MINERALOGY PTY LTD -v- SINO IRON PTY LTD [No 8] [2015] WASC 473 (7 December 2015)

4 By way of a brief description of the relevant commercial context, I refer to evidence adduced by the CITIC parties of estimates that over the period between 2006 and 2034 the Project will increase Australia's gross domestic product by $2.08 billion per annum and will increase employment by an average of 2,080 full-time equivalent employees: affidavit of David John Mason affirmed 2 December 2015 [56]. In Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 2] [2013] WASC 375 [2] Edelman J referred to evidence to the effect that the CITIC parties have spent $7 billion on the Project.

5 The relationships between the participants are governed by a number of agreements. For the purpose of resolving the present application, it is only necessary to refer in any detail to two such agreements, the Mining Right and Site Lease Agreements (MRSLAs). The MRSLAs are agreements between:

(1) Mineralogy and Sino Iron made on 21 March 2006 and amended on 8 January 2008; and

(2) Mineralogy and Korean Steel made on 21 March 2006 and amended on 22 October 2008.

6 The MRSLAs contain identical provisions and, for present purposes, it is unnecessary to draw any distinction between them.

7 Clauses 6 and 8 of the MRSLAs provide for Sino Iron and Korean Steel to pay royalties to Mineralogy in the circumstances specified in those clauses.

8 Clause 8 of the MRSLAs provides for the payment of what is termed the Mineralogy Royalty. This is made up of two components: Royalty Component A and Royalty Component B.

9 A dispute in relation to Royalty Component A was determined by Edelman J in Mineralogy Pty Ltd v Sino Iron Pty Ltd [2013] WASC 194.

10 A central issue in the action is whether Royalty Component B is capable of calculation and, if not, what the contractual consequences are. A facet of this issue is whether any amount is payable in relation to Royalty Component B.

11 Mineralogy alleges that by a deed made on 22 October 2008 (the Fortescue Coordination Deed) CITIC guaranteed the obligations of Sino Iron and Korean Steel under the MRSLAs.

12 The Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA) (the State Agreement) ratified the Iron Ore Processing (Mineralogy Pty Ltd) Agreement. The State Agreement provides the framework for Mineralogy, Sino Iron, Korean Steel and other Project Proponents (as defined in the State Agreement) to mine and process iron ore in the Pilbara and to establish port terminal facilities at Cape Preston. The State Agreement provides for royalties to be paid to the State of Western Australia. In the substantive proceedings, issues in relation to the interpretation and operation of the State Agreement have arisen and that is the basis upon which the Attorney General was granted leave to intervene.

13 A number of interlocutory decisions have been published in these proceedings by Edelman J and Chaney J and in these reasons I draw heavily on the description of the issues and the history of the litigation provided by their Honours in those decisions. I am most grateful for that assistance.

14 Conformably with the principles which govern applications for interlocutory injunctions, expressed in broad terms, the issues raised by the application are:

1. Has Mineralogy established as a 'serious question to be tried' that:

(a) the sums it claims are due to it in respect of outstanding royalties are due;

(b) it has a contingent entitlement to the payment of royalties on an ongoing basis;

(c) the ongoing quarterly royalty payments should be calculated in the manner contended for it?

1. Does the balance of convenience favour the granting of the injunctions sought by Mineralogy?

15 The injunctions sought are mandatory injunctions. Thus, the question of whether the granting of an injunction will create a greater risk of an injustice than the refusal of an injunction features significantly in the deliberative process.

17 First, Mineralogy is effectively seeking an order for payment of a disputed debt before the relevant issues going to both liability and quantum are determined by the court. This makes the application highly unusual.

18 Secondly, the only final remedy sought by Mineralogy that is relevant to the injunction application is an order for the payment of the debt which Mineralogy claims it is owed in respect of royalties. That being so, to succeed in its application, Mineralogy must demonstrate that any monetary award in its favour, including damages to compensate it for the delay in payment of the royalties, that might be made at the conclusion of the trial, would be an inadequate remedy if an injunction is not granted.

19 The substantive action was commenced in the Supreme Court of New South Wales on 18 March 2013. It was transferred into this court on 30 April 2013 and was case managed initially by Edelman J. More recently, Chaney J has been the case manager.

20 In the following paragraphs, I give a brief outline of the history of the litigation and the procedural steps which preceded the application.

21 It would be an understatement to say that the progress of the action to trial has been slow. The reasons for this have been referred to in some detail in earlier interlocutory decisions.

22 In reasons published on 5 August 2014, Edelman J set out a chronology of the proceedings to that date. It is apparent from that chronology that Mineralogy bears a significant level of responsibility for the slow progress of the substantive action to trial.

23 After nearly four years of litigation, the court record does not include a statement of claim which contains a comprehensive statement of the facts upon which Mineralogy presently relies and the relief presently sought by it. The parties have yet to embark upon the process of discovery.

24 On 20 March 2014, Edelman J directed that, after the filing of the then proposed third further amended statement of claim and consequential amendments by the defendants, there were to be no further amendments without leave. In reasons given in relation to a subsequent application for leave to amend the statement of claim, Edelman J explained that order was made against a background of Mineralogy having pleaded, amended or provided proposed amendments to its pleadings on eight occasions between March 2013 and July 2014: see Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 4] [2014] WASC 282 [5] - [6].

25 The latest statement of claim in this action is the third further amended statement of claim filed on 15 August 2014. This statement of claim does not include any money claim in respect of outstanding royalties. In outline, the further amended statement of claim of 15 August 2014 advances the following claims:

(1) that Sino Iron and Korean Steel have failed to allow Mineralogy to inspect various books and records to enable it to verify the amount of ore mined and its royalty entitlements in breach of various clauses of the MRSLAs;

(2) that Sino Iron and Korean Steel have failed to provide Mineralogy with geological and technical information in breach of various clauses of the MRSLAs;

(3) that Sino Iron and Korean Steel have failed to join in the appointment of an expert to determine the dispute about the cl 8 royalty in accordance with the provisions of the MRSLAs.

26 In respect of the first two claims, Mineralogy seeks orders for the production of relevant documents and the relevant information.

27 In relation to the claim concerning the failure to join in the appointment of an expert to determine the cl 8 royalty dispute, Mineralogy seeks various declarations and an order for specific performance designed to compel compliance by Sino Iron and Korean Steel with the contractual provisions.

