bearing. The interest being earnt by the fund over time should be taken into account when determining the annual amount to be deposited by applying discounting.

2.4 Whether marine and port facilities should be included

The following provides the reasons why Mr Slight has included the cost for remediation of the marine and port facilities:

1. Mr Slight's view is that all infrastructure and facilities are to be remediated, including the marine and port facilities including the causeway, breakwater, and jetty facilities.
2. The facilities are part of the site infrastructure, built by Sino and there for the sole use of the Sino project. The facility is under the control of a licensor (WA Department of Transport) and any such remediation obligation is contingent on instruction to that effect from the Department. Mr Slight has not been provided with any instruction from the Licensor that provides any direction either way.

1. The licence agreement with the Department of Transport has several clauses implying that the facility may be left in place with certain conditions and with the written approval of the Department. Mr Slight has not been provided with any documents describing these certain conditions or provided any written approval from the licensor for the Sino project to leave the facilities in place.

1. Mr Slight understands from the definitions section of the licence agreement that 'Approved Proposals' refers to proposals approved under the State Agreement and Ministerial Statement 635, Condition 16, which obligates Sino to prepare and have approved decommissioning and closure plans, including a rehabilitation plan for all disturbed areas which by inference includes the port facilities. Until the closure strategy (or otherwise) for the marine facilities is decided and agreed to in writing by all parties, Mr Slight believes that the removal and remediation of all port and marine facilities must be included within the remediation fund for the site.

The following provides the reasons why Mr Cramer has excluded the cost for remediation of the marine and port facilities:

1. Any obligation for Sino Iron to remove and remediate the facilities is contingent upon a request to Mineralogy from the Licensor. The Licensor is highly likely to consider the facilities a valuable asset that should be retained.
2. The environmental harm caused by the removal of the marine causeway and breakwater would likely substantially outweigh any environmental benefits gained.

1. IAS37 requires provision to only be recognised when an 'outflow of resources' (i.e. expenditure) is probable.

2.5 Basis for post‑closure monitoring and maintenance costs

Mr Slight and Mr Cramer have used different approaches to estimate post‑closure monitoring and maintenance costs. However, as Mr Slight's most recent (October 2020) estimate of monitoring and maintenance costs ($12,185,968) and Mr Cramer's April 2018 and October 2018 estimates ($11,473,267 and $12,452,818, respectively) are broadly consistent, these differences in approach are not discussed further in this memorandum.

Mr Slight and Mr Cramer reached agreement through the process of reviewing each other's reports (and prior to the expert conclave) on the following aspects of the remediation costs which had been initially misaligned.

1. The validity of the Liberty Industrial demolition cost estimate.
2. Exclusion of Liberty Industrial's contingency (covered by overall contingency allowance in Mr Slight's estimate and excluded by Mr Cramer's estimation method).

1. Rock and topsoil cover thickness on the tailings storage facility.

1. Borefield data including disturbance footprint and numbers of bores.
2. The method of calculating duration of the works relating to equipment use 2.
3. The daily camp accommodation cost adopted by Liberty Industrial ($45.00 per day per person).
4. The nominated seed application rate (6.0 kg per hectare).

In addition, both parties have consistently agreed that salvage costs for ferrous and non ferrous materials (such as estimated by Liberty Industrial) should be excluded from the cost estimate.

A summary of the cost estimates by Mr Slight and Mr Cramer are presented in Table 1. The differences in the cost estimates are predominantly a result of the following factors:

1. Each cost estimation was based on a more detailed and accurate information than its predecessor, including information on the disturbance areas of site facilities and proposed rehabilitation concepts.
2. The project footprint (area of disturbance) has expanded each year, resulting in a progressive increase in rehabilitation effort.

1. The 25% contingency adopted by Mr Slight was excluded from Mr Cramer's estimates.

1. The marine and port facilities ('port/causeway removal' in Table 1) were excluded from Mr Cramer's estimates which also resulted in an associated reduction in owner's management costs.
2. The alignment between Mr Slight and Mr Cramer on the cost factors listed above in Section 3. This alignment is reflected in Mr Slight's October 2020 cost estimate and Mr Cramer's October 2018 cost estimate (and reflected for most factors in Mr Cramer's April 2018 estimate).

2020 (2020 Slight Report, cost updated October 2020)

*Note that in his 2018 and 2019 estimates, Mr Slight included landform maintenance costs under the landform category.

The cost estimate totals in Table 1 do not include discounting. Mr Cramer has estimated that if NPV adjustments are applied to his April and October 2018 cost estimates based on the assumptions outline in the 2020 Cramer Report, then a reduction in the order of 20% would result. As discussed in Section 2.3, above, Mr Slight does not consider that discounting should be applied to the cost estimates.

1. As seen, what is an almost $200 million in value discrepancy, as between the two experts is seen to arise over the difference of opinion concerning their stances as regards the use of contingency figure (approximately $105 million), with a further $95 million difference (using the October 2020 assessment) in relation to the issue of port and causeway removal.
2. The basis of disagreement can ultimately be tracked back to the type of remediation cost estimate approach which each used. As briefly touched upon earlier, this distils to Mr Slight's choice of a financial assurance approach (as used by regulators) against, as Mr Cramer has favoured, a financial liability approach to closure cost estimates. This is essentially an estimate used for financial and accounting purposes, including for tax. The financial liability approach as favoured by Mr Cramer, excludes from its methodology the making of an allowance on the basis of contingency. It also includes an exercise in discounting, to take account of the benefit delivered under the concept of time value of money.
3. As will be seen, that disagreement of principle as between the two experts over the applicable type of remediation cost estimate leads in turn to their subsequent disagreements over the inclusion of a contingency amount in the estimate. Mr Slight favours inclusion of the contingency, by using a contingency amount of 25% in his calculation. Mr Cramer does not include a contingency factor at all.
4. As may be seen from the Table 1 comparison of the Joint Expert Memorandum (see [413] above), the application of a contingency amount generates between the two experts a money difference (comparing the April 2018 work of each expert) of an extra $105.8 million. That issue then is the most numerically significant factor of difference between the two experts in their rival approaches.
5. The remaining significant numerical factor of differentiation between the experts relates to the question of whether marine and port facilities (more correctly, the cost of their removal as a part of the Site Remediation Works) should be included under the estimate, or not. Here again, the two experts differ.
6. As he ultimately had in his April 2018 estimate for Mineralogy, Mr Slight had incorporated within his estimate (as seen in Table 1) allowances for the estimated cost of 'Port/causeway removal', within two of his disturbance categories. Table 1 shows the amount as a separated amount out of industrial infrastructure assessed remediation costs in October 2020 as $68,656,911. But within the same Table 1 there was a further allowance by Mr Slight in October 2020 for port/causeway removal costs under the heading 'Owner's Management (port/causeway removal)' of a further $26,427,760.
7. Those two amounts aggregate to $95,084,671. For the CITIC defendants, the estimate by Mr Cramer in respect of port/causeway removal site remediation costs is $0 - on the basis that there should be no such allowance.
8. In the evidence of the two experts across their exchanged reports and during their verbal evidence adduced concurrently at the trial, each of Mr Slight and Mr Cramer put forward a respectable case towards either making an allowance for port/causeway removal costs, or not. Mr Cramer points to a number of factors suggesting that such obviously valuable capital infrastructure as is now established at the port, would be likely to warrant attention and a utilisation by either the State or a quasi-governmental State authority managing jetties and infrastructure of the like. This view is expressed on the basis of a number of plainly beneficial features arising out of keeping in place the as established, no doubt at huge cost, port and loading facilities for ships receiving the magnetite iron ore processed Product. The Product is loaded into ships for transporting to China, facilitated through the use of those purpose built facilities for the greenfields Project. On the other hand, the approach of Mr Slight is to point out, correctly, that as matters currently stand (or, more correctly, stood in 2018 when the annual charge was attempted to be notified by Mineralogy) neither the State nor any governmental authorities has made a binding commitment to acquire or keep these facilities. Nor has Mineralogy been relieved of its current removal obligations towards the facilities (which under the MRSLAs is contractually applicable to Sino Iron and Korean Steel). Consequently, until some more definitive legally enforceable assurance in that respect (and these are my words, not the words of Mr Slight) is obtained, then it is both prudent and necessary to render some provision for the costs of their eventual removal.
9. However, as I have now concluded, Mineralogy's best prevailing estimate determination of such costs by reference to the terms of MRSLA cl 20(e)(i) is not reviewable de novo by a court. That is simply not feasible or practical, let alone desirable in contractual relationships. Nor is the estimate reviewable on parsing public law review type grounds. That approach would deliver unacceptable inertia to commercial relationships. Provided the best prevailing estimate by Mineralogy accords with any chosen contractual criteria, is made honestly and is Mineralogy's (not anybody else's) best prevailing estimate, then by my assessment such an annual charge would otherwise be unassailable.
10. Consequently, the fact Mr Cramer and Mr Slight may differ in principle over making allowance for port and causeway removal Site Remediation Costs or not, ultimately does not matter. I assess Mr Slight's approach, taking account of that factor as he did, as being a reasonable approach to take. I detect nothing aberrant, extravagant or unprincipled about it. It is a more conservative approach towards a remediation estimation of future, costs task and of a risk arising in that realm in future notwithstanding some otherwise in the future positive noises perhaps suggesting otherwise regarding the port and its infrastructure. Mr Slight's expert view on this issue, which is effectively picked up and relied upon by Mineralogy in reaching its best prevailing estimate and from there, towards Mineralogy's Determination of an annual charge, on my view, is unassailable.
11. Likewise, the expert difference of opinion of principle over the rendering of an allowance for a contingency amount in the estimation of cost process was genuine and reasonable. There is a bona fide difference of expert opinions. Mr Slight's suggested favouring of a financial assurance approach, over that of a financial liability methodology (favoured for accounting purposes and promulgated by Mr Cramer), includes a contingency and excludes discounting.
12. On my view, however, the bargain as reflected under each MRSLA at cl 20.6(e), is not amenable, if honestly reached, to a reviewable merits curial dissection, after the event, as most of the counter contentions of the CITIC defendants seek to establish.
13. Obviously, a $200 million gap arising essentially between the two experts, is a significant issue. But it is explained by an understanding of the different approaches used for the two key areas of in principle disagreement. I will not interfere with Mr Slight's assessment. Other numerical differences as between the experts as reflected under Table 1 of the Joint Expert Memorandum are essentially, given the magnitude of the numbers under consideration, of a de minimus level in the overall scheme of the MRSLA relationships.
14. Given the approach I favour, as regards the proper interpretation of MRSLA cl 20.6(e), there is no basis to descend further into debates over the benefits of and the differences in approaches used as between competent experts in their field. Mineralogy chose to rely upon Mr Slight's undoubted experience and his expertise in reaching its best prevailing estimate and thereafter its April 2018 Determination. There is no issue to be complained about in that regard.
15. With those observations made, I can turn to the parties' relief claims at the trial.

Mineralogy's primary debt claim - 16 April 2018

1. As foreshadowed, the basis for Mineralogy's primary debt claim under the ASOC arises (see par 54) either on the basis of its April 2018 Determination (see par 50(a) and (b)) or, alternatively, by Mineralogy's amended pleading, as made on day five of the trial (by leave), which then added an alternative ground for each debt cause of action, seeking the same amount under the letters of Mineralogy to Sino Iron and Korean Steel each dated 21 May 2018 (May 2018 letters) (see ASOC par 51A).
2. Under par 51C, Mineralogy pleads that if the April 2018 Determination (under its letter of 16 April 2018 referred to in ASOC par 50) 'did not constitute a valid notice, under cl 20.6(f) of the Sino and Korean Agreements, of Mineralogy's determination of the 2018 Site Remediation Payments, then the notices [of 21 May 2018] as described in paragraph 51A above constituted valid notices under cl 20.6(f) of the Sino and Korean Agreements'.
3. Consequently, it is first towards Mineralogy's April 2018 Determination referred to in ASOC par 50 that initial attention must be given. After that, Mineralogy's further and alternative debt plea requires the focus if necessary be further directed to the May 2018 letters to each of Sino Iron and Korean Steel.

