MINERALOGY PTY LTD -v- SINO IRON PTY LTD [2022] WASCA 162 (9 December 2022)

[2022] WASCA 162

Court of Appeal (WA)|2022-12-09|Before: Buss P

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Court

Court of Appeal (WA)

Decision date

2022-12-09

Before

Buss P

Source

Original judgment source is linked above.

Judgment (92 paragraphs)

[1]

This appeal concerns another of the very numerous disputes between the parties to this appeal arising from and concerning two iron ore mining agreements made between them.
The appellant, Mineralogy Pty Ltd (Mineralogy), is the registered holder of certain mining leases containing deposits of magnetite ore. Each of the first and second respondents (to which we will refer respectively as Sino and Korean) is a party to an agreement with Mineralogy, termed a Mining Right and Site Lease Agreement (MRSLA), in relevantly identical terms. The third respondent, CITIC Limited (CITIC), is the holding company of Sino and Korean and, according to Mineralogy, is guarantor for Sino's and Korean's obligations under the MRSLAs.
For ease of exposition, we will refer to the MRSLA concerning Sino in the course of these reasons.
The MRSLA establishes a long‑term relationship between Mineralogy and Sino by which, in broad summary, (1) Mineralogy grants Sino the right to take ore from the areas of the mining leases; (2) Sino agrees to produce certain iron ore products from the ore for sale or export; and (3) Sino agrees to pay Mineralogy a royalty comprising two separate components. Relevantly to this appeal, the agreement makes elaborate provision for the carrying out by Sino of site remediation work, including at mine closure, and for security for Sino's site remediation obligations in the manner provided by cl 20.5 and cl 20.6 of the MRSLA.
Clause 20.6 of the MRSLA is the subject matter of this appeal. It provides for Mineralogy to constitute a Site Remediation Fund,[1] to be maintained in a separate interest‑bearing trust account which is to be designated as a trust account, to be used solely for the purpose of paying Site Remediation Costs as they become payable. It also provides for Mineralogy to determine an annual charge on account of future Site Remediation Costs to be determined by Mineralogy, having regard to Mineralogy's best estimate of the amount of future Site Remediation Costs and the amount already contributed by Sino into the Site Remediation Fund, and having regard to the number of years remaining until Mine Closure.

[22]

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

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

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

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

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

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

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

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

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

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

(f) Sino will on an annual basis following commencement of 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).

[28]

