MINERALOGY PTY LTD -v- SINO IRON PTY LTD [No 13] [2016] WASC 403 (13 December 2016)

3 It is convenient to turn to the terms of Mineralogy's amended chamber summons which advances the present interlocutory application. The chamber summons is amended by the grant of my leave on 27 October 2016. At base, Mineralogy seeks the following interlocutory orders:

1. An order that the first, second and third defendants pay to the plaintiff the sum of $US80,894,166 (eighty million eight hundred and ninety four thousand one hundred and sixty six United States dollars) or such other sum as the court may determine.

1. An order that if the defendants comply with order 1, the first and second defendants are permitted to mine, process, ship or otherwise transport iron ore and iron ore products in respect of the project known as the Sino Iron Project provided that on 1 October 2016 and for each quarter thereafter until the final determination of these proceedings the first and second defendants pay to the plaintiff a sum calculated by multiplying $US6.00 by the number of dry metric tonnes of (iron ore) concentrate shipped in the preceding quarter.

4 The interlocutory application of Mineralogy under determination presents as something of a re-run of an earlier application, in consequence of the reasons and orders of the Court of Appeal delivered 27 June 2016 in Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105. That decision upheld Mineralogy's appeal against the decision of the primary judge delivered 7 December 2015, which had refused the earlier application of Mineralogy seeking interlocutory injunctive relief in terms much akin to what is presently sought under the mandatory interlocutory orders seen above. In December 2015, however, the amount of money sought to be paid was a mere $US48 million, claimed to be due by the defendants to Mineralogy in respect of unpaid royalties due to Mineralogy arising under the force of cl 8.1 (with the 'Mineralogy Royalty' to be calculated according to the formula in cl 8.2) in each of the MRSLAs as regards 'Royalty Component B' (RCB): see Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 8] [2015] WASC 473.

5 Mineralogy's December 2015 mandatory interlocutory injunction application was refused by the primary judge, essentially after an evaluation of discretionary balance of convenience considerations conducted at that time. That urgent interlocutory application had been argued, heard and determined upon the basis that Mineralogy had shown, as regards its claim to final relief, a serious question to be determined. Indeed, so much had, in effect, been conceded by the said parties for the purposes of that application. The application had been refused upon the evaluation of balance of convenience factors notwithstanding the serious question which was assumed in Mineralogy's favour.

6 Over seven months later, on 27 June 2016, the Court of Appeal unanimously upheld Mineralogy's challenge to the rejection of its application by the primary judge. The reversal on appeal was reached on the assessment that there had been a failure by the primary judge to evaluate the strength of the serious question that had been accepted as being raised by Mineralogy as regards RCB. Consequently, there had been a failure to incorporate a strength assessment of Mineralogy's serious question into the other phase of the interlocutory evaluation at that time, namely, the balance of convenience. However, procedural fairness considerations raised by the CITIC parties in relation to their heavily truncated opportunities as defendants to assemble and provide responsive expert evidence in order to engage against the counterpart expert evidence which had been adduced in support of Mineralogy's application for urgent interlocutory relief, led the Court of Appeal to ultimately remit Mineralogy's successful appeal for a redetermination by another judge.

7 The following reasons will, therefore, assume a commencing platform of the reader's full familiarity with the June 2016 reasons of the Court of Appeal in Mineralogy v Sino Iron and as well with the primary judge's reasons under appeal in that decision (Mineralogy v Sino Iron [No 8]). It will be necessary for me to touch briefly upon some of the underlying history canvassed under those earlier reasons, but I do so only to the extent necessary to conduct the present rehearing, in effect, of Mineralogy's December 2015 application.

8 There are some new underlying materials which require evaluation for this renewed application by Mineralogy seeking interlocutory mandatory injunctive relief. These are chiefly:

(a) The parties' completed pleadings and, most particularly, a finalised statement of claim emanating from Mineralogy - which was not held by the primary judge in December 2015 or by the Court of Appeal in March 2016, when the appeal was argued. This is the fourth further amended statement of claim (which I refer to as '4 FASOC') filed under the leave of Chaney J (see his Honour's reasons in Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 10] [2016] WASC 90, delivered 23 March 2016 - essentially granting leave in respect of most of Mineralogy's proposed minute of pleading). The 4 FASOC was filed on 1 April 2016.

(b) I also hold a long defence and counterclaim pleading responding to the 4 FASOC by the CITIC parties. The defence and counterclaim was filed on 29 April 2016 and runs to some 136 pages. It adds the State of Western Australia as a party, making it a second defendant to the CITIC parties' counterclaim. There are as well six schedules (A through F) to the defence and counterclaim comprising an additional 146 pages of content.

(c) Last in the trilogy of new pleadings is an amended reply and defence to counterclaim by Mineralogy, filed 5 July 2016.

9 Those pleadings complete (for the present) the parties' pleadings in this action.

10 By way of other new material for this application, I also hold further affidavits - beyond those which were considered by the learned primary judge and the Court of Appeal, although I hold as well much of the original material that was relied upon in December 2015. For convenience sake, I should note the respective materials relied upon by the parties on this application. On the part of Mineralogy, it relies upon:

• the affidavits of Mr D B Wolfe of 17 November 2015, as well as his supplementary affidavit of 19 November 2015, his supplementary affidavit of 22 July 2016 and, finally, by leave, his further affidavit of 8 August 2016
• the three lever arch file volume affidavit of Ms T L Miley sworn 20 November 2015
• the affidavits of Mr K S Byrne of 24 November 2015, 7 August 2016 and 21 September 2016
• the affidavit of Mr K C Jones of 22 July 2016
• the affidavit of Ms S Morgan of 29 September 2016

11 On Mineralogy's behalf in terms of expert evidence I also hold the two affidavits from Mr R Brierley of 5 August 2016 and 21 September 2016.

12 I also hold accounting evidence by the affidavits of Mr S Sorbello of 5 August 2016 and a subsequent affidavit sworn by his colleague at BDL (Qld) Pty Ltd, Mr S Birkett, of 21 September 2016.

13 In terms of the evidentiary materials relied upon by the CITIC parties for this application, I hold the following materials, namely:

• the two-volume bound affidavit of Mr D M Mason affirmed 2 December 2015
• a supplementary affidavit sworn by Mr Mason of 2 September 2016
• the affidavit of Mr I P S O'Donahoo sworn 27 November 2015 and Mr O'Donahoo's second affidavit sworn 2 December 2015

14 For the purposes of the present application, I also hold Mr O'Donahoo's bound two-volume affidavit, sworn 2 September 2016.

15 By way of new expert evidence, I hold the two-volume bound affidavit of the CITIC parties' expert, Mr J P Barkas, sworn 2 September 2016.

16 That material can be contrasted to the evidence as was identified by the primary judge at [39] - [40] of his reasons in Mineralogy v Sino Iron [No 8].

17 I will turn to the content of that evidentiary material later in the course of these reasons, although I do not propose to canvass it at any great length. Of particular importance is the updated expert evidence from Messrs Brierley, Sorbello and Birkett and, for the first time, the response to that material by the CITIC parties from its expert, Mr Barkas. I deal with that expert material in a discrete section of these reasons.

More background concerning prior interlocutory injunction applications and orders obtained by the CITIC parties

18 These reasons also assume familiarity with the reasons for decision of Edelman J in Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 2] [2013] WASC 375, delivered 14 October 2013. Equally important are the reasons of Chaney J in Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 6] [2015] WASC 80, delivered 5 March 2015. Both those prior interlocutory determinations are the subject of observations by the Court of Appeal in its June 2016 reasons.

19 The reasons of Edelman J and then Chaney J, delivered approximately 18 months apart, resolved interlocutory injunction applications which had been brought by the CITIC parties in order to restrain Mineralogy from carrying out threatened MRSLA termination conduct. This had been conduct in the way of the pending threats at that time of Mineralogy to act upon a number of contractual termination notices which it had issued under the termination for default by notice provisions found in cl 30.4 of the parties' MRSLAs.

20 Back in October 2013, as explained under [10] and [11] of his Honour's reasons, Edelman J had occasion to issue at the CITIC parties' behest interlocutory injunction orders preventing Mineralogy from acting any further upon a number of termination for default notices which Mineralogy had issued to Sino and Korean on 26 July 2013. Mineralogy was then contending under cl 30.4(d) of the MRSLAs that at that time there had been breaches and defaults by Sino and Korean. This was alleged to be by their failure to pay to Mineralogy a royalty amount asserted as then due (as a component of the 'Mineralogy Royalty') for RCB, under cl 8 of the MRSLAs.

21 In resolving that interlocutory injunction application in favour of the CITIC parties and against Mineralogy, Edelman J had then said at [12] and [13]:

In these proceedings, Mineralogy's evidence is that based on 19,000 tonnes of iron ore concentrate produced over the three quarters the subject of the default notice, the amount of Royalty Component B is $287,059.

In contrast with the quantum of Mineralogy's claim in these royalty dispute proceedings, which is said by Mineralogy to be worth $9.4 billion, the grant of this interlocutory injunction would, if Mineralogy were ultimately successful in the royalty dispute, affect Mineralogy in an amount of around $15,000 to $25,000. This amount of $15,000 to $25,000 would then be recoverable under the undertakings to damages given by Sino Iron and Korean Steel.

22 It can be seen that the claimed amount then said to be then due to Mineralogy in respect of RCB was a mere $287,059.

23 His Honour issued the interlocutory injunction against Mineralogy at the behest of the CITIC parties and thereby restrained Mineralogy from taking further steps towards a contractual termination of the MRSLAs under Mineralogy's default notice of 26 July 2013: [16].

24 The terms of the injunction were set out at [14]:

Until 21 days from the pronouncement of final orders, or earlier order in this matter, the Plaintiff, whether by itself, its officers, servants, agents or otherwise, be restrained, and an injunction is hereby granted restraining it, from:

(a) issuing or purporting to issue any notice to the First Defendant or the Second Defendant requiring them to suspend the operations carried out by, or on behalf of, either of them on the Project Area, as defined in the Sino Iron Mining Right and Site Lease Agreement (as amended) (Sino MRSLA) and the Korean Steel Mining Right and Site Lease Agreement (as amended) (Korean MRSLA); or

(b) issuing or purporting to issue any notice to terminate the Sino MRSLA or the Korean MRSLA; or

(c) terminating or purporting to terminate the Sino MRSLA or the Korean MRSLA,

in reliance on, or in respect of the defaults alleged in, the purported notice of default issued by the Plaintiff to the Defendants on 26 July 2013.

25 His Honour, however, at the time issued an important qualification concerning potential future developments as regards a future dispute over RCB debt. He added this important qualifying observation at [63]:

[T]his application only relates to the default notice concerning a $287,000 disputed debt. If a default notice were issued concerning an alleged debt of hundreds of millions of dollars as counsel asserted, and if Sino Iron and Korean Steel were to refuse to pay any of that alleged amount, on any terms, then it is possible that the balance of convenience might be different.

26 At the time, in 2013, his Honour also assessed an argument by Mineralogy which contended that interlocutory relief granted in favour of the CITIC parties should be tied to a condition that a royalty amount for RCB should be paid to Mineralogy on a regular quarterly basis, in terms that the CITIC parties 'pay royalties, including Royalty Component B, to Mineralogy, using the disputed formula which Mineralogy relies upon in the principal proceeding' [68].

27 His Honour rejected that condition then sought by Mineralogy as inappropriate: [69].

The CITIC parties' injunction application of March 2015

28 In his reasons for decision, Mineralogy v Sino Iron [No 6], delivered in March 2015, Chaney J evaluated a later application by the CITIC parties seeking injunctive relief to restrain Mineralogy from once again threatening to exercise contractual termination rights under cl 30.4 and cl 30.2 of the MRSLAs. Relevantly, Mineralogy had on this occasion, threatened termination of the MRLSAs by reference to termination and default notices issued in July and September 2014: see [3] and following. Some of the notices then issued by Mineralogy, which the CITIC parties were complaining about, asserted (inter alia) a breach of cl 8.4 of the MRSLAs in relation to a 'Mineralogy Royalty' payment by failing to provide a statement as to the calculation of RCB: [18].

29 His Honour's analysis of the practical effects of issuing interlocutory injunctions at that time restraining Mineralogy are set out at [38] in terms:

1. Mineralogy would be prevented from issuing a suspension notice or a termination notice on the basis of the defendants' refusal to join in requesting nomination of an expert to deal with the issue concerning Royalty Component B, that is on the basis of their failure to comply with the 10 July 2014 default notice (par 1 of the Amended Chamber Summons).
2. Mineralogy would be prevented from entering the mine area for the purpose of rectifying Sino and Korean's alleged breaches of their obligations to provide a statement as to the calculation of Royalty Component B. In practical terms, that means being prevented from examining books and records relevant to calculation of Royalty Component B (par 2 of the amended summons).
3. Mineralogy would be prevented from taking steps in reliance on their contention that the MRSLAs have been terminated on either 3 October 2014 or 9 October 2014 by reason of the 12 September 2014 termination or the 18 September 2014 termination notice. In a practical sense, that means being prevented from attempting to take possession of the site, although the plaintiff has disavowed any present intention to take any such step (par 2A).
4. Mineralogy would be prevented from issuing any further default notices in relation to the alleged defaults the subject of the various default notices which it has withdrawn (par 1 and par 2A).

30 At the end, Chaney J insisted upon an unconditional undertaking from Mineralogy, in lieu of his granting an interlocutory injunction against it, in the terms as identified at [63] of those reasons, not to act further on those termination notices other than on a period of prior written notice (save that there was an adjustment to the stipulated notice period outward to 60 days). The court noted receipt of that undertaking on 6 March 2015.

31 Chaney J's March 2015 reasons clearly display that but for the proffering of the undertaking by Mineralogy to the court in unconditional terms not to take further steps in advancement of its then threatened termination of the MRSLAs, that he would have issued an interlocutory injunction restraining such threatened MRSLA conduct by Mineralogy.

32 It was the case then, and remains the case now, that Korean and Sino have since 2013 been continuing to mine magnetite ore and to process and ship 'Product' (as defined in the MRSLAs), on a basis that the mining lease occupancy and mining rights as are afforded to Korean and Sino under their MRSLAs remain fully alive and enforceable and wholly available to Korean and Sino for full exploitation.

33 That position has been, and remains, the stance of Korean and Sino, notwithstanding that it is also the case that some key input pricing data used in order to perfect what is the stipulated algebraic formula specified by cl 8.2 to indicate how RCB is to be calculated have, on the case of Korean and Sino, been incapable of being sourced since early 2010.

34 That obstacle and the lack of a data source, in order to complete an RCB calculation, on the case of Korean and Sino, renders the RCB formula seen specified under cl 8.2 of the MRSLAs as uncertain and unenforceable.

35 Consequently, the stated position of Korean and Sino, which has been constantly maintained by them since 2013 to date in 2016 is that RCB, as stipulated under cl 8.2 in the MRSLAs, is incapable of ascertainment. They submit that that has been the case essentially since early 2010, when a publicly accessible pricing data source, known as the annual benchmark pricing system (ABPS), ceased to operate.

36 Notwithstanding cessation of the ABPS, Korean and Sino correlatively also contend that all of those parts of cl 8.2 which relate to RCB in each MRSLA can be effectively severed from the MRSLAs, either by invoking common law severance principles or, alternatively, under the express work of MRSLA severance cl 38.5. That functional contractual severance outcome is possible, they contend, as regards RCB within cl 8.2, on a basis that such an excision does not affect the continuing operation and integrity of the MRSLAs on an ongoing basis.

37 In effect then, Korean and Sino have been contending since 2013 and contend now that the MRSLAs remain as fully functional and binding contractual agreements with Mineralogy, which continue in full force and effect - except for the RCB component as one of the two parts of a Mineralogy Royalty specified to be payable under cl 8.2(a). So it is put that the Mineralogy Royalty due to Mineralogy is calculable and payable by Korean and Sino only to the extent of the royalty amount that is payable as Royalty Component A - which amount Korean and Sino say has been and continues to be remitted to Mineralogy faithfully, on a quarterly basis in conformity under the MRSLAs as they now operate, post the severance of the RCB term.

38 However, Mineralogy has never accepted that RCB as defined in cl 8.2 is uncertain and incapable of being calculated as a monetary amount due to it in respect of a promised amount of royalty on 'Product' (derived from iron ore).

39 Specifically, Mineralogy does not accept that the necessary inputs for viably engaging against the RCB algebraic formula as specified by cl 8.2(a) of the MRSLAs are no longer ascertainable.

40 So it is that Mineralogy does not accept that the specified formula used under cl 8.2(a) towards deriving an amount of royalty payable to it as RCB is uncertain in a contractual sense that is sufficient to raise any true difficulty of contractual uncertainty over the utility and enforceability of that clause. Absent any contractual uncertainty with the clause, there is of course no need, on Mineralogy's case, to ever embark upon a consideration of contractual severance principles.