1. It will be remembered, of course, that each of the Sino Iron and Korean Steel MRSLAs were perfected during March 2006 (later varied in 2008, of course). A time lag of over a decade to 16 April 2018 as regards formally pursuing Site Remediation Work and Site Remediation Costs for the purposes of cl 20.5 and cl 20.6 in each MRSLA can be noticed.
2. The trial evidence disclosed (as background only - see Mr Harris' evidence) that there had been passing communications between Mineralogy and the representatives of each of Sino Iron and Korean Steel over this issue during earlier years before 2018. Whilst these communications may be looked at as background to the current debt claim, essentially, nothing else turns upon them as regards establishing a debt obligation.
3. As one illustration of the earlier passing communications and the parties' ensuing inability to progress the issue of Site Remediation Costs and an annual contribution (annual charge) for the purposes of cl 20.6(f), I will highlight Mineralogy's 8 September 2010 communication to the Executive Chairman of CPM under the heading 'Site Remediation Fund'.[102] Under that communication an amount (later revised upwards) was mentioned as the amount notified to be deposited into a 'separate interest bearing trust account controlled by Mineralogy Pty Ltd as trustee'.
4. The request was rejected by CPM by letter of 13 September 2010. That letter concluded:[103]

CPM considers that Mineralogy's request for payment of AUD200 million in respect of the current Operating Year is clearly excessive and does not represent a fair estimate by Mineralogy of 'the amount of future Site Remediation Costs', nor the 'number of years remaining until Mine Closure'.

1. Various communications followed, including from CPM on 7 April 2011.[104]
2. But as already discussed, it was not until April 2014 that Mineralogy opened the NAB account, under the name 'Mineralogy Pty Ltd Remediation Account'.
3. More communications concerning proposed payments ensued during December 2017. This time a vice president of Mineralogy at the time, a Mr Craig Gunnis, sent a letter by email to Mr Chen Zeng.[105] Mr Zeng appears to have been a senior representative of CPM. Mr Gunnis advised:

As you are aware, both Sino Iron Pty Ltd and Korean Steel Pty Ltd have not contributed to the [S]ite [R]emediation [F]und as required by cl 20.6 of the MRSLA in the amounts previously requested by Mineralogy as Trustee of the fund. They have an obligation to do so. Their obligation is not optional.

Mineralogy requires a contribution of $1,300,000,000 to be made within 14 days. ...

1. The communication threatened litigation if the sum of over $1 billion was not made. It also communicated that Mineralogy was agreeable that the matter be referred to an expert under the provisions of the MRSLA by both parties by consent. Thereafter, nothing by way of payment or referral appears to have eventuated.
2. In March 2018, as earlier seen, arrangements appear to have been made for a Cape Preston site visit by Mineralogy's engaged remediation expert, Mr Slight, for the purpose of Mr Slight preparing a report. I have already discussed these events.
3. Because he did not in the end conduct a site visit as had been planned for that occasion (for reasons essentially left unexplained by Mineralogy), Mr Slight had prepared that 2018 report, effectively as a 'desktop' report.

Mineralogy's receipt of Mr Slight's remediation estimate report of 16 April 2018

1. In the executive summary to his report to Mineralogy of 16 April 2018, Mr Slight wrote:[106]

Mineralogy Pty Ltd has requested Mike Slight & Associates to undertake a remediation works cost estimate for Cape Preston Sino Steel Project as per their current agreement under Clauses 20.4, 20.5, and 20.6 with CITIC PACIFIC MINING PTY LTD (CPM). The review has been undertaken as a desktop 'Order of Magnitude' (OoM) costing exercise due to the inability to visit the site or source all relevant remediation plans and documents from CPM. The estimate has considered all likely remediation requirements (as per legal obligations and standards within WA) including remediation of all waste rock dumps (WRL) and tailings storage facility (TSF), removal of the port causeway, decommissioning and demolition of all industrial, processing and support infrastructure required to be removed from the various locations across the site, and all footprint remediation and revegetation ...

Unit costs and production schedules have been developed based on earthmoving 'bottom-up first' principles and have been calibrated against actual remediation and mining activities, to ensure currency and consistency with expected contractor rates for the type of closure activities likely to be undertaken in the estimates. All demolition cost estimates have been based on estimates undertaken for similar processing infrastructure and support facilities within WA[.]

1. Having identified a series of key assumptions for his re-estimation costs estimate, Table 1 to Mr Slight's report, titled '2018 Remediation Cost Summary', then contained a remediation costs summary, reading:

Processing plant, port and causeway, stockyard, administration, camp

Management, supervision, FIFO and camp costs, and consulting services

1. A signed copy of the report then appears to have been forwarded by Mr Slight to representatives of his client, Mineralogy, the same day it is dated, namely, 16 April 2018.[107]

1. There followed on the very same day, namely, 16 April 2018, Mineralogy's Determination to Mr Chen Zeng of CPM.[108]
2. This was a three-page communication signed by Mr Clive Palmer. It was also copied to the Director General of the Department of Jobs, Tourism, Science and Innovation. Mineralogy's letter carried the heading 'Re: Letter to Mr Clive Palmer 29 March 2018'. I need not refer to the earlier correspondence.
3. Mr Palmer's letter is lengthy. It deals with other issues well outside the scope of the current litigation.
4. Relevantly, however, concerning the Site Remediation Fund, the 16 April 2018 letter then said (pages 1 - 2):

Moreover, Sino Iron and Korean Steel are in breach of their obligations to make contributions to the Site Remediation Fund as required by clause 20.5 and 20.6 of the MRSLA. The account details have previously been provided to you. Mineralogy is trustee of the Site Remediation Fund which CITIC companies have refused to contribute to for over 5 years. The Site Remediation Fund was agreed at a time when the EPA did not impose bonds. The requirements of clause 20.5 and 20[.6] was to ensure inter alia the CITIC Parties did not leave Australia without attending to the environmental damage they have caused. Mineralogy currently assesses Sino and Korean's outstanding obligations to contribute to the Fund in respect of the current areas for the project is over $529,378,207. These contributions are for the security of the people of Western Australia. The requirements of clause 20.5 and 20.6 were submitted to the Western Australian Cabinet just before the State Agreement was signed, and as you are aware the MRSLA is listed on the schedule to the State Agreement ...

...

That is all the more reason why Mineralogy must require the payment into the Site Remediation Fund for good order and does not consent to any further submissions of proposals by your company under the [S]tate Agreement at this time.

Mineralogy has retained an expert and flown aerial photography to delineate precisely the requirements of Sino and Korean to contribute to the Site Remediation Fund.

If Sino and Korean are not honouring their environmental obligations in respect of the areas under their control there can be no justification for Mineralogy providing Sino and Korean with additional land to degrade.

...

Please find enclosed a [sic] independent report by M Slight in April 2018 confirming the amount required to meet Sino and Korean obligations to date. I note the good faith provisions of the MRSLA and trust this matter can be attended to without further conflict. Mineralogy will then be in a position to consider your company's request.

1. As seen, the April 2018 Determination was authored by Mr Palmer on Mineralogy letterhead and sent to Mr Chen Zeng of CPM. It presumably is sought to be inferred by Mineralogy that this communication was a MRSLA cl 20.6(f) notification by it to CPM of an annual charge for Sino Iron and Korean Steel, by way of communication to CPM as their agent.
2. Presumably, the advocated inference is that the communication of 16 April 2018 was a notified demand by Mineralogy under each MRSLA for the payment by Sino Iron and Korean Steel of $529,378,207 (divided by 2) = $264,689,103.50 each. The reference to Sino Iron and Korean Steel being in breach of their obligations to make contributions required under MRSLA cl 20.5 and cl 20.6 was obviously misconceived, absent any earlier formal demand and ensuing failure to pay.
3. As seen, Mr Palmer says in the letter that the 'outstanding obligations' of Sino Iron and Korean Steel 'is over $529,378,207'.
4. Because the letter enclosed Mr Slight's 2018 report, it is again by inference that Mineralogy's April 2018 Determination reveals a basis on which the amount was derived, ie, the letter's reference to Table 1 of Mr Slight's attached report, under its heading 'Remediation Costs Summary'. No reference is made to any express determination as to a Site Remediation Costs best prevailing estimate made by Mineralogy itself (ie, not by Mr Slight).
5. Mineralogy's letter does not specify any time for the payment of that as identified amount.

Determination as to the validity of the April 2018 Determination

1. In my end view, Mineralogy's April 2018 Determination was not properly and validly issued to accord with the contractual requirements of MRSLA cl 20.6(e) and (f). Consequently, the Determination was not sufficient to constitute a formal notification of an annual charge for an Operating Year at that time. In other words, I find the April 2018 letter did not lawfully engage with the MRSLA requirements of those contractual provisions so as to constitute a valid notification at the time sufficient to establish a legal basis to create a debt due and owing at that time to Mineralogy.
2. Putting aside momentarily the issue of an absence of any expressly dedicated Site Remediation Fund trust account at then (which, in my end view, is also fatal) the April 2018 Determination of Mineralogy did not identify an annual charge for the purpose of a forthcoming Operating Year - given to each of Sino Iron and Korean Steel under their respective MRSLAs. Only an aggregate sum was mentioned. It could only be as a matter of attempted inference that an annual charge amount notified to each of Sino Iron and Korean Steel in the amount of $264,689,103.50 each and payable within some (un)identified time and was issued for the forthcoming 2018/2019 Operating Year, might emerge. But I find there can be no such necessary inferences reasonably reached from the April 2018 Determination.
3. I also point out, if it be necessary, that a process of merely passing on by just incorporating and enclosing a report of Mr Slight would not sufficiently engage with the requirements of MRSLA cl 20.6(e), as regards a core underlying need for a 'determination' to be reached by Mineralogy (not by Mr Slight, or by any other expert). And the required determination made by Mineralogy needed to be, by cl 20.6(e), a determination that 'has regard to' certain criteria. There is nothing at all to be found within the April 2018 Determination to provide any degree of foundation for an inference that the problematic issues I have now extracted around that April 2018 communication to conclude that Mineralogy's Determination had taken any regard to the requirements of cl 20.6(e)(i) or (ii). The author gave no evidence about the determination process, if any, underlying the 16 April 2018 letter.
4. Consequently, the April 2018 Determination failed completely, on my assessment, to create an enforceable legal basis for a debt obligation arising then, in either of Sino Iron and Korean Steel, at the time it was received (via CPM). This, of course, is making a further assumption (favouring Mineralogy) that CPM was engaged or held itself out at the time as the agent of Sino Iron and Korean Steel for the function of receiving an annual charge notification if rendered under MRSLA cl 20.6(f). Mineralogy has not made out its primary debt claim.
5. Nor as I have earlier discussed, is it for this court to attempt to rehabilitate after the event the attempted cl 20.6(f) annual charge notification deficiencies and miscommunication of Mineralogy at 16 April 2018 and render its own assessment.

1. Two days later, on 18 April 2018, CPM sent a responsive letter to the chairman of Mineralogy, replying to the Mineralogy letter of 16 April 2018.[109] In part, this communication said:

As set out in our previous correspondence (including most recently Allens' letter of 10 January 2018), we consider that Mineralogy's purported determination under clause 20.6(e) of the MRSLAs is invalid and of no effect. Accordingly, CITIC will not be making a payment in response to the demand made on 29 January 2018 or the implied demand in your letter of 16 April 2018 ...

1. That response was fully justified in law. Nothing now turns on the earlier Mineralogy correspondence of 29 January 2018. CPM acknowledged the 16 April 2018 letter as attaching a copy of Mr Mike Slight's report ('in support') and refers to that as an 'implied demand'. The letter advanced to advise Mineralogy:

For the avoidance of doubt, we reject your assertion that CITIC has determined to abandon the Project. Our contribution to the Site Remediation Fund should be determined based on the current estimated duration until Mine Closure.