The nature of the issues on appeal means that it is not necessary to recount or summarise the primary judge's very detailed reasons. The critical issue in the appeal is the proper construction of cl 20.6. As has been observed many times in this court, including in an earlier appeal between the parties to this appeal,[10] there is only one true construction of a legal instrument, and the task of this court on appeal concerning the construction of an instrument is to determine for itself the proper construction of the instrument.
Consequently, we will do no more than outline his Honour's central conclusions.
The primary judge accepted that progressive remediation - in other words, remediation prior to Mine Closure - was contemplated by, and the subject matter of, cl 20.6(a) and was encompassed by the broad definitions of 'Site Remediation Work' and 'Site Remediation Costs'.[11] The judge accepted that some funds would be needed to be held in the Site Remediation Fund for the forthcoming Operating Year to enable progressive remediation work to be carried out and paid for in the course of that Operating Year.[12]
The primary judge observed, by reference to cl 20.6(b), that cl 20.6 was directed to ensuring that sufficient funds be available at Mine Closure to meet Site Remediation Costs. His Honour considered that this reflected and indicated that the clause's predominant object was to ensure sufficient funds at the point of Mine Closure.[13] His Honour observed, in this regard, that there was 'some element of tension' between cl 20.6(a) and (b).[14]
The judge pointed to the definition of 'Mine Closure', namely the permanent cessation of operations at the Mine, as counting against Mineralogy's contention that the Site Remediation Fund must always hold sufficient funds in the event of an unforeseen early closure or shutdown.[15]
The judge agreed with the respondents' contention that Mineralogy's failure to overtly designate their National Australia Bank (NAB) account as a 'trust account' was legally fatal to the validity of Mineralogy's debt claims.[16]
The judge found that cl 20.6(c) explicitly required Mineralogy to establish a designated trust account. Given the potentially huge sums of money to be held in the account, his Honour did not accept that some internal designation by Mineralogy, or communication to NAB, would be sufficient to establish a designated trust account.[17] The requisite level of protection necessitated an express designation by the financial institution itself.[18] To avoid future confusion or misunderstandings, his Honour considered that the trust status needed to be overt.[19]
The judge said that, in practice, Mineralogy would need to notify each of Sino and Korean individually at no later than 31 May of a particular calendar year in respect of the annual charge for an ensuing Operating Year.[20]
The judge noted that nothing in the MRSLA expressly identified when the obligation to render payment arises after a cl 20.6(f) notification.[21] The judge held that, 'essentially by implication', payment should be met within a reasonable time of a notification. The judge held that a reasonable time for payment would be no later than six months into the ensuing Operating Year.[22] This conclusion is not challenged on appeal.
The judge said that cl 20.6(e)(i) and (ii) 'deliver key criteria that must be given proper attention by Mineralogy in any determination decisions'.[23] The judge said that Mineralogy would not meet the required degree of good faith (imposed by cl 37.4) were it to ignore or avoid the controlling criteria in cl 20.6(e)(i) and (ii).[24]
The judge observed that Mineralogy's determination is to be made by reference to future Site Remediation Costs, not incurred costs or liabilities.[25] His Honour found that the phrase 'to be made' in cl 20.6(e) is a reference to the annual charge levied for a forthcoming Operating Year, rather than 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 or Korean in an ensuing Operating Year.[26] While already-planned works would be relevant to an assessment of the cost, the scope of the assessment would be greater than already-planned works.[27]