41 Nevertheless, Mineralogy contends, in any event, that the contractual severance arguments of Sino and Korean, to the effect that RCB can and has been, in effect, viably blue pencilled out of the MRSLAs, leaving an otherwise intact and fully functional subsisting MRSLA bargain continuing in full force as between the parties, is an untenable approach. Mineralogy says that severance argument is fundamentally at odds with the essence of the parties' bargain. It would effectively undermine the stipulated legal consideration to Mineralogy which is the foundation of the MRSLAs by an elimination of RCB.

42 Mineralogy rejects as misconceived any application of severance principles either at common law or under cl 38.5 on the basis that, objectively assessed, the underlying character of what would be left as the MRSLA parties' residual bargain, in effect, after an excision of RCB, would be fundamentally different. Given that case, severance is not applicable.

43 But Mineralogy's first position is that no issue as to severance ever arises, because the RCB calculation formula as found under cl 8.2 in the MRSLAs is not uncertain. It remains a workable formula with viable and accessible input pricing data for all elements of the formula, enabling RCB to be calculated at all times as a quarterly royalty payment amount due to Mineralogy as the other necessary part of the 'Mineralogy Royalty' as defined in the MRSLAs.

44 Mineralogy next contends that once the misconceived notion of contractual uncertainty as regards cl 8.2 and RCB and the allied misconceived notion of a potential severance are together assessed as weakish defence arguments (or, as Mineralogy would contend, arguments which should be afforded no weight whatsoever) then it contends now, as it did in March 2016 before the Court of Appeal, that what remain as the residual defence arguments raised by Korean and Sino by way of fallback positions, all proceed upon a basis that, in the end, some amount of fair or reasonable royalty payment, or a royalty amount on 'Product' worked out as between the parties after a good faith negotiation, will always have been payable to Mineralogy.

45 Hence, Mineralogy then says, it must be due something at least for RCB, once the Sino/Korean uncertainty/severance argument is put to one side as meritless or weightless. All asserted RCB pricing quantification obstacles, in terms of assembling the required input data, do not detract from Mineralogy's base case that at the end of the day it holds a strong entitlement to a payment from Korean and Sino of some funds as a royalty upon 'Product' produced by Korean and Sino, rather than the current position of receiving absolutely nothing for RCB whilst mining, processing and exporting proceed apace.

46 The current status quo, which sees Mineralogy receiving no moneys at all as regards a royalty in respect of substantial and valuable quantities of 'Product' being produced and shipped offshore by Sino and Korean, Mineralogy argues is manifestly unfair, artificially derived and wrongly reallocates the internally made risk assessment by the parties under the MRSLAs. Axiomatically, it is a status quo that is highly prejudicial fiscally to Mineralogy's interests by denying it the substantial royalty funds on 'Product' which it would otherwise have held and enjoyed to apply towards its various business interests as it saw fit.

47 Mineralogy argues that it is sustaining very considerable and ongoing financial prejudice, by reason of being denied on an ongoing basis what, on any reasonable view, must inevitably be its contractual entitlements under the MRSLAs to receive a sizable quarterly revenue stream due to it in respect of 'Product' since 2013. As an investment corporation with wide-ranging business interests through subsidiary corporations holding interests in Australian nickel and coal mining operations, Mineralogy argues that the ongoing fiscal deprivation of royalty on 'Product' which it is suffering (since 2013) is generating harmful negative impacts against it and against its business interests through its subsidiary corporations.

48 Mineralogy then points out as well that under the terms of the MRSLAs it is constrained and confined in ever seeking damages against Korean and Sino to recover consequential losses which it sustains by way of MRSLA breach damages: see cl 30.3(b). It argues, with force, that even a likely long-term breach of contract damages result success against Korean and Sino at a trial, in terms of proving an end entitlement to funds arguments as RCB moneys, is still not full compensation for its true losses, given the constraints against it recovering consequential and indirect losses. Compensation by damages and even the award of interest at a default interest rate (under cl 30(1)(a) and (b)) longer term against the CITIC parties would still be an inadequate end compensation outcome, so it contends - measured against the hypothetical position of it holding these substantial RCB funds now.

49 So it is that Mineralogy argues, in effect, that the previous injunction orders of October 2013 obtained by Sino and Korean and the undertaking which it was compelled to provide in March 2015 continue and have effectively forced Mineralogy to continue to perform all its relevant contractual obligations owed to Korean and Sino under the MRSLAs. Whereas, against that position, Mineralogy says it has not received the countervailing contractual performance in its favour from the CITIC Parties. That all being the case, Mineralogy contends, invoking asserted mutuality principles, that there ought to have been some preconditions tied to the interlocutory relief that has been obtained by Korean and Sino to date against it, requiring Sino and Korean to mutually perform as well their MRSLA obligations as owed to Mineralogy. Such conditions framed with an eye to mutual performance on each side would have at least required Korean and Sino, at minimum, in order to get and keep the interlocutory relief granted to them (impacting upon the parties' contractual allocations of risk under the MRSLAs), to remit to Mineralogy regular royalty payments of an amount of a royalty assessed by reference to 'Product' produced by Sino and Korean, aligning as closely as possible to the RCB calculation formula.

50 Mineralogy therefore contends that the current status quo fails to reflect a proper level of contractual performance obligation mutuality in its favour, as regards the MRSLAs. The undertakings and injunctions obtained by the CITIC parties to date, it contends, unduly and unfairly interfere with Mineralogy's enjoyment and enforcement of its contractual rights vis-à-vis Korean and Sino under the MRSLAs.

51 It is important to appreciate that, in advancing its lack of mutuality arguments based upon historical orders in this action that continue in force, in truth what Mineralogy is complaining about when it says that it is being forced to continue to perform its MRSLA obligations but Korean and Sino have not - is a grievance that Mineralogy has been prevented under the 2013 and 2015 interlocutory relief obtained by Korean and Sino from taking steps in further advancement of MRSLA termination notices which it has issued, as regards the MRSLAs. Mineralogy, in real terms, is complaining that negative restraints which have been imposed against it to date by orders or undertakings accepted by this court on an interlocutory basis, have prevented it from acting further on its termination notices, by reference to Mineralogy's asserted rights to give notice of termination under cl 30.4 of the MRSLAs. That is the pragmatic sense in which Mineralogy contends it has effectively been forced to 'perform its obligations' under the MRSLAs.

52 This position is also apparent from an examination of the terms of those MRSLA agreements, which were perfected in their execution as agreements in March 2006. Objectively assessed, the pragmatic day-to-day obligations resting upon Mineralogy under those agreements look to be few once production has commenced. Once Mineralogy makes available, as it has, site possession and mining rights to Korean and Sino over Mineralogy's mining leases, then from that point on, and after the project infrastructure has been built, the essential performance burdens of the MRSLAs on an ongoing long-term basis bear chiefly upon Korean and Sino. On a prima facie review then of the two MRSLA documents, provided the sublease and mining rights as granted to Korean and Sino to Mineralogy continue, from that point forward Mineralogy, essentially, should be a recipient of ongoing fiscal payments which continue on a long-term basis under those agreements tied to the exploitation of iron ore deposits (magnetite ore) out of Mineralogy's mining leases at Cape Preston.

53 So it is that as Korean and Sino continue to conduct their operations to mine magnetite ore and from that ore then produce 'Product' (as defined), Korean and Sino incur under the MRSLAs the allied obligation to pay and remit the Mineralogy Royalty to Mineralogy on a quarterly basis and calculated in arrears by reference to the levels of production achieved over time.

The position of the CITIC parties opposing any payment of RCB to Mineralogy

54 The CITIC parties contend that the present interlocutory mandatory relief sought by Mineralogy as regards an interlocutory payment in excess of $US80 million is unprincipled pretrial relief that is, in any event, unwarranted.

55 The CITIC parties in their extensive written submissions point to the plethora of termination notices which have previously been issued by Mineralogy over time. They point to multiple changes of position under Mineralogy's ever changing pleadings, including so many changes of position that Edelman J, when case manager, was compelled to order that there be no further amendments to Mineralogy's pleadings without leave - an exceptional position in a Commercial and Managed Case (CMC) List case managed commercial action.

56 The CITIC parties contend that the so-called interlocutory relief as the money presently sought by Mineralogy is unprecedented and that it is, in its effect if not its present characterisation, final in its implementation.

57 They also are concerned that Mineralogy's present and future financial position manifests as being precarious. This leads to the submission beyond the worth of Mineralogy's undertaking that any funds to be paid over to Mineralogy at the present time in respect of RCB are more than likely to be lost forever and incapable of being recouped should that be necessary as a consequence of a future trial outcome in their favour on this point. They contend that moneys paid over now to Mineralogy are as good as 'forever lost'. Any payment is inappropriate, they contend, in the absence of a final trial determination in relation to Mineralogy's entitlement to such moneys.

58 The CITIC parties also contend, with some force, in my view, that any interlocutory relief which they have been successful in obtaining to date has essentially been fully justified on its merits and has been directly responsive to what has been ongoing unacceptable, unsupportable and provocative conduct directed at them by Mineralogy. Such conduct has, in effect, left them no other alternative but to seek relief from a court of equity, to preserve their contractual positions, against what they contend to be the as-threatened multiple unlawful terminations of the MRSLAs by Mineralogy. They contend that the magnitude of the fiscal consequences of such threatened terminations under notice presents to be of such proportions, given the investment to date in this Pilbara ore production project of billions of dollars, as to be a violation of the express covenant of good faith in the MRSLAs found at cl 37.4 - where the MRSLA parties promised to afford good faith to each other, in relation to their performances of the MRSLAs as long term contractual relationships.

59 As regards their own financial positions, the CITIC parties point to the significant and substantial net capital reserves of the third defendant, CITIC Ltd (a corporation listed on the Hong Kong Stock Exchange) as essentially the parent company of Sino and Korean and to its obligations, in effect, as guarantor of those obligations of Sino and Korean under project documentation. Consequently, they submit there is absolutely no sensible prospect arising on the available evidence upon this application that there should be any concern that, in the event that Mineralogy proves successful at trial in obtaining a significant financial judgment award against them after a final hearing, that such judgment amounts as are finally ascertained and ordered to be due and payable to Mineralogy in respect of RCB would not be easily met.

60 The CITIC parties then contrast their own strong fiscal positions to that of Mineralogy, which they say is demonstrably uncertain, even precarious. Accordingly, they contend that the standard undertaking as to damages proffered by Mineralogy as a necessary component of the seeking of equitable relief as now sought by Mineralogy lacks a sufficiently secure financial foundation.

61 Furthermore, as they did in December 2015, the CITIC parties emphasise their overwhelming project investment of capital and infrastructure to date all now outlaid in establishing what is the substantial investment in a fully functional iron ore mining and processing project on Mineralogy's mining leases at Cape Preston (and associated transport infrastructure).

62 The extent of the investment is vast. At par 63 of his first affidavit of 2 December 2015, Mr Mason sets out CITIC's capital expenditure for 2009, 2010, 2011, 2012 and 2013 with respect to the Sino Iron Project in Cape Preston in Western Australia as those expenditures had been stated in that company's annual reports for 2010, 2011, 2012 and 2013. The overall amount of the expenditures across the five financial years as from FY 2009 to FY 2013 presents as being approximately $AUD8.4 billion. At par 11 of his second affidavit, of 2 September 2016, Mr Mason says that he is 'informed by Kim Liew, Financial Controller at CPM [CITIC Pacific Mining Management Pty Ltd], and believe it to be true that CITIC has spent more than USD$10 billion to date on the Project'.

63 The Sino/Korean iron ore project in the Pilbara is also a substantial employer and a significant contributor to the economy of Western Australia, by payment of mining royalties to the State. The CITIC parties particularly draw attention to their obligations to continue to operate this project as ongoing obligations they have undertaken directly to the State of Western Australia under a State agreement - see the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA), which essentially requires Sino and Korean to continue their mining and processing operations of magnetite ore, save for a very few limited intruding and exceptional circumstances as specified. They say that they have met all their obligations to the State by the ongoing payment of royalties (see cl 11(1)(a) of the State agreement following the establishment and implementation of the project (as defined)).

64 Through Mr Mason's most recent affidavit, the CITIC parties provide some further details concerning the underlying economic scale of the project and the undeniable benefits arising out of the continuance of the current mining operations at Cape Preston. There has been a request that much of what is commercially and economically sensitive material in Mr Mason's affidavit be kept and remain confidential. I have for the present acceded to that request. Consequently, I do not dwell upon the material in these reasons, save to observe that it is essentially uncontradicted. It points to what is a significant economic project venture in the Pilbara of Western Australia and a continuing significant workforce who benefit from a continuance of the project. Correlatively and necessarily it is then said, as is obvious, there would almost inevitably be a significant disruption and dislocation associated with any unjustifiable termination of those ongoing arrangements. This would deliver a significant harm not only to the CITIC parties but to their employees and, possibly, to the economy of Western Australia. These enumerated consequences align with factors which bore heavily upon Chaney J, in his March 2015 interlocutory injunction reasons, resulting in the unconditional undertaking which was necessarily provided from Mineralogy in lieu of injunctive orders at that time: see Mineralogy v Sino Iron [No 6] [42]. Chaney J observed that the CITIC parties then (as applicants) had:

identified what are undoubtedly very substantial costs, losses and expenses which would flow from the defendants suspending their operations in the project area. It is not necessary to recite the details of these costs, losses and expenses. Given the enormous capital investment by the defendants in the project so far, the impact of suspension of operations and the immobilisation of the project employing thousands of people is obvious. I have no hesitation in concluding that, if the consequence of a refusal to grant the injunctions was that mining operations were to cease, either temporarily or permanently, then the balance of convenience would be overwhelmingly in favour of the grant of the injunctions [42].

65 Chaney J's 'Armageddon' hypothesis observations rendered in March 2015 all firmly remain in place as relevant considerations bearing upon the balance of convenience on this application. They give rise to concerns in the event of an unsupportable termination of the MRSLAs by Mineralogy of waste, dislocation and general economic harm ramifications of very sizable and widespread negative proportions. These are undoubtedly powerful considerations still bearing upon any assessment of the balance of convenience. I acknowledge their continuing force. They particularly bear upon, in the context of the balance of convenience, the court's exercise of its power to issue a discretionary equitable remedy before trial - and are relevant to be weighed no matter how strong or weak the prima facie case of an applicant for interlocutory injunctive relief might present prior to a trial.

66 Also of powerful present significance, however, to ultimate interlocutory assessments is an awkward phenomenon that is pointed to by the CITIC parties as regards Mineralogy's currently articulated pleaded position against them (now clarified with the benefit of the 4 FASOC making this problem absolutely explicit). The difficulty of concept is that Mineralogy is contending it has lawfully brought to an end the future performance obligations of the MRSLAs by it acting upon breach conduct, resulting in the lawful termination by Mineralogy of the future performance of those MRSLA agreements in early October 2014. This is demonstrable at various places within Mineralogy's 4 FASOC, which explicitly state that the MRSLAs have been terminated for breach by Mineralogy at that time. See, for instance and non-exclusively, 4 FASOC par 84 and pars 103 - 106, contending of them for contractual repudiation and breach by Sino and Korean such that each of them repudiated their respective MRSLA. In way of illustration, I set out from the 4 FASOC pars 107 - 110 therein. They illustrate the as presently articulated stance of Mineralogy:

1. By notices of termination to each of Sino and Korean dated 12 September 2014 and 18 September 2014, Mineralogy terminated the Sino MRSLA and the Korean MRSLA effective from 3 October 2014 or alternatively 10 October 2014.
2. Alternatively, by service of the written summons in proceedings CIV 2368 of 2015, Mineralogy accepted the repudiation of the RMSLAs and terminated the MRSLAs.
3. By letter dated 29 October 2015 from Kilmurray Legal to the defendants' solicitors the plaintiff confirmed its acceptance of the repudiation of the Sino MRSLA and the Korean MRSLA. The letter was effective to terminate the Sino MRSLA and the Korean MRSLA by reason of the repudiation of those agreements by Sino and Korean.
4. Alternatively, for the avoidance of doubt by this Fourth Further Amended Statement of Claim, Mineralogy hereby accepts the repudiation and terminates the Sino MRSLA and the Korean MRSLA.

67 I will also set out par 119 of the 4 FASOC, by which Mineralogy currently pleads:

In the premises, by reason of the repudiation of the MRSLAs by Sino and Korean, Mineralogy has suffered loss and damage in the sum of approximately $6.4 billion, or alternatively a sum representing the lost opportunity to be paid royalties within their present value of approximately $6.4 billion (on the assumption pleaded in paragraph 117 by Mineralogy that it would have received royalty payments from Sino and Korean up to and including the year 2044).

68 Even on the present application, the expert accounting reports from Mineralogy's experts Messrs Sorbello and Birkett which Mineralogy has relied upon are seen to be prepared on a basis that they explicitly draw a temporal line at before and after what is called a 'Termination Date' of 3 October 2014. This position is demonstrable from the terms of those reports, which render an accounting assessment for Mineralogy's claims for moneys sought in respect of RCB, both before and after such a termination date, extending presently to a claim calculated up to the end of quarter two on 30 June 2016.

