MINERALOGY PTY LTD -v- SINO IRON PTY LTD [No 10] [2016] WASC 90 (23 March 2016)

Supreme Court of WA|2016-03-23|Before: Chaney J

1 CHANEY J: By a chamber summons dated 17 December 2015, the plaintiff (Mineralogy) seeks leave pursuant to O 21 r 5 of the Rules of the Supreme Court 1971 (WA) to file and serve a proposed amended statement of claim, in the form attached to the summons (proposed ASOC).

2 Usually, a plaintiff can amend its pleadings without leave of the court at any time not later than seven weeks before the date fixed for the start of the trial (O 21 r 3(1)). Leave to amend is required in this action by reason of an order made by the previous case manager, Edelman J, on 20 March 2014. His Honour ordered that, after the filing of a proposed third further amended statement of claim and consequential amendments by the defendants, there be no further amendments without leave. That order was made in light of a number of changes in position by the plaintiff up to that point in the action. His Honour said:

Leave will not be something which would be automatically forthcoming. There will need to be strong reasons given to justify leave in circumstances where we are now back where we were I think more than a year ago (ts 340).

3 Thereafter, the plaintiff produced a number of versions of the proposed third further amended statement of claim between April and July 2014 before the final version filed on 15 August 2014 became the current form of the pleading (current SOC). The basis of the claims pleaded in the current SOC was different from any of the bases of the claims pleaded in the original statement of claim.

4 On 4 September 2014 the defendants filed an amended defence to the current SOC and a second further amended counterclaim. The second further amended counterclaim sought declarations concerning some of the issues which had been the subject of the plaintiff's early versions of their statement of claim but which had not been pursued in the current SOC.

5 On 24 October 2014 the defendants filed a further pleading which amended the counterclaim by expanding the issues to include claims for declarations as to the validity of various termination notices that had been issued in September 2014 by the plaintiff.

6 The defendants filed further amendments to their defence and counterclaim on 14 April 2015 and 29 May 2015. It is the last of those documents which is the defendants' current defence and counterclaim (current defence and counterclaim).

7 Meanwhile, in March 2015, the first and second defendants and two related companies commenced a further action, CIV 1431 of 2015, against Mineralogy and its principal, Mr Clive Palmer, seeking restitution in the event that the court in these proceedings were to conclude that the Mining Rights and Site Lease Agreements (MRSLAs), which are central to the dispute in these proceedings, have been frustrated. On 10 November 2015, after the plaintiffs in those proceedings had amended their statement of claim twice, I struck out that part of the statement of claim that related to the claims against Mr Palmer by the two related companies: see Sino Iron Pty Ltd v Mineralogy Pty Ltd [2015] WASC 429.

8 On 19 August 2015, Mineralogy commenced action CIV 2303 of 2015 (CIV 2303). In that action, Mineralogy claimed against each of the defendants in this action in relation to an alleged breach of 6.3(b) of the MRSLAs. On 31 August 2015, Mineralogy commenced action CIV 2368 of 2015 (CIV 2368) against the defendants in this action. That action claimed that the first defendant (Sino) and the second defendant (Korean) had repudiated the MRSLAs on various grounds. Various claims for damages were made in those proceedings. On 27 November 2015, I determined that both CIV 2303 and CIV 2368 should be permanently stayed: see Mineralogy Pty Ltd v Sino Iron Pty Ltd [2015] WASC 454. The basis for that conclusion is summarised at [29] of those reasons where I concluded that the commencement of two additional actions to litigate issues which are already raised in, or where a complete remedy is available in, an existing extant action is vexatious and an abuse of process. In essence, I concluded that the overlap in the issues raised in the two new sets of proceedings with those already raised in this action meant that, if the plaintiff wished to pursue these new claims, it ought to have sought leave to amend its statement of claim in this action. The application for leave to amend presently before me is a consequence of that decision.