The judge found that Mineralogy's assessed numerical figure constituting its best prevailing estimate of future Site Operating Costs to be made within the next Operating Year, by reason of its character as a 'best prevailing estimate', was not a reviewable assessment, provided it was the honest best prevailing estimate. However, the numerical figure constituting the money already in the Site Remediation Fund was reviewable, by virtue of it being a fixed sum rather than an estimate.[28]
The judge expressed his conclusion on the critical question of construction in the following manner:[29]

[35]

The primary judge erred in both fact and law by finding that a construction of cl 20.6(e) of the MRSLA that led to a divisional exercise resulted in a more 'commercial' outcome, when that conclusion was not supported on the evidence below and was contrary to the objective purpose of cl 20.6 of the MRSLA: J[283], [397]-[398]. 5. The primary judge erred in both fact and law by finding that the appellant's determination of the amount to be paid into the Site Remediation Fund failed to have regard to the number of years remaining until Mine Closure in accordance with cl 20.6(e) of the MRSLA and was invalid: J[488]-[491].
While, in this way, Mineralogy's grounds of appeal challenge discrete aspects of the primary judge's reasoning process in coming to his Honour's ultimate construction, this is not how Mineralogy's written or oral submissions proceed. Rather, consistently with the orthodox position that there is but one true construction of a legal instrument, Mineralogy seeks to demonstrate that the primary judge's construction was in error and that the true construction was in the terms contended for by Mineralogy. It is appropriate to evaluate grounds 1 - 5 conformably with the way in which they were argued - ie by determining the proper construction of cl 20.6. In doing so it is unnecessary to address each of grounds 1 - 5 separately.
Grounds 6 - 8 concern whether Mineralogy's NAB bank account was a designated trust account:
1. The primary judge erred in law by finding that the bank account established by the appellant failed to meet the requirements of cl 20.6(c) of the MRSLA, properly construed, and ought to have found that the bank account was controlled by the appellant as trustee and complied in substance with that subclause: J[497] ‑ [500] and [557] ‑ [559].
2. The primary judge erred in law by finding that a failure to constitute a bank account in accordance with cl 20.6(c) of the MRSLA rendered ineffective any determinations made by the appellant under cl 20.6(e) of the MRSLA: J[507].
3. The primary judge erred in both fact and law by finding that the respondents were excused from performing any obligations to make payment into the Site Remediation Fund under cl 20.6 of the MRSLA in the absence of a bank account being established by the appellant that met the requirements of cl 20.6(c) of the MRSLA: J[504] ‑ [507].
Grounds 9 - 11, which concern whether the April and May 2018 notices were valid, are as follows:
1. The primary judge erred in law by finding that the appellant was required, in notifying the respondents of its determination under cl 20.6(e) of the MRSLA, to identify separate amounts for each of the first and second respondents and the manner in which the appellant had regard to the matters in paragraphs (i) and (ii) of the sub-clause, when no such requirements were imposed for any notice under cl 20.6 of the MRSLA: J[455]-[456].
2. The primary judge erred in both fact and law by finding that the appellant's notice of 16 April 2018 did not constitute a valid notice of the appellant's determination under cl 20.6(e) of the MRLSA and was therefore ineffective: J[457].
3. The primary judge erred in both fact and law by finding that the appellant's notices of 21 May 2018 were ineffective at law, because of the matters identified in grounds 1 to 9 above: J[487]-[491] and [507].
Ground 12 is a conclusionary ground that raises no additional issues:
1. Because of the matters described in grounds 1 to 11 above, the primary judge ought to have found that the appellant's notice of 16 April 2018, alternatively its notices of 21 May 2018, were valid and binding determinations under cl 20.6(e) of the MRSLA and the respondents were obliged to pay the sum of $529,378,207 into the Site Remediation Fund.