69 Lest there be any doubt, an examination of Mineralogy's prayers for relief found at page 51 of the 4 FASOC displays claims to relief in terms:

1. Payment of sums for Royalty Component B.
2. A declaration that the Sino MRSLA and the Korean MRSLA have been terminated.
3. Damages for the repudiation of the Sino MRSLA and the Korean MRSLA.
4. Damages for the unlawful taking of concentrate.
5. Damages for breach of the MRSLAs.
6. In the alternative, a declaration that the Sino MRSLA and the Korean MRSLA be rectified.
7. Payment by way of restitution.
8. ...

70 As against the third defendant, CITIC, the parent corporation of Sino and Korean, relief is seen to be sought is by reference to another instrument, namely, a document referred to as the Fortescue Coordination Deed. That, in effect, sees the third defendant guarantee the performance obligations of its subsidiary corporations, Sino and Korean. Relief sought against CITIC is expressed as:

1. Payment of sums pursuant to clause 11.5 of the Fortescue Coordination Deed.

71 What emerges with clarity from this analysis of Mineralogy's completed statement of claim is that the final relief which it seeks after a trial displays what can only be assessed as a fundamental in principle inconsistency in Mineralogy's present position. On my assessment, there is a base assertion of inconsistent contractual rights. If a lawful termination for breach of the MRSLAs has been effected by Mineralogy for cause, then the ongoing performance of the MRSLAs has been brought to an end, as from early October 2014. That result came about by Mineralogy's legitimate acceptance, on its plea, of serious or repudiatory breaches of the MRSLAs by Korean and Sino. As a result, Mineralogy's rights subsequent to such a contractual termination from that point must be essentially limited to it seeking loss of bargain breach damages. In other words, it is not conceptually open to Mineralogy presently to claim royalty money payments accruing to it quarterly under the performance covenants of Korean and Sino under the MRSLAs if future contractual performance has been lawfully brought to an end in October 2014 by Mineralogy. There is nothing novel in that analysis. It is a purely orthodox contractual analysis, as regards parties' contractual rights under contractual arrangements that have been brought to an end under perfected termination for breach scenarios: see, for instance, Sir Owen Dixon's classic observations in McDonald v Denny Lascelles Ltd [1933] HCA 25; (1933) 48 CLR 457, 477. See as well the observations in the House of Lords by Lord Diplock in Photo Production Ltd v Securicor Transport Ltd [1980] UKHL 2; [1980] AC 827, 849 as regards primary obligations which, post breach and a termination of future performance, are replaced by secondary damages entitlements for the innocent contracting party. See also FPM Constructions v Council of the City of Blue Mountains [2005] NSWCA 340 [192] - [193] (Basten JA).

72 In other words, for Mineralogy to presently contend in one breath that it should receive interlocutory mandatory injunctive orders of a compulsive kind, forcing Korean and Sino to actively perform ongoing royalty payment contractual obligations arising under the MRSLAs, by paying to Mineralogy amounts of royalty money said to fall due in Mineralogy's favour on a quarterly basis as RCB up to 30 June 2016, is wholly irreconcilable and inconsistent with Mineralogy's termination stance as regards the MRSLA's future performance ending at October 2014.

73 Mineralogy is, therefore, as regards its contractual rights post October 2014, presently articulating an interlocutory position seeking payments on a basis inconsistent with its pleaded case seeking final relief upon a basis of contractual termination at October 2014. Its present interlocutory claim for money payments in respect of RCB subsequent to alleged termination of the MRSLAs at October 2014 sits wholly inconsistently with a contention in the next breath that contractual mutuality has been upset and performance obligations under those two MRSLA agreements should be enforced by this court at this time in Mineralogy's favour. This inconsistency of position is a problem for Mineralogy. It cannot be explained away or glossed by an argument that Mineralogy's case is run in the alternative. Analysis of the pleadings shows that the assertion of termination is not advanced in the alternative. Even if it was, the problem still manifests.

Contractual obligation debt/common law loss of bargain damages redux

74 An appreciation of an in principle contractual distinction between an innocent party claiming damages for a breach of what has become a contract terminated in respect of its future performance, as opposed to that party claiming to enforce the benefit of a contractual right falling due under contractual obligations which remain live and enforceable is a distinction that arose before and was fully appreciated in December 2015. The reasons of Tottle J drew a clear distinction between liquidated amounts falling due to Mineralogy under the MRSLAs, in contrast to what is a conceptually distinct claim for breach damages, also advanced by Mineralogy, on the basis of an acceptance of the innocent party of the repudiatory breach conduct of Korean and Sino in October 2014.

75 I highlight in this respect his Honour's December 2015 observations at [63], referring to Mineralogy's claims to be entitled to very substantial damages and, as well, to $US22 million, in respect of unpaid RCB up to the date of alleged MRSLAs termination in October 2014, observing that 'this is Mineralogy's primary position'. I also note his Honour's observations at [64] concerning that, in an absence of it being established that the MRSLAs had been terminated, Mineralogy's claim was for (then) the additional sum of $US26 million in respect of unpaid RCB from October 2014 to (then) December 2015.

76 At [65] of his reasons his Honour directed remarks exclusively at Mineralogy's then common law breach damages claim, but not against the claim to funds due under the MRSLAs by reference to RCB. His Honour said of the breach damages claim only:

[65] In my view, however, the strength of any claims for damages is irrelevant to the serious question to be tried which must be considered for the purposes of the application for an interlocutory injunction because there is simply no principled basis upon which a plaintiff may obtain an injunction compelling payment of damages in advance of a trial. For that reason, I have not attempted to make an assessment of Mineralogy's claims that it has validly terminated the MRSLAs and I make no assessment of its consequential claims for damages ...

[66] A mandatory interlocutory injunction may be granted to compel performance of a contractual obligation. Thus, the only basis upon which Mineralogy may succeed in its application is if the application can properly be characterised as an application for an order compelling the performance of a contractual obligation.

[67] Notwithstanding references in Mineralogy's submissions to the claims for unpaid royalties being claims for damages ... the claims for the unpaid Royalty Component B (both the claim for royalties payable up to October 2014 and the claim for royalties payable thereafter, assuming no termination of the MRSLAs) are debt claims, rather than damages claims (albeit that there may be a concurrent claim for damages for loss of the use of the funds between the due dates for payment and the date on which payment is ultimately made).

78 His Honour returned to the basal legal distinction between a contractual debt obligation and a claim for common law breach damages, concluding, as he did then, on the balance of convenience, not to grant Mineralogy's application for mandatory interlocutory injunctive relief at that time. He observed:

[103] First, as I have observed in the earlier passage in these reasons, there is no basis in principle upon which a court can order that a payment be made to a plaintiff in respect of a claim for damages before the claim is determined. Mineralogy has not drawn any authority to my attention which supports the proposition that the court's discretion to grant injunctive relief could or should be exercised in that way. Thus, in my view, the application cannot be sustained by reference to a contention that Mineralogy is likely to receive an award of damages at trial.

[104] Secondly, in seeking an injunction to compel the payment of royalties Mineralogy is asking the court, in effect, to determine (on a provisional basis) the issue of the liability to pay Royalty Component B and the quantum of the royalty payments wholly in its favour.

79 I would respectfully adopt the observations by his Honour as regards the fundamental distinction between a claim to a contractual right such as a payment under a contract that remains fully effectual, in conceptual contradistinction to a claim for damages in respect of the breach of a contract, the future performance of which has been brought to an end by a lawfully implemented termination for breach.

80 On my assessment, his Honour in December 2015 drew, with respect, what was the entirely correct legal distinction as between a claim brought by Mineralogy for contractual breach damages - which could never support the interlocutory mandatory injunction requiring Sino and Korean to pay $US48 million (then sought), in contrast to the conceptually distinct claim for monetary sums falling due under a contract which remained afoot.

81 His Honour also observed, whilst proceeding to evaluate Mineralogy's application only upon the basis of a claim for a monetary sum (ie, the position most favourable to Mineralogy):

[108] In my opinion, it is not a complete answer to Mineralogy's application to say that because the claim is for monetary sums it must follow that the award of money at the conclusion of the trial will be adequate compensation. For that reason, I have endeavoured to make an assessment of the extent of the relevant risk of harm by reference to the categories of harm identified by Mineralogy.

82 I agree with that assessment and adopt it as applicable to this renewed application.

83 I would also mention, without citing further, his Honour's observations at [10].

84 From the leading reasons of Newnes JA (with whose reasons Corboy J expressly agreed at [117]) the appeal was allowed essentially on one ground only. That was so notwithstanding that numerous further grounds had been raised by Mineralogy on that appeal: see [72].

85 Significantly to the present debt/damages conceptual distinction discussion, I note that in the course of his reasons Newnes JA considered and expressly rejected what was then Mineralogy's ground 2 of its appeal, identified under [72](2) of his Honour's reasons.

86 The failed ground 2 argument was to the effect that a claim for a payment in respect of damages was a sufficient basis to compel performance of a contractual obligation. Newnes JA expressly rejected ground 2. His Honour said at [74] - [75]:

This ground is entirely misconceived. Whilst the primary judge concluded (at [65]) that a court could not order that a payment be made to a plaintiff in respect of a claim for damages before the claim is determined, his Honour did not determine the application on that basis. His Honour expressly disregarded Mineralogy's claim for damages at [65] and [66]. Having found (at [66]) that Mineralogy could only obtain the injunctions it sought on the basis of an order compelling the performance of a contractual obligation - that is, on the basis of its claims for payment of royalty component B - the primary judge determined the application on that basis [17], [18], [67].

This ground must be dismissed.

87 Nevertheless, the observations rendered upon this issue would seem to have been either overlooked or ignored by Mineralogy whilst advancing the present application. The conceptual distinction, on my assessment, is vital to the end determination of this application. I will return to that issue later. For the present, I turn to Mineralogy's successful ground of appeal and its present ramifications.

88 Whilst dealing with Newnes JA's reasons in the Court of Appeal, it is convenient to observe that his Honour then evaluated ground 1 of Mineralogy's appeal, which he identified under his reasons at [72](1). The ground was in terms:

in having found there was a serious question to be tried in respect of Mineralogy's claim to Royalty Component B, reasoned that he was not in a position to make 'any' assessment of the strength of Mineralogy's case.

89 Towards ground 1, I note his Honour's observations commencing at [76]. At [89] Newnes JA referred to [74] of the primary judge's reasons, where it had been said:

I am satisfied that Mineralogy has established as a serious question to be tried in respect of its entitlement to payments in respect of Royalty Component B. I am not in a position to make any assessment of the strength of Mineralogy's claims (including, and especially, any provisional assessment of quantum).

90 Ground 1 was the only successful ground was upheld at the appeal (see [100] - [103]) culminating in the observations by Newnes JA:

but, in my opinion, it did not relieve him of the task of assessing the strength of Mineralogy's case as best he could.

As a consequence of declining to undertake that evaluative task, the primary judge was not in a position to determine whether Mineralogy had shown a sufficient likelihood of success to justify, in the circumstances, the grant of the injunction pending the trial. In my respectful view, by declining to undertake it, his Honour fell into error.

I would uphold this ground of appeal. In those circumstances it is unnecessary to determine the remaining grounds upon which Mineralogy relies and indeed they involve issues that could not properly be resolved until there is an assessment of the strength of Mineralogy's case in the action.

Debt/common law damages: the distinction - present concerns

92 With this action now having run almost 3 1/2 years, I hold the somewhat novel advantage of having (almost) completed pleadings but, more particularly, Mineralogy's 4 FASOC.

93 It would appear that the observations by Newnes JA (with whom Corboy J agreed) in rejecting ground 2 of Mineralogy's appeal, which I have set out above, have not effectively been heeded by Mineralogy upon the present application. By its 4 FASOC and, indeed, by its amended reply and defence to counterclaim, Mineralogy still contends repeatedly for a termination for breach by it of the MRSLAs in early October 2014: see par 176, par 183 and pars 191 - 198 of the amended reply and defence to counterclaim.

94 On my assessment of the pleadings, Mineralogy's contention towards an early October 2014 termination by it of future performance of the MRSLAs from that time onwards for breach is not advanced on an alternative basis under its pleadings. That is so, albeit that its appeal looks to have been argued upon a basis that Mineralogy submitted to the Court of Appeal that there was no effective repudiation and that Mineralogy was still claiming a debt: see ts 4.

95 By my assessment, the inconsistency of rights which is presently being articulated on this application as regards the MRSLAs being terminated in their future performances by it for breach as an innocent contracting party in October 2014, yet at the same time presently seeking on this application to, in effect, compel on mutuality grounds a performance by Sino and Korean of a significant aspect of the underlying MRSLA contractual relationship, by seeking that the court order Korean and Sino to render to Mineralogy lump sum and ongoing royalty money payments towards RCB, is untenable. Either the MRSLAs are fully alive and on foot post October 2014 up to now, or they are not. If their ongoing performance was terminated by Mineralogy in October 2014, then after that Mineralogy's claims at trial are for loss of bargain damages against Korean and Sino only, apart from any accrued contractual entitlements held on either side as at the time of the termination event. That being so, the contention of Korean and Sino on this interlocutory injunction application that common law damages at trial will be a fully adequate remedy for Mineralogy if it wins at trial is irresistible.

96 Mineralogy's inconsistency in position as regards its rights asserted as presently reflected, needs to be corrected before a court could contemplate interlocutory injunctive relief of the character as is currently sought from a court of equity in an exercise of its auxiliary jurisdiction to assist the common law in the final pursuit of what are exclusively common law causes of action based upon contractual rights.

97 This is a fundamental conceptual problem for Mineralogy that needs to be addressed, before relief beyond evaluating a claim for Mineralogy's accrued contractual entitlements around RCB up to October 2014 can be countenanced.

98 Having said all that, since the present position of the CITIC parties presents as that, from their perspective, they regard all the rights and obligations afforded to them under the MRSLAs as fully effectual and intact - with those agreements remaining fully on foot, it looks to me that Mineralogy's position of inconsistency can still be remedied. It presently remains open for Mineralogy to correct what I assess to be its fundamentally inconsistent assertion of conflicting contractual rights. Mineralogy, on my assessment, needs, in effect, in order to obtain the equitable assistance which it seeks, to do equity to Korean and Sino - by demonstrating now that Mineralogy is ready, willing and able to perform all its obligations under the MRSLAs now and into the future. That starting platform presents to me, in effect, as the 'price' payable presently by Mineralogy for seeking equitable relief, in order for it to enjoy a prospect of securing compulsive interlocutory injunctive remedies from this court - requiring Sino and Korean to perform their contractual obligations to Mineralogy, as regards a future rendering of RCB quarterly payments and all arrears of RCB after October 2014.

99 To date, I have not addressed observations by McLure P in the Court of Appeal, where the learned former President addressed a number of observations towards the meaning and effect of cl 8.2 and cl 8.6 within the MRSLAs and with which Corboy J explicitly agreed in his subsequent concurring reasons. I propose to canvass her Honour's observations, particularly upon cl 8.2, within the framework of my following evaluation of the place and significance of RCB in cl 8.2 within the two MRSLAs.

100 I will set about that task as a necessary component in leading to my following evaluation of the strength of the prima facie case now articulated by Mineralogy upon this application seeking mandatory injunctive relief. This comes about uniquely for an action remitted to the Supreme Court of Western Australia from the New South Wales Supreme Court under the cross-vesting legislation in April 2013 (having been commenced in the New South Wales Supreme Court in March that year). It comes about wholly exceptionally that the present interlocutory injunction application falls to be evaluated some 3 1/2 years into the running of an action (at this time) and when all parties have fully pleaded out their cases. Sino and Korean have, as a result, now fully articulated their defences under their defence and counterclaim, and contended against their rendering any payment whatsoever and whenever towards RCB under the MRSLAs.

101 So, as a component in the process of my presently evaluating the strength of Mineralogy's prima facie case (or serious question to be tried), it falls to evaluate the strength or weakness of the defences presently articulated by the CITIC parties against Mineralogy's claim to receive RCB. Their defences against rendering any payment are articulated at the same time as Korean and Sino continue to mine ore and then process and export Product under the MRSLAs as living contracts. That is so notwithstanding Korean and Sino's contention that the RCB calculation formula as set within cl 8.2 for RCB is uncertain and unworkable, leading to the consequent unenforceability of that clause for RCB, coupled to a concomitant rehabilitation exercise in contractual severance, otherwise finally leaving intact, fully functional and enforceable MRSLAs.

102 An evaluation of the strength of the CITIC parties' uncertainty and severance defence arguments, leaving otherwise fully functional MRSLAs, can only be undertaken as an exercise in objective contractual construction - once a proper contractual understanding is attained towards the place and function of RCB as a concept within the MRSLAs as a whole. That overview of the MRSLAs needs to be temporally focused at March 2006, when they were executed. Next then, I turn to some prima facie attempted objective insight of RCB assessed within the overall framework of the MRSLAs as a whole. The exercise is conducted, of course, only on a prima facie basis within the present interlocutory context.