9 In broad terms, the proposed amendments do the following things:

(a) remove the claim in relation to the inspection of books and records which is pleaded in [12] to [35] of the current SOC;

(b) include the claims pleaded in CIV 2303 and CIV 2368, both of which are permanently stayed;

(c) include a claim for restitution as an alternative claim in the event that it is found that royalty component B (as defined in the MRSLAs) is not payable as a matter of contract and it is found that the MRSLAs have not been terminated; and

(d) include a claim for rectification, as an alternative, if it is found that the construction of cl 8 of the MRSLAs concerning royalty component B contended for by the plaintiff is not accepted.

10 The proposed ASOC replaces the pleading in [11] of the current SOC as to the material terms of the MRSLAs. Paragraphs 12 to 35 of the current SOC are deleted, thereby removing claims arising in relation to an alleged breach of the requirement under the MRSLAs to provide inspection of books and records and an alleged breach of a requirement under the MRSLAs to provide geological information and technical plans.

11 Amendments to [28] of the proposed ASOC add an alternative claim of breach of an implied term of good faith to existing pleaded facts asserting breaches of clauses of the MRSLAs dealing with expert determination of disputes. That amendment involves no expansion of the factual matters already the subject of these proceedings.

12 Paragraphs 31 and 32 plead matters concerning payment of a State royalty. At the hearing of this application, senior counsel for Mineralogy acknowledged that those pleadings are not material to any pleaded cause of action, and that the plaintiff did not seek to pursue those paragraphs of the proposed ASOC.

13 Paragraphs 33 to 38 of the proposed ASOC deal with the defendants' failure to pay royalty component B in relation to concentrate produced by the defendants under the MRSLAs up to September 2014 as required by cl 8.1(a) of the MRSLAs. The proper construction of cl 8.1(a) of the MRSLAs, and whether the amount payable pursuant to that clause is capable of calculation, is already an issue in the proceedings by reason of matters raised in the current counterclaim.

14 Paragraphs 39 to 47 of the proposed ASOC concern a claim for default interest and costs under specified provisions of the MRSLAs and assert a liability of the third defendant pursuant to a guarantee, contained in an agreement known as the Fortescue Coordination Deed, of the obligations of Sino and Korean under the MRSLAs. Those claims are directly related to, and dependent upon, the other claims for alleged breaches of the MRSLAs by the defendants.

15 Paragraphs 48 to 51 of the proposed ASOC contain a claim for a money sum in relation to an alleged breach of cl 6.3 of the MRSLAs. The current counterclaim seeks a declaration that cl 6.3(b) of the MRSLAs is unenforceable. A detailed schedule to the current defence and counterclaim containing extensive pleading of factual matters is directed to the defendants' contention that no monies are payable under cl 6.3(b).

16 Paragraphs 52 to 63 of the proposed ASOC assert a repudiation by the defendants of the MRSLAs by their refusal to pay the sums payable pursuant to cl 6.3 of the MRSLAs.

17 Paragraphs 64 to 86 of the proposed ASOC deal with what is alleged to be a breach of the 'legal requirements' provisions of the MRSLAs. Those matters were the subject of a claim made in CIV 2368, but do not currently form any part of the pleadings in these proceedings. They do, however, plead breaches of provisions of the MRSLAs said to amount to a repudiation by the defendants of the MRSLAs. They thus reflect an additional basis upon which it is said by the plaintiff that the defendants have repudiated the MRSLAs. The status of the MRSLAs is a live issue on the current defence and counterclaim.

18 Paragraphs 87 to 108 deal with a claim of alleged breach of cl 16.1 of the MRSLAs which deals with the standard of works. The material facts relied upon are in large part drawn from the schedule to the current defence and counterclaim. Mineralogy's proposed pleading thus relies upon the defendants' pleaded case as providing a factual basis upon which the breach is asserted. The defendants rely on the same facts as supporting their contention that they have no liability pursuant to cl 6.3 of the MRSLAS.

19 Paragraph 136 of the proposed ASOC introduces a rectification claim. That claim forms no part of the current pleadings.

20 Paragraph 137 also introduces a claim, which is not part of the current pleadings, for restitution.

The defendants' arguments opposing the application

21 The defendants object to leave being granted on four bases. They are that:

(a) Mineralogy's numerous and sometimes very significant changes to its case has slowed the proceeding down dramatically, and the latest very significant changes in the proposed pleading will slow the progress of the proceeding down further in a number of ways, including necessitating further responsive pleadings, investigating and addressing new factual issues, delay in the matter coming on for trial and an increase in the length of the trial.