1. CPM's response noted Mr Slight had been unable to visit at the time appointed for a site inspection at 26 to 28 March 2018, but that Mr Slight was still welcome to meet with CITIC's officers for the purposes of providing an updated report.
2. There followed further communications, including from Mineralogy on 19 April 2018,[110] leading to CPM's response of 20 April 2018.[111] By this letter Mr Zeng pointed out in explicit terms at par 3:

Before any amount is deposited into the Site Remediation Fund, a properly constituted trust account must be established in conformity with clause 20.6. This will require an agreement to govern how the fund is to be administered. Our lawyers are ready to commence work with your lawyers to achieve that.

Mineralogy has not yet determined, as it is required to do, the 'annual charges' that Sino Iron and Korean Steel are reasonably required to deposit into the fund on account of future site remediation costs: see clause 20.6(e) of each MRSLA. The references to remarks by CITIC that it may be forced to temporarily suspend the operations under force majeure provisions do not affect an assessment of what is a reasonable annual contribution now.

Accordingly, Sino Iron and Korean Steel do not have any outstanding obligation to contribute to the fund.

Nevertheless, by way of good faith indication only, our view is that a reasonable annual charge should be calculated by dividing the total estimated cost of meeting rehabilitation Legal Requirements (as defined in the MRSLAs) by the number of years remaining in the estimated life of the Project (taking into account CITIC's exercise of the First Option). As I foreshadowed in my previous letter, I would welcome the opportunity to discuss with you or your representatives the assessment of our contribution once Mr Slight has updated his report ...

1. No doubt these communications which were substantially correct led to Mineralogy's further May 2018 letters.
2. By reference to the pleadings, that alternative basis to establish debts due by Sino and Korean and the subject of Mineralogy's late amendment to add it at the trial, is the surviving foundation for Mineralogy's debt claim given the conclusions which I have now reached.
3. So, I turn then to the May 2018 letters, which were given in identical terms to Sino Iron, Korean Steel and to CITIC Ltd that day.

Mineralogy's alternate debt claim - 21 May 2018

1. Given its importance as a basis for potentially establishing a half a billion dollar plus debt against Sino Iron and Korean Steel and their parent CITIC (essentially, by way of guarantee under the FCD), it is necessary to see in full the terms of the May 2018 Notice by letter dated 21 May 2018. As mentioned, each of Sino Iron and Korean Steel received a copy of the letter (copied to the other and also to CITIC). The text in each communication is identical, so I set out and incorporate only the communication to Sino Iron below:[112]

21 May 2018

NOTICE

To:

Sino Iron Pty Ltd

Level 7, 45 St Georges Terrace

Perth WA 6000

Attention: Chen Zeng - Director & Fei Xu, CITIC Pacific Mining Management Pty Ltd

Timothy Knowles - Company Secretary, Sino Iron Pty Ltd

Copy:

Korean Steel Pty Ltd

Level 7, 45 St Georges Terrace

Perth WA 6000

Attention: Chen Zeng - Director & Fei Xu, CITIC Pacific Mining Management Pty Ltd

Timothy Knowles - Company Secretary, Sino Iron Pty Ltd

Copy:

CITIC Limited

32nd Floor, CITIC Tower

1 Tim Mei Avenue

Central, Hong Kong

Attention: Ricky Choy - Company Secretary, CITIC Limited

Dear Sirs

RE: Notice of Demand under Mining Right Site Lease Agreement__

(a) the Mining Right and Site Lease Agreement between Mineralogy Pty Ltd (Mineralogy) and Sino Iron Pty Ltd (Sino Iron) dated 21 March 2006, as amended by the Deed of Variation dated 31 March 2006 and the Deed of Amendment dated 8 January 2008 (MRSLA); and

(b) the Mining Right and Site Lease Agreement between Mineralogy and Korean Steel Pty Ltd (Korean Steel) dated 21 March 2006, as amended by the Deed of Amendment dated 22 October 2008 (Korean MRSLA).

1. We also refer to the Fortescue Coordination Deed between Mineralogy, Korean Steel and Sino Iron and Citic Pacific Limited dated 22 October 2008 (FC Deed).
2. This Notice is issued pursuant to clause 20.6 of the MRSLA and clause 11.6(c) of the FC Deed.

1. Pursuant to clause 20.2 of the MRSLA, Sino Iron is to comply strictly with all Legal Requirements relating to protection of the environment and Site Remediation Works, as defined.
2. Pursuant to clause 20.4 of the MRSLA:

(a) as and when required by Legal Requirements, Sino Iron is to carry out all Site Remediation Works that may be required as a result of Sino's Activities, as defined; and

(b) following Mine Closure, Sino Iron is to carry out all necessary Site Remediation Work, including complying with any ongoing Legal Requirements relating to Site Remediation Work on areas affected by Sino's Activities.

1. Pursuant to clause 20.5 of the MRSLA, Mineralogy may from time to time require Sino Iron to provide reasonable security for the performance of its obligations under clause 20, including those outlined in paragraphs 4 and 5 above. Such security will be provided in the form of a Site Remediation Fund as defined in clause 20.6.
2. Pursuant to clause 20.5 of the MRSLA:

(a) Mineralogy is to establish a Site Remediation Fund as defined.

(b) The Site Remediation Fund is to provide security and certainty, for the benefit of Sino Iron and Mineralogy, that sufficient funds will be available at Mine Closure to meet Site Remediation Costs.

(c) The Site Remediation Fund is an interest-bearing trust account controlled by Mineralogy as trustee, with interest earned on funds to be retained in the Fund.

(d) For each Operating Year, Mineralogy may determine an annual charge to be paid into the Site Remediation Fund by Sino Iron.

1. Pursuant to clause 12.2(a) of the MRSLA, the activities of Sino Iron in entering upon and using the Access Areas are part of Sino's Activities for purposes of the MRSLA, including clause 20.
2. Pursuant to clause 30.1 of the MRSLA, if any amount payable by Sino Iron under the MRSLA is not paid by the due date, then such amount will accrue interest at the Default Interest Rate.
3. The clauses described in paragraphs 4 to 9 above are the same, and to the same effect, in the Korean MRSLA but with respect of Korean Steel in place of Sino Iron.

Failure to Comply with the Site Remediation Obligations

1. On 10 April 2014, Mineralogy established an interest-bearing account controlled by it as trustee for purposes of establishing the Site Remediation Fund under clause 20.6 of the MRSLA.
2. On 8 September 2010, and pursuant to clauses 20.5 and 20.6 of the MRSLA, Mineralogy:

(a) determined an annual charge of $200 million to be paid by Korean Steel and Sino Iron into the Site Remediation Fund for the Operating Year commencing 1 July 2011; and

(b) by way of a letter to the Executive Chairman of CITIC Pacific Mining Management Pty Ltd (CPM), required payment of that amount by Korean Steel and Sino Iron into the Site Remediation Fund by 8 October 2010 (2011 Fund Payment).

1. Contrary to its obligations in clauses 20.5 and 20.6 of the MRSLA, on 13 September 2010, by way of a letter from Ms Dillon of CPM, Sino Iron confirmed that it would not pay the 2011 Fund Payment.
2. On 27 December 2017, Mineralogy:

(a) determined an annual charge of $1.3 billion to be paid by Korean Steel and is into the Site Remediation Fund for the Operating Year commencing 1 July 2018; and

(b) by way of letter to Mr Zeng of CPM, required payment of that amount by Korean Steel and Sino Iron into the Site Remediation Fund by 10 January 2018.

(a) revised its determination of an annual charge to $529,738,207 to be paid by Korean Steel and Sino Iron into the Site Remediation Fund for the Operating Year commencing 1 July 2018; and

(b) by way of letter to Mr Zeng of CPM, with an attached report of Mr Slight providing part of the basis for the determination, required payment of that amount by Korean Steel and Sino Iron into the Site Remediation Fund (2018 Fund Payment).

1. Contrary to its obligations in clause 20 of the MRSLA:

(a) Sino Iron has not paid any amounts into the Site Remediation Fund for any Operating Years; and

(b) on 18 April 2018, by way of a letter from Mr Zeng of CPM to Mr Palmer of Mineralogy, Mr Zeng confirmed that payment would not be made into the Site Remediation Fund.

1. On 11 January 2012, by way of a letter to CPM, Mineralogy issued a demand and served a notice of default on Sino Iron for the failure to make the 2011 Fund Payment.
2. On 29 January 2018, by way of a letter to Mr Zeng of CPM, Mineralogy issued a demand for the 2018 Fund Payment.
3. On 16 April 2018, by way of a letter to Mr Zeng of CPM, Mineralogy issued a further demand for the 2018 Fund Payment.
4. On 19 April 2018, by way of a letter to Mr Zeng of CPM, Mineralogy issued a further demand for the 2018 Fund Payment.
5. By this Notice, Mineralogy hereby:

(a) gives further notice that it has determined for the Operating Year commencing 1 July 2018 an annual charge of $529,738,207 to be paid by Korean Steel and Sino Iron into the Site Remediation Fund; and

(b) demands that Sino Iron, pursuant to clauses 20.5 and 20.6 of the MRSLA, pay $264,869,103.50 into the Site Remediation Fund, being its share of the annual charge so determined (but without prejudice to any of Mineralogy's rights under the MRSLA and FC Deed, including clause 25 of the FC Deed), and with the payment details for the Site Remediation Fund being as follows:

Bank: National Australia Bank

Name: Mineralogy Pty Ltd Remediation Fund

BSB: [REDACTED]

Account: [REDACTED]-6708

(c) demands that the payments referred to in this paragraph 21 be made within 14 days of the date of this notice.

Yours sincerely,

[Signed]

Sarah Mole | Executive Assistant to the Chairman

Mineralogy Pty Ltd

1. So, as may be seen, the terms of the May 2018 Notice address and correct many of the deficiencies that I earlier identified in the April 2018 Determination. This was a better effort, but was it enough?
2. Given the deficiencies of the April 2018 Determination, if the May 2018 Notice is assessed as valid separate notice given at then to each of Sino Iron and Korean Steel, there would need, concerning CITIC's potential guarantor liability, to follow a default by those two corporations in meeting their obligations before further notice could then be validly issued to CITIC calling on it under the FCD to meet the obligations of its subsidiaries who were in default.
3. Aggregating the May 2018 Notice by Mineralogy to Sino Iron, Korean Steel to include CITIC as well is not in proper accord with the regime of the guarantee and indemnity provisions of the FCD. I discussed those guarantee and indemnity provisions in Mineralogy [No 16] and Mineralogy [No 17]. Clearly, they were not met here, at least as regards what is pleaded against CITIC by Mineralogy under its ASOC in terms of any possible legal exposure on CITIC's part vis-à-vis the FCD and the May 2018 Notices given to Sino Iron and Korean Steel.

1. A first thing to notice about the May 2018 Notice is its par 3. It says there that notice is issued pursuant to MRSLA cl 20.6 and FCD cl 11.6(c). Regrettably, however, much of this communication then divert to canvass what is only irrelevant past history.
2. The May 2018 Notice looks to try and save face somewhat, by the reference to the ineffective prior April 2018 Determination by Mineralogy, in terms of the creating of an enforceable debt obligation then against Sino Iron and Korean Steel pursuant to MRSLA cl 20.6(f) up to that time. To that end, I note the legal irrelevancies as identified pars 11, 12, 13 and 14.
3. In relation to par 15(a), the May 2018 Notice then says that on 16 April 2018 Mineralogy had 'revised its determination of an annual charge to $529,738,207 to be paid by Korean Steel and Sino Iron into the Site Remediation Fund for the Operating Year commencing 1 July 2018'.
4. Only by an inference could the April 2018 Determination by Mineralogy possibly be read as addressing an Operating Year annual charge commencing 1 July 2018. In fact, the April 2018 Determination, now seen, did not address any Operating Year by its text.
5. Paragraph 15(b) of the May 2018 Notice then attempts to rewrite history, by its reference to 'an attached report of Mr Slight providing part of the basis for the determination' (my emphasis). I have found instead that the April 2018 Determination should be read as Mineralogy, at then, merely adopting without more Mr Slight's number amount in its entirety and, effectively, then just forwarding it on at that time to CPM, and seeking to obtain payment.
6. Paragraph 16 with its preface of 'contrary to its obligations in clause 20 of the MRSLA', is also wrong. I have now assessed that the April 2018 Determination failed at then to create any enforceable legal payment obligation in Sino Iron and Korean Steel, given its many deficiencies.
7. I turn then to fresh demands as made and identified by the May 2018 Notice to Sino Iron and Korean Steel. Obviously, the historical communications as identified under pars 17 and 18 are legally irrelevant. So also, given all its demonstrable deficiencies, was the April 2018 Determination.
8. Essentially then, the validity of the May 2018 Notice turns upon what it said at par 21 thereof. I address that next.