28 In addition, Mineralogy seeks 'nominal damages for breach of contract'.

29 The third further amended statement of claim of 15 August 2014 does not articulate any cause of action against CITIC.

30 In September 2014, Edelman J granted interim injunctions to Sino Iron and Korean Steel restraining Mineralogy from terminating or suspending the Project. The application for interlocutory injunctions was heard by Chaney J who published his reasons for his decision that the injunctions sought by SinoIron and Korean Steel should be granted on 5 March 2015: Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 6] [2015] WASC 80. In that application Mineralogy argued that injunctions restraining the suspension or termination of the Project should be granted only if the CITIC parties paid US$22 million in relation to Royalty Component B and ongoing quarterly Royalty Component B payments in an amount of US$11.65 per dry metric tonne of Products (as defined in the MRSLAs). Chaney J declined to impose a condition in these terms. The present application is, in effect, an attempt to impose a similar condition on the CITIC parties' continued operation of the Project.

31 In an attempt to circumvent the orders made by Edelman J on 20 March 2014 requiring leave to be granted for any amendment to the pleadings and to circumvent the requirement that applications for summary judgment be made within 21 days after an appearance has been entered, Mineralogy commenced two further actions, being the actions numbered CIV 2303 of 2015 (CIV 2303) and CIV 2368 of 2015 (CIV 2368).

32 For the reasons delivered on 27 November 2015, Chaney J determined that CIV 2303 and CIV 2368 should be stayed permanently: see Mineralogy Pty Ltd v Sino Iron Pty Ltd [2015] WASC 454. In his reasons for staying these actions, at [3] - [11] his Honour gave the following helpful summary of the claims made in each action:

[3] CIV 2303 is a claim against each of Sino Iron and Korean Steel for what is said to be a breach of cl 6.3(b) of the MRSLAs by each of Sino Iron and Korean Steel to pay a royalty arising from a failure to produce no less than 6 million tonnes of product no later than seven years from the date of each of the MRSLAs. The claim is for payment of a sum of US$98,298,000 by each of Sino Iron and Korean Steel. A claim is also made against the third defendant (CITIC) pursuant to a guarantee under cl 11.5 of an agreement known as the Fortescue Coordination Deed by which CITIC provided a guarantee for the performance of the obligations of Sino Iron and Korean Steel. The claim against CITIC is therefore for the total amount said to be due from Sino Iron and Korean Steel pursuant to cl 6.3(b) of the MRSLAs, being $196,596,000.

[4] The question of proper construction of cl 6.3(b) of the MRSLAs is raised by the defendants in the counterclaim in CIV 1808. Various alternative constructions of cl 6.3(b) are raised in [23], [24] and [25] of the counterclaim in support of a claim for declarations as to the proper construction of cl 6.3(b), which would affect the question of the amount, if any, payable pursuant to that clause. The defendants also plead that they have no liability to make a payment under cl 6.3(b) of the MRSLAs because the failure to produce 6 million tonnes within seven years of the date of the MRSLAs occurred by reason of matters or things outside of Sino Iron and Korean Steel's control and are thus excused by cl 6.3(a) from the requirement to make the payment under cl 6.3(b). Apart from an admission as to one aspect of one of the alternative pleaded constructions, Mineralogy's defence to counterclaim puts the defendants' pleas as to the construction of cl 6.3(b) in issue. Although the money claim made in CIV 2303 does not presently form part of Mineralogy's pleading in CIV 1808, it did form a component of five of the eight previous versions of Mineralogy's statement of claim. It is clearly a matter capable of being dealt with in CIV 1808. Similarly, CITIC's liability under the Fortescue Coordination Deed has previously formed part of the claim in earlier versions of Mineralogy's statement of claim in CIV 1808, and whilst not part of the present pleading, it clearly could form part of the claim in CIV 1808. It is clear that determination of the cl 6.3 construction issues in CIV 1808 directly affects the determination of the amount, if any, to which Mineralogy is entitled to be paid under cl 6.3(b).

[5] CIV 2368 involves a claim that Sino and Korean have each repudiated the MRSLA to which they are a party. The repudiation is said to comprise:

(i) the failure to pay what is referred to in the MRSLAs as royalty component B on production up to 30 September 2014;

(ii) Sino Iron and Korean Steel's failure to join in the appointment of an expert in respect to the dispute concerning calculation royalty component B being said to be a breach a cl 33.2(b) of the MRSLAs or alternatively breaches of obligations of good faith;

(iii) a wilful failure by Sino Iron and Korean Steel to pay royalty pursuant to cl 6.3 of the MRSLAs;

all of which are said to manifest an intention by Sino Iron and Korean Steel not to perform their obligations under the MRSLAs.

[6] Mineralogy also claims that Sino Iron and Korean Steel failed to comply with what are described in the MRSLAs as 'legal requirements' and with the Iron Ore Processing (Mineralogy Pty Ltd) Agreement (State Agreement), as they were required to by the MRSLAs. In particular, Mineralogy's claim relates to the requirements to construct a pellet plant capable of producing 6 million tonnes of pellets per annum, and a requirement to produce 21.6 million tonnes of concentrate per annum. Mineralogy plead that Sino and Korean did not, and did not intend to, construct a pellet plant in compliance with the requirements, and intentionally constructed insufficient production lines necessary to produce the required amount of concentrate. These matters are said to evince an intention by Sino and Korean not to perform their obligations under their respective MRSLAs, and are therefore said to lead to the conclusion that Sino and Korean thereby repudiated the MRSLAs by no later than 30 September 2014.

[7] There is a further claim of repudiation said to arise by reason of a breach of what is referred to as a standard of work provision contained in cl 16.1 of the MRSLAs. It is pleaded that each of Sino Iron and Korean Steel was aware from February 2008 that their contractor was not carrying out work to the standard required by cl 16.1 of the MRSLAs and they took no steps to comply with that clause, thereby evincing an intention not to carry out obligations in accordance with the MRSLAs and consequently repudiating the MRSLAs.

[8] There is then a claim for unlawful removal of magnetite ore post termination of the MRSLAs and a claim for the value of the ore removed.

[9] Mineralogy claims damages for the repudiation of the MRSLAs.

[10] Further, a claim is made in relation to an agreement known as the China Project Option Agreement which is said to have come to an end by reason of the termination of the MRSLAs, resulting in loss and damage to Mineralogy. Finally there is a claim for a declaration as to the termination of the Fortescue Coordination Deed.

[11] Most of the matters raised in the statement of claim in CIV 2368 overlap with issues in CIV 1808. They include the failure to pay royalty component B, the failure to join in the appointment of an expert and issues surrounding cl 6.3 of the MRSLAs. There is, of course, overlap between CIV 2303 and CIV 2368 in relation to cl 6.3, although curiously, the amount of the royalty said to be payable by each of Sino Iron and Korean Steel in CIV 2368 is almost US$22 million less for each of Sino Iron and Korean Steel than is claimed in CIV 2303. Various other issues are either currently raised in the pleadings in CIV 1808, or were previously the subject of pleadings in that action which have since been superseded. Neither of the parties has submitted that any of the issues raised in CIV 2368 are not capable of being dealt with in CIV 1808.