Observations on Royalty Component B within the MRSLAs

103 The full text of cl 8 in the MRSLAs, including the key definition of 'Mineralogy Royalty' which is arrived at by reference to a summation of the defined terms 'Royalty Component A' and 'Royalty Component B' was set out in full at [34] in the reasons for decision of Newnes JA in the Court of Appeal. For convenience, I set out here that MRSLA text of cl 8 once again:

(a) Sino [Korean] will pay to Mineralogy a royalty ("Mineralogy Royalty") in respect of Magnetite Ore taken by Sino [Korean] pursuant to the exercise of its Mining Right.

(b) The Mineralogy Royalty is an enduring royalty, payable throughout the Term of the Mining Right.

(c) Sino [Korean] will pay the Mineralogy Royalty quarterly, based on the quantity of Magnetite Ore taken by Sino [Korean] and Products produced during the previous quarter. The Mineralogy Royalty will be payable not later than the 14th day of each quarter.

(a) The Mineralogy Royalty is calculated according to the following formula:

Mineralogy Royalty = Royalty Component A + Royalty Component B

Royalty Component A at the date of this Agreement is as specified in Item 5 of the Schedule; and

Royalty Component B is calculated according to the following formula:

Royalty Component B = The amount of the additional royalty payable for that quarter.

Product = The total aggregate tonnes of product (derived from iron ore) produced by the Sino [Korean] in that quarter for sale or supply, regardless of the type of that product.

PP = The prevailing published annual FOB price (expressed in US dollars per DMTU [the percentage by mass of iron in a tonne determined on a dry basis]) for pellets established by the largest supplier or seller of pellets in Brazil for export multiplied by 68.1.

CP = The prevailing published annual 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.

(a) less than US$55 - 6% of the Pellet Price;

(b) greater than or equal to US$55 but less than US$65 - 8% of the Pellet Price;

(c) greater than or equal to US$65 but less than US$70 - 9% of the Pellet Price; or

(d) US$70 or greater - 10% of the Pellet Price.

CR = Where the Concentrate Price is:

(a) less than US$35 - 6% of the Concentrate Price;

(b) greater than or equal to US$35 but less than US$40 - 8% of the Concentrate Price;

(c) greater than or equal to US$40 but less than US$45 - 9% of the Concentrate Price; or

(d) US$45 or greater - 10% of the Concentrate Price.

(b) The rate of Royalty Component A will be reviewed on a quarterly basis from the date of this Agreement. On each review, the increase in the rate of the Royalty Component A will be a percentage equal to the CPI Movement between the date of review and the date of the previous review (or the date of this Agreement in the case of the first review).

If there is a FOB price for either Brazil pellets or Mount Newman fines applying for different destinations, the applicable price for use in the formula in calculating Royalty Component B under clause 8.2(a) will be the price for shipments to China, or, if there is no price for shipments to China, for shipments to Asia.

Each payment of Mineralogy Royalty will be accompanied by a statement, showing in detail the calculation of the Mineralogy Royalty for the month in question. The statement will include such information as Mineralogy may reasonably require for the purpose of confirming the correctness of the calculation.

(a) Mineralogy may at any time on reasonable written notice to Sino [Korean] inspect and copy Sino's [Korean's] books and records for the purpose of verifying the amount of Mineralogy Royalty payable by Sino [Korean].

(b) In exercising its right under clause 8.5(a), Mineralogy agrees to give to Sino [Korean] a minimum of 7 days written notice.

(c) Mineralogy may also, at its cost, have Sino's [Korean's] books and records audited. Sino [Korean] will make freely available its books and records for this purpose to Mineralogy or its auditors.

Any dispute as to the amount paid to Mineralogy shall be referred to an Expert, in accordance with clause 33, who shall make in the absence of agreement between the parties a final determination for any quarter of the amount to be paid to Mineralogy under this clause 8.

104 Item 5 of the Schedule to the MRSLAs, referred to in cl 8.2(a), states:

Rate of Royalty Component A as at date of this Agreement

A$30 per tonne of Magnetite Ore taken by Sino [Korean] during the term of this Agreement.

105 I can render the following preliminary observations about the royalty arrangements for Mineralogy from cl 8.

1. The term 'Mineralogy Royalty' is found defined in aggregate terms - by reference to it being an enduring royalty payable throughout the term of the 'Mining Right'. As seen, it is the arithmetic summation of two royalty amounts: see cl 8.1(a) and cl 8.1(b) read with cl 8.2(a) in the MRSLAs.
2. The 'Mineralogy Royalty' is payable to Mineralogy quarterly, based on the quantity of 'Magnetite Ore' 'taken' as regards the first component A. Component B is a royalty that is differently derived by reference to a different underlying quantum of subject matter, namely the quantity of 'Product' produced during the previous quarter (cl 8.1(c) of the MRSLAs).
3. Some potentially problematic issues in respect of Royalty Component A have been earlier resolved: see Mineralogy Pty Ltd v Sino Iron Pty Ltd [2013] WASC 194 (Edelman J), delivered 21 May 2013, and where his Honour concluded at [247]:

Although the word 'taken' in cl 8.1 is ambiguous, the best interpretation of that word, and the clause, is a construction similar to that proposed by Mineralogy. Clause 8.1 in the 2006 MRSLAs has the effect that a royalty becomes payable by either Sino Iron or Korean Steel or by them jointly when the relevant person takes possession or control of Magnetite Ore, either by stockpiling for the purposes of possible future processing or use (as opposed to placing it on waste piles) or by moving it directly to the primary crusher.

1. The underlying machinery for Royalty Component A can be seen via cl 8.2(a) to be tied to item 5 of the Schedule in both MRSLAs. There is also via cl 8.2(b) a regular review of the level of Royalty Component A. This is conducted on a quarterly basis, by reference to 'CPI Movement'.
2. Whilst item 5 of the Schedule shows that Royalty Component A is payable by reference to Magnetite Ore taken, the underlying referenced subject matter in respect of the other aspect of the royalty is differently constructed in terms of the underlying subject matter. Both the components A and B are necessary to in aggregate derive the 'Mineralogy Royalty'.
3. By cl 8.2(a) of the MRSLAs the Mineralogy Royalty is an amount of money which needs to be 'calculated'. An arithmetic formula is provided to complete this calculation. It is the summation of Royalty Component A and Royalty Component B.
4. The word 'calculated' is seen then to be used yet again later in cl 8.2(a), now in a context of defining the basis upon which the Royalty Component B is to be ascertained. A second mathematical formula is provided in order to perfect this calculation for RCB.
5. As seen, the formula provided for the calculation of the monetary quantum of what is referred to as Royalty Component B provides a more complex algebraic formula. As an objective assessment, the provision of that formulae and the calculations to be undertaken all suggest to me a laying down, at this point, of elaborate machinery - in order to derive with precision the royalty money amounts which are to fall due to Mineralogy, on a quarterly basis.
6. As now seen, certain pricing ingredients used within the Royalty Component B formula post 2006 have proven, or are said to be, problematic in terms of their ascertainment. That is the case particularly as regards the subject matter that is referred to by the acronym PP (which I assume for present purposes is meant to signify a reference to pellet price) and also a counterpart formulae acronym CP (which I assume for present purposes signifies concentrate price - although those conclusions concerning the meaning of the two acronyms are an inference I have drawn, rather than being matters that are explicitly stated).
7. It is apparent from the defined term 'Product' that it is the commencing point in the equation for both the PP and CP components in the formula specified to derive Royalty Component B. 'Products' is defined in the MRSLAs' early definition clause (cl 1.1) as:

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 [Korean] may decide from time to time and no more.

1. Other definitions in that definition clause at cl 1.1 in the MRSLAs also define the term 'Iron Ore Concentrates' to mean 'Magnetite Ore concentrated to at least 65% Fe'; 'Pellets' to mean 'high grade iron ore pellets produced from Magnetite Ore'; and 'HBI' to mean 'hot briquetted iron produced from Magnetite Ore'.

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.

Clause 1.1 also defines 'Mineralogy Royalty' to mean 'the royalty payable by Sino [Korean] to Mineralogy under this Agreement, as set out in cl 8.1'.

1. Hence, it may be seen that whereas Royalty Component A is a royalty amount payable to Mineralogy in reference to the subject matter of 'Magnetite Ore' 'taken', that Royalty Component B is to be distinctly calculated by reference to the quarterly amounts of the different subject matter, being 'Product'.
2. Whilst 'Products' is first defined in the cl 1.1 MRSLA clause that I have mentioned, there is within cl 8.2 a further and independent definition for 'Product', as regards its meaning within Royalty Component B and which it is necessary to assimilate.
3. Within the definition of the Royalty Component B formula, 'Product' is defined in terms:

Product = The total aggregate tonnes of product (derived from iron ore) produced by Sino [Korean] in that quarter for sale or supply, regardless of the type of that product.

Hence, it is seen that although the defined term 'Product' is capable of embracing a number of different derived iron ore products such as concentrate, pellets or HBI, in the end this does not matter for the purposes of qualifying as product in terms of a subject matter delivering the obligation to pay a royalty exposure to Mineralogy. All 'Product' will do that and the royalty payable is the same.

1. Expansive as the definition of 'Product' is now seen to be under cl 1.1, it would not appear to extend to include iron ore 'fines'.
2. For present purposes, it is significant that all argument before me has proceeded upon the basis that, to date, the only derived subject matter from the iron ore 'taken' at Mineralogy's Cape Preston mining leases as worked by Korean and Sino (from the magnetite iron ore which has been taken since 2013) is iron ore 'concentrate'. No other subject matter potentially capable of fulfilling the nominated MRSLA definition of 'Product' looks to have been derived to date. It would appear to be that to date no pellets or HBI has been produced, just concentrate.
3. The last negative observation is significant, once the dual halved parts in the RCB formula are examined, noting again that the acronyms PP and CP in that formula both envisage use of FOB (shipping) prices for the two distinct underlying subject matters that are chosen. The chosen subject matters in the formula are the price of iron ore pellets originating from Brazil, but in the other half of the formula the other distinctly chosen subject matter is of Mount Newman iron ore fines for export.
4. The Royalty Component B formula on close examination is seen first to halve the overall quantum of produced Product (as defined). Relevantly, for present purposes, since 2013 this has been only iron ore concentrate which has been produced from the extracted magnetite ore. Having halved the quantum of the produced Product, the RCB formula then proceeds to multiply that halved amount of Product by an FOB shipping price for each of the two chosen underlying subject matters, across the distinct halves of the formula. Hence, taking half the tonnage of the iron ore concentrate product (as Product), that tonnage amount is then multiplied, in the case of PP, by a shipping price in US dollars per dry metric tonne for Brazilian sourced iron ore pellets. The same methodology is used in respect of the other half of the calculation taking the halved Product tonnage and applying the US dollars shipping price (FOB), this time for the subject matter of Mount Newman fines for export (noting as dual curiosities that, first, fines would not appear to fall within the definition of 'Product' and, second (and in passing) that Mount Newman fines are actually derived from hematite ore, not magnetite ore: see ts 1412).
5. For each of PP and CP the FOB price nominated for either subject matter (pellets or fines) is indicated to be the annual shipping price for the subject matter.
6. Further, that annual nominated shipping price is identified as having been 'published' - indicating prima facie that the price used is in the international public domain, rather than being pricing information that is kept confidential.
7. A further aspect in each of the PP and CP price definitions is that these annual prices to be used are specified to be 'prevailing' - indicating prima facie a specification of a market price which may change over time - and presumably here, annually.
8. Each half of the specified Royalty Component B formula is then to be multiplied by a percentage for PR and CR. This percentage proceeds to manifest on a sliding scale, depending upon the level of the price for pellets or, in the case of CR, Mount Newman fines (albeit referred to as Concentrate Price in CR).

106 Summarising the position then, the RCB formula that is found under cl 8.2 is expressed to be the monetary royalty amount payable to Mineralogy which is the result of a calculation that is implemented by reference to necessary inputs of Product tonnage, a percentage applicable on a sliding scale (as explained under PR or CR) and then by a US dollars price (FOB shipping price) under PP or CP, followed by further factors of multiplication (68.1 in the case of PP but 68.1 in the case of CP, then a further 1.05). The application of the RCB formula generates a calculated amount of money in US dollars payable quarterly in arrears as RCB. It is the other half of the Mineralogy Royalty as defined, which is to be paid, along with Royalty Component A. Clearly, RCB forms a significant part of the legal consideration anticipated to be flowing to Mineralogy in respect of the mutual rights and obligations of the parties over time under the MRSLAs.

107 I proceed, for the purposes of this interlocutory exercise, on the further assumed basis that the quantum of Royalty Component B was likely to be higher in a monetary quantum over time than the amounts falling payable as Royalty Component A. I note that in [40] of Newnes JA's reasons in the Court of Appeal his Honour observed that 'Royalty Component B is far and away the greater proportion of the royalties payable by Sino Iron and Korean Steel under the MRSLAs'.

108 I turn now then to the more problematic issue arising around RCB, namely, the source or sources for finding the necessary input pricing data post 2010 in relation to finding or working out the US dollar prevailing published annual FOB pellet price (PP) and the prevailing published annual FOB concentrate price (CP), so as to derive the amount of royalty money payable as Royalty Component B from time to time over the long anticipated duration of the MRSLAs.

'PP' and 'CP' as concepts used within Royalty Component B in cl 8.2 of the MRSLAs

109 As seen, both PP and CP, as core ingredients of the Royalty Component B formula, use the expression 'the prevailing published annual FOB price' (expressed in US dollars per DMTU) of pellets in the case of PP, or Mount Newman fines for export in the case of CP.

110 These FOB pricing inputs for pellets and fines, used in the halves of the formula need to be ascertained to derive a RCB amount. This has given rise to the underlying pragmatic problem as explained by Newnes JA at [37] and [38] in his Honour's reasons in the Court of Appeal in relation to pricing sources that were formerly available and published at the time when the MRSLAs were entered into in 2006, which source was known as the Annual Benchmark Pricing System (ABPS). As explained by Newnes JA at [37]:

Under this system, annual benchmark prices for iron ore products were set through negotiations between the world's largest steelmakers and their largest suppliers, before being announced by the suppliers and published.

111 The emerging problem post March 2006 is that whilst the ABPS was in existence and identifiable as a relevant surrounding circumstance when the MRSLAs were entered in March 2006, the ABPS system then fell into disuse after early 2010. As Newnes JA explained at [38]:

It is not in issue that the annual benchmark pricing system ceased to operate in around early 2010, after the MRSLAs were entered into but some three years prior to extraction of ore and the production of Product which triggered the obligation to pay Royalty Component B. The respondents allege that Royalty Component B is therefore not capable of calculation in accordance with cl 8.2 of the MRSLAs and the MRSLAs make no provision for any other method of calculating it ...

112 I can render three preliminary observations now on the underlying problem concerning an ascertainment or location of the necessary pricing inputs for the RCB formula as published and publicly assessable sources of annual FOB US dollar shipping prices for pellets and Mount Newman fines, respectively.

113 In the first place, as a negative observation, it is crystal clear that cl 8.2(a) by the definitions for PP and CP do not mention the ABPS in terms as the chosen input source of the required public pricing data. True the ABPS may well have presented to the parties, objectively assessed, in 2006 when the MRSLAs were entered as a very convenient, or even a preferred, source for accessing this annual public US dollar pricing information for Brazilian pellets and Mount Newman export fines. But a temporal convenience around 2006 does not necessarily translate to the conclusion that there were at that time no other US dollar shipping price publicly available input sources of annual data capable of being utilised in respect of the chosen subject matters of Brazilian export pellets and Mount Newman export fines. This raises a question or questions of fact about which evidence, including expert evidence from industry participants, may be given at a trial. The relevant point is that the now inoperative ABPS is not mentioned in the PP and CP definitions.

114 I have not overlooked here a plea by the CITIC parties in their recent defence and counterclaim that the expression 'prevailing published annual FOB price' is a descriptive term of industry custom and usage carrying what is a specific industry meaning: see CITIC parties' defence and counterclaim par 18. Evaluation of that industry custom and usage contention raises considerations of expert evidence in relation to the industry custom and practice at 2006 when the MRSLAs were perfected. In that regard, the nature of such evidence is explained in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 150 CLR 226.

115 Presently, however, as I assess the assembled interlocutory expert material adduced for this application, there is no such industry specific expert evidence directed at a precise industry custom and practice meaning for that term at the time the MRSLAs were entered in 2006. That is an issue that could emerge at the trial.

116 The second preliminary observation I would render concerns cl 8.6 in the MRSLAs which I now have set out above. This subclause links the royalty payment regime set out under cl 8 with the expert reference dispute resolution provisions of the MRSLAs, under cl 33. Clause 8.6 seen above provides the capacity for an expert appointed by the parties under cl 33 to render a final determination in relation to the amount of royalty paid to Mineralogy in a particular quarter, if that issue is in dispute.