(b) the delay in making the proposed amendments is not satisfactorily explained;

(d) there are pleading defects in some of the other claims.

22 These proceedings were originally commenced in New South Wales in March 2013. They were transferred to this court on 30 April 2013. Justice Edelman set out a chronology of the proceedings up until August 2014 in Mineralogy v Sino Iron Pty Ltd [No 4] [2014] WASC 282 [7] [18]. It is not necessary to repeat that chronology. I have broadly outlined what has occurred since September 2014 earlier in these reasons. The present position is that, largely because of the amendments to the pleadings by the defendants, which in part have arisen by reason of issues arising between the parties as a result of their ongoing commercial relationship, applications by both sides for interlocutory injunctions, and the institution of new actions by both the defendants and the plaintiff which have been the subject of interlocutory dispute, this matter has not progressed beyond pleadings. In early 2015, the parties were endeavouring to reach agreement as to the possibility of dealing with some discrete issues in advance of more complex issues which were likely to significantly delay the trial. Those efforts have come to nothing, and it is now likely that there will be a single trial of all issues. Various estimates as to the length of trial have been proffered in the range of two or three months. The parties disagree as to whether or not there is any prospect that the trial can be heard this year. A strategic conference is to be held when the current pleading issues are resolved so as to identify and programme all interlocutory steps which need to be addressed, and to establish some timetable leading up to trial.

23 I am not persuaded that the proposed amendments will add significantly to the time for trial. To the extent that additional time may be required to deal with additional issues, I do not consider that likely to significantly affect when a trial can be listed. There will be a need for further responsive pleadings, but given that many of the proposed additional bases of claim concern matters in respect of which the defendants are already seeking declarations, I do not consider that the programme for responsive pleadings is likely to significantly impact on other interlocutory steps.

24 Although, when the requirement for leave was imposed by Edelman J delays in the proceedings were clearly to be laid at the feet of the plaintiff, delay since then has been as much the responsibility of the defendants' changes in their pleadings and commencement of separate actions as it has been attributable to the plaintiff's actions.

25 The claims which the plaintiff seeks to agitate are very substantial claims indeed. It sought to pursue those claims by separate actions. I concluded that that course was not appropriate because of the significant overlap in the issues sought to be agitated with the issues already on foot in these proceedings. If Mineralogy were to be denied leave to pursue those claims in these proceedings, it is difficult to see that any new action which it might bring to seek a remedy on those claims could be said to be an abuse of process in the way that both CIV 2303 and CIV 2368 were found to be. If separate actions were to be commenced, the question would arise as to whether they should be dealt with at the same time as this action. That is likely to lead to ongoing interlocutory disputes. That would result in greater delay in the progress of these proceedings than is likely to occur in the event that leave is granted.

26 Leave should not be refused on the first of the grounds of opposition relied upon by the defendants.

27 In an affidavit filed in support of the application for leave to amend the statement of claim, the plaintiff's director of litigation, Tracey Lyn Miley, noted that, at present, Mineralogy has no existing claim for debt or damages for breaches or repudiation of the MRSLAs and now wishes to bring those claims. She said that Mineralogy had previously held a view that a decision of the court regarding the obligation of Sino and Korean to submit to expert determination or to pay royalty component B was likely to lead to a commercial resolution between the parties. That opinion has now changed in light of the course of events in this and other litigation. She says that while Mineralogy remains open to meet to explore a commercial resolution, it regards any commercial resolution as unlikely. She said that Mineralogy's decision to pursue the claim in the proposed pleadings was also influenced by consideration of the evidence in recently concluded proceedings between the same parties in the Federal Court. According to Ms Miley, it is the evidence given in the Federal Court proceedings that has influenced the decision to pursue the claims relating to breaches of legal requirements and standard of work.