1. At par 21 of Mineralogy's letter of 21 May 2018 (bearing in mind the subheading 'Demand' which appeared before par 17 and is applicable to the paragraphs which followed, including par 21), I repeat the following was seen:
   1. By this Notice, Mineralogy hereby:

(a) gives further notice that it has determined for the Operating Year commencing 1 July 2018 an annual charge of $529,738,207 to be paid by Korean Steel and Sino Iron into the Site Remediation Fund; and

(b) demands that Sino Iron, pursuant to clauses 20.5 and 20.6 of the MRSLA, pay $264,869,103.50 into the Site Remediation Fund, being its share of the annual charge so determined (but without prejudice to any of Mineralogy's rights under the MRSLA and FC Deed, including clause 25 of the FC Deed), and with payment details for the Site Remediation Fund being as follows:

Bank: National Australia Bank

Name: Mineralogy Pty Ltd Remediation Account

BSB: [REDACTED]

Account: [REDACTED]-6708

(c) demands that the payments referred to in this paragraph 21 be made within 14 days of the date of this notice.

1. If the above notice was actually given on 21 May 2018 to the identified parties (Sino Iron, Korean Steel and CITIC) the 14 days given to pay as allowed would be, in effect, only allowing until 5 June 2018 for payment.
2. As earlier discussed, I can find no basis within cl 20.6 or, indeed, in any part of the MRSLAs to conclude as to a mere 14-day obligation to pay the annual charge.
3. Even if there was otherwise a valid annual charge notified by Mineralogy in May 2018, the fact is that there was still no sufficient time for payment identified (or even impliedly identified) in cl 20.6 of the MRSLAs. So then, by implication, payment would only be due within a reasonable time.
4. As I earlier indicated at [297], despite the parties' rival contentions, neither of the temporal stances for payment to be made is ultimately attractive. On my own assessment, a reasonable time for making that payment would be at no later than at halfway through the relevant Operating Year that is notified in respect of the annual charge. That, effectively, would allow a period for payment across all of a preceding June month and then across the first six months of the Operating Year as so notified. I assess that, in the circumstances, allowing up to seven months (to 31 December inclusive of the 30 days prior to the commencement of the Operating Year) is the reasonable amount of time to find and pay what may be in a commercial setting be a very significant sum of money.
5. Assuming the 14-day demand for payment did not render the May 2018 Notice invalid, the respective amounts as notified to Sino Iron and Korean Steel would then only fall due for payment at not earlier than at 31 December 2018. That, of course, would mean that at the time when Mineralogy issued its writ to commence the present action, on 22 October 2018, both the amounts as demanded from each of Sino Iron and Korean Steel on 21 May 2018 by Mineralogy, were not yet legally due and payable.
6. Nevertheless, there are greater problems for the May 2018 Determination. On my assessment, two more deficiencies are both fundamental and fatal to the creation of a valid debt under the May Notice.

1. The first fatal deficiency, of course, is that on the proper construction of MRSLA cl 20.6(e), Mineralogy's determination of an annual charge in the May 2018 Notice for Sino Iron and Korean Steel did not render any proper regard to the true meaning of (e)(ii) and so, to its criteria for a necessary division by 'the number of years remaining until Mine Closure'.
2. As already discussed, I have concluded upon the correct interpretation of cl 20.6 that the (e)(ii) factor of years remaining, will need ultimately to be divided into the monetary amount as is ascertained under (e)(i) (being ($A - $B)/C). That necessary methodology by way of a division of the ascertained money amount, by the number of years remaining until Mine Closure into the amount of future Site Remediation Costs - did not occur.
3. Mineralogy, of course, advocated for its rival interpretative towards the methodology under of cl 20.6(e), arguing that the number of years remaining until Mine Closure need only be generally factored into its determination of an annual charge. However, I reject that rival constructional approach of Mineralogy on the basis that it is too loose and simply does not sufficiently respect the force and clarity of the text deployed under cl 20.6(e)(ii) in each MRSLA and so, requiring the end point division of the numerator money by the remaining years.
4. Because of that basal interpretive feature necessary under cl 20.6(e)(ii), the May 2018 Notice of Mineralogy was deficient in that respect. It did not meet the required contractual criteria of MRSLA cl 20.6(e). It was therefore also legally ineffective to create any valid debt obligation in Sino Iron and Korean Steel at any time, even if a reasonable time for rendering the payment of the notified annual charge had been properly afforded.

1. The further and independently fatal deficiency in the May 2018 Notice (which will also fatally undermine the April 2018 Determination), is the fact that the contractual criteria of MRSLA cl 20.6(c) in respect of there never being established by Mineralogy, an account which was ever expressly designated as a trust account is also, on my assessment, an insurmountable defect.
2. This defect as seen, was pointed out to Mineralogy explicitly by CPM in its 18 April 2018 response to the April 2018 Determination.[113]
3. I examine the trust account itself in greater detail in the next part of these reasons, dealing with the CITIC defendants' counterclaim. But in the context of Mineralogy's debt claims, I am of the opinion that no required trust account has existed, sufficiently meeting the important protective requirements of MRSLA cl 20.6(c) of each MRSLA for the Site Remediation Fund monies.
4. Mineralogy's submissions attempted to address this problematic issue, in effect, on a de minimis basis. For instance, Mineralogy referred to the obligation as regards a designated trust account under cl 20.6(c) as being an inessential term within the MRSLAs. With respect, I completely disagree with that legal assessment.
5. Objectively assessed, cl 20.6(c) imposed what are clear and explicit criteria towards establishing a separate interest bearing trust account, which would be controlled by Mineralogy as trustee. In 2006, that was a part of a large scale long term commercial bargain which, objectively assessed, might possibly see in the future many millions or, indeed, billions of dollars being held in that account to accumulate interest over a very long period until some of those the funds were required to be drawn upon and used for the only purpose for which those funds were allowed to be used (see cl 20.6(d)), namely, to pay Site Remediation Costs 'as they become payable'.
6. Given the stakes, I cannot accept that some internal designation by Mineralogy towards the funds as being held on trust by it as a trustee or, indeed, Mineralogy's advice given to the account operator or fund holding institution (in this case, the NAB), would be sufficient to address the trust status designation disconformity problem with the NAB account. Nor do I accept that the problem was met and addressed later.
7. There would, on my assessment, be a level of desirable legal protection, objectively assessed, particularly for potentially long term fund holding arrangements entered with a financial institution, by way of the express designation by the financial institution itself of the relevant account, as being a trust account. This I assess, was essential. There ought to be no scope at all left open for potential future equivocations or misunderstandings over the status of the account and its funds, say, 10, 20 or even 30 years into the future - when different personalities or different record keeping regimes might emerge. The labelled trust status of the account and its funds from inception and at all times thereafter needed to be made absolutely explicit to all concerned. The trust status needed to be overt, meaning on my assessment, 'plain as a pikestaff'. Anything less did not meet cl 20.6(c). The need for explicit clarity in respect of the trust status of possibly very significant levels of funds was a clear objective textual message unmistakenly articulated by the first sentence of MRSLA cl 20.6(c).
8. Underlying that objective sentiment, of course, are the legal protections arising under the law of equity against misdealings with trust funds, by any stranger knowingly assisting in a defaulting trustee's dealing concerning trust funds. I refer, of course, to the so-called rule in Barnes v Addy [1874] UKLawRpCh 20; (1874) LR 9 Ch App 244, explained by the High Court in Consul Development Pty Ltd v DPC Estates Pty Ltd [1974] HCA 8; (1975) 132 CLR 373 and later in Rowena Nominees Pty Ltd (in liq) v St George Bank Ltd [2002] WASC 270 and Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89. So too for a knowing recipient of such trust funds, when it is clear they are trust funds. In future years then under the MRSLA relationships as potential long-term contacts, there ought to be no occasion for anyone to ever become embroiled in parsing legal arguments over a satisfaction or otherwise of Peter Gibson J's (see Baden Delvaux & Lecuit v Sociéte Générale pour Favoriser le Développement due Commerce et de L'Industrie en France SA [1993] 1 WLR 509 at [250]) taxonomy over the different levels of knowledge or notice as to what has been known in terms of a dealing with trust funds. Label them clearly in the account they are held as trust funds is the cl 20.6(c) message and command to Mineralogy.
9. That express requirement under the first sentence of MRSLA cl 20.6(c) displays a sound underlying legal rationale for what it required to be done. Here, requirement was not met, by Mineralogy's opening a NAB account in 2014, under the name 'Mineralogy Pty Ltd Remediation Account'.
10. To the extent Mineralogy might (this was not entirely made clear) also seek to argue that it was not (at 2014) possible to open an expressly designated trust account, on the evidence of its witness, Mr Mashayanyika, then par 11 of his witness statement and evidence was not, as I have earlier discussed, accepted as being admissible to establish the truth of what was found there stated. In any event, I would require more in the way of reliable evidence, if Mineralogy were to be seriously asserting it was not possible for it at and after 2014 to open an account with a financial institution somewhere in Australia that will be expressly designated as being a private (ie non-statutory) trust account.
11. For completeness, I point out that at the time in 2014 when the NAB account was opened by Mineralogy certain documentation was then filled out.[114] As exposed by the CITIC defendants during trial (ts 277 - 278) there had been a space or a box in the relevant account opening form which would be filled out in terms of potentially identifying a new account as sought to be opened as a trust account. However, that space was left blank, indicating a lack then of attention to a vital detail by Mineralogy's representative, even at the opening the NAB account in 2014.
12. The deficiency aligns itself with what, with respect, is an obvious problem with the NAB account as it was opened. I have no evidence before me from the trial that the lack of designation problems are not fixable.
13. The deficiency means that the attempted demands under the April 2018 Determination and May 2018 Notice, as advanced by reference to that as nominated NAB account, were wholly defective on that basis alone.
14. Put another way, Sino Iron and Korean Steel were perfectly justified, even if all other aspects of the April 2018 Determination and the May 2018 Notice of Mineralogy were otherwise fully in accord with all other requirements of MRSLA cl 20.6(e) and (f), to refuse at then, to render payments - until a complying Site Remediation Fund had been properly established by Mineralogy in a separate interest bearing trust account which was an account overtly designated by the financial institution as being a trust account.
15. The gravity of the designation deficiency simply cannot be brushed over as being inessential. Nor was it fixed afterwards, even though the problem was clearly highlighted more than once.
16. On that basis alone, all the attempted demands of Mineralogy after the NAB account was established in 2014, were legally ineffective.
17. As such, Mineralogy also fails to establish its alternate May 2018 debt claim.
18. Having now determined that Mineralogy's primary and alternate debt claims were ineffective and fail, I now turn to the CITIC defendants' counterclaim.