33 On 20 November 2015, Mineralogy filed a chamber summons in CIV 2368 seeking injunctive relief in the following terms:

1A. An order that the first, second, and third defendants pay to the plaintiff the sum of $48M or such other sum as the Court may determine on or before 4:00pm on 3 December 2015.

1. An order that until the trial of this action or earlier order, the first and second defendants be restrained from mining, processing, shipping or otherwise transporting iron ore or iron ore products in respect of the project known as the Sino Iron Project unless and until the defendants comply with order 1A.
2. 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 each of 1 January 2016, 1 April 2016, 1 July 2016 and 1 October 2016 the first and second defendants pay to the plaintiff a sum calculated by multiplying USD$6 by the number of dry metric tonnes of concentrate shipped in the preceding quarter.
3. An order that if the first and second defendants fail to pay any of the sums referred to in the preceding orders, the first and second defendants be restrained until trial of this action or earlier order from mining, processing, shipping or otherwise transporting iron ore or iron ore products in respect of the project known as the Sino Iron Project.
4. Such further or other order as the Court deems fit.
5. An order that the defendants pay the plaintiff's costs of and incidental to this application.

34 Various affidavits were filed and served by Mineralogy within CIV 2368 in support of the chamber summons of 20 November 2015.

35 On 27 November 2015, following publication of Chaney J's reasons for his decision that CIV 2303 and CIV 2368 should be stayed permanently, Mineralogy issued a chamber summons in this action seeking the same interlocutory relief as had been sought by the chamber summons of 20 November 2015 in CIV 2368.

36 Mineralogy proceeds with this application on the basis that the claims which it had sought to advance in CIV 2303 and CIV 2368 will be incorporated in this action. In accordance with the orders made by Edelman J on 20 March 2014, Mineralogy will require leave to make further amendments to the further amended statement of claim of 15 August 2014. Mineralogy submits that the grant of leave would be a proper exercise of the court's discretion and that I should proceed to hear its application for interlocutory relief on the assumption that such leave will be forthcoming.

37 Mineralogy pressed for an urgent hearing of the application, submitting that a hearing on or before 4 December 2015 was required. I refer to the reasons for this submission below. Chaney J's commitments in respect of other hearings were such that his Honour was unable to hear the application within that timeframe and the application was referred to me. A directions hearing was held on 1 December 2015, at which directions programming responsive affidavits and submissions were made and the matter was listed for hearing today.

38 Very substantial affidavits have been filed and served by the principal protagonists. The affidavits attach transaction documents, annual reports and the like extending to many thousands of pages. The volume of the evidentiary materials reflects the complex nature of the underlying transactions. Only a small proportion of the materials were directly relevant to the determination of the application.

39 Mineralogy read and relied upon the following affidavits:

1. Affidavit of Clive Theodore Mensink, affirmed 17 November 2015.
2. Supplementary affidavit of Clive Theodore Mensink, affirmed 19 November 2015.
3. Affidavit of Darren Bruce Wolfe, affirmed 17 November 2015.
4. Supplementary affidavit of Darren Bruce Wolfe, affirmed 19 November 2015.
5. Affidavit of Tracey Lyn Miley, affirmed 20 November 2015.
6. Affidavit of Robert Brierley, affirmed 25 November 2015.
7. Affidavit of Kris Sjouke Byrne, affirmed 24 November 2015.
8. Affidavit of Steven Alfred Sorbello, affirmed 25 November 2015.
9. Affidavit of Kris Sjouke Byrne, affirmed 28 November 2015.
10. Second supplementary affidavit of Clive Theodore Mensink affirmed 3 December 2015.
11. Second supplementary affidavit of Darren Bruce Wolfe affirmed on 4 December 2015.

40 The CITIC parties read and relied upon the following affidavits:

1. Affidavit of Ian Peter Scott O'Donahoo, sworn 27 November 2015.
2. Affidavit of Ian Peter Scott O'Donahoo, sworn 2 December 2015.
3. Affidavit of David John Mason, affirmed 2 December 2015.
4. Second affidavit of David John Mason, affirmed 4 December 2015 in support of the defendant's application for confidentiality orders.

41 Objection was taken by the CITIC parties to the reports of Mr Brierley and Mr Sorbello, which are attachments to their affidavits, being relied upon for any purpose other than to demonstrate that there are serious questions to be tried in the proceeding. The objection was taken on the basis that, as the CITIC parties had not had sufficient time to file and serve responsive expert evidence, Mineralogy should only be permitted to place limited reliance on the Brierley and Sorbello expert reports to establish the existence of a serious question to be tried. If it had not been for Mineralogy's insistence on an urgent hearing, the preferable course would have been to adjourn the hearing of the application until the CITIC parties were able to respond to the evidence of Mr Brierley and Mr Sorbello.

42 I have read the affidavit material but it is so extensive not only in terms of volume (in excess of 5,000 pages) but in relation to the subject matter, it is not feasible to provide a useful summary of it. In what follows, I have made brief references to the evidence which is critical to my determination of the application.

The primary factual contentions and relevant clauses of the MRSLAs

43 There was no dispute about the express terms of the relevant clauses. As I have noted, Mineralogy advances claims on the basis of cl 6.3 and cl 8 of the MRSLAs.

44 The claims based on cl 6.3 are not to be found in the third further amended statement of claim filed 15 August 2014 filed in this action. The cl 6.3 claims were the subject of CIV 2303 and are described in the extract from Chaney J's reasons in Mineralogy Pty Ltd v Sino Iron Pty Ltd [2015] WASC 454 which I have set out above.

6.3 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 7 years from the date of this Agreement.

(b) If Sino [Korean] fails to comply with paragraph (a) then it must, no later than one month following the date by which compliance was 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.

46 I turn now to the claims based on cl 8. The third further amended statement of claim dated 14 August 2014 does not include money claims based on cl 8. Those claims were included in CIV 2368.

47 Clause 8.1 to cl 8.3 (with definitions inserted) provide as follows:

(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

where:

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 = (PR x ((1/2 x Product) x PP))

where:

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 or processing, 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.

PR = Where the Pellet Price is:

(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

(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.

8.4 Statements

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.

8.5 Inspection, copying and audit

(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.

8.6 Disputes

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.

48 In his reasons published on 14 October 2013 for granting an injunction to the CITIC parties restraining Mineralogy from purporting to suspend or terminate the Project (Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 2] [2013] WASC 375) [29] Edelman J recorded that it was common ground that the integral parts of the royalty formula for the Royalty Component B could be abbreviated as a prevailing published Brazilian price and a prevailing published Mount Newman price, respectively as follows:

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

the prevailing published annual FOB price (expressed in US dollars per DMTU) for Mount Newman fines.