28 The defendants contend that Ms Miley's explanation as to why the claims have not previously been made in these proceedings is unsatisfactory. They submit that the affidavit reveals that Mineralogy made a forensic decision concerning the claims from which it now seeks to resile. They also contend that matters the subject of evidence in the Federal Court proceedings were also within the knowledge of Mineralogy prior to those proceedings.

29 Neither of those reasons justify shutting Mineralogy out from pursuing its claims. Indeed, having regard to the objective of trying to resolve issues as to the rights and obligations of the parties under the MRSLAs, it is positively desirable that those claims which are, in substance, claims for determination of the consequences which flow if the declarations which the defendants seek in the current defence and counterclaim are refused also be dealt with in these proceedings. It is undoubtedly the case that Mineralogy has made forensic decisions in relation to the conduct of these proceedings, just as the defendants have, and it would be surprising if those forensic decisions were not influenced by commercial considerations. Because of the ongoing dysfunctional commercial relationship between these parties, it is hardly surprising that those commercial considerations might be affected by the course of these and other proceedings and the course of ongoing dealings between the parties.

30 In these circumstances, I do not consider that the explanation for delay is so inadequate as to constitute a basis to refuse leave to make the amendments sought.

31 Paragraph 11 of the proposed ASOC pleads the relevant terms of the MRSLAs. In relation to cl 8.2 which concerns the payment of royalties, in particular in relation to royalty payment B, [11] of the proposed ASOC contains the following:

(l) The Mineralogy Royalty was to be calculated according to the following formula: Mineralogy Royalty = Royalty Component A + Royalty Component B (Clause 8.2(a)).

...

(p) 'Royalty Component B' was to be calculated according to the following formula: Royalty Component B = (PR x ((1/2 x Product) x PP)) + (CR x ((1/2 x Product) x CP)) (Clause 8.2 (a)).

(q) For the purposes of the calculation of the Royalty Component B the following definitions were provided for the variables in the formula:

(i) 'Product' was the total aggregate tonnes of product (derived from iron ore) produced by Korean/Sino in that quarter for sale or supply, regardless of the type of that product;

(ii) 'PP' was the prevailing published annual FOB Price (expressed in US dollars per Dry Metric Tonne Unit) for pellets established by the largest supplier or seller of pellets in Brazil for export multiplied by 68.1;

(iii) 'CP' was the prevailing published annual FOB price (expressed in US dollars per Dry Metric Tonne Unit) for Mount Newman fines for export multiplied by 68.1 and then further multiplied by 1.05;

(iv) 'PR' was, where the Pellet Price was:

Less than US$55 - 6% of the Pellet Price;
Greater than or equal to US$ 55 but less than US$65 - 8% of the Pellet Price;
Greater than or equal to US$65 but less than US$70 9% of the Pellet Price; or
US$70 or greater - 10% of the Pellet Price;

Less than US$35 6% of the Concentrate Price;
Greater than or equal to US$35 but less than US$40 8% of the Concentrate Price;
Greater than or equal to US$40 but less than US$45 9% of the Concentrate Price; or
US$45 or greater - 10% of the Concentrate Price;

32 The rectification claim is pleaded in [136] of the proposed ASOC. It reads:

Alternatively, and only in the event that it is found that Clause 8.2 of the MRSLAs is void and/or unenforceable, Mineralogy says that:

At all times up to and at the time of the executing of the MRSLAs, the common and continuing intention of the parties to the MRSLAs was that the clause would have the effect that: 1. 'PP' was to be the average, over a period of 12 months preceding the end of the relevant quarter, published FOB price (expressed in US dollars per DMTU) for pellets established by the largest supplier or seller in from Brazil for export multiplied by 68.1; and 2. 'CP' was to be the average, over a period of 12 months preceding the end of the relevant quarter, published FOB price (expressed in US dollars per DMTU) for Mount Newman fines for export multiplied by 68.1 and then further multiplied by 1.05. 2. On the basis set out above, the MRSLAs fail to record that intention by reason of a common mistake as to the effect of the words of the MRSLAs.

The MRSLAs fall to be rectified by substituting the current definitions of 'PP' and 'CP' in Clause 8.2 with the wording set out in subparagraphs (i) and (ii) above.