1. As mentioned, the CITIC defendants,[115] by way of a counterclaim, seek relief to remove Mineralogy as trustee of the Site Remediation Fund under s 77 of the Trustees Act or under the court's inherent jurisdiction and instead appoint an independent, professional trustee (see FADC pars 89 - 102 and prayer for relief A). Alternatively, the CITIC defendants seek by way of relief that the trustee of the Site Remediation Fund (whether Mineralogy or a newly appointed trustee) execute a 'formal trust deed' and/or establish a designated trust account (see prayer for relief B).
2. The principles governing the court's power to replace a trustee pursuant to s 77 of the Trustees Act and under court's inherent jurisdiction are essentially the same. These governing principles are not in dispute between the parties (see Scaffidi v Montevento Holdings Pty Ltd [2011] WASCA 146; Panizza v Clathington Pty Ltd as trustee for P and D Panizza Family Trust [2019] WASCA 344; Blenkinsop v Blenkinsop Nominees Pty Ltd as trustee for the Blenkinsop Family Trust [2015] WASC 463; and Wood (as co-executor and trustee of the will of the deceased) v Wood [No 4] [2014] WASC 393).
3. In accordance with these principles, the CITIC defendants cite the welfare of the trust beneficiaries as the dominant consideration in the court's exercise of the discretion to replace Mineralogy as trustee: Elovalis v Elovalis [2008] WASCA 141 at [30] - [31]. Further, the CITIC defendants say this step is required in order to ensure the security of the trust property and such a step is to be considered expedient (within the meaning of s 77(1) of the Trustees Act) in the circumstances of the case at hand. The CITIC defendants pose three primary supporting arguments being the:
   1. prior conduct of Mineralogy in dealing with the Site Remediation Fund trust and failure to establish a 'trust account';
   2. history of dealings with the Administrative Fund under the Facilities Deed (in the Cosmo Proceeding); and
   3. chronic nature of the disputation between the parties in light of the purpose of the trust.
4. The CITIC defendants draw attention to the substantial nature of the Site Remediation Fund (which ultimately may contain hundreds of millions of dollars) in combination with the significant nature of the decisions that the trustee will be called upon to make regarding the expenditure of funds for the purpose identified in MRSLA cl 20.6(d). Mineralogy should, they say, not be concerned with the identity of the trustee given the object of the Site Remediation Fund and the restrictions on its access and use.

Prior dealings with Site Remediation Fund trust

1. The CITIC defendants point to various conduct to support their submission that Mineralogy has not appropriately exercised the powers conferred on the Site Remediation Fund trustee. Primarily, they point to Mineralogy's failure to complete the basic task of establishing 'a trust fund account ... designated as a trust account' in addition to continuing to fail in abiding by its 'untenable position, failing properly to comprehend and exercise its duties'.[116]
2. A further attack against Mineralogy is its conduct in making its historical determinations and the subsequent 'annual charge' and demand notices sent to the CITIC defendants, submitted (by the CITIC defendants) to in fact be invalid or improper.
3. The CITIC defendants also raise Mineralogy's conduct in connection with the CITIC defendants' offers to make appropriate contributions by way of 'annual charge'.
4. Also raised is Mineralogy's conduct in issuing media releases about the Site Remediation Fund, submitted by the CITIC defendants to be false or misleading and 'calculated to damage the reputation of, and apply commercial pressure to the CITIC parties'.[117]
5. The CITIC defendants also question Mineralogy's desire to remain trustee in the face of the narrow purpose of the trust outlined by MRSLA cl 20.6(d) and suggest that rather than embracing the trustee's sole function to control and administer the fund, Mineralogy is 'confusing' the separate functions established by cl 20.6(c) and cl 20.6(e).[118]

1. I have previously explained that the Cosmo Proceedings from the Supreme Court of Queensland concerned the alleged use of funds in an 'Administrative Fund'. In that litigation the CITIC defendants claimed Mineralogy misappropriated $12.167 million from the Administrative Fund under the Facilities Deed. They now point to that being the last time Mineralogy held control of a substantial fund established under the (different) Project Agreements.
2. In spite of the express obligations assigned to Mineralogy under the Facilities Deed and the restrictions on the use of the fund's money (to which both Sino Iron and Korean Steel contributed under their respective obligations under the Facilities Deed), the CITIC defendants submit that the conduct of Mineralogy in 2013, by making the payments in breach of obligations (and outside the identified purposes) amounted then to a misappropriation of fund money.
3. Although in the Cosmo Proceeding Jackson J had found that the funds were not held on trust, the CITIC defendants point to his Honour also observing that the payments were made in breach of cl 5 of the Facilities Deed and that Mr Palmer knew this to be so (see Sino Iron v Palmer [No 3] at [115]).
4. Whether or not the money was held on trust does not, the CITIC defendants submit, affect Jackson J's conclusion reached as to the breach of cl 5 of the Facilities Deed.
5. In the CITIC defendants' submission, the failure of Mineralogy to accept its past failures in respect of two payments made in breach of their obligations under the Facilities Deed and its persistent downplaying of the significance of that conduct, only further highlights a need for its removal. The extent of Mineralogy's defence (including justification) of its conduct is said to exemplify its (unacceptable) attitude towards meeting its contractual obligations.

1. Citing examples of the history of disputation between the MRSLA parties at par 133 of their opening submissions, the CITIC defendants submit that there exists real potential for this to continue into the future and impede the efficient (and satisfactory) execution of the trust.
2. To that end, I would add and refer to the observations I rendered as to the litigious warfare between these parties - rendered in the context of my costs determination: see Palmer v CITIC Ltd [No 2] [2019] WASC 14 (S). It is my observation, as case manager of all the CITIC and Mineralogy litigation in this court since 2016, that nothing has changed. The battles continue to rage on many fronts unabated.

1. Finally, the CITIC defendants draw my attention to the position held by Mr Palmer as a director of and ultimate beneficial owner of virtually all of the shares in Mineralogy in addition to alone controlling the currently existing bank account (the NAB account).
2. Mr Palmer is, himself the common factor by the CITIC defendants, as the central figure in the Administrative Fund dealings (Cosmo Proceeding) described and in much of other conduct submitted to compel Mineralogy's removal as trustee.

1. If the court were persuaded (as a matter of discretion) to appoint a new trustee of the Site Remediation Fund (in place of Mineralogy), the CITIC defendants also submit that further trust terms will be needed to regulate the terms of that appointment.
2. In brief terms, this is said to be needed as the terms of MRSLA cl 20.6 evince a clear intention to create a trust. But the terms do not provide adequate guidance as to how the trustee should apply funds in the Site Remediation Fund to pay Site Remediation Costs. This is particularly necessary if there is any disputation arising between the beneficiaries as to the proper application of the funds.
3. The CITIC defendants provide suggestions as to what these terms may encompass, including an inclusion of a dispute resolution clause whereby the parties would bring proceedings themselves at their own cost to avoid utilising property for the resolution of the dispute.[119]
4. However, as mentioned, such correlative relief is contingent on the court appointing a new trustee to the Site Remediation Fund and, given that prior obstacle, was not heavily addressed in oral submissions by senior counsel for the CITIC defendants.

1. Mineralogy submits first that where, as in this case, it remains able and willing to continue in its role as trustee, it is unlikely that s 77 of the Trustees Act applies (citing Re Blanchard (1861) 3 De G F & J 130, 135 - 136; Porteous v Rinehart [1998] WASC 270; (1998) 19 WAR 495, 507 and Vagliviello v Vagliviello [2003] WASC 61 at [7]).
2. Second, Mineralogy proposes that none of the conduct identified by the CITIC defendants warrants Mineralogy being replaced as trustee.
3. Third, Mineralogy submits this is not a case where the circumstances support a conclusion that replacing the trustee would be advantageous, appropriate or suitable (citing Scaffidi v Montevento Holdings Pty Ltd at [173]). Doing so, it submits would radically alter the agreed contractual allocation of risk and would effectively denude Mineralogy (in its position of tenement holder) of the security and certainty it is to obtain under cl 20.5 of the MRSLA.

Prior dealings with Site Remediation Fund trust

1. Mineralogy submits that none of the identified conduct in connection with the Site Remediation Fund warrants replacing it as trustee (nor does it bear the character of misconduct). Further, Mineralogy's desire to continue as the trustee (as established by the prosecution of the proceedings) is submitted as a strong factor against such relief by the court, as it was the prior agreement of the parties under the MRSLAs. Mineralogy's position is that the MRSLA parties have agreed it would be the trustee by a consensual arrangement, despite its position as counterparty under the MRSLA with diverging interests from time to time (distinguished from Princess Ann of Hesse v Field (1962) 80 WN (NSW) 66, 73). The parties' subsequent contractual dispute is not a basis to overturn the carefully negotiated component of a wider overall bargain, which manifests under cl 20.6.
2. As to the past conduct under the Site Remediation Fund, Mineralogy claims it has, in good faith, attempted to perform its obligations under the MRSLA by its previous determinations, and as regards the establishing of an account. Its position in response to the CITIC defendants' submissions is:
   1. Mineralogy denies the allegation that it has failed to establish a properly constituted trust account. No further steps are required on their part as cl 20.6 contains all the elements necessary for the creation of a trust, which was established when Mineralogy created the Site Remediation Fund account and deposited a nominal amount of funds into it, then held on trust for the trustee. In any event, they say, this does not warrant replacement of Mineralogy as trustee; and
   2. Mineralogy's previous notifications of its determinations were good faith attempts to perform its obligations under the MRSLA to realise the security and certainty provided for in cl 20.6.
3. Mineralogy denies any misapprehension with respect to its obligations.
4. Mineralogy also identifies aspects of the commercial bargain struck between the parties that serve to protect Mineralogy by reducing risk exposure that should not be disturbed by replacing them as trustee. In summary, Mineralogy, as the trustee, says it is protected from being out of pocket for remediation liability expenses.
5. To further bolster the importance of this protective position, Mineralogy points to the CITIC defendants' past conduct by avoiding any payments into the Site Remediation Fund (similar it submits to that in the past of it avoiding payment of Royalty Component A and B payments until this court ordered to the contrary) and alleges that this constitutes a breach of the CITIC defendants' good faith obligations in MRSLA cl 37.4.
6. Such conduct, Mineralogy counter submits, is sufficient to deny the CITIC defendants the relief sought in an exercise of the court's discretion, if it were to find an existence otherwise of grounds to support the removal relief the CITIC defendants seek (see Official Trustee in Bankruptcy v Tooheys Ltd (1993) 29 NSWLR 641, 650).
7. This is particularly so, Mineralogy submits, where the CITIC defendants only seek such relief more than five years following conduct they rely on in support and in response to Mineralogy's enforcement of the CITIC defendants' obligations.
8. All this conduct, Mineralogy argues, should be viewed as disentitling, as a consequence of the CITIC defendants own breaches of the MRSLAs, in addition to an absence of 'clean hands' in equity.

1. Mineralogy contends that the two payments in dispute within the Cosmo Proceeding were not in fact made in breach of the Facilities Deed, and were able to be used by Mineralogy in its business. At the time the payments were made, Mineralogy identifies that proceedings had been commenced to recover approximately $US200 million owed to it by Sino Iron and Korean Steel and it therefore held an equitable set-off in respect of sums held by it. Mineralogy distinguishes the payments under the Facilities Deed, pointing out that those sums were not legally held on trust as was found by the Supreme Court of Queensland - there being no appeal from that determination. Further, it is submitted, in any event, all sums at issue there were refunded by Mineralogy, before the determination of the dispute.
2. Continuing the battle theme of the parties' respective claims as to the heinous nature of the other's conduct over time, Mineralogy points to the CITIC defendants' conduct in respect of the dispute over the Administrative Fund as a reason, in fact, for supporting Mineralogy retaining its position as trustee over the Site Remediation Fund.
3. Mineralogy criticises the CITIC defendants' conduct in respect of:
   1. Sino Iron and Korean Steel's rejection of Mineralogy' early attempts to repay the withdrawn sums and avoid the dispute;
   2. the commencement of separate proceedings (to the arbitration) by Sino Iron and Korean Steel (the Cosmo Proceeding) against Cosmo and Mr Palmer (not Mineralogy) in the Queensland Supreme Court, entertaining potential for inconsistent judgments;
   3. the failure of Sino Iron and Korean Steel to rely on any issue estoppel or abuse of process estoppel in the conduct of the Cosmo Proceeding (it submits in an attempt to embarrass Mr Palmer); and
   4. the attempt by Sino Iron and Korean Steel to again relitigate (for a third time it is said) the contention regarding the Facilities Deed in this action by the counterclaim, amounting, in effect, to a collateral attack on the reasons of Jackson J in the Cosmo Proceeding.

