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

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

[2021] WASC 45

Supreme Court of WA|2021-02-24|Before: Martin J

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Source facts

Court

Supreme Court of WA

Decision date

2021-02-24

Before

Martin J

Source

Original judgment source is linked above.

Judgment (387 paragraphs)

[1]

The key issues in dispute at the present trial concern the meaning of contractual terms addressing the issue of mine site remediation funding obligations. The contracts in question are two wholly written mining right and site lease agreements (known as a MRSLA) as perfected on 21 March 2006 and subsequently varied as between the plaintiff, Mineralogy Pty Ltd (Mineralogy), and each of the first defendant, Sino Iron Pty Ltd (Sino Iron) and the second defendant, Korean Steel Pty Ltd (Korean Steel).[1] CITIC Ltd (CITIC), the third defendant, is the parent corporation of Sino Iron and Korean Steel. Collectively, I refer to the the three defendants as the 'CITIC defendants'.
The present dispute over the true contractual meaning underlies Mineralogy's demand for a financial contribution (ie, payment) from Sino Iron and Korean Steel, which in aggregate exceeds half a billion dollars and which Mineralogy contends has been due and owing to it since it issued a request for payment of those funds in April 2018, further or alternatively in May 2018.
The underlying dispute over the true meaning of written text found used within the controversial contractual terms raises interpretive questions which give rival alternate meanings towards that text. Or, to use the terminology of the plurality of the High Court in Mount Bruce Mining v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104, this is a situation of 'constructional choice'.
The present dispute focuses heavily upon MRSLA cl 20.5 and cl 20.6, the text of which is essentially identical within each MRSLA. For convenience, as was done at trial, in these reasons I will refer to the Sino Iron MRSLA as the template.

The same MRSLAs have already been the subject of prior disputation and litigation already conducted in this court. Edelman J's reasons in Mineralogy Pty Ltd v Sino Iron Pty Ltd [2013] WASC 194 (Mineralogy [2013]) resolved an interpretive clash between the same parties over the true meaning of another MRSLA term dealing with the obligation of Sino Iron and Korean Steel to pay Mineralogy the royalty payment that is referred to as 'Royalty Component A' under MRSLA cl 8.1.
Subsequently, by my reasons for decision following trial in what is known as the 'Royalty Component B Proceedings' (see Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 16] [2017] WASC 340 (Mineralogy [No 16]) delivered 24 November 2017) I considered there the disputed issues around the true meaning of a phrase used within the 'Royalty Component B' formula within cl 8.2(a). The appeal from that decision to the Court of Appeal in Sino Iron Pty Ltd v Mineralogy Pty Ltd [2019] WASCA 80 (Mineralogy [No 16] appeal) (delivered 21 May 2019) saw Buss P, Murphy & Beech JJA also discuss a number of clauses within each MRSLA as part of assessing the Royalty Component B formula used within its overall contractual context.
Further local litigation has followed concerning a contended engagement from time to time of another term within each MRSLA in Mineralogy's favour. That litigation has been conducted over what presents as argued penalty-like exposures for Sino Iron and Korean Steel under MRSLA cl 6.3, in the event of them each not producing 6 million tonnes of Product (as defined in the MRSLAs) by no later than seven years from the entering into the MRSLAs. Clause 6.3 is the subject of my reasons in Mineralogy Pty Ltd v Sino Iron Pty Ltd [2020] WASC 40 (delivered 13 February 2020) in a context of the CITIC defendants' successful abuse of process and Anshun estoppel challenges against Mineralogy's action. That decision is presently pending an appeal.
A further decision of mine published last year (see Sino Iron Pty Ltd v Mineralogy Pty Ltd [2020] WASC 311 (MCP decision, delivered 1 September 2020) considers a number of Project Agreements (including the same MRSLAs) between Sino Iron and Korean Steel, and CITIC.
The 2020 reasons address the two MRSLAs in the MCP decision context of a strikeout application centred around cl 15 and cl 16 in each MRSLA (see [148] and [151]). MRSLA cl 16 is the Standard of Work provision found in each MRSLA. As I said at [156]:

[8]

The sum of $529,378,207.
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.
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.
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.
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.
Damages.
Interest.
Costs.
Such other orders as the Court deems appropriate.
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).
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'.
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.
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).
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.
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.
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.
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.
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.
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.

[18]

Five relatively obvious matters may conveniently be isolated and identified at the outset. This can be accomplished in relatively brief terms.
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.
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)].
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.
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.
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.
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.
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).

[19]

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.
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.
Non-exclusively, I highlight the following six matters around the Site Remediation Fund in a context of the present interpretive dispute.
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.
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.
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]
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.
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.
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.'
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.
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.
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.
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.
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).
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).
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.
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.
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.
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.
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.
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'.
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).
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.

[28]

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.
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.
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.
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.
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.
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.
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.

[29]

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.
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.
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.
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.
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.
The commencing 'SUB', as a source identifier, indicates the document has been obtained on subpoena.
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.
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.
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.
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.
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.
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.
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.
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.
I can now turn to the submitted trial evidence of the parties' respective witnesses.

[32]

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.
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.
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.
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.
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.
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.
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]
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:

[34]

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.
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.
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).
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.
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:

[59]

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]
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]
At par 55, Mr Harris notes the delivery of my reasons for decision on 24 November 2017 in Mineralogy [No 16].
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.
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.'
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.
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.
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]
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]).
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.
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).
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.
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.
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.'
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.
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.]
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.
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.
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.
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.
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.