[38]

Senior counsel for Mineralogy accepted that the concept of 'current disturbance' was critical to Mineralogy's preferred construction. Asked to identify the textual foothold for the focus on current disturbance inherent in the construction propounded by Mineralogy, senior counsel pointed to the definition of 'Site Remediation Costs'.[38]
Mineralogy submits that, because the words 'on account of future Site Remediation Costs' are read by inserting the definition of 'Site Remediation Costs', the reference to 'on account of future Site Remediation Costs' in cl 20.6(e) means a charge on account of both the costs of remediation to be incurred in the future, as well as the liability for remediation that arises in the future. Mineralogy submits that, unlike costs which are not incurred until remediation work is done, liabilities are incurred whenever mining operations cause disturbance.[39] Thus, to determine what liabilities for remediation might be incurred in the following financial year, one need only look to what further disturbance is projected in that financial year and estimate the costs that would then be incurred in remediating that disturbance in the future.[40]
When Site Remediation Costs are understood in this way, Mineralogy submits that it does not make sense for the estimated Site Remediation Costs to be divided by the number of years until Mine Closure.[41]
Further, when Site Remediation Costs are so understood, it can be seen, Mineralogy submits, that what the annual charge is to be 'on account of' are the 'Site Remediation Costs' that are 'to be made' in that Operating Year. As a matter of ordinary language, costs are incurred or paid, rather than 'made'. The phrase 'to be made', as used in cl 20.6(e), is a recognition that the Fund captures not just the actual costs of remediation that are to be paid, but the liabilities arising from disturbance made during that year.[42]
Secondly, Mineralogy emphasises that the ordinary meaning of the words 'having regard to' is nothing more than to consider or take into account. Mineralogy submits that, whereas the clause says that Mineralogy must take into account the matters in subparagraphs (i) and (ii), the primary judge's construction is radically different in requiring Mineralogy to divide the result of the matters in (i) by the matter in (ii).[43]
Mineralogy submits, therefore, that the requirement to have regard to the number of years remaining until Mine Closure should not be read as requiring that the years remaining be the denominator in a 'divisional exercise'. Rather, a more natural reading of that part of the clause is that Mineralogy is to consider the extent to which the number of years remaining until Mine Closure affects whether the amount to be paid into the Fund adequately accounts for and secures Site Remediation Costs as defined.[44] One way that the number of years until Mine Closure can affect the extent to which the Fund adequately provides for Site Remediation Costs is that, the further out one is from Mine Closure, the greater the uncertainty as to how much it will actually cost to undertake remediation. One has regard to that uncertainty by making allowance for an appropriate contingency. As one approaches Mine Closure, the amount of that contingency would be expected to reduce.[45]
Further, regard may be had to the number of years remaining until Mine Closure by allowing appropriately for the effect of inflation, balanced against the interest that will accrue on money already paid into the Fund.[46]

[43]