1. Mineralogy, relying on Letterstedt v Broers (1884) 9 App Cas 371 and Scaffidi v Montevento Holdings Pty Ltd at [174], submits that the level of hostility and friction between the parties is alone insufficient and does not of itself provide a reason to remove Mineralogy as trustee.
2. If anything, Mineralogy submits this factor favours retaining it as the trustee as provided for in the MRSLAs.
3. It also suggests that appointing an independent trustee for the Site Remediation Fund would not alleviate or ameliorate the disputation - in circumstances of a hugely hostile environment, where that new trustee would inevitably require constant directions from the court, prior to acting.

1. Mineralogy also advances a view that the CITIC defendants, through their attempt to replace Mineralogy as trustee, are strategically attempting to fundamentally alter the MRSLA contractual relationship and bargain subsisting between the parties, so as to achieve an outcome that better suits their commercial ends. Such a strategy is referred to by the plaintiff as being the sinister function of a comprehensive and targeted taskforce - the aforementioned 'Fulcrum group'.
2. Under Mineralogy's closing (at pars 217 - 226), various submissions and allegations are put concerning illegitimate activities of the Fulcrum group. I have previously outlined the basis of this argument and concluded, in my opinion, that the allegations of illegitimate or sinister activities are not established and are a distraction in this litigation.

1. A first issue to address concerning the removal and replacement of trustee relief as is sought under the counterclaim is whether the current situation presents as one under which there is presently a trust in existence, over funds, or at least some executory arrangement akin to the establishing of a trust. Only then does there arise a potential question of whether, pursuant to s 77(1) of the Trustees Act, or in the court's inherent jurisdiction, there is a sufficient basis for the court to exercise a discretion to remove and replace Mineralogy as trustee of the Site Remediation Fund.
2. It will be remembered that the relevant words as used under cl 20.6(c) in each MRSLA say, 'the Site Remediation Fund will be maintained in a separate interest-bearing trust account controlled by Mineralogy as trustee, and which will be designated as a trust account ...' There has been waged, of course, the fierce dispute, now resolved over whether Mineralogy has yet been successful in issuing any enforceable annual charge against either Sino Iron or Korean Steel under cl 20.6(e). I have ultimately now found otherwise. There has also been an unwavering blanket refusal to date against payment of any monies as annual charges by either Sino Iron or Korean Steel (as the pleadings confirm - see ASOC par 43 and FAD par 43) - the open offers aside. The refusal stance I have found to be legally justified, so far. But I would assess that further notifications by Mineralogy for ensuing Operating Years, are almost inevitable.

1. In relation to the first issue concerning an existence of a trust or executory trust arrangement that might engage with the court's statutory and equitable removal and replacement jurisdiction, two essential matters are submitted by Sino Iron and Korean Steel. First, they refer to the $25 payment by Sino Iron, which was made into the NAB account as established by Mineralogy to suggest that Sino Iron has paid funds into the account and which are thereby held on trust by Mineralogy. I reject this argument. No evidence of a surrounding explanation of the payment was adduced at the trial that I could ascertain to enlighten the circumstances under which the effectively minuscule $25 amount payment made by Sino Iron, found its way into the NAB account. One thing is clear: the $25 was never paid into that account by Sino Iron upon the basis that they were any form of response to an effective issue of an annual charge by Mineralogy for any forthcoming Operating Year. Hence, the $25 payment may be wholly put aside, essentially, as an aberration - that does not bear upon the present evaluation as to the existence of a trust, or of anything resembling a trust fund.
2. A second and more substantive submission was put by reference to an invocation of the decision of the High Court of Australia in Norman v Federal Commissioner of Taxation [1963] HCA 21; (1963) 109 CLR 9 (Norman) and, in particular, by reference to well remembered observations by Windeyer J (who was in the minority) explaining choses in action by reference to future entitlements to receive money.
3. Nevertheless, on my assessment, the observations as were relied upon from Norman are inapposite here and are distinguishable. For that case, in a context of an assessment of the liability for a taxpayer's income tax rendered by the Commissioner of Taxation, it had been contended that the future entitlement to interest on an amount of a 3000 pound loan had effectively been assigned or gifted to someone other than the taxpayer. Consequently, the taxpayer was contending there was no liability in it for income tax to be paid upon that interest, given effectively a gifting of the future interest elsewhere.
4. It will be remembered that in Norman, Dixon CJ, in the majority, said he was not disposed to disagree with any of the principles as had been identified in the reasons of Windeyer J (see page 16). However, Dixon CJ reached a different conclusion, along with the rest of the majority.
5. One further matter relied on by the CITIC defendant is the NAB's corporate cheque account terms and conditions (effective 13 November 2017).[120] The CITIC defendants point to the terms which, regarding the bank and its customer, Mineralogy, essentially permit there to exist a cross‑collateralised arrangement effected as between Mineralogy's accounts - under which a deficiency of funds in one of Mineralogy's accounts can be redressed by the bank, effectively by being set off against a credit balance in another of Mineralogy's accounts.[121]
6. Such an arrangement, of course, could not lawfully apply to funds held in a Mineralogy account that was a trust account, containing trust funds.
7. But absent any express designation by the NAB of the account as a trust account, the CITIC defendants submit that there presented a set-off vulnerability of an exposure to Mineralogy's unmet debts, to the institution, of funds held other than by reference to their express designation as funds held on trust by Mineralogy in a trust account. I accept the force of that vulnerability submission.
8. But on my assessment, I do not accept that there is a convincing analogy between Norman to the present facts. Here, under MRSLA cl 20.5 Mineralogy may (not must) require reasonable security from Sino Iron or Korean Steel in the form of a Site Remediation Fund annual charge for an Operating Year payment under cl 20.6(e) (notified under cl 20.6(f)). But that would not render the situation, prior to Mineralogy's valid and effective notification of an enforceable determination to Sino Iron or Korean Steel's payment, as any sort of executory trust arrangement, akin to that which was discussed, either in Norman, or in the situation as later discussed by Barwick CJ in a following decision which reached a different conclusion as to the assessability of future promised interest - as regards an income tax liability (see Shepherd v Commissioner of Taxation (Cth) [1965] HCA 70; (1965) 113 CLR 385).
9. Consequently then, in my view, the present position is that there is no trust or trust like executory arrangement and, also, there are no funds yet held on trust by Mineralogy from either Sino Iron or Korean Steel by reference to MRSLA cl 20.6(c) in respect of which a discretion to remove and replace Mineralogy as that trustee, can be exercised.
10. The counterclaim must fail upon that basis alone.

1. Nevertheless, were a different view to be taken concerning a founding position as regards an existence of a trust or trust arrangement from which Mineralogy might then potentially be removed as a matter of discretion, I briefly turn to the hypothetical exercise of a discretion, were it otherwise engaged.
2. In prevailing circumstances, I take account of the principles applicable to the exercise of the discretion as they were discussed by Martin CJ in Elovalis v Elovalis at [29] - [48]. In a previous decision I have also applied those same trustee principles in Wood v Wood [No 4] at [166] and [172]. The discretion exercised is essentially protective and is exercised upon the basis of expediency in all circumstances. Here, essentially, for the following brief reasons, I am not ultimately left persuaded that it would be appropriate for the court to exercise its discretion to remove and replace Mineralogy as trustee.
3. First, by reference to the agreed MRSLA terms as reflected under cl 20.6(c), a court ought be cautious in terms of intervening to alter and to disrupt the parties' underlying negotiated MRSLA bargain. I fully accept that these MRSLA arrangements as negotiated between the parties are elaborately intertwined and form, in effect, an interrelated tapestry around a complicated long-term contractual bargain was struck in 2006 and later varied. This was a bargain freely entered and documented by well-resourced and well advised commercial parties.
4. Second, the parties, ie, Mineralogy and Sino Iron and/or Korean Steel, have chosen each other for better or worse towards their long-term contractual agreement mutual obligations. They have effectively chosen each other for the future, warts and all. The fact post-March 2006 the parties have since fallen into serious disagreements and virtually into continuous litigation from 2013, is not the point. They must learn to live together as regards this MRSLA bargain or end it legitimately. The MRSLAs continue to be performed.
5. Third, as seen, a significant component of the arguments advanced concerning a removal of Mineralogy as trustee was linked to contentions over Mineralogy's suggested misconduct canvassed by the Cosmo Proceeding. It was openly contended, in effect, as the CITIC defendants' senior counsel put it 'Mineralogy has form' (ts 241). I have already discussed the reasons of Jackson J in the Supreme Court of Queensland. They establish that the arrangements by reference to monies held in the Administration Fund and controlled by Mineralogy in relation to the Facility Deed, were not monies held by Mineralogy on trust. Justice Jackson also observed in that case, when declining to make further findings that were asked of him against Mineralogy, underlying that dispute (as indeed underlies the present) that a certain measure of tactics were being deployed on each side in relation to seeking to gain an advantage over the other. Given the fact the Administrative Fund, the subject of the Cosmo Proceeding, has been curially and finally assessed not to have been held on trust, my assessment is that that is a sufficient basis alone to distinguish the situation and put it aside. I am not prepared to draw any adverse inferences against Mineralogy in terms of its suitability to be a trustee by reference to those events as litigated elsewhere.
6. Fourth, as is evident in my reasons so far, no funds have yet been paid by Sino Iron or Korean Steel for an Operating Year in respect of an enforceable and properly notified annual charge. In short, the position is still one where to date Mineralogy controls no funds contributed as annual charges for an Operating Year by Sino Iron or Korean Steel. If that situation changes and some more convincing evidence were to emerge suggesting the funds actually held in a trust account controlled by Mineralogy were under threat of dissipation or misuse by Mineralogy against the terms of their sole use deployment as regards Site Remediation Costs, then further application could be made to this court for relief in that circumstance on better evidence of some threat to that end.
7. Fifth, as these reasons have also earlier canvassed, to date the NAB account as it was established by Mineralogy in 2014, has failed to meet the requirements of cl 20.6(c) as a trust account and more particularly as a 'designated trust account'. Those deficiencies as I earlier discussed, in effect, have been fatal to the primary and alternate debt claims as advanced by Mineralogy under the present litigation against all defendants. But if Mineralogy in the future addresses the account designation deficiency and does establish a 'designated trust account' for a Site Remediation Fund, then the legal protections that flow from such a trust account designation as regards the presence of a trust (and the correlative obligations associated) would be an extra protection in respect of funds payable and paid by Sino Iron and Korean Steel into that account. In other words, a level of legal protection that currently absent, would, if Mineralogy does address the designated trust account situation, then be put in place. Nevertheless, I do not accept that Mineralogy's to date erroneous position on this issue concerning its refusal, or its inertia to establish a 'designated trust account', disqualifies it or makes it as unsuitable to be a trustee, if the currently deficient account arrangements are properly redressed in future. Shortly stated, the position is that Mineralogy took a different legal construction upon what was required by cl 20.6(c) in terms of the bank account it controlled into which the annual charge for an Operating Year would be paid. My reasons ultimately conclude that Mineralogy erred in that construction. But the fact that it took a different construction does not, on my assessment, render it expedient it be removed as a trustee. Legal arguments were put, won and lost on the issue. So be it. That is not enough for the relief.
8. Taking account of these matters, I am not ultimately persuaded that it is, as a matter of discretion, expedient to order the relief that Sino Iron and Korean Steel seek under their counterclaim. That relief, at this stage, would be an unwarranted intrusion by the court upon an aspect of the MRSLA bargain. In dismissing the counterclaim, however, I do not preclude scope for a future application seeking Mineralogy's removal and replacement as trustee if made under different and more convincing underlying circumstances.