33 The defendants contend that the proposed rectification claim is untenable. They do so on several grounds.

34 First, the defendants note that the case proposed is not that the parties used the wrong words to record their common intention, but rather that the parties intended the words used to have the pleaded effect. Paragraph 11(q) pleads that each of 'PP' and 'CP' were 'the prevailing published annual FOB price', whereas [136] pleads that those words should have the effect that they mean the average published FOB price taken over a period of 12 months preceding the end of the relevant quarter. The defendants contend that the words 'prevailing published annual FOB price' could never be intended to be a reference to an average price for the previous twelve months calculated quarterly.

35 There is no evidence before me for the purposes of this application which addresses the method by which a 'prevailing' price might be determined for publication. A conceivable method to establish a price to be published as the prevailing annual FOB price might be to apply a figure which represents the average of the previous 12 months. The question of whether or not the parties shared a continuing common intention that the words should have the effect pleaded is a matter that should be assessed in the light of all of the evidence in due course. I would not disallow the amendment on the first basis of the defendants' objections.

36 The defendants' second contention in relation to the rectification claim is that it is plainly time barred by reason of s 27 of the Limitation Act 2005 (WA). That section provides that an equitable action cannot be commenced after the later of either the elapse of six years since the cause of action accrued or the elapse of three years since time started running, on equitable principles, for the commencement of the action.

37 In argument, the defendants submitted that the cause of action for rectification would have accrued on the date of the execution of the MRSLAs, that being the date upon which every fact which would be necessary for the plaintiff to prove in order to support its right to judgment had occurred - see AME Hospitals Pty Ltd v Dixon [2015] WASCA 63; (2015) 48 WAR 139 [136] - having regard to the elements of a cause of action for rectification as explained by the court in RCR Tomlinson Ltd v Russell [2015] WASCA 154 [48] - [54], namely:

the instrument containing the parties' agreement does not reflect the intention of the parties to it;
the discomformity between the common intention of the parties and the terms of the instrument must continue until the time of execution of the instrument;
the discomformity between the continuing common intention and the instrument may result either from a mistake in recording the parties' common intention or from a mistake about the meaning or effect of words deliberately chosen;
the intention of the parties must have been disclosed in some way, although not necessarily by a direct communication that gives rise to an outward expression of accord by them; and
the parties' common intention must be clear and welldefined enough to be stated in words that can be incorporated into the instrument.

All of these necessary facts would generally have occurred at the time of execution of the instrument. Given that the MRSLAs were executed in 2006, an action would be required to be commenced by 2012, unless that is earlier than three years after time started running on equitable principles for the commencement of the action.

38 Neither party was able to identify any authorities as to the question of when time starts running on equitable principles for the commencement of action for rectification. The defendant posited some alternatives. One alternative drew on the analogy to a claim for money paid under a mistake of fact. In Torrens Aloha Pty Ltd v Citibank NA [1997] FCA 77; (1997) 72 FCR 581, Sackville J observed that in that context, while the relevant statute of limitation was applied by analogy, lapse of time was no bar for relief until the mistake was discovered or ought reasonably to have been discovered (596). On that basis, the defendants submitted that time may have commenced running when it could be said that the plaintiff was aware that the words of the contract did not bear their intended meaning. The defendants point to correspondence in January and February 2013 between the defendants and Mineralogy, and their respective solicitors, as to whether or not royalty component B could be calculated. The defendants contended that that exchange of correspondence demonstrates that Mineralogy was aware, by January or February 2013, of the contention that the words used in cl 8.2 of the MRSLAs did not reflect what Mineralogy now contends was the common intention of the parties.

39 In response, Mineralogy contends that the relevant date for limitation purposes is when the application for amendment is made. The application for amendment to introduce the rectification claim was made in December 2015, which is within three years of January and February 2013, albeit that the application was not heard until March 2016. That argument would appear to have some force, but it illustrates that the determination of questions of limitation in the context of the proposed rectification claim is by no means straightforward.

40 It is undesirable that limitation questions be decided in interlocutory proceedings except in very clear cases: see Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514, 533. This is a case where it cannot be said that any limitation question can readily be determined in the absence of all of the evidence relevant to the cause of action and considered submissions on the application of s 27 of the Limitation Act. I would therefore not strike out the rectification claim on the basis that it is out of time.