49 Edelman J went on to summarise the case advanced by the CITIC parties in relation to the calculation or Royalty Component B, as set out in the pleadings current at that time, as follows:

[30] Sino Iron and Korean Steel say that the MRSLAs make no provision for calculation of Royalty Component B in the event that there is no prevailing published Brazilian price or prevailing published Mt Newman price. They say that, on the proper construction of clause 8.2, the reference to those prevailing published prices is a reference to the Annual Benchmark Pricing System.

[31] Sino Iron and Korean Steel plead that the Annual Benchmark Pricing System was the global iron ore pricing system in place from about the late 1960s through to about early 2010. According to 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.

[32] It is an admitted fact that the Annual Benchmark Pricing System ceased to operate in around early 2010. Sino Iron and Korean Steel provided evidence including news reports which described this change as 'the biggest shake-up in [the global iron ore pricing system's] 40-year history'.

[33] In broad terms, Sino Iron and Korean Steel plead that the effect of the cessation of the Annual Benchmark Pricing System means that Royalty Component B is not capable of calculation in accordance with clause 8.2 of the MRSLAs. They say that the parts of clause 8.2 which relate to Royalty Component B are 'uncertain, void and/or unenforceable' and are to be severed from the MRSLAs without affecting the continued operation of the rest of the MRSLAs.

[34] Alternatively, Sino Iron and Korean Steel plead that if those parts of clause 8.2 cannot be severed then there is an implied term of the MRSLAs to the effect that in the event that there are no prevailing published annual FOB prices, the parties must negotiate in good faith to seek to agree on an appropriate replacement formula to calculate Royalty Component B.

50 Save for one matter, this summary of the CITIC parties' case in relation to the Royalty Component B issue provides a sufficient understanding of their position for the purposes of this application. That matter is that the CITIC parties have amended their defence to plead, in the alternative, that because the Royalty Component B cannot be calculated, the MRSLAs have been frustrated.

51 Mineralogy contends that the CITIC parties failed to produce no less than 6 million tonnes of Product no later than seven years from the MRSLAs, that is by 21 March 2013, and that pursuant to cl 6.3 the CITIC parties must pay an amount equivalent to the Mineralogy Royalty on the amount of ore required to produce 6 million tonnes of concentrate. The CITIC parties contend that the obligation to pay any royalty pursuant to cl 6.3 has not arisen because they were prevented from doing so by acts, matters or things outside their control. These cl 6 issues involve detailed factual disputes.

52 Mineralogy contends that the CITIC parties have shipped 4,734,380 dry metric tonnes of Product since the fourth quarter of 2013: see par 20 of the factual assumptions Mr Sorbello was asked to make for the purposes of the calculations contained in his report. It is common ground that no payments have been made in respect of Royalty Component B in respect of these shipments.

53 Mineralogy contends that it is possible to calculate the prevailing published Brazilian price and the prevailing published Mount Newman price by reference to prices published by various sources identified by Mr Brierley in his report.

54 The principles governing interlocutory injunctions and interlocutory mandatory injunctions were recently considered by Beech J in Francis v Bernard James Duffy LJD Pty Ltd [2015] WASC 426 [17] - [23] in the following terms (omitting citations):

[17] I apply the principles I set out in Twinside Pty Ltd v Venetian Nominees Pty Ltd, and Bedshed Franchising Pty Ltd v Battersby.

[18] The principles were explained by Gummow and Hayne JJ in Australian Broadcasting Corporation v O'Neill. Their Honours stated that the relevant principles are those set out in Beecham Group Ltd v Bristol Laboratories Pty Ltd. In Beecham, the two main inquiries were said to be whether the plaintiff had made out a prima facie case and whether the balance of convenience favoured the grant of the injunction. The phrase 'prima facie case' does not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed. It is enough that the plaintiff show a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the trial. How strong the probability needs to be depends upon the nature of the rights the plaintiff asserts and the practical consequences likely to flow from the orders the plaintiff seeks.

[19] The strength of the plaintiff's case and the balance of convenience are to be considered together. As the apparent strength of the plaintiff's case diminishes, the balance of convenience moves against the making of an order. The grant of an injunction involves balancing the injustice which might be suffered by the defendant if the injunction is granted and the plaintiff later fails at trial, against the injustice which might be suffered by the plaintiff if the injunction is not granted and the plaintiff later succeeds at trial.

[20] While the court takes into account the apparent strength of the plaintiff's case, the court does not undertake a preliminary trial or attempt a forecast of the ultimate result. Moreover, an application for an interlocutory injunction is not an occasion to determine contested questions of fact and conflicts in affidavit evidence.

[21] The authorities favour the position that the question of adequacy of damages is not an independent requirement, but rather is best considered as part of the balance of convenience.

[22] The plaintiffs' application seeks interlocutory mandatory relief in that it seeks an order compelling the defendant to give up possession of Home Farmmain.

[23] The principles relating to interlocutory mandatory injunctions were explained in Cash Converters Pty Ltd v Hila Pty Ltd and Films Rover International. In some cases, it is said that an interlocutory mandatory injunction should be granted only if the court has a high degree of assurance that the plaintiff will succeed at trial. However, ultimately the question is as to the balance of the risk of injustice. In considering that balance, the court must take into account the nature and consequences of the particular injunction sought.

55 The court may take into account the rights or interests of third parties when determining where the balance of convenience lies, though such a consideration is rarely decisive: Patrick Stevedores Operations v Maritime Union of Australia [1998] HCA 30; (1998) 195 CLR 1 [65] (Brennan CJ, McHugh, Gummow, Kirby & Hayne JJ), adopting Dr Spry's statement in Equitable Remedies (5th ed, 1997), 402 - 403. The weight to be given to third party interests varies according to the circumstances. In most cases, it appears that the main concern of courts has been to avoid interfering with third party rights or interests by the grant of an injunction. Thus in Miller v Jackson [1977] EWCA Civ 6; [1977] QB 966, 988 Cumming-Bruce LJ said:

Courts of equity will not ordinarily and without special necessity interfere by injunction where the injunction will have the effect of very materially injuring the rights of third persons not before the court.

56 It would appear, however, by the endorsement of the majority of the High Court in Patrick Stevedores Operations of Dr Spry's statement in Equitable Remedies (5th ed, 1997), 402 - 403 that a court may also consider, where appropriate, 'detriment that might be caused to third persons or to the public generally if an injunction were refused'.