1. Finally, I should add that for the purposes of the present evaluation the replacement trustee proffered by Sino Iron and Korean Steel, namely the Victorian corporation Equality Trustees, would have been a suitable trustee to control the cl 20.6(c) trust, had I been of a view that a replacement trustee were needed.
2. I have earlier mentioned the evidence of Mr Silavecky, who was representing that proposed replacement trustee. In the course of his cross-examination some questions were put suggesting that it would be the role of a replacement trustee acting under MRSLA cl 20.6 effectively to insert itself as a protagonist potentially against Sino Iron and Korean Steel, in relation to the issuing or calculation and recovery of annual charges in future Operating Years issued under cl 20.6(e) (ts 363 - 364). However, that is not my interpretive assessment towards the workings of cl 20.6 arrangements. In other words, even were Mineralogy replaced as trustee, that would not detract from Mineralogy's ongoing role under cl 20.6(e) in it determining of annual charges for Operating Years on account of future Site Remediation Costs issued in respect of forthcoming Operating Years. Properly appreciated then in terms of the limited trustee fund holding and investing role I have assessed, if necessary, this proposed replacement trustee would be satisfactory, were that relief to have been required.
3. Nonetheless, the counterclaim of Sino Iron and Korean Steel seeking to remove Mineralogy as trustee must for the reasons given, be dismissed.

1. These reasons will now be provided to the parties before any orders are made.
2. In the end result, however, the orders that should issue, prima facie, present as being:
   1. Mineralogy's action is dismissed.
   2. The counterclaim of the CITIC defendants is dismissed.
   3. In each instance, costs should follow those outcomes.
3. I will hear the parties if necessary as to the final dispositive orders, including as to costs, if post conferral over a period of 14 days, the parties are unable to present an agreed minute of orders to the court giving effect to these reasons.

Set out below are textual extracts from the Sino Iron MRSLA. Exactly the same provisions are found in the Korean Steel MRSLA.

Included below are a number of the key MRSLA definitions for many words and phrases commonly used in the two agreements.

Also set out in full, taken from each MRSLA is all of the pivotal cl 20, so that the key subclauses therein, namely subcl 20.4 ‑ 20.6 and which address the subject of a Site Remediation Fund, can be seen and assessed in proper surrounding MRSLA cl 20 context.

1.1 Definitions

In this Agreement, unless the context otherwise requires:

Access Area means an area made available by Mineralogy to Sino in accordance with Clause 12.

Claim means any legal proceedings, claims, actions, fines, penalties, judgments, liabilities or demands arising under any statute or in equity or at common law.

Environmental Approval means any Government Approval obtained under the EP Act [Environmental Protection Act 1986 (WA)] or otherwise relating to environmental obligations.

Facilities Deed means the agreement between the parties hereto and listed in a schedule by that name in the State Agreement, as amended or replaced from time to time.

Government Approvals means all approvals, permits, licences and authorisations required from Government Authorities in respect of Sino's Activities.

Government Authority means any local, State or Federal Governmental agency, body or authority, including the responsible Minister under the State Agreement.

Legal Requirements means present or future obligations arising under:

(a) legislation regulations by-laws;

(b) the orders and requirements of any Government Authority, including notices requiring the carrying out of any repair[s], alterations or works;

(c) the terms and conditions of the proposals, as submitted to and approved by the Minister under the State Agreement, in respect of Sino's Project; and

(d) the terms and conditions of the Mining Leases, and of all Government Approvals relating to Sino's Project, Sino's Project Facilities, and Sino's Activities.

Magnetite Ore means ore mined from the Mine Area and containing a magnetite content of at least 17% magnetite Fe. Magnetite Ore also includes any Low-Grade Material used by Sino to produce Iron Ore Concentrates.

Mine means the open-cut mine to be developed within the Mine Area by Sino and/or other Mine Participants for the Mining and extraction of Magnetite Ore.

Mine Area means the area, within the Mining Leases, within which Mining Operations are to be conducted, as described in Clause 3.1, and as may be amended from time to time under this Agreement.

Mine Closure means the permanent cessation of operation at the Mine.

Mine Facilities means facilities established within the Mine Area for the purpose of Sino exploiting its Mining Right in accordance with this Agreement.

Mining Act means the Mining Act 1978 of Western Australia as amended from time to time and includes the Regulations for the time being in force thereunder.

Mining Leases means Mining Leases 08/123 to 08/125 inclusive granted under the Mining Act and any renewals, modifications, variations and substitutions thereof held by Mineralogy as at the date of this Agreement which contains the Mine Area.

Mining Operations means all activities in connection with:

(a) development of one or more Mines within the Mine Area in accordance with the Mine Plan;

(b) mining of Magnetite Ore from the Mine and delivery of the Magnetite Ore to the Processing Facilities;

(c) establishment and operation of Mine Facilities as necessary to support Mining Operations;

(d) creation and operation of all necessary stockpiles and waste dumps;

(e) applying for and obtaining necessary Government Approvals associated with Mining Operations;

(f) acquiring power, water and other services and utilities as required for Mining Operations; and

(g) all activities incidental to the foregoing.

Operating Year means each period of 12 months commencing 1 July. The first Operating Year will be the period commencing on the date of this Agreement and ending on the next 30 June.

Processing Facilities means the processing facilities required by Sino for the processing of Magnetite Ore into products.

Products means up to a combined aggregate total of 12,000,000 (twelve million) tonnes per year of a combination of Iron Ore Concentrate, and/or Pellets and/or HBI for sale or export in such ratio as Sino may decide from time to time and no more.

Project Area means, at the time of this Agreement, the Mining Leases together with the Site Lease Area, Mining Leases 08/264 to 08/266 inclusive, Miscellaneous Licence 08/20 and General Purpose Leases 08/52 to 08/54 inclusive, and as amended from time to time in accordance with this Agreement, the Facilities Deed and the State Agreement.

Sino's Activities means all activities and operations undertaken by Sino pursuant to this Agreement, including without limitation:

(a) all activities and operations within the Site Lease Area; and

(b) all activities and operations associated with Sino's use of Access Areas.

Sino's Project means Sino's Project described in the Schedule, which is to be implemented by Sino under this Agreement.

Sino's Project Facilities means the Mine Facilities constructed or installed within the Mine Area, the Processing Facilities constructed or installed within the Site Lease Area, and any other plant, facilities or infrastructure constructed or installed by Sino pursuant to its rights under this Agreement within the Mine Area, Site Lease Area or under the Facilities Deed in the Access Areas or elsewhere within the Project Area.

Site Lease Area means the area, within the Tenements, described in Clause 4.1, or otherwise agreed in writing between Mineralogy and Sino.

Site Remediation Costs means costs and liabilities incurred in respect of Site Remediation Work.

Site Remediation Fund is defined in Clause 20.6.

Site Remediation Work means all work required in connection with the decommissioning of the Mine, shut-down and cessation of Mining Operations, and rehabilitation or remediation of areas affected by Mining Operations as necessary to meet Legal Requirements and good industry practices. Without limitation, Site Remediation Work may include as appropriate severing and removing structures and facilities, making good damage to the land, re contouring the land, spreading top-soil, re‑establishing vegetation and removing contaminated soil.

State Agreement means the Iron Ore Processing (Mineralogy Pty Ltd) Agreement dated 5 December 2001 between the Honourable Geoffrey Ian Gallop, the Premier of Western Australia, acting for and on behalf of the State of Western Australia and its instrumentalities from time to time, Mineralogy, International Minerals Pty Ltd ABN 86 058341 638, Austeel Pty Ltd ABN 38 058 430 032, Balmoral Iron Pty Ltd ABN 83 058 429 931, Sino (then named Bellswater Pty Ltd), Brunei Steel Pty Ltd ABN 79 058 429 977 and Korean Steel Pty Ltd ABN 20 058 429 600, ratified by the State Agreement Act and as amended from time to time[.]

Tenements means Mining Leases 08[/]123 to 08/125 inclusive any other title held by Mineralogy over these areas.

20. ENVIRONMENTAL OBLIGATIONS

20.1 Environmental Approvals

(a) Unless otherwise determined by Mineralogy, Sino is responsible for obtaining all necessary Environmental Approvals in relation to Sino's Project and Sino's Activities.

(b) Mineralogy may elect to obtain (or may have obtained) Environmental Approvals in respect of Sino's Project as a proponent. In that event, and if Mineralogy wishes to transfer a part of the whole of any Environmental Approval to Sino:

(i) Sino must sign any document or instrument, pay any bond, security or other financial provision and otherwise do anything reasonably necessary to effect the transfer.

(ii) Sino will indemnify Mineralogy for any costs and expenses, including any fines or penalties that Mineralogy incurs or has incurred by virtue of Mineralogy having been the proponent and/or continuing to be a co-proponent for Sino's Project and its associated activities.

20.2 Legal Requirements

(a) In relation to the Site Lease Area and otherwise in relation to all of Sino's Activities, Sino will comply strictly with all Legal Requirements relating to protection of the environment and Site Remediation Work.

(b) Sino acknowledges that Legal Requirements will include:

(i) the conditions of all present or future Environmental Approvals in relation to Sino's Project;

(ii) the undertakings made by Sino or by Mineralogy in relation to Sino's Project as part of Sino's Project Proposals made under the State Agreement in relation to Sino's Project[.]

20.3 Bonds

As between Mineralogy and Sino, Sino will be solely responsible for the provision of all bonds required by Government Authorities in respect of Sino's Activities.

20.4 Site Remediation Work

(a) As and when required by Legal Requirements, Sino will carry out all Site Remediation Work that may be required as a result of Sino's Activities. All Site Remediation Work must meet Legal Requirements.

(b) Following Mine Closure, Sino will remove and dispose of all Sino's Project Facilities in accordance with Legal Requirements, and will carry out all necessary Site Remediation Work. Sino will comply, and will continue to comply, with any ongoing Legal Requirements relating to Site Remediation Work on areas affected by Sino's Activities.

20.5 Mineralogy may require security

Mineralogy may from time to time require Sino to provide reasonable security for the performance of its obligations under this Clause 20. Such security will be provided in the form of a Site Remediation Fund.

20.6 Site Remediation Fund

(a) In order to make provision and to provide security for payment of future Site Remediation Costs as they become payable, Mineralogy will establish a Site Remediation Fund, and Sino will make payments into the Site Remediation Fund in the manner set out in this clause.

(b) The Site Remediation Fund is intended to provide security and certainty for the benefit of Sino, and for Mineralogy as the holder of the Mining Lease, that sufficient funds will be available at Mine Closure to meet Site Remediation Costs.

(c) The Site Remediation Fund will be maintained in a separate interest bearing trust account controlled by Mineralogy as trustee, and which will be designated as a trust account. The interest earned on funds in the Site Remediation Fund will be retained in the Site Remediation Fund.

(d) The Site Remediation Fund may be used solely for the purpose of paying Site Remediation Costs as they become payable. The Site Remediation Fund may not be used or accessed for any other purpose.

(e) For each Operating Year, Mineralogy will determine an annual charge on account of future Site Remediation Costs to be made by Sino in that Operating Year. The amount of the annual charge is to be determined by Mineralogy, having regard to:

(i) Mineralogy's best prevailing estimate of the amount of future Site Remediation Costs, and the amount (if any) already contributed by Sino Iron into the Site Remediation Fund; and

(ii) the number of years remaining until Mine Closure.

(f) At least 30 days prior to the commencement of each Operating Year, Mineralogy will notify Sino of its annual charge in respect of the forthcoming Operating Year.

20.7 Environmental Management Plan

(a) As a condition to Mineralogy's approval of Sino's Development Plan, Sino will prepare for the approval of Mineralogy an environmental management plan setting out the obligations of Sino with regard to environmental management. Sino may from time to time submit changes to the environmental management plan.

(b) The environmental management plan must at a minimum:

(i) be sufficient to ensure compliance by Sino with its obligations under all applicable Legal Requirements, and to meet the requirements of all relevant Government Authorities;

(ii) comply with good and accepted environmental management practices adopted by the mining industry in Australia;

(iii) set out the strategies and management processes that will achieve compliance with those requirements;

(iv) set out the obligations of Sino with regard to, among other things, the reporting of environmental incidents; and

(v) set out the obligations of Sino with regard to periodic review of its environmental management performance.

(c) The environmental management plan submitted by Sino shall be subject to the approval of Mineralogy, approval not to be unreasonably withheld.

(d) Mineralogy may from time to time require Sino to modify or add to the environmental management plan if Mineralogy can demonstrate that the amendment is necessary to meet the standards required under paragraph (b).