[60]

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.
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).
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.
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]
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.
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:

[62]

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.'
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'.
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.
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.
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.
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.
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):

[66]

The potential relevance of this evidence goes to a crucial issue in dispute in the trial.
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 ...'
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.
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.
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).
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.
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).
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.
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).
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).
Also identified as being then a director of Mineralogy was another employee of Mineralogy, a Ms Baljeet Singh (ts 312).
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).
That concluded the non-expert witness evidence led on behalf of Mineralogy at the trial.

[69]

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]
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).
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.
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.

[80]

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.
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.
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.
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.

[82]

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).
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.
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.
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:

[87]

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.
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.
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.
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.
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.
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.
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).
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).
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.
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.

[98]

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).

[102]

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.
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.
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)).
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'.
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.
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.
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.
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.
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.
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.
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.

[103]

As to cl 20.5, this provision obviously needs to be read very closely with the immediately following cl 20.6.
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.
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.
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.
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.
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).
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.
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'.
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.
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.
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.
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.

[104]

Towards MRSLA cl 20.6(a), I highlight the following aspects of the subclause.
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.
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'.
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.
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.
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'.
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.
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.
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.
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.
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.

[105]

This subclause addresses the as expressed intent of all MRSLA parties underlying the establishment of a Site Remediation Fund.
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.
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.
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.
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.
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.
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.
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.
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.

[106]

Maintenance of the Site Remediation Fund, once it is established by Mineralogy, is the subject of this subclause.
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'.
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).
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.
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.

[111]

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.
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.

[112]

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'.
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.
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.
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]).
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.
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.
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.
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).
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.
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.
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.
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.
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.
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).

[114]

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).
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.
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.
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.
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.

[117]

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.
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 '$B') under (e)(i), at the end is to be divided by the number of years that is assessed as remaining until Mine Closure (amount of years 'C').
Essentially then, the numerator future Site Remediation Costs amount, as is determined by Mineralogy must then be divided by an assessed years remaining until the envisaged time of the permanent cessation of operations at the mine. This reflects the expression of an ($A - $B)/C years fractional calculation.
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.
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.

[118]

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.
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.
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.
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.
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]
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]

[119]

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.
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.
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.
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.
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.
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.
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]
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'.
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]
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.

[121]

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.
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]
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.
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]
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.
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]
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]
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:

[136]

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.
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]
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).
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.
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.
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.
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.
Finally, it was said that the above errors led to Mr Slight significantly overestimating the owner's management costs by nearly some $53 million.
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]

[150]

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.
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).
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.
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.
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.

[151]

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 $A for the Operating Year at hand.
As a matter of ascertaining the overall true meaning of MRSLA cl 20.6(e), my end view is that there must be found a methodological requirement upon Mineralogy whilst determining the annual charge (if any) for an Operating Year - to engage properly with the chosen contractual criteria, as has been specified in MRSLA cl 20.6(e). This will require Mineralogy to have regard as well to, and so, to ascertain the input C and then, for Mineralogy to divide the numerator money sum of the cl 20.6(e)(i) fraction ($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.
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.
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.

[154]

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.
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.
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.
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.
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.
For present purposes then, I will proceed next by incorporating relevant portions from the Joint Expert Memorandum dated 15 November 2020:[100]

[199]

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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
With those observations made, I can turn to the parties' relief claims at the trial.

[215]

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.

[218]

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.
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.
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.
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.
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.

[251]

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.
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.
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'.
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.
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.
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.
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.
Essentially then, the validity of the May 2018 Notice turns upon what it said at par 21 thereof. I address that next.

[254]

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.
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.
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.
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.
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.
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.

[256]

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.
This defect as seen, was pointed out to Mineralogy explicitly by CPM in its 18 April 2018 response to the April 2018 Determination.[113]
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.
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.
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'.
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.
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).
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.
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'.
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.
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.
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.
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.
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.
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.
On that basis alone, all the attempted demands of Mineralogy after the NAB account was established in 2014, were legally ineffective.
As such, Mineralogy also fails to establish its alternate May 2018 debt claim.
Having now determined that Mineralogy's primary and alternate debt claims were ineffective and fail, I now turn to the CITIC defendants' counterclaim.

[257]

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).
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).
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.
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.

[266]

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.
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.
Mineralogy denies any misapprehension with respect to its obligations.
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.
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.
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).
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.
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.

[267]

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.
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.
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.

[271]

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.
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.
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.
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.
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]
Such an arrangement, of course, could not lawfully apply to funds held in a Mineralogy account that was a trust account, containing trust funds.
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.
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).
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.
The counterclaim must fail upon that basis alone.

[272]

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.
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.
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.
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.
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.
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.
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.
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.

[278]

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.

[283]

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:

[287]

(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.

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

At a glance

Court

Decision date

Before

Source

Judgment (387 paragraphs)

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

Project proposals and annual environmental reports

First requests concerning the Site Remediation Fund by Mineralogy

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

Best prevailing estimate and amount already contributed

Determination as to the validity of the April 2018 Determination

Prior dealings with Site Remediation Fund trust

Prior dealings with Site Remediation Fund trust

Legislation Cited (3)

Cases Cited (15)