41 The remaining objections by the defendants to the rectification claim go either to the merits of the claim, to an absence of proper particulars, or to discretionary factors in relation to leave such as explanation for the delay and the raising of new factual issues. None of those reasons is, in my view, a sufficient reason to disallow the amendment, although I accept that the provision of particulars will be required at some point.

42 The new restitution claim is pleaded in [137] of the proposed ASOC. It reads:

Alternatively, and only in the event that it is found that Clause 8.2 of the MRSLAs is void and/or unenforceable, and if all of those parts of Clause 8.2 of the MRSLAs, which relate to Royalty Component B are to be severed from the MRSLAs without affecting the continuing operation of the rest of the MRSLAs, Mineralogy says that:

Sino and Korean have been taking Magnetite Ore purportedly pursuant to the exercise of their Mining Rights under the MRSLAs; 2. Sino and Korean have been producing Products and shipping those Products purportedly pursuant to the exercise of their Mining Rights under the MRSLAs;

The quantity of Magnetite Ore taken by Sino and Korean in the period to the date of this pleading is as advised by defendants;

The quantity of Products produced and shipped in the period is as advised by Sino and Korean; 2. Sino and Korean have only paid Mineralogy the value of Royalty Component A in relation to the quantity of Magnetite Ore taken by them in the period up until the date of this pleading; 3. Sino and Korean have refused to pay Mineralogy any amount of Royalty Component B; 4. Sino and Korean have refused to pay Mineralogy any money in relation to the quantity of Products produced and shipped; 5. Sino and Korean have obtained at the expense of Mineralogy a benefit by taking Magnetite Ore and producing Products pursuant to the purported exercise of their Mining Right in circumstances where they have not paid the Mineralogy Royalty; 6. The consideration to Mineralogy has wholly or substantially failed; 7. Sino and Korean have thereby been unjustly enriched; 8. In the premises, the plaintiffs are entitled to the sum assessed by this honourable court.

43 The primary objection to this additional claim is that it is untenable having regard to the circumstance in which it is said that the claim arises as set out in the chapeau to [137] of the proposed ASOC. That is, the claim is only made in the event that cl 8.2 of the MRSLAs is void or unenforceable and if those parts of cl 8.2 of the MRSLAs which relate to royalty component B are severed from the MRSLAs without affecting the continuing operation of the rest of the MRSLAs.

44 The defendants' position is that if the provisions of cl 8.2 relating to royalty component B are severed, then the Mineralogy Royalty which is payable under the MRSLAs necessarily becomes only royalty component A. It is not in dispute between the parties that royalty component A has been paid by the defendants to Mineralogy. The defendants contend therefore that a plea that the defendants have not paid the Mineralogy Royalty, if by reason of severance it consists only of royalty component A, cannot be maintained. They contend that, having provided for severance of void or unenforceable provisions of their contract, the parties to the MRSLAs have determined the allocation of risk as between themselves, and it is not open to the court to grant restitutionary relief in a way which reallocates that contractual risk. They argue that the subsistence of an effective contract negates the restitutionary relief.

45 In support of that argument, the defendants rely on Lumbers v W Cook Builders Pty Ltd (in Liq) [2008] HCA 27; (2008) 232 CLR 635. In Lumbers Gummow, Hayne, Crennan and Kiefel JJ said [79]:

The doing of work, or payment of money, for and at the request of another, are archetypal cases in which it may be said that a person receives a 'benefit' at the 'expense' of another which the recipient 'accepts' and which it would be unconscionable for the recipient to retain without payment. And as is well apparent from this court's decision in Steele v Tardiani, an essential step in considering a claim in quantum meruit (or money paid) is to ask whether and how that claim fits with any particular contract the parties have made. It is essential to consider how the claim fits with contracts the parties have made because, as Lord Goff of Chieveley rightly warned in Pan Ocean Shipping Co Ltd v Credit Corp Ltd, 'serious difficulties arise if the law seeks to expand the law of restitution to redistribute risks for which provision has been made under an applicable contract'. In a similar vein, in the comments upon s29 of the proposed Restatement (3d), 'Restitution and Unjust Enrichment', the reporter says:

'Even if restitution is the claimant's only recourse, a claim under this Section will be denied where the imposition of a liability in restitution would overturn an existing allocation of risk or limitation of liability previously established by contract.'