57 In Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404, the Queensland Full Court upheld an interlocutory injunction granted at first instance restraining certain parties to that action from exercising any power of sale under a bill of encumbrance. The first instance judge proceeded on the basis that, without the injunction, the plaintiff would be put out of business. However, fresh evidence produced on appeal established that the business had been assigned to a third party trustee company of which the plaintiff was a director, shareholder and primary beneficiary. Thomas J (with whom Campbell CJ and Andrews SPJ agreed) held that the new ownership did not alter the primary judge's assessment of the balance of convenience and the detriment to be suffered by the third party trustee company could equally influence that assessment in favour of granting the injunction: see (419 - 420). It should be noted, however, that Clarke concerned a prohibitory (not a mandatory) interlocutory injunction which was granted to preserve the status quo until trial.

58 In summary, this court can take into account the rights or interests of third parties that may be detrimentally affected if an interlocutory injunction is granted, and those which may be affected if such an injunction is refused. That said, the assessment of the balance of convenience is heavily dependent on the circumstances of the case at hand and, as the majority in the High Court noted in Patrick Stevedores Operations, third party interests will rarely be a decisive consideration.

59 In the absence of a statement of claim which sets out Mineralogy's claims, I reproduce below the short summary of its claims which appears in the written outline of submissions relied upon in support of the application. These submissions were filed originally in CIV 2368 and the references to the statement of claim are to the statement of claim in that action.

(a) that up to 30 September 2014 Sino Iron and Korean Steel were obliged to pay, and have not paid, to Mineralogy Royalty Component B on a quarterly basis, the total of which is approximately $22M;

(b) Sino Iron and Korean Steel have repudiated the MRSLAs on a number of bases and notices of termination given by Mineralogy in September 2014 were effective to terminate the MRSLAs in October 2014;

(c) alternatively Mineralogy effectively terminated the MRSLAs by the delivery of the claim and statement of claim in these proceedings;

(d) Sino Iron and Korean Steel have continued to mine and export iron ore concentrate since September 2014 and are liable in damages to Mineralogy for the value of the concentrate which has been exported since that date, a sum of approximately $190M;

(e) further, Mineralogy is entitled to loss of bargain damages for the repudiation of the MRSLAs by Sino Iron and Korean Steel in the amount of $6.4B;

(f) alternatively, if Mineralogy has not validly terminated the MRSLAs, then Sino Iron and Korean Steel ought to have paid to Mineralogy further sums for Royalty Component B for each quarter since 30 September 2014 up to and including 30 September 2015, the total amount of which is approximately $26M.

Has Mineralogy established a serious question to be tried?

61 The CITIC parties concede that there is a serious question to be tried as to their liability to make royalty payments under the MRSLAs. They submit, however, that given the complexity of the issues, it is not appropriate to make any assessment of the strength of Mineralogy's case on an urgent application such as this, especially as they have not had the opportunity to file expert evidence in response to Mineralogy's expert evidence. No concession is made in relation to quantum.

62 The lack of an updated and comprehensive statement of claim hinders an assessment of the nature of the serious question to be tried which must be established.

63 Mineralogy placed much emphasis on its claims that the CITIC parties have committed repudiatory breaches of the MRSLAs which have been accepted by it and resulted in the valid termination of the MRSLAs. As a consequence Mineralogy claims to be entitled to very substantial damages. In addition, Mineralogy claims approximately US$22 million in respect of the unpaid Royalty Component B up to the date of the alleged termination, October 2014. This is Mineralogy's primary position.

64 In the alternative, and on the basis that Mineralogy does not establish that the MRSLAs have been terminated, it claims an additional sum of approximately US$26 million in respect of the unpaid Royalty Component B from October 2014 to date.

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. I understand that the claim that the MRSLAs have been terminated is relied upon by Mineralogy for the proposition that if the CITIC parties wish to maintain the benefit of the agreements and hold Mineralogy to them then they should pay Royalty Component B. In the view I take of this matter, however, I do not think that it is necessary for Mineralogy to argue that the agreements have been terminated in order to argue that the CITIC parties should be held to the bargain which Mineralogy contends they made.

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 (see par 8 of Mineralogy's written outline of 27 November 2015) 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).

68 Mineralogy relies upon the reports of Mr Brierley and Mr Sorbello to establish the quantum of its claims in respect of the unpaid Royalty Component B. I have made brief references to their evidence above.

69 Mr Brierley is a qualified mining engineer with extensive industry experience who now works as the Head of Research for a firm of stockbrokers. In a report dated 12 November 2015 attached to his affidavit he expresses various opinions as to the prevailing published Brazilian price and the prevailing Mount Newman price at various dates.

70 Mr Sorbello is a chartered accountant. In a report dated 25 November 2015 attached to his affidavit, Mr Sorbello sets out calculations that he has made as to the quantum of the Royalty Component B payable based on assumptions which incorporate Mr Brierley's opinions. On that basis, he concluded that the Royalty Component B payable up to October 2014 was US$21,424,686 and the amount payable since October 2014 was US$26,658,261.

71 The evidence of Mr Brierley and Mr Sorbello is detailed and technical. In the context of an application of this nature brought on for hearing at relatively short notice it is impossible to evaluate the evidence. Moreover, it would be most unfair to the CITIC parties to draw any conclusions based on the evidence of Mr Brierley and Mr Sorbello without the CITIC parties having the opportunity to adduce their own evidence.

72 An historical indication of the CITIC parties' estimate of the quantum of Royalty Component B is to be found in CITIC's announcement to the Hong Kong Stock Exchange made on 31 March 2006 (annexure DBW-3 to Mr Wolfe's affidavit of 17 November 2015). At page 4 of the announcement there is a reference to the royalty obligations in the following terms:

Such royalty comprises two components:-

1st component (based on the quantity of magnetite ore taken) - A$0.30 (approximately HK$1.68) per tonne of magnetite ore taken by Sino-Iron (adjusted based on Inflation during the previous quarter).

2nd component (based on the quantity of products produced) - An additional royalty is payable quarterly to the Seller by Sino-Iron by reference to the market price of pellets and Mount Newman fines (as reference for the price of concentrate) and is calculated as follows:

(i) production volume multiplied by 50% and multiplied by the prevailing published annual FOB price (expressed in US dollars per dry metric ton unit) for pellets established by the largest supplier or seller of pellets in Brazil for export and multiplied by 68.1 and multiplied by an applicable rate in the range 6% to 10% depending on the then prevailing market price for pellets; plus

(ii) production volume multiplied by 50% and multiplied by the prevailing published annual FOB price (expressed in US dollars per dry metric ton unit) for Mount Newman fines for export and multiplied by 68.1 and further by 1.05 and multiplied by an applicable rate in the range of 6% to 10% depending on the then prevailing market price for concentrates.

(1) The applicable rate for pellets and concentrates is 6% to 10% depending on the prevailing market price for each of those product types.