117 Presently, there is, putting it mildly, the strongest of disputation arising over the alleged inadequacy of the amount of royalty funds paid to Mineralogy concerning Royalty Component B since production of iron ore concentrate as Product commenced in 2013 up to date. There is a strong dispute over there being no royalty amount paid at all to Mineralogy in respect of Royalty Component B. That observation is relevant to a submission of contractual uncertainty as regards the calculation of Royalty Component B by the CITIC parties, who say that the MRSLAs make no provision for any other method of calculating RCB. But that submission needs to be evaluated in light of cl 8.6, which is capable of being viewed as express provision for another method, namely, by the work of a chosen expert appointed under cl 33 of the MRSLAs. To that end, I note the observations of McLure P, agreed with by Corboy J, at [25] concerning cl 8.6 extending both to the 'standard and the quantification of RCB'.

118 The third preliminary observation is of significance as regards my present need to grapple with challenges for an RCB calculation. This is the presence within the MRSLAs of cl 37.4, which provides:

Mineralogy and each Mine Participant will act in good faith towards one another in relation to performance of this agreement. (my emphasis)

119 Accordingly, the present contractual relationship is not a scenario in which questions about the potential implication of the implied term of good faith and dealing as between the parties in the performance of their contractual relationship over time arises. The obligation is not to be implied. It is expressly stipulated for in the present contractual relationships by cl 37.4.

120 Given that mutual obligation, the ongoing obligation of these contracting parties to mutually work co-operatively together towards resolutions of what present as problematic day-to-day implementation issues that in the way of most commercial dealings of long duration are almost inevitably bound to manifest over the course of the long-term commercial contractual relationship - is not in doubt.

121 Clause 37.4 can be coupled, if need be, to the implied term of law found in all commercial contracts, as described by Mason J in Secured Income Real Estate (Australia) v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596, 605 - 607. This implied term of law requires contracting parties to cooperate, in order to mutually confer upon each other the benefits of their contractual arrangements. Together, the express cl 37.4 and implied obligation of law for cooperation call for an exhibition of high mutual standards of commercial dealing over time between all these MRSLA contracting parties.

122 It is necessary to turn to some further aspects of the MRSLAs in relation to furthering the objective perspective as at 2006, in relation to where RCB sits overall within this long-term commercial relationship. That perspective is necessary in order to evaluate the strength of the uncertainty and correlative severance argument advanced by the CITIC parties to date on an interlocutory basis.

Other provisions in the MRSLAs showing some linkage to RCB

123 Clause 7.1 to cl 7.8 of the MRSLAs deal with the ownership and processing of Magnetite Ore and aspects of the production, processing and sale of Iron Ore Concentrates, Pellets and HNI. Relevantly, cl 7.2 provides that 'Sino [Korean] must process Magnetite Ore taken by Sino [Korean] from the exercise of Sino's Mining Right into either Iron Concentrates, Pellets or HBI'. On that basis, it can be seen that Sino and Korean are obliged to process all Magnetite Ore that each has taken into one or, or a combination of, the three product forms falling within the defined term 'Product' in the RCB formula. On the face of it, it would appear then, in view of cl 7, that the MRSLAs proceed on a basis that, at least at some point after the extraction of Magnetite Ore has commenced (and been 'taken'), the tonnage value for Product in the RCB formula in cl 8.2(a) will not be a nullity.

124 In that context, it can be seen that cl 6.3 provides a temporal framework for when the production of Product is to commence. Clause 6.3, manifesting in each of the MRSLAs, says:

Commencement of production

(a) Unless prevented from doing so by an act, matter or thing outside of Sino's [Korean's] control, by the doing of, or failing to do, an act by Mineralogy under this Agreement or otherwise, or a failure to obtain all Government Approvals necessary for it to do so (provided it has used its best endeavours to obtain such approvals in a timely manner), Sino [Korean] must produce no less than 6,000,000 (six million) tonnes of Product no later than seven years from the date of this Agreement [ie, by 20 March 2013].

(b) If Sino [Korean] fails to comply with paragraph (a) then it must, no later than one month following the date by which compliance is required, pay to Mineralogy an amount equivalent to the Mineralogy Royalty payable on the amount of Magnetite Ore required to produce 6,000,000 (six million) tonnes of iron ore concentrate.

125 This subclause forms the basis of a discrete field of further conflict in this action between the parties, under Mineralogy's contention that cl 6.3(b) has now been affirmatively engaged in its favour, against Korean and Sino's countercontention that the clause has not been engaged - since they have been prevented under cl 6.3(a) from achieving the production of 6 million tonnes of Product, for various reasons said to be outside their control.

126 Whatever is ultimately to be made over that cl 6.3 dispute (with the CITIC parties also contending that the clause is, in any event, unenforceable as a penalty) the internal reference as seen in cl 6.3(a) to 6 million tonnes of Product and the specified payment to Mineralogy under cl 6.3(b) of an amount equivalent to the Mineralogy Royalty payable on the amount of Magnetite Ore required to produce 6 million tonnes of iron ore concentrate, on the face of it looks to me to carry a strong resonance to the RCB royalty, as defined under cl 8.2(a). On the face of it, cl 6.3 looks to have been framed, objectively assessed, with an eye to secondarily shoring up for Mineralogy an amount towards the royalty sum which it would otherwise have received under cl 8.1 and cl 8.2 to a plateau level - should there prove to be a failure to generate 6 million tonnes of concentrate as Product by March 2013, after seven years of the MRSLAs being on foot.

127 Whilst the precise workings and implications of this clause, which looks at first blush to be something like a longer term minimum performance guarantee by Korean and Sino, will need to be settled later, it does for necessary purposes at present look to be a clause that is derived from and linked to the underlying consideration by way of royalty for Mineralogy which is specified as RCB.

128 A second wider feature of the MRSLAs which I would also note was remarked upon by Newnes JA in his reasons at [92]. This is cl 14.1(b) in each of the MRSLAs. Pursuant to this provision, a future surrender of RCB by Mineralogy will be the 'exercise price for an option Mineralogy holds under the MRSLAs, to acquire up to just under 20% of Sino Iron and Korean Steel'.

129 To that end, the clause identifies the 'Exercise Consideration' for 'Option Shares', on a basis that the option would be 'exercised for the sole consideration of Mineralogy surrendering and releasing Royalty Component B as set out in cl 8.2(a)'. The proviso to cl 14.1 identifies that no other price or consideration is payable by Mineralogy for the issue of the Option Shares other than the Exercise Consideration.

130 Once again, therefore, there appears to be a further function for Royalty Component B to possibly play within the MRSLAs as a whole, effectively as surrendered option consideration that might in the future be given up by Mineralogy, in order for it to obtain significant levels of shareholding in Korean and Sino, up to the level in each case of Mineralogy just under a substantial shareholder.

131 Given those wider roles played by RCB in the MRSLAs in the two aspects I have just identified, it presents to me as again, prima facie, being very difficult to see at present how, given all that, it could be possible to blue pencil sever RCB out of the MRSLAs, on a basis that this calculation formula is uncertain and unenforceable as the CITIC parties contend - but leaving, nevertheless, an otherwise fully intact long-term future ongoing relationship for the MRSLAs, post that severance surgery. Such an amputation would, on the face of it, seem to render a significant violence to the nature of the initial bargain, not only as regards the legal consideration to be received by Mineralogy as a royalty payment over time, but also as regards the role to be played by RCB in relation to a plateau sum which is sought to be reinforced under cl 6.3 and also as potentially surrenderable option consideration to operate under cl 14.1.

132 The blue pencil amputation advocated by the CITIC parties would appear to do a significant violence to the character of the residual bargain that is left subsisting as between the parties to the MRSLAs.

133 These observations are of course only rendered on a prima facie basis, but the two wider MRSLA features which I have now noted (non-exclusively) suggest to me at present that the role and function of RCB within the MRSLAs extends a considerable way beyond its bare manifestation at cl 8.2. A consequence, correlatively, is that the severance of Royalty Component B might presently be viewed as more akin to the amputation of a human limb, rather than to the trimming of an inconvenient overgrown fingernail. There are, of course, numerous severance authorities canvassing these principles but, on my assessment, the law in this area is well settled: see generally MacKinlay v Derry Dew Pty Ltd [2014] WASCA 24; (2014) 46 WAR 247 [75] - [76], [135]; Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24; (2013) 45 VR 657 [98].

Court of Appeal: reasons of McLure P concerning cl 8.2 in the MRSLAs

134 I turn to assess the observations by McLure P concerning cl 8.2 of the MRSLAs. Her Honour's observations as regards that clause and cl 8.6 were expressly agreed with by Corboy J: see [118].

[22] The total effect of the decisions at first instance is that Sino Iron and Korean Steel have been permitted to receive all the contractual benefits to which they would be entitled under the MRSLAs whilst refusing to pay any amount on account of RCB and having the benefit of interlocutory injunctions preventing Mineralogy from exercising its contractual rights under cl 30.4(d) of the MRSLA.

[23] I agree with Newnes JA that the primary judge erred in failing to make an assessment of the strength of the CITIC parties' primary defence that RCB is uncertain, void and severable. Courts go to very considerable lengths to uphold agreements and the terms thereof. Ambiguity does not mean (legal) uncertainty. Courts will always strive to give a businesslike or commercial meaning to contractual terms. This preparedness to uphold the validity of a contract or its terms is further heightened when, as in this case, the agreement is a long term contract which is partially performed.

[24] There are separate aspects to the proper construction and application of the RCB in cl 8.2 of the MRSLA. The first is the identification of the relevant standard for determining the Brazilian pellet price (PP) and the Mount Newman fines concentrate price (CP) in the RCB formula. The ABPS provided the published market price of the relevant products for the relevant quarter. That is confirmed by CITIC in its 2006 announcement to the Hong Kong stock exchange. Prima facie, the standard for the calculation of RCB is the published market price for the relevant products (PP and CP) during the relevant quarter. The fact that (unlike the ABPS) the market price changes during the relevant period does not make the standard legally uncertain. How best to achieve and quantify the market price for the relevant period is a matter for expert evidence on a subject involving a well understood process that is neither ambiguous nor uncertain. Up to now, the CITIC parties have been successful without adducing expert evidence on this subject.

[25] Alternatively, it is arguable that the agreement to refer disputes to an expert under cl 8(6) of the MRSLA extends to both the standard and the quantification of the RCB. See Foley v Classique Coaches Ltd [1934] 2 KB 1; F & G Sykes (Wessex) Ltd v Fine Fare Ltd (1967) 1 Lloyd's Rep 53. Either way, the claim that RCB is uncertain, void and severable faces formidable obstacles.

[26] However, Mineralogy's insistence on an urgent hearing means this court cannot itself determine the application without infringing the respondent's right to procedural fairness. The application should be remitted to Chaney J who is responsible for the management of the action.

136 Newnes JA at [101] - [104], in upholding ground 2 of Mineralogy's appeal, directed his remarks towards the application of the test in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618 (which was affirmed in Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57 by four of the six justices sitting in that appeal) to the effect that on an application for an interlocutory injunction the court does not 'undertake a preliminary trial, and give or withhold interlocutory relief upon a forecast as to the ultimate result of the case' (Beecham, 622), but it was necessary for an assessment to be rendered on the strength of the plaintiff's probability of ultimate success. He referred to observations from Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 156; (2011) 217 FCR 238 to the effect that this overall evaluation was necessary in order to 'enable the strength of the case to be taken into account in an assessment of the balance of convenience and justice': see Newnes JA at [102] applying Samsung Electronics v Apple [87] - [88].

137 However, the President's perspective is seen to be directed at the defendants, rather than at the injunction applicant, Mineralogy, as regards its prima facie case on this application. That reverse starting perspective probably reflects the wholly unique circumstances of the present interlocutory injunction needing to be undertaken at a point over three years after commencement of the action - and where at the time of the appeal hearing (on 27 March 2016) Mineralogy had not then filed its 4 FASOC of 1 April 2016 (albeit it had substantially obtained Chaney J's leave in that respect on 23 March 2016): see Mineralogy v Sino Iron [No 10]. Nevertheless, as the authors of Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (5th ed, 2015) say at [21375]:

It is self evident that the stronger the defence apparently open to the defendant the less chance the plaintiff has of obtaining interlocutory relief.

138 As I have already said, I will proceed for this application on the basis that an evaluation of the strength of Mineralogy's accepted prima facie case concerning its entitlement to funds in respect of Royalty Component B raises, as an aspect of that overall evaluation, an assessment of the strength of the defences presently raised by the CITIC parties against rendering any payment at all towards Royalty Component B, based upon their arguments of contractual uncertainty as regards the RCB formula aspects of cl 8.2 and associated severance arguments towards an otherwise residually functional MRSLA, albeit without RCB being operative.

139 The President's observations at [23] were directed towards the articulated defence concerning RCB by the CITIC parties to the effect that RCB was 'uncertain, void and severable' - noting also her Honour's observations at [7] concerning the other fallback defence positions of the CITIC parties concerning RCB, in the event that their primary uncertainty/severance defence was not to prevail. For those fallback defence scenarios, it was accepted that the CITIC parties would, however, eventually need to pay an amount of funds to Mineralogy concerning a royalty payment obligation fashioned by reference to, or in lieu of, RCB. Even on the ultimate lowest tier fallback hypothesis of a contractually frustrated contract outcome, that would not negate accrued rights and entitlements by Mineralogy prior to any frustrating events taking effect. As regards frustration, however, it is relevant to reiterate that mining, processing and shipping of ore from the Cape Preston mining leases of Mineralogy by Sino and Korean is ongoing. That conduct is of a character that it is difficult on its face to rationalise against the postulated fallback scenario of a contractual relationship terminated in future performance by reason of a frustrating event tied to an inability to find a source for pricing data for pellets and fines in order to import their US dollar market values from time to time into the RCB formula.

140 The learned President's remarks concerning ambiguity not necessarily carrying the conclusion of legal uncertainty, and about courts striving to give businesslike and commercial meaning to contractual terms that are agreed between parties, are both orthodox and contextually compelling. Likewise are the President's observations concerning the preparedness of courts to strive to uphold the validity of the parties' contractual bargain being even more heightened where the underlying circumstances present a long-term contractual relationship which has been partially performed in implementation. Those observations reflect longstanding legal principle: see the observations of Barwick CJ in Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429 and Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000) 22 WAR 101 (Ipp J, as he then was).

141 The protective sentiment of the law concerning the enforceability of partially performed contractual arrangements has been articulated with irresistible clarity by Lord Denning in F & G Sykes (Wessex) Ltd v Fine Fare Ltd [1967] 1 Lloyd's Rep 53, 57 - 58, when the Master of the Rolls said:

In a commercial agreement the further the parties have gone on with their contract, the more ready are the Courts to imply any reasonable term so as to give effect to their intentions. When much as has been done, the Courts will do their best not to destroy the bargain. When nothing has been done, it is easier to say that there is no agreement between the parties because the essential terms have not been agreed. But when an agreement has been acted upon and the parties, as here, have been put to great expense in implementing it, we ought to apply all reasonable terms so as to avoid any uncertainties.

142 As regards the objective understanding of cl 8.2 within the MRSLAs, President McLure's reasons draw into focus a point of law of some force, namely, that if the cl 8.2 RCB formula (or, more correctly, one or more of the inputs to be used within that formula as regards an input price for the selected subject matter, being either Brazilian sourced pellets or Mount Newman export fines) proves difficult to ascertain, that such a problem does not necessarily carry a conclusion of legal uncertainty in respect of the contractual term.

143 Even more fundamentally, if the problematic contractual term is assessed as not being legally uncertain, then there can arise no occasion for any severance of the term from the contract, either by common law principles or under a contractual severance clause. The burden of President McLure's observations under [23] - [25] is directed against a likelihood, assessed on a prima facie basis, of any ultimate finding of contractual legal uncertainty in such respects. On that hypothesis, the associated issue of severance, leaving an otherwise fully functional MRSLA contractual relationship, would not then arise.

144 At [24] of her Honour's reasons the learned President referred to separate aspects of the proper construction and application of Royalty Component B within cl 8.2. The first aspect identified was the identification of a relevant 'standard' for determining PP and CP within the RCB formula. The other aspect was the quantification of the amount. After rendering some observations concerning cl 8.6 in the MRSLAs (on the basis that that clause would extend arguably to both the standard as well as the quantification of RCB) the President ultimately concluded:

Either way, the claim that [Royalty Component B] is uncertain, void and severable faces formidable obstacles.

145 Whilst not strictly binding upon me now, as they were obiter, given that only ground 1 of the appeal was successful, the observations are residually persuasive. The legal issues in dispute surrounding those observations have not altered on the present application, after a remission of Mineralogy's mandatory interlocutory injunction application by the Court of Appeal in June 2016 after the appeal was allowed.

146 Absent a contractual uncertainty issue tainting the RCB formula in cl 8.2 of the MRSLA (and thereby avoiding a severance scenario which leaves intact an otherwise fully functional MRSLA without an RCB obligation), it presently seems to me to be undeniable that, in the end (whenever that is), some significant amount of money must ultimately be paid over by Sino and Korean as a royalty to Mineralogy in respect of RCB under the remaining fallback scenarios of Korean and Sino as identified under [7] of the President's reasons, apart from frustration. Even the scenario of frustration would not undermine the rights of Mineralogy to accrued entitlements as regards a royalty payment where the accrued entitlement had arisen prior to the event of frustration. But the prospect of a contractual frustration, viewed now by reference to the ongoing production and export activity at Cape Preston, looks to me as a very remote contingency.