46 Observations as to the proposition that restitutionary remedies should not be used to redistribute risks for which provision has been made under an applicable contract were also made by Gleeson CJ at [46] and [47]. In Anderson v McPherson [No 2] [2012] WASC 19, Edelman J summarised the proposition to be extracted from those passages in Lumbers with the proposition that no cause of action for restitution of unjust enrichment can exist where the action is inconsistent with the express or implied terms of the contract as to do so would redistribute risks for which provision has been made by the contract [239].

47 The defendants draw support for their contention that the subsistence of an effective contract negates claims to restitutionary relief from an observation made by Kenneth Martin J in Toll Global Forwarding Pty Ltd v Theiss Pty Ltd [2015] WASC 364 [232]. That observation must be read in the context of the contractual circumstances being considered in Toll Global Forwarding. In Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516, the court dealt with a claim for restitution in relation to a severable portion of consideration under a contract for the purchase of tobacco products. Restitution was found to be available. In this case, the proposed claim for restitution arises in circumstances where a portion of the consideration which comprises the Mineralogy royalty pursuant to the terms of the contract is found to be severable. In this case, the relationship of the claim in restitution to the applicable contract is quite different from the relationship of the claims in either Toll Global Forwarding or Lumbers to the contracts applicable in those cases.

48 I do not consider that it can be said that the claim for restitution is inconsistent with the provision in the contract which permits severance of void or unenforceable provision such that a claim for restitution is unarguable. I therefore reject the first basis upon which the defendants contend the restitution claim should not be permitted.

49 The second and third bases upon which the restitution claim is said by the defendants to be untenable are, as counsel for the defendants put it, closely related to the first objection. As I understand the submissions, they are essentially to the effect that once royalty component B has been severed, the Mineralogy royalty comprises only royalty component A, so that the pleading is internally inconsistent where it pleads that royalty component A has been paid but the Mineralogy royalty has not. For reasons for which I have explained in relation to the first ground of objection, I do not consider that a claim for a total failure of consideration in relation to a distinct and severable portion of the consideration can be said to be untenable.

50 The fourth objection is as to a lack of particularity in the pleading. The defendants argue that, while a lack of particularity would not usually be a reason to refuse leave to amend, the history of amendments to the pleadings in this action is such that leave should not be granted unless the proposed pleading is in proper form in all respects. While there is force in that submission, I consider it preferable that the matter be progressed by the defendants making a formal request for further particulars of the pleading and requiring the plaintiff to answer or object to that request. The alternative is to require the plaintiff to bring in a fresh minute containing further particularisation. That would require the plaintiff to identify the areas in respect to which the defendants seek further particulars by analysis of the defendants' submissions in this application. It is preferable that the defendants' requirements for further particularisation be expressed with precision. Otherwise, it is likely that there will be further requests for particulars and possibly further interlocutory disputes. It is preferable that, rather than give leave to replead [137] of the proposed ASOC, the pleadings stand in its present form on the basis that the defendants will seek such further and better particulars as they consider are necessary to meet the case against them.

51 The defendants complain that a number of the paragraphs, and in particular [72], [73], [74], [75] and [85], are vague or insufficiently particularised. They complain that there is insufficient information as to how a claim for $6.4 billion made in [120] of the proposed ASOC is made up.

52 These objections should be treated on the same basis as the complaint in relation to the lack of particularity of [137]. The appropriate course is for the defendants to seek further and better particulars of those paragraphs which they consider lack sufficient particularity.

53 The plaintiff should be given leave to amend its statement of claim in terms of the proposed ASOC save for [31] and [32] which should be deleted. Directions should then be made for a programme so that the pleadings can be finalised with a view to progressing the matter to a hearing.

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Judgment (78 paragraphs)

Cases Cited (5)