(e) Sino will at all times comply with the approved environmental management plan and will ensure that Sino's employees and contractors comply with the approved environmental management plan.

(f) Sino will on an annual basis following commencement of the development review its environmental management performance against the environmental management plan and will provide a report to Mineralogy on the effectiveness of the plan in achieving compliance, the reasons for non-compliance and the changes required to the plan to achieve compliance.

(g) If Mineralogy has approved an environmental management plan under a Project Agreement which contains the same content as the environment management plan to be approved by Mineralogy under this Agreement, Mineralogy will be deemed to have approved the environmental management plan.

(h) If Mineralogy approves the environmental management plan and Mineralogy's approval is also required under a Project Agreement for an environmental management plan which contains the same content as the environmental management plan, Mineralogy will be deemed to have approved that environmental management plan. Sino and Mineralogy hereby agree to vary the terms of such Project Agreement to the extent required to give effect to this paragraph (h).

20.8 Claims in respect of Environmental incidents

Sino will indemnify Mineralogy against all Claims in respect of:

(a) any Site Remediation Work required as a result of Sino's Activities;

(b) any contamination of land resulting from Sino's Activities;

(c) pollution (which includes all discharges and emissions in excess of or in contravention of relevant Legal Requirements) resulting from Sino's Activities;

(d) dangerous, hazardous or toxic substances brought onto the Mining Lease by Sino.

SCHEDULE B Chronology of mostly agreed facts found at the trial (see [73])

Mining Leases 08/123, 08/124 and 08/125 granted to Mineralogy.

Mining Leases 08/264, 08/265 and 08/266 granted to Mineralogy.

Various parties enter into the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (State Agreement), including Mineralogy, Korean Steel and Balmoral Iron Pty Ltd.

The Minister for the Environment issues Ministerial Statement No 635.

General Purpose Leases 08/52, 08/53 and 08/54 granted to Mineralogy.

Mineralogy and Sino Iron and Mineralogy and Korean Steel respectively enter into Mining Right and Site Lease Agreements (MRSLAs)

[NOTE: The Sino Iron MRSLA was amended and varied on 31 March 2006 and later again, on 8 January 2008. The Korean Steel MRSLA was amended and varied on 22 October 2008.]

Mineralogy submits the Preliminary Decommissioning and Closure Plan for the Sino Iron Project.

Mineralogy, Sino Iron, Korean Steel and CITIC Pacific Ltd enter into the Fortescue Coordination Deed.

Mineralogy relinquishes certain land ('Area D') to the State and the State Agreement is varied accordingly

Mineralogy sends a letter to CPM regarding the Site Remediation Fund (SRF). Amongst other things, the letter states that 'there is currently no Site Remediation Fund ... established for CPM's Project ...' Mineralogy requests information from CPM relating to the SRF.

Mineralogy letter to CPM requiring CPM to deposit $200 million into a 'separate interest bearing trust account controlled by Mineralogy Pty Ltd as trustee' within '30 days from the date of this letter'.

CPM letter to Mineralogy requesting that it 'withdraw its notification dated 8 September and re‑submit notification of the annual charge to be made to the Site Remediation Fund in accordance with the terms of the [MRSLAs]'.

Mineralogy requests further information for the purposes of calculating the Site Remediation Costs and the parties exchange correspondence regarding the information requests.

CITIC and Mineralogy hold various meetings and exchanges correspondence regarding (amongst other things) the SRF.

Sino Iron and Korean Steel transfer ownership of Camp 123 back to Mineralogy and vacate the accommodation facilities at Camp 123.

Mineralogy opens a bank account with the National Australia Bank styled 'Mineralogy Pty Ltd Remediation Account' with account number [REDACTED]‑6708 (NAB account)

Mineralogy emails CITIC (Allens) providing details of the NAB account.

Mineralogy emails National Australia Bank attaching a completed NAB Connect Additions/Amendments Request Form.

CITIC submits Mine Continuation Proposals to the State, which attach a copy of CITIC's Conceptual Closure Plan dated January 2017 (January 2017 Conceptual Closure Plan).

CITIC submits its Annual Environmental Report for the 2017/18 financial year to the Department of Jobs, Tourism, Science and Innovation, and provides a copy to Mineralogy.

The Minister for the Environment issues Ministerial Statement No 1066.

CITIC provides Mineralogy with a copy of the January 2017 Conceptual Closure Plan as part of the Mine Continuation Proposals.

Mineralogy sends a letter to CPM requiring that CITIC deposit $1.3 billion into the NAB account within 14 days. See full terms of letter.

Mineralogy and CITIC (Allens) exchange correspondence regarding the 27 December 2017 notification.

Mineralogy engages remediation expert Mr Mike Slight to assess the cost of Site Remediation Works.

Mineralogy notifies CITIC that it has engaged Mr Slight.

Mineralogy requests a site visit for Mineralogy and for Mr Slight on 26 to 28 March 2018 and then Mineralogy and CITIC exchange correspondence about arrangements for the site visit which is scheduled.

Scheduled site visit does not proceed by Mineralogy and Mr Slight.

CITIC and Mineralogy exchange correspondence to schedule a meeting between Mr Slight and CITIC personnel to occur on 16 May 2018 in Perth.

Mr Slight assess the cost of Site Remediation Works to be $529,378,207.

Mineralogy sends a letter to CPM requesting that $529,378,207 be deposited into the NAB account, attaching a copy of Mr Slight's assessment.

CPM responds to the 16 April 2018 communication. Amongst other things, CPM states 'Mineralogy's purported determination ... is invalid and of no effect. Accordingly, CITIC will not be making a payment in response to the demand ...'.

Mineralogy issues written notices of demand to each of Sino Iron and Korean Steel, demanding payment of $264,869,103.50 by each of Sino Iron and Korean Steel into the NAB account (ie $529,378,207 in total).

Meeting at CPM's office in Perth, Western Australia attended by Mr Slight, Mr Chris Spielvogel (Mineralogy) with Mr Horton, Mr Watson and Mr Northey of CPM.

Mineralogy and CITIC exchange correspondence to schedule a site visit for Mr Slight on 6 June 2018.

Mineralogy issues notices of default to CITIC, Sino Iron and Korean Steel, demanding payment of $529,378,207 into the NAB account.

Allens, on behalf of CITIC, sends a letter to Mineralogy responding to the April 2018 Determination and the notice dated 20 August 2018.

Allens, on behalf of CITIC, puts an open offer to contribute $6 million to the SRF as the annual charge for the Operating Year commencing 1 July 2018, by reference to an estimate prepared by AECOM and Liberty Industrial in September 2018, then estimating future site remediation costs at approximately $180 million.

Mineralogy rejects CITIC's open offer of 5 September 2018.

Mineralogy demands CITIC 'immediately cause Korean Steel and Sino Iron to perform their obligations under clauses 20.5 and 20.6 of the MRSLAs, by paying $529,378,207 in total' into the NAB account.

Mineralogy demands CITIC pay $529,378,207 in total into the NAB account.

CITIC submits a Ramp-up Phase Closure Plan 2018 ‑ 2021 of 4 October 2018 to the State.

CITIC makes a further open offer to contribute $8 million to the SRF as the annual charge for each Operating Year from 2016 to 2021.

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

[1] CPM.587.007.0391, exhibit 1.0404 (Sino Iron MRSLA) and MPL.001.002.0180, exhibit 1.0027 (Korean Steel MRSLA). It is not in dispute that the Sino Iron MRSLA and Korean Steel MRSLA are in identical terms, save for a reference to 'Sino' in the former will be a reference to 'Korean' in the latter.

[3] CPM.634.001.4208, exhibit 1.0651 (April 2018 Notice or April 2018 Determination).

[5] MPL.001.001.3222, exhibit 1.0711 (Sino Iron notice); MPL.001.001.3224, exhibit 1.0710 (Korean Steel notice) (May 2018 Notice or May 2018 Determination).

[6] MPL.001.001.3342, exhibit 1.0759. Mineralogy's rejection is at CPM.634.001.5129, exhibit 1.0760.

[8] However, the facts sought to be identified under par 25 of an earlier chronology lodged on behalf of the CITIC defendants (folio document 112) in relation to facts around the CITIC defendants' counterclaim against Mineralogy in relation to an ASIC media release are not received, given an earlier interlocutory ruling of mine concerning the inadmissibility of such matters.

[47] Exhibit 5B, par 7 - CPM.629.018.0032, exhibit 1.0959.

[48] Exhibit 5B, par 8 - CPM.629.019.0054, exhibit 1.0967.

[49] Exhibit 5B, par 9 - CPM.629.019.0056, Confidential exhibit 1.0968.

[51] Exhibit 8, par 4 - CPM.629.014.0060, exhibit 1.0926.

[52] CPM.629.019.0337, exhibit 1.0715. See ts 319 and following.

[55] Mineralogy's opening written submissions dated 2 November 2020 (Mineralogy's opening), par 33.

[56] Mineralogy's closing written submissions dated 23 November 2020 (Mineralogy's closing), par 55.

[58] See the CITIC defendants' closing written submissions dated 23 November 2020 (CITIC defendants' closing), pars 11 - 12.

[59] CITIC defendants' closing, par 23.

[60] CITIC defendants' closing, par 24.

[61] CITIC defendants' closing, par 18.

[64] CITIC defendants' opening submissions (CITIC defendants' opening), par 45.

[65] CITIC defendants' opening, par 47.

[66] CITIC defendants' opening, par 48.

[67] CITIC defendants' opening, par 49.

[68] CITIC defendants' closing, par 54. See also par 38.

[74] See, for example, MPL.001.001.1528, exhibit 1.0538 and CPM.634.001.4040, exhibit 1.0616.

[77] CITIC defendants' opening par 89, referring to Mineralogy's opening par 38.

[78] MPL.001.001.1611, exhibit 1.0492, at page 13 of the document.

[79] Exhibit 10, Cramer Expert Report, pages 63, 65, 78 - 79, 163 - 167.

[84] MPL.001.001.2235, exhibit 1.0617, ts 405, ts 410.

[85] CITIC defendants' opening, pars 94 - 112.

[86] CITIC defendants' opening, pars 95 - 99.

[87] CPM.631.014.2808, exhibit 1.0466, at .2918, .2965, .2911.

[88] CITIC defendants' opening, par 105 and closing, par 144.

[89] See CITIC defendants' closing, par 149.

[90] Exhibit 10, page 41, table 3.4, Cramer Expert Report.

[94] Exhibit 10, Cramer Expert Report; exhibit 9A, August Slight Report, at par 124; Exhibit 9B, October Slight Report, at pars 28 - 33.

[95] CPM.629.026.0118, exhibit 1.1068 at par 0571.

[97] MPL.001.003.0133, exhibit 1.0037, pages 4 and 14 - 15.

[98] CPM.560.002.2778, exhibit 1.0223, page 34.

[99] CPM.639.255.4060, exhibit 1.0773, pages 144 and 156 - 157.

[101] (Footnote from report) 'Termed an "IFRS closure cost" estimate in Cramer 2020. IFRS is an acronym for International Financial Reporting Standards'.

[102] MPL.001.001.0379, exhibit 1.0146.

[103] MPL.001.001.0145, exhibit 1.0150.

[104] MPL.001.001.3464, exhibit 1.0216.

[105] MPL.001.001.1517, exhibit 1.0526.

[106] Exhibit 1.0651 at CPM.634.001.4212.

[107] MPL.001.001.0932, exhibit 1.0662.

[110] MPL.001.001.1976, exhibit 1.0685.

[111] CPM.634.001.4257, exhibit 1.0687.

[112] CPM.629.003.2339, exhibit 1.0708.

[114] MPL.001.001.3982, Confidential exhibit 1.0346.

[115] A reference to the 'CITIC defendants' in this counterclaim context is, of course, exclusively a reference to Sino Iron and Korean Steel.

[116] CITIC defendants' opening, par 133.

[117] CITIC defendants' opening, par 133(iii).

[118] CITIC defendants' closing, pars 157 - 160; and ts 362 - 363.

[119] CITIC defendants' closing, par 172.

[120] SUB.001.001.0277, exhibit 1.1051.