147 The President had also observed as regards cl 8.2 that:

The fact that (unlike the ABPS) the market price changes during the relevant period does not make the standard legally uncertain [24].

148 On my assessment, that legal analysis which I would respectfully endorse has not changed for this application.

149 It is now necessary for me to turn to rendering an assessment as to the strength of Mineralogy's overall prima facie case, as an aspect of the present interlocutory injunction evaluation. The strength evaluation necessarily then interrelates with the second limb analysis aspects of the interlocutory injunction assessment concerning all the discretionary factors bearing upon the presenting balance of convenience considerations - which, for the present case, extends to include assessing the potential adequacy of an end award of damages at trial, where the nature of the final relief pursued by Mineralogy and its contractual causes of action relied upon are all grounded exclusively upon common law rights.

150 I also need to conduct the strength assessment as regards Mineralogy's prima facie case from, for this unusual case, the wider perspective of assessing the strength of the defences raised by the CITIC parties, as was highlighted by the President's reasons. Specifically, I need to evaluate the primary defence of the CITIC parties' contention to the effect that RCB is uncertain, void but severable, leaving the MRSLAs otherwise functional minus any RCB obligations.

Interlocutory mandatory injunctions before trial requiring affirmative steps by a defendant

151 It is unnecessary to canvass at any length principles applicable to the grant of an interlocutory mandatory injunction in Western Australia. They have been comprehensively discussed and assembled in the reasons for decision of Newnes JA in the appeal reasons at [76] - [85]. In short, the position is that no different standard applies in respect of a mandatory interlocutory injunction.

152 Principles applicable to the grant of interlocutory injunctions were also extensively canvassed by Newnes JA - see particularly [87] of his Honour's reasons, where his Honour referred to the leading authorities of Beecham and ABC v O'Neill.

153 Personally, I prefer the terminology upon an interlocutory injunction application of an applicant needing to make out a prima facie case, in the sense as was explained by Gummow and Hayne JJ in ABC v O'Neill at [65] - [72]. Their Honours' observations at those paragraphs were expressly agreed with as being an appropriate explanation of the organising principles applicable to evaluating an application for an interlocutory injunction as discussed by Gleeson CJ and Crennan J at [19] (footnote 28). So it was in ABC v O'Neill that four of the six sitting justices in the High Court endorsed the explanation of the interlocutory injunction organising principles by Gummow and Hayne JJ at [65] - [72]. Kirby J took a different view in his dissenting reasons at [138], preferring Lord Diplock's formulation from American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396, 407 - 408. The sixth member of the court, Heydon J, also dissenting, agreed with the orders as proposed by Kirby J but did not, on my assessment of his Honour's reasons, canvass, at least directly, the subissue concerning the formulation of the interlocutory injunction test for Australia.

154 As explained by Gummow and Hayne JJ in ABC v O'Neill, there are two main areas of enquiry, namely, the evaluation of an applicant's prima facie case and then the discretionary considerations going to the overall balance of convenience, in relation to the grant of interlocutory relief as opposed to not intervening at that time. At [65] of their reasons, their Honours had referred to the observations of Kitto, Taylor, Menzies and Owen JJ in Beecham (84) as regards the two main areas of enquiry, citing this passage from Beecham :

The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer is an injunction were granted.

When Beecham and American Cyanamid are read with an understanding of the issues for determination and an appreciation of the similarity in outcome, much of the assumed disparity in principle between them loses its force. There is then no objection to the use of the phrase 'serious question' if it is understood as conveying the notion that the seriousness of the question, like the strength of the probability referred to in Beecham, depends upon the considerations emphasised in Beecham.

156 I have had occasion in the past to apply the ABC v O'Neill formulation in scenarios of interlocutory injunctions before trial seeking restraints against defendants, in contexts of the final relief sought by an applicant plaintiff being exclusively grounded upon common law rights and common law causes of action. That is the position in present circumstances, where Mineralogy's causes of action are seen to be exclusively grounded in common law claims either to contractual entitlements afforded by the terms of the MRSLA, or to common law damages arising out of alleged breaches of contractual terms of the MRSLAs by the CITIC parties.

157 For scenarios of common law causes of action and common law relief there is an additional consideration which arises as a part of an evaluation of the balance of convenience. This is the question concerning the potential adequacy of an award of damages at trial being a sufficient remedy, rather than a grant of equitable relief by way of an injunction to restrain conduct or mandate positive conduct prior to trial. In Marsh v Baxter [2013] WASC 209 [22] - [23] and in Moran v Schwartz [2014] WASC 334 [26] I evaluated interlocutory injunction applications pursued by plaintiffs who articulated exclusively common law tort rights (negligence, nuisance, defamation) taking into account in that context considerations concerning the adequacy of common law damages at a trial as a part of the balance of convenience.

158 In this context, I would note and adopt the recent observations by Pritchard J in Aikman v The Owners of Strata Plan 48817 - 16 Dolphin Drive Mandurah [2016] WASC 380 [56], which noted that there has been some controversy over whether the adequacy of damages as an alternative remedy is a factor to be considered as part of the balance of convenience, or as a separate consideration in the overall exercise of discretion whether to grant injunctive relief. Her Honour's approach was that it is more appropriate to consider the adequacy of damages as part of the overall balance of convenience rather than as a discrete consideration. Her Honour had there referred to observations about this issue by Edelman J in National Australia Bank Ltd v Joyce [2012] WASC 224 [38] - [40] and which I would also respectfully adopt.

159 The present application for injunctive relief as pursued by Mineralogy arises in a context of its causes of action which are exclusively grounded in the common law, on the basis of its MRSLA contractual rights. As explained by the learned authors of Meagher, Gummow and Lehane (5th ed), such an application reflects a claim for equitable relief formerly granted by courts in the auxiliary jurisdiction of a court of equity in aid of a legal right or title: see [21-010] and [21-015] of that text.

160 The distinction as between such an application and the distinct scenario of an injunction granted in aid of an equitable right or title in the exclusive jurisdiction of a Court of Chancery is historical but, nevertheless, remains important for the reasons as are fully explained in that text. That is the case notwithstanding that this court's power to grant equitable relief by way of injunction, where it is just and convenient to do so, arises as a component of its statutory jurisdiction: see s 24 of the Supreme Court Act 1935 (WA), particularly s 24(7) under the court's concurrent administration of law and equity, and s 25(9). As to the power under s 24(7), the position was comprehensively explained by Murphy JA in Ailakis v Olivero [No 2] [2014] WASCA 127 [164] - [170].

161 Hence, in the present case, it is necessary as a component of an aggregate balance of convenience overall assessment to weigh the adequacy of an award of damages at the end of a trial to Mineralogy, if it is successful, as being a sufficient enough common law remedy, rather than by an earlier pretrial intervention through equitable relief at this time by way of injunction.

162 The overall assessment of the balance of convenience raises the relative justice or injustice for each side of an affirmative intervention by injunction at this time, as is pursued by Mineralogy's application. Whilst no different test is applied for the seeking of mandatory injunctions of an interlocutory kind, it is, nevertheless, relevant to notice that the present application seeks to compel what is actively affirmative conduct by Sino and Korean, rather than a less intrusive order by way of an injunction restraining them from doing something. It is also necessary to conduct the assessment in a wider perspective of this action as a whole, noticing as well the previous interlocutory relief which has been granted to Sino and Korean at their behest as against Mineralogy, in respect of the same MRSLA contractual relationships and which remains in place. In other words, the present application as regards interlocutory relief should not simply be looked at in isolation.

163 It is also relevant to note that the present application is not one of the scenarios more often seen of an attempt to seek the enforcement by interlocutory injunction of what is simply a purely negative stipulation covenant found within a contract. The present application is different and more compulsive conductwise for the defendants, in terms of what is sought. Mineralogy seeks to compel affirmative payments to it prior to trial by Sino and Korean, as regards sizable amounts of money, assessed by reference to Mineralogy's claims to be entitled to be paid such amounts as Royalty Component B, or as moneys assessed by reference to that royalty entitlement under the MRSLAs.

164 I also notice that the affirmative interlocutory relief being sought by this compulsive injunction, if granted, will bring about a result favouring Mineralogy that is akin to that of an ordering of final relief in its favour after a trial, which had successfully resolved these issues in its favour. That consideration in relation to a grant of final relief in effect, if not in principle, is no inhibition against the grant of interlocutory equitable relief by injunction. It is an evaluation consideration, however, which demands that very considerable caution be used in the evaluation of the true need for and the ramifications of the granting of such relief (and its terms), as the court weighs the multiple discretionary considerations bearing on the balance of convenience: see ABC v O'Neill [72] (Gummow & Hayne JJ); Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533, 535 - 536 (McClelland J); NWL Ltd v Woods [1979] 1 WLR 1294, 1305 (Lord Diplock); Cayne v Global Natural Resources plc [1984] 1 All ER 225, 233 (Kerr LJ); JTA Le Roux Pty Ltd as trustee for the FLR Family Trust v Lawson [No 2] [2013] WASC 373 [23] (Edelman J); Yara Australia Pty Ltd v Burrup Holdings Ltd [2010] FCA 1273; (2010) 80 ACSR 641 [79]- [86] (Barker J).

165 In this context, I would note what was said by Kerr LJ in Cayne (233), where his Honour observed that the 'overriding consideration for present purposes is that if an injunction is granted, the effective contest between the parties is likely to have been finally decided summarily in favour of the plaintiffs' on a basis that the 'practical realities' were that if the plaintiffs succeeded in obtaining an injunction, they would never take the matter to trial. See also Yara Australia v Burrup Holdings at [86] and [88]. I will return to this issue later in these reasons, which relates in part to the way in which any interlocutory relief might be given.

166 Mineralogy's position, of course, is that the monetary amounts it seeks for itself by way of interlocutory injunction from Sino and Korean simply restore a proper and more principled mutuality balance in the parties' MRSLA contractual relationship by, in effect, adding proportionate conditions to balance against the interlocutory relief which Sino and Korean earlier obtained in 2013 and 2015 and continued to benefit from, under those orders. Mineralogy points out that the earlier injunctions and undertakings bearing upon it, as obtained by Sino and Korean, did not impose accompanying conditions that required payments to Mineralogy assessed by reference to its entitlement to funds as Royalty Component B and that this lopsided earlier outcome effectively deprived it of its contractual rights under the MRSLAs. It effectively interfered with the balance of contractual rights and obligations reflected in the parties' bargain. That imbalance feature did attract the attention of McLure P in her observations at [15] and particularly at [22] in the Court of Appeal reasons.

167 The interlocutory mandatory injunction evaluation now called for arises only in respect of Mineralogy's pursuit of liquidated amounts payable to it under the MRSLAs as Royalty Component B, arising whilst the MRSLAs remain fully alive and enforceable. I reiterate my earlier observations concerning Mineralogy's present problematic contradictory rights assertion of a termination of future obligations of performance under the MRSLAs from a point at early October 2014.

168 That Mineralogy termination averment at early October 2014 concerning the MRSLAs' future performance is not capable of being consistently rationalised against its present claim to be paid arrears up to 30 June 2016 in respect of RCB and to receive ongoing future payments thereafter up to trial.

169 This is because if Mineralogy is correct and the MRSLAs have, as it says, been lawfully terminated by it for breach at that time in respect of future MRSLA performance obligations, then Mineralogy's best case can only be at trial for the recovery of accrued royalty entitlements up to the time of termination of the MRSLAs, but thereafter for common law loss of bargain damages.

170 If MRSLA future performance termination as at October 2014 is, indeed, Mineralogy's position, then it is conceptually challenging to see why it is that an award of common law damages to Mineralogy after a trial will not be a sufficient and adequate remedy, if Mineralogy is proven correct in its breach and termination claims. That is so even if, as undoubtedly appears to be happening, Sino and Korean still continue as of now to industriously mine, produce and ship magnetite ore and iron ore concentrate as Product from the Cape Preston mining leases, the subject of the MRSLAs, on a basis that the MRSLAs remain fully afoot, enabling Sino and Korean to continue to secure for themselves the longterm benefits of those MRSLAs on an ongoing basis.

Parties' submissions on the present application

171 I have already referred to the terms of Mineralogy's amended chamber summons seeking the mandatory interlocutory relief seen in the terms of par 1 and par 3 of that amended chamber summons.

172 In support of Mineralogy's renewed application following the reasons of the Court of Appeal, I hold Mineralogy's two tranches of written submissions, which are extensive. The first tranche is of 22 July 2016. The second tranche of 6 October 2016 (31 pages plus annexures) responds to the CITIC parties' written outline of submissions. The CITIC parties' written submissions of 28 September 2016 are also extensive.

173 Beyond that written material, I have also had the benefit of comprehensive verbal submissions made to me by respective senior counsel over 1 1/2 days of argument in late October 2016. It is the case, however, that much of what was submitted concerning balance of convenience considerations at this time was also presented before Tottle J in December 2015 and remains pertinent. There have been some further developments after that time, however. For instance, the situation concerning Mineralogy's subsidiary, Queensland Nickel, developed to a point that liquidators have been appointed to that corporation and are pursuing investigations. Mineralogy says that similarly required funding needs of an urgent nature present, given its relationship with its subsidiary, Queensland Coal. However, these indicated urgent needs concerning Mineralogy's accessing of royalty funds would appear to raise matters of convenience to Mineralogy, rather than matters of formal obligation to its subsidiaries.

174 The position in respect of Mineralogy being constrained, however, under the MRSLAs from pursuing breach of contract damages fashioned at a recovery of consequential or indirect losses is, on my assessment, a lively consideration bearing on the balance of convenience and, in particular, a weighing consideration against the adequacy of a mere award of common law damages at a trial, in contrast to an earlier grant of interlocutory injunctive relief.

175 As I have indicated earlier, beyond the evidentiary position at December 2015 and March 2016, I hold on this application further evidentiary materials as I earlier identified. Of particular significance in that respect is the updated expert material produced now under Mr Brierley's further and updated reports and by further updated calculations by the accountant, Mr Birkett, under his affidavit of 21 September 2016.

Expert evidence assessed on interlocutory basis: RCB

176 From an evidentiary perspective, on this renewed application for interlocutory relief by Mineralogy, matters have advanced somewhat beyond the position at 27 June 2016, when the Court of Appeal delivered its reasons, allowing Mineralogy's appeal.

177 McLure P had summarised the expert evidence which was before the primary judge and the Court of Appeal, at [9] and [10] of her reasons. At that time there was only expert evidence advanced from Mineralogy, with the CITIC parties contending that they have not then had an adequate opportunity to respond, bearing in mind the urgency with which that application had been pursued by Mineralogy in late 2015. McLure P said:

In its interlocutory injunction application, Mineralogy tendered two expert reports, one by Mr R Brierley, a mining engineer with significant experience in the iron ore and financial services industries. His evidence is that the ABPS came to an end after China surpassed Japan as the largest collective customer of iron ore and a significant spot market had evolved that resulted in the publication of daily prices. Mr Brierley said that in the relevant period, daily (spot) prices were published from which quarterly and annual FOB price in US dollars per DMTU for both Brazilian pellets for export and Mount Newman fines for export could be determined. He calculated the average spot prices for the relevant quarters, and the average annual spot prices, for pellets and Mount Newman fines (at 62% Fe) based on those published spot prices.

Relying on Mr Brierley's report and other specified assumptions, Mr S Sorbello, a chartered accountant, calculated that the RCB for the period from the fourth quarter of 2013 to the third quarter of 2014 was $21,424,686 and for the period from the fourth quarter of 2014 to the third quarter of 2015, was $26,658,261. The total aggregate tonnes of Product for the whole period is 4,734,380 [9] - [10].

178 In the aftermath of that decision, Mr Brierley and Mr Sorbello both provided updated reports extending the duration of their opinions and calculations up to the quarter ending 30 June 2016. Mr Brierley prepared an updated expert report of 30 July 2016 and Mr Sorbello his updated report of 5 August 2016.

179 The work of Mr Sorbello was essentially from the perspective of an accountant, implementing a number of attempted Royalty Component B algebraic calculations - by using input data for those RCB calculations as provided from Mr Brierley's report.

180 From the perspective of the CITIC parties, their expert evidence on this application is found in the expert opinion of a two-volume affidavit sworn by Mr Barkas of 2 September 2016. His affidavit assembles all the underlying materials and instructions provided to him, before he provides a substantive opinion response under attachment JB11 by his report of 1 September 2016 (pages 854 - 897 of that affidavit).

181 I think it fair to observe that the report of Mr Barkas, commenting upon updated Brierley and Sorbello reports of 2016, did not seek to advance any rival computations for RCB over the same periods, up to 30 June 2016. Instead, Mr Barkas's report provides his professional critique directed at a number of aspects of the Brierley report, including as to the underlying assumptions concerning ore moisture content and also pointing out some (albeit what Mr Brierley later describes as minor and which he then corrects) arithmetical miscalculations.