(2) If there is a FOB price for Brazil pellets or Mount Newman fines applying for different destinations, the applicable price for use in the formula above will be the published price for shipment to China (if any), or to Asia

Sino-Iron is required to produce not less than 6 million tonnes of product no later than seven years from 21 March 2006. If Sino-Iron fails to produce such quantity of products, it must, no later than one month following the end of the seventh year of 21 March 2006, pay to Mineralogy an amount equivalent to the royalty payable on the 6 million tonnes of products. The amount is estimated to be approximately US$42 million (approximately HK$327.6 million) if based on the 2005 market price. Such amount is in addition to the royalty that Sino-Iron shall pay to Mineralogy based on the actual product volume of the same year. [my emphasis].

73 Beyond observing that the March 2006 announcement would suggest that the CITIC parties contemplated in 2006 that the Royalty B Component was likely to be very substantial, on this application, having regard to the limitations of the evidence and the severe time limitations, it is not possible to make a reliable provisional determination of the quantum of Mineralogy's claims in respect of Royalty Component B. I should add that Mr Scerri QC, who appeared for the CITIC parties, submitted the figures contained in the March 2006 announcement are now irrelevant as they were calculated on the basis of the Annual Benchmark Pricing System, which was discontinued in 2010.

74 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).

75 Mineralogy submitted that I should approach the exercise of the discretion to grant or refuse an injunction on the basis that I should regard the status quo as a position in which the CITIC parties would be paying the full amount of Royalty Component B. It was submitted that as a matter of doing justice between the parties the CITIC parties should not 'get away with' not paying.

76 The CITIC parties respond to this submission with the observation that the view of the status quo contended for by Mineralogy has no basis in fact as patently no payments have been or are being made in respect of Royalty Component B.

77 Given the nature of the issues in dispute it is not possible to say that the status quo favours either side. The problem with Mineralogy's submission is that it assumes that the central issues will be resolved in its favour.

Adequacy of damages/harm that will be suffered if no injunction granted

78 Mineralogy submits that damages are not an adequate remedy because of the harm that it and related entities and sections of the general public both within Australia and overseas will suffer if the injunctions are not granted. It submits that a damages award will not adequately compensate it for the harm it will suffer or the harms suffered by the interests of the third parties.

79 The CITIC parties submit that damages are manifestly an adequate remedy when the claim is for monetary relief.

80 Mineralogy claims that it, and five other entities or groups, will suffer irreparable harm if the injunction is refused. They are:

1. Waratah Coal Pty Ltd (Waratah);
2. Fairway Coal Pty Ltd (Fairway);
3. The Palmer Care Foundation;
4. Queensland Nickel Pty Ltd (QN) (together with the people of Townsville); and
5. The island state of New Caledonia.

81 Mineralogy is the ultimate holding company of Waratah and Fairway. The Palmer Care Foundation and QN are related more indirectly. The population of New Caledonia's relationship with Mineralogy is the most indirect or remote.

82 In accordance with the authorities to which I have referred, I am prepared to consider the interests of third parties in my assessment of where the balance of convenience lies. The degree to which these interests are relevant and the weight to be attached to them varies according to how remote those interests are from the subject matter of this litigation.

83 The evidence in relation to these matters was found in the affidavits of Mr Mensink and the affidavits of Mr Wolfe. Mr Mensink is the sole director and secretary of Mineralogy. He is also the sole director and secretary of QN. Mr Wolfe is the Group Financial Controller of what he referred to in his affidavits as the Palmer Group of Companies; that is, companies ultimately wholly owned by Mr Clive Palmer. Both Mineralogy and QN are companies which form part of the Palmer Group of Companies.

84 Mineralogy claims that a refusal to grant the injunction will harm it in essentially three ways.

85 First, it has suffered a substantial detriment in that it has not received US$48 million that it says is owing to it and that it legitimately expects to receive: Mineralogy's submissions (par 61).

86 Secondly, it says that the failure to grant the mandatory injunction in the sum of US$48 million will detrimentally affect its ability to pay legal costs associated with this action and five other actions. Accordingly, it says that its right to pursue those legal proceedings is prejudiced. There are six actions being pursued by Mineralogy which it contended will involve it in estimated legal costs of $10.745 million over the next 12 months. Four of those actions are in this court, one in the Court of Appeal of Western Australia, and one in the Federal Court of Australia: Mr Wolfe's affidavit affirmed 17 November 2015 (par 46), Mineralogy submissions (par 127).

87 Thirdly, Mineralogy claims that a refusal to grant the injunction sought will jeopardise the jobs of 14 of its staff: Mr Wolfe's affidavit affirmed 17 November 2015 (par 42 and par 108). It says that, without an immediate injection of funds, it will not be able to maintain the same level of business activity and jobs will be lost.

88 As noted, both Waratah and Fairway are wholly owned subsidiary companies of Mineralogy. With respect to these companies, Mineralogy makes two claims that it says favour the grant of the injunction.

89 First, both companies have significant minimum expenditure requirements that they are legally obliged to satisfy in order to maintain their respective mining tenements. Failure to meet those minimum expenditure conditions makes their tenements liable to forfeiture. Mineralogy submits that, without its financial assistance, both Waratah and Fairway will be unable to meet those expenditure conditions and that, without the injunction, Mineralogy will be unable to offer Waratah and Fairway that assistance: Mineralogy submissions (par 130).

90 Secondly, in relation to Waratah only, Mineralogy claims that, without the funds from Mineralogy (and therefore without the injunction), Waratah will be forced to terminate the employment of seven of its staff: Mr Wolfe's affidavit affirmed 17 November 2015 (par 100 and par 108), Mineralogy submissions (par 130).

91 The Palmer Care Foundation was established pursuant to an amendment to the State Agreement. The amendment was given effect to by the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Amendment Act 2008 (WA). Under cl 5A(9) of the State Agreement (as amended), the State of Western Australia acknowledges Mineralogy's intention to establish a private fund and contribute, during the course of the State Agreement, $100 million of benefits and grants to that fund to achieve its objects. At least one of the fund's objects is to advance medical research and support indigenous communities in Western Australia.

92 The fund, as contemplated by cl 5A(9), was created by a Private Ancillary Fund Trust Deed executed on 24 September 2012 between Mineralogy and Palmer Foundation Pty Ltd: Miley Affidavit (par 60).

93 The essence of Mineralogy's claim in support of the present application for an interlocutory injunction is that, without an immediate injection of funds, Mineralogy is unable to make its promised contributions to the Palmer Care Foundation fund: Mr Wolfe's affidavit affirmed 17 November 2015 (par 106), Mineralogy submissions (par 131). This inability to contribute funds will, it is said, negatively affect Palmer Care Foundation's ability to pursue its objects.