The primary question of construction on appeal concerns cl 20.6(e), which governs Mineralogy's determination of an annual charge on account of future Site Remediation Costs for an Operating Year, giving rise to an obligation for Sino to make payment of that sum into the Site Remediation Fund. In order to resolve that question, it is necessary to understand cl 20.6(e) in the context of cl 20 as a whole.
Clause 20.6 recognises and reflects that both Mineralogy and Sino have obligations in respect of remediation of the site on which Mining Operations under the MRSLA are conducted.
As the tenement holder of the relevant mineral leases, Mineralogy has obligations as to site remediation arising under the Mining Act 1978 (WA).
As between Mineralogy and Sino, under the MRSLA, Sino is obliged to undertake all Site Remediation Work: cl 19, cl 20.2 and cl 20.4.
The MRSLA contemplates, and imposes, obligations on Sino in respect of two kinds of site remediation. First, at Mine Closure (that is, permanent cessation of operations at the Mine), Sino is obliged to carry out all necessary Site Remediation Work: cl 19.1 and cl 20.4(b). 'Site Remediation Work' is defined to mean 'all work required in connection with the decommissioning of the Mine, shutdown 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'. The definitions of 'Mining Operations' and 'Legal Requirements' are set out in [12] above.
Secondly, Sino is obliged, as and when required by Legal Requirements, to carry out all Site Remediation Work that may be required as a result of Sino's activities: cl 20.4(a). The primary judge and the parties have referred to this kind of remediation, which occurs before Mine Closure, by the shorthand 'progressive remediation'. At times, we will do the same.
As well as the distinct substantive obligations in cl 20.4(a) (as and when required) and cl 20.4(b) (following Mine Closure), these two aspects of Sino's obligations in respect of Site Remediation Work are reflected in the two limbs of the definition of 'Site Remediation Work'. That definition is set out at [64] above. The two limbs of the definition are reflected by reading the definition in the following manner:

[45]

Clause 20.5 entitles Mineralogy to require Sino to provide reasonable security for the performance of Sino's obligations under cl 20, in the form of the Site Remediation Fund provided by cl 20.6. That purpose - providing security for Sino's obligations under cl 20 - encompasses Sino's remediation obligations in respect of Site Remediation Work at Mine Closure (cl 20.6(b)) and those in respect of progressive remediation (cl 20.6(a)).
By cl 20.6(b), the Site Remediation Fund is intended to provide reasonable security and certainty that sufficient funds will be available at Mine Closure (that is, the permanent cessation of operations at the Mine) to meet costs and liabilities incurred in respect of all work required in connection with the decommissioning of the Mine, shutdown 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.
By cl 20.6(a), the Site Remediation Fund is also intended to provide reasonable security for payments, as they become payable, of other future costs or liabilities incurred in respect of work required from time to time before Mine Closure to rehabilitate or remediate areas affected by Mining Operations as necessary to meet Legal Requirements and good industry practices.
So, the dual purposes stated in cl 20.6(a) and cl 20.6(b) encompass and reflect the two limbs of Sino's obligations concerning Site Remediation Work provided for in cl 20.4(a) and cl 20.4(b). These two purposes are complementary and are not in conflict or tension.
The Site Remediation Fund is to be constituted by a separate interest‑bearing trust account controlled by Mineralogy as trustee, which account must be 'designated as a trust account': cl 20.6(c).
Interest earned on the funds in the Site Remediation Fund will accrue and accumulate within it, thereby increasing the amount of the Site Remediation Fund: cl 20.6(c).
The Site Remediation Fund is expressly for the benefit of both Sino and Mineralogy. Clause 20.6(b) provides that 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.
Mineralogy must only use the Site Remediation Fund for the purpose of paying Site Remediation Costs - namely, costs and liabilities incurred in respect of Site Remediation Work - as they become payable: cl 20.6(d). Inserting the definition of 'Site Remediation Work', the Site Remediation Fund may be used solely for the purpose of paying costs and liabilities incurred in respect of (i) all work required in connection with the decommissioning of the Mine, shutdown and cessation of Mining Operations and (ii) rehabilitation or remediation of areas affected by Mining Operations as necessary to meet Legal Requirements and good industry practices. In other words, the Site Remediation Fund may be used, and may only be used, to pay costs and discharge liabilities for either of the two aspects of Sino's obligations concerning Site Remediation Work referred to in [64] and [65] above.
Each Operating Year (namely, each period of 12 months commencing 1 July), following a notice from Mineralogy, Sino must make a payment into the Site Remediation Fund in accordance with an annual charge as determined by Mineralogy: cl 20.6(a) and cl 20.6(e). Clause 20.6 does not make express provision for the time for payment of the annual charge by Sino. In the circumstances, the MRSLA is to be read and construed as requiring that Sino pay the annual charge within a reasonable time after receiving Mineralogy's notification of the annual charge.
For each Operating Year, Mineralogy determines an annual charge to be paid by Sino into the Site Remediation Fund: cl 20.6(e). The annual charge is on account of - that is, in anticipation of, and as a contribution to - future costs and liabilities to be incurred in respect of Site Remediation Work, namely the costs and liabilities of work of the kinds mentioned in [64] and [65] above: cl 20.6(e).
Mineralogy must notify Sino of the annual charge to be paid into the Site Remediation Fund for the next Operating Year by no later than the 31 May preceding the commencement of that Operating Year: cl 20.6(f).