182 Fundamentally, however, on the present application there seems to emerge as between the rival experts a disagreement of principle. This manifests under Mr Barkas's report by his objections of principle raised against the analogue pricing approach that was employed by Mr Brierley - by his use of the averages of daily spot prices to derive annual FOB prices for Brazilian-sourced iron ore pellets and Mount Newman fines - as the essential input data needed in Royalty Component B algebraic calculations.

183 The paragraphs below encapsulate Mr Barkas's as expressed in principle disagreement with Mr Brierley's chosen methodology (with Mr Brierley's results used later by Mr Sorbello under his accounting calculations to derive quantitative $US sums using RCB across the nominated periods at issue). Mr Barkas had observed at pars 16 - 19 of his report (page 860 of his affidavit):

1. I agree with Mr Brierley that prevailing annual FOB prices for Brazilian pellets and Mount Newman fines were published under the former benchmark system of international iron ore contract pricing that existed prior to March 2010.
2. Mr Brierley's instructions from Mineralogy effectively assume that 'prevailing published annual FOB prices' for the two types of iron ore stipulated either actually exist under the current system of index-based pricing for each of the quarterly periods from 2013 Q1 to 2016 Q2, or alternatively that they can be 'determined by reference to published data as to spot, monthly or quarterly prices which best represents the prevailing price for the quarter.'
3. However, in my opinion there are fundamental differences between the benchmark and index-based pricing systems that prevent calculation of analogues of such prevailing FOB prices in the current market. This is because complexities and uncertainties inherent in the range of assumptions necessary to generate estimates of these prices from spot market indices introduce wide margins of error.
4. Therefore I do not agree that that calculation of published iron ore spot market CFR indices and shipping prices can be used to derive 'prevailing' FOB prices with any reasonable accuracy.

184 Upon receipt of the Barkas report, Mineralogy then caused Mr Brierley to provide a responsive report. This is found as annexure RB14 to Mr Brierley's affidavit of 21 September 2016. Annexure RB14 sees Mr Brierley (across pages 51 - 55) respond on a seriatim, paragraph by paragraph basis, to all the observations and criticisms found in the Barkas report.

185 This response culminates in Mr Brierley finally providing an updated appendix A - which accepts and takes account of a number of Mr Barkas's lesser criticisms, concerning arithmetical errors that Mr Brierley picks up and corrects (for instance, his work as a response to the Barkas criticisms concerning moisture content assumptions from a percentage perspective as originally used under Mr Brierley's spot price calculations). I note, for instance, Mr Brierley's acknowledgement of his (minor) mathematical errors under responses to par 63 and par 67. Likewise, in respect of his first assumptions about reasonable moisture contents, Mr Brierley responsively adjusts his revised calculations to reflect higher percentage moisture contents as Mr Barkas had critiqued: see Mr Brierley's responses to pars 60, 62 and 70. The arithmetical end consequences of the revisions by Mr Brierley are seen to be, overall, of a small quantitative magnitude.

186 The updated appendix A, at page 55 of Mr Brierley's responsive affidavit, contains his reworked US cents per dry metric tonne unit FOB calculations in respect of concentrate, then quarterly calculations in respect of Brazilian pellet prices (sourced from either U Metal or Vale).

187 The reworked Brierley calculations up to the quarter ending 30 June 2016 are then used as input data in a further accounting report provided by Mr Sorbello's colleague at BDO (Qld) Pty Ltd, Mr Birkett. Under his accounting report of 21 September 2016, annexure SBO-02 to his affidavit, Mr Birkett uses the most recent reworked calculations by Mr Brierley to himself adjust and rework Mr Sorbello's earlier Royalty Component B calculations: see tables 8, 9, 10 and 11, found under pars 5.2 - 5.5 of Mr Birkett's report. Mr Birkett's report exercise follows the methodology of the previous Sorbello accounting reports, in effect, by providing RCB calculations across distinct pre and post (asserted MRSLA termination date) temporal periods.

188 The Birkett calculation seen in table 8 (par 5.2) proceeds from the perspective that in the overall period between quarter four 2014 to the end of quarter two 2016, that Sino and Korean had shipped a total of 8,517,705 dry metric tonnes of Product (Magnetite Concentrate) of an assessed value (using the US cents per DMTU (FOB) as taken from appendix A to Mr Brierley's most recent responsive report) to derive an assessment of value for that concentrate ('Product') in US dollars of $485,203,039.

189 The calculation as seen under table 9 (par 5.3) provides an amount in respect of RCB in US dollars up to the quarter ending 30 September 2014 (quarter 3) which date is referred to as 'termination date'.

190 The calculation as seen under table 10 (par 5.4) provides an amount in respect of RCB (after the 'termination date') in US dollars from quarter four 2014 through quarter two 2016.

191 Table 11 to Mr Birkett's report sees his summation of RCB calculations (using the most recent Brierley price data) for both periods, first up to and including the termination date and, second, in the period post termination, up to the end of quarter two, namely, to 30 June 2016 (ie, being the summation of the RCB amounts seen under tables 9 and 10 of Mr Birkett's report).

192 Up to that termination date (30 September 2014) there is calculated the RCB amount of $21,380,541. For the period after termination date (to 30 June 2016) his calculated amount for RCB is $59,603,625. Those two calculated amounts added together generate the total RCB Mineralogy claim to 30 June 2016 for RCB of $80,984,166. That process explains the derivation of the amount as is presently seen claimed by Mineralogy, by par 1 of its amended chamber summons, in a pursuit of its present interlocutory compulsive mandatory injunctive payment relief as is sought on this present application.

193 In terms of the present expert opinion differences of in principle magnitude, as between Messrs Barkas and Brierley, that divergence is best seen encapsulated by a juxtaposition of pars 49 through 53 (pages 868 - 869 of his affidavit) from Mr Barkas's report against the seriatim responses as provided by Mr Brierley under what is annexure RB14 to his affidavit of 21 September 2016 (at page 53 of that affidavit). For convenience, I will set these principles out in tabular fashion. But the essence of the present in principle disagreement between the experts distils to the fundamental clash over whether or not it is open as a matter of principle, in the way Mr Brierley has proceeded, to derive from daily spot prices, the key inputs needed in RCB for the annual FOB prices for Brazilian pellets and Mount Newman fines post March 2010, in the absence from then of the former annual benchmark pricing system (ABPS). In short, Mr Barkas opines in the negative. But Mr Brierley takes a polar opposite view. Because of that in principle difference of approach, Mr Barkas does not ever embark upon an exercise of providing rival calculations of Royalty Component B in these periods. His position is that it is simply not conceptually open to do that. This is seen in the juxtaposition of the aspects of their respective opinions which are seen in the following comparisons:

Paragraph 49: I do not agree that back calculation of CFR-China index prices can be used to derive prices that are analogues of the prevailing published annual FOB prices for Brazilian pellets or Mount Newman fines that existed prior to March 2010.

Paragraph 49: I disagree and it is my opinion that an annual average price can be calculated from reliable published prices that are reflective of current market conditions for both iron ore fines and pellet products.

Paragraph 50: Rather, in my opinion, there are fundamental differences between the benchmark and index-based pricing systems that prevent the calculation or accurate estimation of such origin-specific or brand-specific prices.

Paragraph 50: I disagree and believe that the replacement of the benchmark system with the index-based pricing system did not negatively impact the market and has allowed for the continuation of trade in iron ore products, including the two products referred to in clause 8.2 of the Mining Right/Lease Agreement between Mineralogy Pty Ltd and Sino Iron Pty Ltd.

Paragraph 51: This is because the daily price indices assessed by index providers such as Platts are not restricted to specific iron ore brands (eg, Newman fines) nor (in almost all cases) to single countries of origin; certainly the Platts 62% Fe fines index is not so restricted. Further, the pricing of individual cargoes of given iron ore product is always subject to bilateral negotiation between buyers and sellers with respect to adjustments that will apply to any index chosen by them as the price reference.

Paragraph 51: The Platts Iron Ore Index (known as IODEX) is based on a standard specification of iron ore (being 62% iron content with standard impurity levels) and is not origin or brand-specific, however it is well known that its price assessment data is weighted to Australian sourced material and that specification is an analogue to product previously supplied to BHP Billiton (being known as Mt Newman Fines and Rio Tinto (Pilbara) or previously Hamersley Fines). Similarly, the published pellet prices are weighted to regions of dominant supply and are specified as Brazil pellets by UMetal. Furthermore, the bilateral negotiation between buyer and seller with respect to adjustments to index prices that may apply for individual cargoes is something that has occurred from time to time in the market before, during and after the official move from annually negotiated prices in April 2010, and is, thus, nothing new.

Paragraph 52: Specifically, in the case of Mount Newman fines, BHP Billiton does not disclose how it applies index prices in long-term contracts. In addition, pricing terms will vary depending on specific arrangements with individual customers that may cover choice of index or basket of indices, the ('averaging') period to be used, ocean freight rates, iron and moisture bases, and any negotiated premium or discount. Because of these factors, two identical cargoes of Newman Fines shipped on the same day may have significantly different FOB prices. As a result, there is no published price that purports to accurately represent the prevailing FOB price for export contract and spot market sales of this material (whether quoted in US dollars per DMTU or otherwise), and in my opinion such a price cannot be 'back calculated' with reasonable accuracy using any available pricing indices.

Paragraph 52: The terms of a sale of iron ore shipment can differ (eg; pricing can be month or quarter of despatch of shipment average, month or quarter or delivery of shipment to customer port average, prior quarters average lagged by one month) but I believe that the vast majority, if not all, shipments of standard Pilbara fines product are priced with reference to the Platts IODEX. I disagree with the statement that '... there is no published price that purports to accurately represent the prevailing FOB price for export and spot market sales of this material ...' and it is my opinion that there is reliable, published prices from Platts and The Baltic Exchange that allow for an accurate published price on an FOB basis to be calculated for a Mount Newman fines equivalent product.

Paragraph 53: Similarly, Vale does not publish or otherwise disclose export FOB prices or the index-based pricing terms it uses for contract sales of the various grades of Brazilian pellets it produces and exports. Rather, pricing options negotiated between Vale and its pellet customers cover index selection and the calculation mechanism for the necessary quality-related price adjustments. Appropriate pellet premiums (above sinter fines prices) are also negotiated bilaterally between contracting parties but are not publically [sic] amounts. For these reasons, in my opinion, no prevailing FOB price for Vale's Brazilian pellets currently exists, whether denominated in US dollars per BMTU or otherwise.

Paragraph 53: I disagree, in my opinion a published Brazil pellet price is disclosed in each Vale quarterly earnings report. Vale is the largest provider or seller of pellets in Brazil and its stated average price received can be back calculated into an FOB equivalent by the application of Vale's stated and published ocean freight cost and its stated or published proportion of pellets sold CFR and those sold FOB. Furthermore, UMetal publishes a price for Brazil pellets and the Baltic Exchange publishes an ocean freight rate. Both of these prices are reliable and can be used to back calculate an FOB equivalent price.

194 It is apparent then that there is presently a strong clash of expert perspectives, as regards a legitimate use of anything other than an annual benchmark pricing system to source the pricing data required in a derivation of a royalty payment of money for Mineralogy as RCB under cl 8.2 of the MRSLAs, as an aspect of the 'Mineralogy Royalty'. Given that clash, it is convenient to recall the observations of the President at [24] of her reasons, where her Honour had observed:

Prima facie, the standard for the calculation of RCB is the published market price for the relevant products (PP and CP) during the relevant quarter. The fact that (unlike the ABPS) the market price changes during the relevant period does not make the standard legally uncertain. How best to achieve and quantify the market price for the relevant period is a matter for expert evidence on a subject involving a well understood process that is neither ambiguous nor uncertain.

195 Those highly persuasive observations, which I would respectfully apply on this application, were explicitly identified and agreed with concerning cl 8.2 by Corboy J in his reasons at [118] on that appeal.

196 At this point, I would simply observe once again that cl 8.2 in the MRSLAs does not, as regards the derivation of Royalty Component B over time, say expressly that the input data source for PP and CP must be data obtained by using the (no longer operative post early 2010) ABPS. References seen in cl 8.2 to a FOB (shipping) price pose no real difficulty. Nor is a conversion of a C&F price to a FOB price theoretically problematic.

197 The pragmatic obstacle to implementing an RCB calculation, if there is a problem, is tied to the absence post March 2010 of a published annual market price for PP and CP (which had once been the case under the ABPS). The Brierley methodology in lieu of using what became the now inoperative ABPS source takes an average of the published daily spot prices for Brazilian pellets and Mount Newman fines, gathered from other publicly available industry data sources.

198 This clash of expert perspectives is not an issue that I can or need to resolve on a final basis for this application. For present purposes, I now hold Mr Brierley's revised and reworked reports responding specifically to, and also adopting, a number of the criticisms raised by Mr Barkas, and then reworking his earlier calculations accordingly. Against that, I have the approach of Mr Barkas for the CITIC parties which basically opines that Mr Brierley's averaging approach by using spot price data to derive the annual prices for RCB is too far removed from the terms of cl 8.2 as regards meeting the proper input of the RCB calculation formula.

Determinations upon interlocutory injunction orders sought by Mineralogy

199 It is undeniably the case that at present Sino and Korean continue to intensively mine and process ore on their MRSLA mining leases to extract vast quantities of magnetite ore to produce 'Product', in the nature of iron ore concentrate. This intensive production activity proceeds on an ongoing and industrious basis on Mineralogy's mining leases at Cape Preston. Product is loaded aboard ships and exported offshore. Mr Birkett assesses the worth of the produced magnetite concentrate as Product shipped to June 2016 to be $US652,993,692: see table 13 (par 5.7) of his affidavit.

200 All this ongoing mining and export activity involving more than 10 million tonnes (DMT) of magnetite concentrate is being implemented on the necessary basis, as asserted by the CITIC parties, that their MRSLAs remain fully intact and enforceable, thereby affording them the contractual rights to fully exploit all their contractual mining entitlements under those agreements.

201 Yet since the commencement of the production of iron ore concentrate as Product began at these mining leases in 2013, the joint contention of Korean and Sino has been and remains that there presents what is for Mineralogy a most unfortunate inability for the parties to utilise the MRSLAs' Royalty Component B calculation formula, because it is uncertain and unenforceable, albeit severable, from the MRSLAs, with the correlative consequence that nothing at all as a royalty amount as RCB on Product can or needs to be paid to Mineralogy.

202 That overall status quo (2013 - 2016) of no royalty at all on Product, I would presently assess, prima facie, to be startlingly curious. There is for me a detectable undertone of ongoing unjust enrichment to Korean and Sino at Mineralogy's expense in that status quo which, generally speaking, is an unsatisfactory situation for courts of common law and equity when that unifying concept is present (see Pavey v Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221 (Deane J)).

203 For reasons now canvassed, I am of the view at this time that Mineralogy has made good what is a strong prima facie case that it holds an entitlement against Sino and Korean to be receiving quarterly payments of at least some reasonable amount of royalty funds in respect of RCB from Sino and Korean, or at least a reasonable amount of royalty that is assessed by reference to 'Product', in lieu of RCB and that is worked out on a principled basis that international iron ore industry experts would assess as being fair and reasonable to Mineralogy.

204 The only major caveat to that strength assessment is the problem of Mineralogy's conceptually irreconcilable contemporaneous assertion that the MRSLAs were legitimately and justifiably terminated by it in early October 2014 on the basis of serious or repudiatory breaches of terms in those agreements, by Korean and Sino. That is the inconsistent MRSLA termination stance which, I assess, inhibits Mineralogy's claims post October 2014 to anything but it seeking common law loss of bargain damages for breach. But I also assess this to be an inconsistent rights assertion stance of Mineralogy that is presently capable of being corrected by an unequivocal withdrawal of all assertions of MRSLA termination - in relation to the future ongoing performance of its own obligations under the MRSLAs by Mineralogy to thereby show that it is in a position to do equity to Sino and Korean and show that it is 'ready, willing and able to perform' itself.

205 Because of the way Mineralogy has advanced its case post 2014, including through its experts, a temporal distinction has been needlessly drawn between rights in two time periods. These are the periods pre and post Mineralogy's asserted termination, as regards the ongoing future performance of the MRSLAs, at early October 2014 (or, in other words, an initial assessment must be conducted towards the quarterly periods up to the end of the 30 September 2014 quarter, with subsequent quarterly periods thereafter to 30 June 2016 being assessed differently, on the basis that they must be post contractual performance (following the MRSLAs' termination evaluations).

206 For the pre-termination period to 30 September 2014, on my assessment, Mineralogy presently asserts what I assess to be a strong prima facie case that it should have received by now from Sino and Korean what can be reasonably assessed as an accrued pre-termination entitlement to moneys due in respect of Royalty Component B - as a vested contractual entitlement that was obtained prior to termination of the MRSLAs. That accrued right survives intact for Mineralogy, notwithstanding any termination of the ongoing performance of the MRSLAs, even if that had later occurred: see McDonald v Dennys Lascelles (477) (Dixon J). See also Austman Pty Ltd v Mount Gibson Mining Ltd [2012] WASC 202 [39] and [543] - [544], discussing FPM Constructions Pty Ltd v Council of the City of Blue Mountains, especially [192] - [193].