94 QN is not a subsidiary of Mineralogy. There is no contractual relationship between QN and the CITIC parties.

95 QN operates a nickel refinery in Yabulu, near Townsville, Queensland. Various deponents of affidavits filed by Mineralogy depose to the fact that the price of nickel has dropped substantially in recent times, placing QN in financial difficulty. QN has, in the past, relied on Mineralogy for loans when required: Mr Wolfe's affidavit affirmed 17 November 2015 (par 39), Mr Mensink's affidavit affirmed 17 November 2015 (par 19). As a consequence of the fall in the nickel price, QN is experiencing a liquidity crisis and it is claimed that it requires an injection of $28 million to avoid the closure of its refinery, job losses for up to 767 employees and to avoid QN being placed into administration: Mr Mensink's affidavit affirmed 19 November 2015 (par 7), Mr Wolfe's affidavit affirmed 17 November 2015 (par 70), par (108), Mineralogy submissions (par 140).

96 It was also contended that the closure of the Yabulu refinery will have a negative flow-on effect on the economy of Townsville, QN being the town's largest private employer: Mineralogy submissions (par 137). Mineralogy claims that the refinery's closure will cause further job losses in Townsville: Mr Wolfe's affidavit affirmed 17 November 2015 (par 59 and par 108).

97 Lastly, QN has launched its own legal proceedings in the Supreme Court of Queensland against the CITIC parties for unconscionable conduct. Mineralogy says that if the injunction is not granted, and QN is thereby unable to receive financial assistance from Mineralogy, QN will be unable to pursue that legal proceeding. This, it is said, favours the grant of the injunction.

98 QN has, for the last 20 years, been the sole purchaser of laterite ore from New Caledonia. Mineralogy claims that the possible closure of QN's Yabulu refinery, together with QN going into administration, will thereby cause the economy of New Caledonia to suffer, in that it will result in approximately 500 New Caledonians losing their jobs and New Caledonia losing $152.89 million worth of exports. Both Mr Wolfe and Mr Mensink depose to the fact that economic turmoil and unemployment in New Caledonia has historically caused political and social unrest, and violence: Mr Wolfe's affidavit affirmed 17 November 2015 (par 107), Mr Mensink's affidavit affirmed 17 November 2015 (par 23). Mineralogy submits that the potential for these events to occur favours the grant of an injunction.

99 A recurrent theme in Mineralogy's submissions is that it is unjust for the CITIC parties to have the benefit of the Project without fulfilling their side of the bargain by paying Royalty Component B. In Mineralogy's written reply and oral submissions, this theme found expression in the invocation of the principle that he who seeks equity must do equity. It was submitted that where one party seeks to force an ongoing contractual relationship on the other party against that party's will, the first party must pay monies due pursuant to the contract. Mineralogy relied on the decision of the Full Federal Court (Lockhart, Beaumont & Hill JJ) in Telstra Corporation Ltd v First Netcom Pty Ltd [1997] FCA 860; (1997) 78 FCR 132 at 136F to 137G and the authorities there cited.

100 It might be thought to be curious that it is Mineralogy that is invoking this principle as it is seeking the intervention of equity rather than the CITIC parties. Mineralogy submits, in effect, that the CITIC parties are the beneficiaries of equity's intervention in the form of the orders made by Chaney J restraining it from suspending or terminating the Project. In this respect, the present application for mandatory injunctions compelling the payment of Royalty Component B is an attempt to re-argue the proposition that a condition should have been imposed on the CITIC parties that they pay the royalties, as the price of the injunctive relief they obtained on 5 March 2015. Mr Couper QC, who appeared for Mineralogy, acknowledged this was so, but pointed to the fact that Mineralogy had now adduced admissible evidence in support of the quantum of its claims and submitted that there was a demonstrable urgent need for injunctive relief.

101 Albeit that Mineralogy invokes the principle that he who seeks equity must do equity in an unusual procedural context, when regard is had to the contents of announcement made to the Hong Kong Stock Exchange on 31 March 2006, which appears to suggest that the CITIC parties contemplated that the Royalty Component B payable on 6 million tonnes of Product would be approximately US$42 million at 2005 market prices and exchange rates, it might be thought that there is some force in Mineralogy's submission. It must be accepted that the present position involves an inherent risk that the CITIC parties are enjoying the benefits of the Project without paying the consideration that it promised to pay. As against this, however, the CITIC parties submit that Mineralogy has received over US$400 million as consideration for the rights it has granted to them. It was argued that I should not accept the proposition that Royalty Component B constituted the largest proportion of the consideration.

102 The risk to which I have referred is, however, no more than one of several factors that must be taken into account in the exercise of my discretion. Having reflected upon all of the matters raised by the parties in support of their respective positions, I have reached the conclusion that I should not grant the injunctions sought by Mineralogy for the following reasons.

103 First, as I have observed in an 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.

105 These are the central issues in litigation which has been on foot for nearly four years. They are issues that have been the subject of complex (if not comprehensive and complete) pleadings. They are issues that have generated over 5,000 pages of documentary evidence in this application alone. They are issues that are the subject of Mineralogy's detailed and complex expert evidence that, as a direct consequence of this application being brought on for an urgent hearing, has not been properly tested. They are issues that make a provisional assessment on a summary basis problematic. This is so even though the CITIC parties have acknowledged there is a serious question to be tried. These difficulties, and in particular the difficulty in making a provisional assessment of quantum militates against making an order for payment on an interlocutory basis.

106 Thirdly, the difficulties in making a determination of the critical issues on a summary basis constitute a substantial practical obstacle to the successful invocation by Mineralogy of the principle that a party seeking equity must do equity. What the CITIC parties 'must do', in terms of what if anything must be paid in respect of Royalty Component B, is in issue in the action.

107 The second and third reasons are very substantial obstacles for Mineralogy to overcome. In my opinion, they are significant factors which weigh more heavily than other factors in the exercise of my discretion. They militate against the grant of the injunctive relief sought by Mineralogy.

108 Fourthly, I am not satisfied that the outcome of the balancing of the risks of injustice favours the grant of an injunction. 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. In my assessment, however, the potential harm relied upon by Mineralogy does not tip the balance of injustice in its favour when considered in the context.

109 Briefly stated my views on those matters are as follows.

110 Mineralogy's financial statements for the years ending 30 June 2014 and 30 June 2015 have yet to be finalised: Mr Wolfe's affidavit affirmed 17 November 2015 (par 27). Draft accounts for the 2014 year, a statement of financial position and a statement of comprehensive income in respect of the 2015 year were attached as part of confidential annexure 'POD26' to Mr O'Donahoo's affidavit of 2 December 2015. These documents appear to establish that at 30 June 2015 Mineralogy had net assets of $89,626,850. Of this total exploration and mining rights were valued at $77,992,353.