[46]

Clause 20.6(e) stipulates that the amount of the annual charge is to be determined by Mineralogy having regard to three identified matters. The first is Mineralogy's 'best prevailing estimate of the amount of future Site Remediation Costs'. The second is the amount (if any) already contributed by Sino into the Site Remediation Fund. The third is the number of years remaining until Mine Closure.
In our view, both the text and purpose of this clause suggest that these three matters are mandatory and exhaustive. The imperative language of cl 20.6(e) - 'is to be determined by Mineralogy, having regard to ...' - is apt to prescribe the process by which Mineralogy is to determine the annual charge. In so dictating the process, the text conveys that the stipulated matters are mandatory and exhaustive. So reading cl 20.6(e) fits comfortably with cl 20.6's purpose of constituting a fund for the benefit of both parties to the MRSLA. Moreover, no other apparently relevant consideration was identified by any party.
In construing cl 20.6(e) in this manner, we note that interest accrues on the Site Remediation Fund. In our view, such interest, which is retained in the Fund under cl 20.6(c), falls within the ambit of the second stipulated matter, namely the amount already contributed by Sino, and thus is a matter to be taken into account.
In determining an annual charge, including in making its best estimate of the amount of future Site Remediation Costs, Mineralogy must act in good faith towards Sino: cl 37.4. That requires Mineralogy to act honestly and not arbitrarily or capriciously.
The subject of Mineralogy's best estimate is the amount of 'future Site Remediation Costs': cl 20.6(e)(i). That requires Mineralogy to make an assessment of Site Remediation Costs that have not yet been incurred, but which are expected to be incurred.
As explained in [66] above, the definition of 'Site Remediation Costs' encompasses costs and liabilities in respect of the two forms of Site Remediation Work the subject of cl 20.4(a) and cl 20.4(b). Thus, inserting the definition of 'Site Remediation Costs' into cl 20.6(e)(i), the subject of Mineralogy's estimate is the costs and liabilities in respect of future Site Remediation Work of both kinds - progressive remediation and remediation at Mine Closure. That reflects the dual purposes of cl 20.6 as expressed in cl 20.6(a) and cl 20.6(b). Keeping these dual purposes in mind seems to us to be central to understanding the proper construction of cl 20.6(e).
In order to effect its overarching purpose of providing reasonable security for Sino's obligations under cl 20 - expressed in cl 20.5 - and having regard to the dual purposes expressed in cl 20.6(a) and cl 20.6(b), the Site Remediation Fund must contain sufficient money to meet two objectives. First, it must have sufficient funds to enable the payment of costs and discharge of liabilities in respect of Site Remediation Work - as required by cl 20.4(a) - anticipated to be undertaken in the forthcoming Operating Year. Secondly, by the time of Mine Closure, there must be sufficient funds to enable the discharge of Sino's obligations - as provided for by cl 20.4(b) - at, and following, Mine Closure.
Consequently, having regard to cl 20.6(e)'s text and context within cl 19 and cl 20, in our view, on a proper construction of cl 20.6(e), Mineralogy is to determine the amount of the annual charge in the following manner. Mineralogy must make an assessment of the work by way of Mining Operations (as defined) done to date and the work likely to be done in the future, up to Mine Closure. It must then assess what rehabilitation or remediation, either (i) by way of progressive remediation in the forthcoming Operating Year, or (ii) by way of remediation at and following Mine Closure, is likely to be required, arising from those Mining Operations, in order to meet Legal Requirements and good industry practices. Mineralogy must then estimate the costs of such rehabilitation or remediation. Undertaking these steps will produce two estimates: (i) the expected cost of progressive remediation in the forthcoming Operating Year; and (ii) the expected cost of remediation at and following Mine Closure. By definition, the latter sum will not be required until the passage of the number of years remaining until anticipated Mine Closure.
Bearing in mind the two objectives identified in [84] above, the annual charge should be the sum which:

[52]

In our view, the following three related textual considerations individually and collectively count decisively against adopting Mineralogy's propounded construction.
First, Mineralogy's construction gives attention to the expected remediation costs only in relation to all disturbance that has previously occurred and that is anticipated to occur up to the end of the forthcoming Operating Year. This is inconsistent with the text, which requires Mineralogy to estimate all future Site Remediation Costs. There is no justification in the text for confining the inquiry to costs arising only from previous disturbance and anticipated disturbance in the forthcoming Operating Year. The generality of the word 'future' directs attention to all costs not yet paid and liabilities not yet incurred, but which are expected to be paid or incurred at a later time. It is not restricted in the manner contended for by Mineralogy.
But for the presence of cl 20.6(e)(ii) - which requires regard to the number of years remaining until Mine Closure - commercial considerations might have militated against reading the clause as permitting Mineralogy to determine an annual charge for an Operating Year that requires a payment in respect of all anticipated future costs and liabilities for the entire life of the Mine. But cl 20.6(e)(ii) means that cl 20.6(e) is not to be so read. Rather, as explained in [93] below, cl 20.6(e)(ii) ensures that payments of annual charges directed to remediation costs to be incurred at or following Mine Closure are staged so that, by Mine Closure, sufficient funds are available to meet those costs.
Secondly, the text of cl 20.6 does not support reading the clause as employing disturbance that has previously occurred and that is anticipated to occur up to the end of the forthcoming Operating Year as the criterion for staging payments on account of anticipated Site Remediation Costs. We do not accept Mineralogy's submission that, for the purpose of cl 20.6, a presently existing liability to remediate the site is incurred whenever, and to the extent that, mining operations cause disturbance. A presently existing liability to do something by way of remediation arises only when and if either a Legal Requirement or good industry practice requires that thing to be done now. To so conclude is not to deny that, as a matter of fact, in some - perhaps many - instances, the disturbance to the ground may play a central role in evaluating the likely future remediation obligations. The point is that disturbance is not the contractual criterion selected by the parties in cl 20.6. Thus, we do not accept Mineralogy's submissions summarised in [49] ‑ [51] above.
Thirdly, in our view, Mineralogy's construction seeks to relegate the requirement in cl 20.6(e)(ii) that Mineralogy have regard to the number of years remaining until Mine Closure to a matter of very little significance, in circumstances where the number of years remaining until Mine Closure is one of three explicitly identified mandatory considerations. Mineralogy's attempts to give some effect to this integer, as summarised in [53] ‑ [54] above, seem to us artificial and unconvincing. The central significance given in cl 20.6(e) to the number of years remaining until Mine Closure is, in our view, readily understood in the framework of the reference in cl 20.6(e)(i) to all future Site Remediation Costs, as explained in [89] above.
In our view, the purpose and effect of the stipulation that Mineralogy is to have regard to the number of years remaining until Mine Closure is to enable and ensure the staging of uniform annual payments of the part of the annual charge that relates to remediation at and following Mine Closure so that, by the time of Mine Closure, sufficient funds are available to enable payment of the costs and discharge of the liabilities of Site Remediation Work necessary thereafter.
In short, in our view, while it would have been open to the parties to choose to adopt the approach articulated in Mineralogy's construction, the text of cl 20.6 reveals that they did not do so. To our minds, to adopt Mineralogy's construction would be to rewrite cl 20.6(e).
As already noted, Mineralogy emphasises that the parties could have expressly stipulated, but did not expressly stipulate, that the amount required for future rehabilitation work was to be divided by the number of years remaining until Mine Closure. There would have been more force in this point if Sino's rehabilitation obligations had been limited to obligations arising at Mine Closure. In our view, the force of the point is removed once it is recognised that the purpose of the Site Remediation Fund is to secure performance of Sino's progressive remediation obligations, as well as its remediation obligations arising at Mine Closure. Stipulation of a process of division of the amount required for future remediation by the number of years remaining until Mine Closure would not have been apt to ensure that both purposes were achieved.
In their submissions to this court, the parties joined issue on whether the primary judge's construction accommodated Sino's obligations of progressive remediation. Mineralogy contended that it did not, pointing to the absolute terms in which the primary judge's ultimate conclusion on the construction question, in the passage set out at [33] above, was expressed. Against this, the respondents pointed to earlier parts of his Honour's reasons, referred to in [23] above, in which Sino's progressive remediation obligations were recognised by his Honour.
It is neither necessary nor fruitful to resolve this issue. As already observed, the task of this court is to identify for itself the correct construction. In order to succeed on appeal, Mineralogy must establish the construction it propounds. For the reasons already given, we do not accept that construction.
Nor do we accept Mineralogy's contention that the definition of 'Mine Closure', namely permanent cessation of Mining Operations, is properly to be understood as permanent cessation of such operations on particular parts of the Mine Area as are undertaken by Sino.
This contention requires that words are read into the definition of 'Mine Closure' in the MRSLA. In our view, there is no sufficient justification for doing so.
The MRSLA contemplates that Sino will undertake Mining Operations until Mine Closure. Clause 28 governs early termination. Clause 28.1 provides that Sino's Mining Right under cl 3 and Site Lease under cl 4 continue until they expire or are terminated in accordance with the MRSLA. Clause 28.2 provides that Sino may not surrender the Mining Right and Site Lease after the commencement of development activities. Clause 28.6 provides that upon the happening of any of the events stipulated in cl 28.6(a), which include the appointment of a receiver or an order for winding up of Sino, Mineralogy may - not must - terminate the MRSLA by giving written notice of termination. Clause 31 prohibits Sino from assigning its interests under the MRSLA except with the prior written consent of Mineralogy. Clause 31.2 provides that Sino will not assign any part of its interests under the MRSLA, and that no such assignment will be effective unless and until the intended assignee has entered into an assumption deed in the form annexed to the MRSLA or other agreed form.
Having regard to the terms of the MRSLA as a whole, including the terms to which we have referred, we would not read the additional words into the definition of 'Mine Closure' in accordance with Mineralogy's submissions.
In any event, the manner in which cl 20.6 operates in the event of an early Mine Closure carries little weight in the construction of cl 20.6. Early Mine Closure is evidently not the primary scenario contemplated by the parties. More significantly, any commercial disadvantage of Mineralogy (or Sino) in the manner in which cl 20.6 operates in the event of an early Mine Closure falls well short of overcoming the textual considerations to which we have referred in [88] - [94] above.
Thus, Mineralogy's submissions at [56] ‑ [57] above cannot be accepted.