207 The strength of that case for Mineralogy, plus the weakness of the defences articulated against it by the CITIC parties, do not sit as isolated considerations apart from the further assessment of the overall balance of convenience. There is an interrelationship between the interlocutory strength of a prima facie case that is demonstrated for injunctive relief and the balance of convenience considerations: see Mason ACJ in Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148, 155. Here, taking that interrelationship into account, acknowledging the strength of the prima facie case (and, correlatively, the weakness of the defence arguments as to uncertainty of RCB and its severance), I render the following observations (recognising that Mineralogy is advancing an exceptional case seeking relief for what is a claim to receive now a sizable amount of money, in effect, as final relief).

208 First, I can detect no fiscal prejudice to the CITIC parties by presently requiring them to render a sizable payment of moneys now, on the basis that I will explain. The CITIC parties do not at all contend that they lack the capacity to render such a payment, or that they would be prejudiced in any way themselves raising those funds. Indeed, the essence of their articulated position has been that they would have made royalty payments on Product earlier had, in effect, RCB been capable of being calculated. Their position has been that, through problematic circumstances post March 2010 that were wholly unattributable to them, an RCB calculation simply cannot be made. So, therefore, no payment at all for RCB is due to Mineralogy.

209 Second, bearing upon balance of convenience considerations, there is merit, as I would assess matters presently, in the submission of Mineralogy that the MRSLAs debar it from later pursuing viable breach damages claims against the CITIC parties for consequential damages, in the event of Mineralogy successfully establishing at trial a breach of the MRSLAs as regards Sino and Korean's RCB obligations, because cl 30.3(b) excludes a claim for damages for indirect or consequential loss or damage or to claims of loss of profit, special loss or damages suffered by a MRSLA party or by any other person. There is persuasive authority (see AB v CD [2014] EWCA 229; (2015) 1 WLR 771 [18], [24], [27] - [30] (Underhill LJ), [33] (Laws LJ)) to the effect that the inability or limitation to pursue such indirect or consequential breach damages losses may be taken into account in assessing the balance of convenience as regards interlocutory relief by a court considering an intervention into the contractual relationship. That consideration is a circumstance favouring Mineralogy receiving some funds immediately assessed by reference to RCB - where it is now clear that Mineralogy (subject to resolving the termination problem) has articulated a strong case to receive some funds now, difficult as a precise computation might ultimately prove to implement at a later time. But that, essentially, is a matter of precision to be confronted later at a trial, with the assistance of expert evidence.

210 The unusual circumstances in this matter are such that an evaluation of the adequacy of common law damages as a remedy, in a context of an assessment of the balance of convenience, can also be framed as an inquiry as to whether it is just in all the circumstances that the plaintiff be confined to a remedy in common law damages awarded at trial: Evans Marshall & Co Ltd v Bertola SA [1973] 1 WLR 349, 379; State Transport Authority v Apex Quarries Ltd [1988] VicRp 26; [1988] VR 187, 193; SMS Rental (WA) Pty Ltd v Cahma Life Nominees Pty Ltd [2009] WASC 35 [45]; Action Cycles Pty Ltd (recs and mgrs apptd) v Ross [2011] VSCA 411 [30].

211 I would note here the viewed expressed by the primary judge in the reasons in Mineralogy v Sino Iron [No 8] [108], where his Honour stated:

I accept that there is a risk that Mineralogy and its related entities may suffer prejudice for which the award of monetary sums at the conclusion of the trial may not be adequate compensation. In my opinion, it is not a complete answer to Mineralogy's application to say that because the claim is for monetary sums it must follow that the award of money at the conclusion of the trial will be adequate compensation. For that reason, I have endeavoured to make an assessment of the extent of the relevant risk of harm by reference to the categories of harm identified by Mineralogy. I have given anxious consideration to the serious consequences which Mineralogy urges me to accept will flow from a refusal to grant an injunction.

212 His Honour then went on to review the potential harm relied upon by Mineralogy, as presented based on the evidentiary materials then before him, at [110] - [126]. The findings in those paragraphs are then summarised at [66] - [70] in the reasons of Newnes JA in the Court of Appeal. In that context, I have examined the further materials provided by Mineralogy as to the potential harm that may be suffered if interlocutory relief is not granted, notably the two 2016 affidavits of Mr Wolfe.

213 Third, balanced against those considerations of convenience favouring Mineralogy are some persuasive concerns as are expressed in materials filed for this application by the CITIC parties towards Mineralogy's current precarious financial position and the CITIC parties' legitimately expressed concern that if substantial moneys are ordered to be paid over now before a trial outcome to Mineralogy (essentially as final relief to Mineralogy) vis-à-vis RCB, that the strong likelihood is that those funds will never be recovered again, were it to arise following a trial that they needed to be repaid.

214 Fourth, against the third consideration, Mineralogy counters by asserting that its uncontroversial entitlement to regular quarterly payments of royalty money as Royalty Component A, might be used in future as a set off to enable such a recoupment, in the unlikely event (it says) that ever were to be necessary. That set off contention, however, would I think conceptually founder, if there has been a termination of the performance of the MRSLAs - in which case, there would be no further ongoing accruing entitlement to Royalty Component A and, in lieu thereof, only a claim by Mineralogy to common law breach and loss of bargain damages.

215 Having reviewed the extensive affidavit materials as now filed by the parties, I am presently satisfied that there are indeed a few fiscal 'clouds' hovering over the financial future of Mineralogy. They might develop to put at risk a potential future recovery of funds paid over now, if required to be repaid. But then balanced against that, however, is the fact that Mineralogy has demonstrated (termination issue aside) a strong prima facie case which has to date only been answered weakly by the CITIC parties - under their cl 8.2 uncertainty and severance arguments. Fallback arguments which the CITIC parties raise essentially accept that some royalty amount, assessed on 'Product', that is fair or reasonable or arising out of a good faith negotiation would need to be paid in lieu of a precise calculation of RCB. At all events, on fallback scenarios Mineralogy must at the end receive 'Product' royalty money, as regards Product produced and with Product continuing to be produced on Mineralogy's mining leases at Cape Preston presently and for the foreseeable future.

216 I am also satisfied that the currently subsisting nonpayment of anything stance by Sino and Korean since 2013, in respect of RCB, in circumstances where Mineralogy might otherwise as at 2006 have contractually anticipated (objectively assessed) receiving a substantial quarterly inflow of funds by a royalty assessed against iron ore concentrate produced as Product - has contributed, although not exclusively so, to present fiscal strictures and 'clouds' which presently afflict Mineralogy. In other words, the non-payment of anything stance on 'Product' of Korean and Sino as a result of the asserted inability to compute RCB is a strong contributing factor to Mineralogy's current fiscal problems. That is not to exclude Mineralogy's own contributions to its own problems, including, as I would assess matters, by its voluntary payments towards the funding of a political party at the 2013 federal election.

217 But I would add on this prima facie assessment that the no RCB money at all stance to date of Sino and Korean (contending that RCB is incapable of calculation) does not seem to me to amount, at least by itself (if Korean and Sino are ultimately proven wrong about that at trial), to repudiatory conduct of the MRSLAs on their part, as regards their MRSLA obligations. In other words, I would not view Korean and Sino's breach conduct, if it is ultimately ever assessed as that, in making no RCB payments at all to date, as being sufficient to provide a platform to allow Mineralogy as the so-called innocent contracting party, to use that as sufficiently repudiatory conduct and thereupon to legitimately terminate all future performance of the contractual obligations under the MRSLAs. To the contrary, and of course only on a prima facie basis at this time, I would assess the conduct of Sino and Korean to date as regards non-payment of RCB as being whilst potentially mistaken as to the MRSLAs' correct interpretation vis-à-vis RCB, as not being inconsistent with them still acknowledging the ongoing contractual obligations under the MRSLAs: see Meagher, Gummow and Lehane (5th ed) at [20-120] and the cases referred to at footnote 252. More would be required, I think, to assess Sino and Korean as exhibiting enough to be assessed objectively as sufficiently repudiatory conduct, as regards the stance they have taken currently towards not paying anything towards RCB. Of course, that assessment may need to be revised on an ongoing basis after these reasons are published.

218 Given what has now been canvassed, I am of the view that there should presently issue some equitable relief by way of an interlocutory mandatory injunction to compel Korean and Sino to pay one-half of $US21,380,541 to Mineralogy within 30 days. The other half of that amount is to be paid into court - to abide there the outcome of a trial of all issues presently in dispute as between the MRSLA parties concerning RCB: see table 9 of Mr Birkett's report for derivation of this figure.

219 Such orders will - and, on my assessment, are necessary to - restore a proper balance under the MRSLA respective contractual interests and risk allocations as between the parties. That is appropriate in circumstances where the present prior interlocutory injunctions, issued by Edelman J as regards Mineralogy's termination notices, and then the unconditional undertaking of Mineralogy given to Chaney J in 2015 against taking steps in furtherance of more termination notices, still remain in place. Their ongoing effect was explained by McLure P at [22].

220 A payment into court of a half component of that amount is directed towards addressing legitimate concerns of the CITIC parties concerning possible later recoupment, were that necessary post trial from Mineralogy. It also caters, conservatively, to address quantum adjustment issues that could be required, once the parties' respective experts set about their further work for trial, in relation to issues concerning working out the level of a fair or reasonable royalty in respect of Product in lieu of RCB - should it be the case that the calculations and methodology adopted by Mineralogy's experts to date (Messrs Brierley, Sorbello and Birkett) prove to be excessive. It is unlikely, however, on my present assessment, that these calculations would prove to be excessive to an extent of more than half of the Birkett amounts. That half component would remain in court, until a final determination of these issues.

221 For the subsequent temporal period, after Mineralogy's asserted termination date of early October 2014, the conceptual position is presently different. If future performance obligations on both sides under the MRSLAs have come to an end by Mineralogy's early October 2014 election to bring about a termination of performance result, then Mineralogy's claims post October 2014 can only be for loss of bargain damages, not for RCB moneys due under the MRSLAs themselves as living contracts - assuming Mineralogy is proven right at trial in taking that October 2014 termination election step.

222 It is not presently open conceptually, on my assessment, for Mineralogy to presently seek ongoing liquidated payment amounts as RCB contractual royalty entitlements contractually due to it under the MRSLAs post October 2014 when, in the next breath, Mineralogy is asserting those MRSLA agreements came to an end as regards their performances in October 2014. This is a conceptual obstacle by a pursuit of mutually inconsistent rights which Mineralogy cannot skate around by asserting that its MRSLA October 2014 termination stance is a position taken in the alternative (which it actually does not, from an evaluation of the face of its pleadings and its prayers for final relief on its 4 FASOC) or even more weakly, that it is just not 'fair' that the CITIC parties continue to occupy, mine, produce and export ore and product from the mining leases without paying anything on Product to Mineralogy. That latter submission is only an unprincipled whinge.

223 As Mineralogy seeks the assistance of equity to compel Korean and Sino to meet their asserted obligations to pay royalty moneys said to be falling due to Mineralogy as royalty payments by reference to RCB in the MRSLAs, or reasonable amounts in lieu thereof, Mineralogy first needs to do equity itself towards the other parties to the MRSLAs. It will do that by showing itself to be fully ready, willing and able to perform its own obligations under the MRSLAs. But this, in practical terms, does not now require very much at all from Mineralogy to fix, as I explain below.

224 Put another way, to obtain discretionary equitable relief by the remedy of injunction on an interlocutory basis, Mineralogy must be seen to be conducting itself on an equitable basis. I can envisage no greater scenario of a party presenting themselves to a court as being thoroughly unready, unwilling, and unable to perform their contractual obligations under an agreement, than by that party pleading as its case, that all the future obligations of performance under the parties' agreements have come to a complete end over two years ago.

225 Mineralogy's fundamentally inconsistent rights position of contractual MRSLA terminations at October 2014 must first be corrected, before any equitable relief as sought post October 2014 can be countenanced.

226 Nevertheless, it is the case that Korean and Sino do still continue to conduct themselves at Cape Preston upon the basis that the MRSLAs continue on foot, thereby affording them full entitlement to occupy, mine and produce ore and product, as they do. That being so, Korean and Sino have not yet reacted as they might otherwise have to the termination stance as articulated to date by Mineralogy. Given that, it is, on my assessment, still open to Mineralogy for the present to correct its presently inconsistent assertion of rights problems and to fix the conceptual problem by removing all assertions of a MRSLA termination unilaterally and immediately, starting with its pleadings in this action.

227 Mineralogy needs to demonstrate to the court that it is ready, willing and able to perform its ongoing obligations to the CITIC parties under the MRSLAs to obtain any further equitable relief for the post October 2014 period. If it does that, sooner rather than later, then I can see no present reason, conceptually, why a similar 50/50 receipt/payment into court interlocutory regime would not be appropriate as regards a $US59,603,625 amount - assessed by table 10 in Mr Birkett's report.

228 But if Mineralogy does not swiftly correct its current inconsistent assertion of rights position, then its best claim for this post October 2014 period, essentially, would only be a claim for common law damages for breach and loss of bargain damages. On that best case, given the very nature of that common law damages claim, the answer to the necessary interlocutory question - where there is, as here, an exclusively common law contract derived cause of action (bearing upon the balance of convenience) - as regards the longer term adequacy of the post trial outcome of an award of common law damages, carries necessarily a self-evident affirmative answer.

229 Consequently, I would afford to Mineralogy a brief opportunity, if it wishes, to: (1) amend (by my leave) their pleadings in accord with what I have indicated above and (2) present (with leave) further affidavit material within a shortish period to demonstrate to my satisfaction that it is ready, willing and able to perform its future and ongoing obligations under the MRSLAs.

230 In the event those contingencies are met by Mineralogy, I see no reason why interlocutory injunctive orders of a similar kind should not issue, along the lines I have indicated for the period up to 30 September 2014, so as to also issue in respect of the period to 30 June 2016 (ie, for $US29,801,812.50 to be paid to Mineralogy and with the same amount to be paid into court to abide a trial of issues as regards RCB).

231 As regards future ongoing periods beyond 30 June 2016 (which Messrs Sorbello and Birkett have not attempted to address by their reports filed to support this application) I would merely observe that a substantial component of the proposed orders seen under par 3 of Mineralogy's amended chamber summons conceptually are not appropriate. In particular, orders premised upon the hypothesis of the defendants complying with order 1 then 'being permitted' to continue to conduct mining, processing, shipping and other activities subject to further provisos are conceptually unworkable, uncertain and, in any event, are conceptually misconceived and inappropriate as framed.

232 Having said that, the balance of proposed order 3, as regards a regular payment of a sum calculated by multiplying $US6 by the future quarterly number of dry metric tonnes of iron ore concentrate shipped in a preceding quarter, would, on the face of it, seem to be appropriate, subject to certain qualifications.

233 In the first place, my observations above and made frequently through these reasons concerning Mineralogy's MRSLA inconsistent termination stance, as regards the early October 2014 termination of the MRSLAs, is a problem that first needs to be wholly fixed. That must happen in order for any equitable interlocutory relief for future periods before trial to even be in contemplation.

234 Second, I expect the parties from this point on, with the action now under my case management, to co-operate towards each other with good faith towards the objective of a swift (from now on) determination by way of preliminary issue on a final basis of all contentious issues concerning Royalty Component B within the present action. I note from prior reasons that that same objective has been aspired towards by prior case managers, but as yet has proven so far unattainable. Nevertheless, my resolve to that end is undiminished. I expect the parties and their legal representatives to co-operate meaningfully to that end, by agreeing an isolation of most underlying facts (hopefully, fully agreed as between the parties) and all relevant documents (again hopefully, agreed) so that a final determination concerning all issues as regards RCB can be reached, sooner rather than later.

235 Aligned to that objective, and because Korean and Sino continue to intensively mine iron ore and produce Product from Mineralogy's mining leases on an ongoing basis, a payment of a quarterly amount calculated at $US6 per dry metric tonne of iron ore concentrate shipped in the preceding quarter, presents to me as appropriate to be paid into court, with liberty to apply to vary those arrangements. That figure would represent about a 40% discount on the pricing calculations of Mr Brierley to date and so is conservative in its conception as Mineralogy suggests. To be more specific, all such RCB-linked moneys claimed beyond the end of June 2016, rather than half, would be paid into court, to abide the outcome of a final determination upon RCB. That should provide incentive for the parties to more timeously work to that objective. The funds would thereby also be secured, but available to abide a final outcome.

236 Hence, once again, subject to the pre-conditional need for Mineralogy to address and correct the October 2014 termination stance by showing that it is ready, willing and able to perform its obligations under the MRSLAs, I see no reason why, as a matter of concept, further orders along those lines should not issue in future once the groundwork is met.

237 In consequence then, I would propose to issue orders in the above terms, subject to hearing the parties within a reasonable time frame, concerning the precise formulation of orders implementing these reasons.