111 Mr Wolfe's evidence is that he met with executives of 'the big four Australian banks' in September and October 2015 and was told Mineralogy's assets in the form of mineral deposits would not be considered adequate security for borrowings. He deposed that he had been told by Mr Palmer that he had spoken to an executive of the National Australia Bank, who had told him that he would discuss Mineralogy's funding requirements with the Chairman of the Bank and subsequently was told that the Bank would not lend money to Mineralogy or to QN: Mr Wolfe's affidavit affirmed 17 November 2015 (par 41 and par 42). Mr Mensink does not appear to have made any inquiries about the availability of any form of finance himself but has relied on what he has been told by Mr Wolfe on that topic. The substance of Mr Wolfe's evidence and that of Mr Mensink was to the effect that without an injection of cash Mineralogy will be unable to fund its various claims against the CITIC parties and will be unable to fund the expenditure commitments of its resource subsidiaries.

112 Neither Mr Mensink nor Mr Wolfe gave evidence as to the possibility of Mineralogy raising funds or financing its obligations by alternate means: assets sales; equity finance; farm outs or joint venture arrangements.

113 Moreover, in the context of the submission made on Mineralogy's behalf that unless it receives the sums it contends are due to it in respect of Royalty Component B, it will not have the funds to prosecute its various claims against CITIC, no evidence has been adduced on Mineralogy's part as to the availability, or lack thereof, of other possibilities for funding the litigation.

114 On an application of this nature a court is necessarily confined to making provisional assessments of the evidence and forming impressions. I have reservations about the evidence which has been adduced on Mineralogy's behalf about its inability to fund its activities in the future. It is somewhat surprising that there is no evidence about the alternate sources of finance that are commonly relied upon by businesses in the resources sector to finance their activities. I am left with the impression that Mineralogy has overstated its inability to fund its activities.

115 I do not underestimate the considerable benefits to society that are likely to flow from the injection of funds into the Palmer Care Foundation. I do not, however, consider that the inability of Mineralogy to contribute funds to the Palmer Care Foundation pending the outcome of this action is a factor which carries significant weight in assessing the balance of convenience or is in any respect decisive. I would add that Mineralogy's contributions to the Palmer Care Foundation extend over the life of the State Agreement so a present delay in making contributions is not a fatal blow to the Foundation's activities and purposes.

116 The evidence of Mr Wolfe and Mr Mensink suggests that QN has an immediate need for $28 million to meet its commitments and that without a cash injection of that amount Mr Mensink will be obliged to put QN into administration and terminate its employment of 767 employees with disastrous consequences for those employees, their families and the communities within which they live. This cash crisis appears to be the direct result of a significant fall over the last few months of the price of nickel.

117 It was originally contended that the cash injection was required by 4 December 2015 and hence the submission by Mineralogy that a hearing should be heard on or before that date. It appears that QN has been able to extend the deadline but I am informed by Mr Mensink's evidence that the cash injection is required today.

118 Mr Wolfe's evidence is that he held face to face meetings and made presentations to a number of banks and to potential financiers in September and October 2015 in order to borrow funds to provide working capital without success. Mr Mensink has not made any attempts personally to establish whether finance might be available but has relied on Mr Wolfe's inquiries.

119 It appears from the evidence (in particular the annual report of QN for the financial year ending 30 June 2015 to which I refer below in more detail) that QN has traded successfully over several decades. I pause to observe that in the 2013 - 2014 financial year it was sufficiently profitable to be able to donate over $15 million to the Palmer United Party: see the Australian Electoral Commission Donor to Political Party Disclosure Return - Organisations for the financial year 2013 - 2014 attached to Mr O'Donahoo's affidavit sworn on 2 December 2015.

120 QN's annual report incorporating financial statements for the financial year ending 30 June 2015 (annexure DBW-9 to Mr Wolfe's affidavit of 17 November 2015) record that QN's total current assets exceed its total current liabilities by $76.5 million and that its total assets exceeds its total liabilities by $1.9504 billion. Mr Wolfe deposes that QN's non-current assets are valued at $1.95 billion and that QN has no debt other than a $23.1 million facility relating to equipment.

121 QN's annual report was signed by Mr Mensink on 7 September 2015. The report recorded that QN had invested $900 million expanding the production capacity of the Yabulu refinery from 30,000 tpa to 65,000 tpa nickel and that the expansion is continuing with the construction of a second line of nickel production which should be completed in 2017. The report states that on completion of the additional production line QN will be the fifth largest nickel refinery in the world.

122 Neither Mr Mensink nor Mr Wolfe has given any evidence about attempts by them to source finance from sources other than major retail banks or to rationalize QN's operations otherwise than by closing the refinery on which it has recently spent $900 million and terminating the employment of its entire workforce. Moreover, on the evidence Mr Wolfe has not held any meetings with financiers since 2 October 2015 when he met with representatives of Suncorp.

123 There is no evidence that Mr Mensink has discussed with an appropriately qualified insolvency practitioner the wisdom of taking the extraordinary step of terminating the employment of all employees of QN seemingly before putting the company into administration. Terminating the employment of all employees will have the effect of converting a going trading concern into a care and maintenance operation. One would think that making a decision about QN's workforce is a decision which would be made in conjunction with the prospective administrator as converting a going concern into a care and maintenance operation would risk limiting the administrator's prospects of securing a Deed of Company Arrangement.

124 No evidence was adduced of any attempt by Mr Mensink, Mr Palmer or Mr Wolfe to find a way for QN to resolve its financial difficulties otherwise than by making the current injunction application and if that fails taking the dramatic steps to which I have referred. This is surprising given QN's long trading history, its strong balance sheet and its important position within the Queensland economy and society.

125 I draw attention to these matters because I am not satisfied on the evidence that has been adduced that the stark alternatives namely; grant the injunction or let QN suffer dire consequences, reflect an assessment of all options that one would expect to be considered when a major business is experiencing financial difficulties. There is some evidence to suggest that the National Australia Bank was prepared to consider providing QN with finance (attachment DBW16 to Mr Wolfe's affidavit affirmed 17 November 2015) but the avenues of finance that the bank was prepared to consider do not appear to have been pursued.

126 I am prepared to accept that there is a risk that QN may be placed into administration, but I am not prepared to accept that the dire consequences outlined in the Mensink and Wolfe affidavits will flow from QN being placed into administration. This conclusion carries with it the conclusion that the New Caledonian interests are not at risk to the extent that it is contended by Mineralogy.

127 The reasons that I have set out above for coming to the conclusion that interlocutory relief should not be granted are necessarily abbreviated and expressed in summary form because of the urgent need to provide the parties with a decision today. To the extent to which I have not referred to any submissions advanced by the parties, it should not be thought I have not taken them into account.