[57]

These grounds of appeal, and Mineralogy's submissions in support of them, are wholly without merit.
The account said by Mineralogy to constitute the Site Remediation Fund bore the name and style 'Mineralogy Pty Ltd Remediation Account'.[60]
Clause 20.6(c) provides, relevantly, that '[t]he 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'. It is immediately apparent that this clause imposes two distinct requirements on the constitution of the Site Remediation Fund. First, the Fund must be a separate interest‑bearing trust account that is controlled by Mineralogy as trustee. Secondly, that account must be 'designated as a trust account'.
Consequently, Mineralogy's submissions entirely miss the mark. It is not to the point that the use of the word 'trust' or 'trustee' is not necessary in order to constitute a trust. Whether the account is a trust account relates to the first requirement in cl 20.6(c), whereas this ground impugns the judge's finding about the second requirement, namely designation as a trust account.
Moreover, to say, as Mineralogy does, that the purpose of the account was identified by the account name is, again, not to the point. An account holder may choose to identify, in the name of the account, the intended purpose of that account without conveying anything as to whether it is a trust account and whether there are any constraints on the account holder's freedom, as a matter of law, to use the funds in the account as it chooses.
What cl 20.6(c) requires is that the account be designated as a trust account, not merely that the purpose of the account be designated. 'Designated' means 'marked', 'named' or 'specified'. What must be marked, named or specified is the status of the account as a trust account. By definition, the holder of a trust account owes trust obligations to the beneficiary or beneficiaries of the trust, thereby constraining the trustee's liberty to deal as it pleases with the funds in the account. In order that an account be 'designated as a trust account' it must, in some manner, be named or marked in a way that conveys to third parties, including to the bank with whom the account is held, that the account holder is not free to do as it pleases with the money in the account.
Simply bearing the title 'Mineralogy Pty Ltd Remediation Account' fell manifestly short of designating the account as a trust account.
Consequently, ground 6 fails.
Grounds 7 and 8 fail for the following reasons.
Ground 7 asserts that the judge found that a failure to constitute the bank account in accordance with cl 20.6(c) rendered ineffective any determination made by Mineralogy under cl 20.6(e), and that the judge erred in so finding. The judge did not so find. Ground 7 asserts that the judge made the alleged finding in [507] of the primary reasons. However, in that paragraph, his Honour found that Mineralogy's demands were ineffective, not that its anterior determination under cl 20.6(e) was ineffective. The correctness of the judge's finding as to the inefficacy of the demands is the subject of ground 8.
As to ground 8, so far as relevant, the respondents' only obligation arising under cl 20.6 is its obligation in cl 20.6(a) to 'make payments into the Site Remediation Fund in the manner set out in [cl 20.6]'. By definition, that obligation does not arise, and cannot be performed, if there is no Site Remediation Fund in existence. Clause 1.1 states that 'Site Remediation Fund' is defined in cl 20.6. That imports the requirements stated in cl 20.6(c).
Mineralogy's submission that, notwithstanding the absence of a trust account designated as required by cl 20.6(c), the respondents were nevertheless obliged to pay the money to Mineralogy and could have sought directions from the court requiring Mineralogy to change the name of the account and 'achieve any proper designation'[61] is without any plausible basis and should not have been advanced. Nothing in cl 20.6 requires Sino to pay money on account of site remediation into an account in the name of Mineralogy that is not the Site Remediation Fund meeting the requirements stipulated in 20.6(c). In the absence of a Site Remediation Fund, the respondents had no obligation under cl 20.6.
For these reasons, grounds 6 - 8 fail.

[59]

In circumstances where Mineralogy's claims fail for the two independent reasons already canvassed - namely, because its purported determination of the annual charge was not in accordance with cl 20.6(e) and because the purported Site Remediation Fund was not designated as a trust account - we propose to deal with grounds 9 ‑ 11 in a somewhat summary fashion.
Mineralogy submits that there is no requirement in the MRSLA that Mineralogy separately identify the amounts to be paid by each of Sino and Korean in its determination. Mineralogy points to CITIC's obligations under the Fortescue Coordination Deed and to provisions of that deed by which Sino and Korean are made jointly and severally responsible for obligations of remediation imposed on any one of them.[62]
We do not accept these submissions. Mineralogy's claim against each of Sino and Korean was said to arise pursuant to cl 20.6 of each of Sino and Korean's respective MRSLA. By cl 20.6(f), at least 30 days prior to the commencement of an Operating Year, Mineralogy must notify Sino (under the Sino MRSLA) of its annual charge in the forthcoming year. Correspondingly, under the Korean MRSLA, Mineralogy must notify Korean of its annual charge in the forthcoming year. Before doing so, according to the terms of each separate MRSLA, Mineralogy must have determined an annual charge to be made by the relevant company (Sino or Korean) in that Operating Year.
The primary judge correctly found that the letter of 16 April 2018 failed to notify each of Sino and Korean of its respective annual charge.
Mineralogy's reliance on the Fortescue Coordination Deed does not assist it. By that deed, Sino and Korean covenanted that their liabilities were joint and several and that each would be liable for the other's obligations. That covenant thus applies to the extent that either Sino or Korean has an obligation under its MRSLA. However, it does not purport to speak to, and so does not influence, whether any such obligation has come into existence. In the present context, without a valid notification to each company under cl 20.6(f) of their respective MRSLAs, no obligation came into existence. Consequently, the covenant in the Fortescue Coordination Deed was not engaged.
Ground 11 contends that the primary judge erred in finding that Mineralogy's notices of 21 May 2018 were ineffective, relying on grounds 1 ‑ 9 to establish the judge's error. Grounds 1 ‑ 9 having failed, ground 11 fails accordingly. In any event, as the respondents submitted, Mineralogy's reliance on the 28 May 2018 notices ignored the circumstance that on the primary judge's unchallenged findings the amounts notified would (assuming the notices were valid) only have fallen due for payment on 31 December 2018. This was after Mineralogy commenced its proceedings - meaning that Mineralogy had no cause of action when it commenced the proceedings.