CONCLUSION AND ORDERS
85As Hanwright have succeeded on the "MBM area" issue, they succeed in their claim in relation to Eastern Range. In order to succeed in relation to the Channar area claim, it was necessary for Hanwright to succeed not only on the "MBM area" issue but also on at least one of issues two and three (the "through or under" issue and the "in association with" issue). As they have not done this, Hanwright fail on their Channar claim.
86In these circumstances, I propose that the Court order that the parties bring in proposed short minutes of order to give effect to these reasons for judgment, with supporting submissions, in accordance with the following timetable:
(1)The appellant within 14 days of the date of this judgment;
(2)The respondents within a further 14 days;
(3)Any reply by the appellant within a further 14 days.
87MEAGHER JA: I have had the advantage of reading in draft the judgment of Macfarlan JA. I agree with his Honour's conclusions in relation to the three issues which arise and with his reasons for those conclusions. I add the following observations in relation to the first of those issues (the "MBM area" issue). I also agree with the orders his Honour proposes. In what follows, I have adopted the abbreviations used by Macfarlan JA.
88The subject matter of the parties' dealings were rights to occupy land and prospect for ore in the form those rights took in the 1960s and 1970s, and by reference to what they were understood to confer at that time. Generally, rights of temporary occupation were granted for mineral exploration purposes pursuant to an agreement between the State and the grantee. That agreement was then approved by an Act of Parliament. The rights of temporary occupation were granted in respect of Crown land which had been reserved from occupation under s 276 of the Mining Act 1904 (WA). Those areas or blocks of land were described as temporary reserves and identified by block numbers.
89The events leading to the making of the 1970 Agreement are summarised by Macfarlan JA. By the January 1968 Agreement, Hanwright and HI had agreed to form a company to be known as MBM which was to be owned as to 25 per cent by Hanwright and 75 per cent by HI. That company was to prospect for and mine ore from the areas around Mount Bruce in the Pilbara that were the subject of the 1967 Hanwright State Agreement. Under the January 1968 Agreement, HI was entitled at its option to have those reserves, described as the Mount Bruce Reserves, transferred to MBM. They included "all present and future rights of Hanwright in relation to the above blocks and reserves including any extensions of the ore bodies located therein or any adjustments of the present indicated boundaries of the above Temporary Reserves arranged with the Government". The temporary reserves to which Hanwright was entitled were in March 1968 identified as block numbers 4594H-4627H. In October 1969 the rights in respect of those reserves were cancelled and rights to occupy and prospect were granted in respect of temporary reserves identified as block numbers 4937H to 4967H.
90It was in this context that the 1970 Agreement addressed three principal matters. First, HI relinquished the option it had under the January 1968 Agreement. The temporary reserves in relation to which Hanwright held exploration rights (block numbers 4937H to 4967H) are described in the 1970 Agreement as the Mount Bruce Temporary Reserves.
91Secondly, the 1970 Agreement provided for the division of the Mount Bruce Temporary Reserves between Hanwright and MBM. The "entire rights" to block numbers 4937H to 4946H and 4963H to 4967H were to be "acquired" by MBM and the "entire rights" to the remaining blocks numbered 4947H to 4962H were to be "restored" to Hanwright. The apparent consideration for that acquisition was the relinquishment by HI of its option (cl 2.1), the payment by MBM of a base royalty of 2½ per cent (cl 3.1) and the payment of a further royalty by MBM limited in amount to A$5m (cl 3.2).
92Thirdly, Hanwright was granted an option to sell to HI iron ore "from the Hanwright area" (cl 6). In addition to these matters, there were limited arrangements made as to the use by one party of transport and other infrastructure facilities which were to be constructed by the other in the Pilbara area (cll 7, 8).
93In relation to the "MBM area" issue, MBM contends that as defined in cl 2.2 "MBM area" refers to and includes the "present and future rights of Hanwright in relation to temporary reserves 4937H to 4946H and 4963H to 4967H, including rights to any extensions or adjustments". That is said to be the result of a "careful contextual reading of cll 1.1, 1.4, 2.2 and 3.1 of the 1970 Agreement".
94MBM submits that in accordance with the opening words of cl 1.4, all references to "reserves" in cl 2.2 are to be read as including "all present and future rights of Hanwright". It follows, it is said, that the defined expressions "Hanwright area" and "MBM area" refer to and include the present and future rights in relation to the reserves which the relevant block numbers identify.
95There is a distinction between the rights to occupy and prospect granted in respect of a temporary reserve and the reserved area or block which is the subject of those rights. The opening words of cl 1.4, to some extent, blur that distinction. However, the language which the parties have used makes clear when it is that they are intending to refer only to the areas or blocks. That language shows that what the parties by cl 2.2 agreed to divide were Hanwright's rights in respect of the Mount Bruce Temporary Reserves and that they did so by agreeing that the rights in respect of a part of the area of those reserves should be held by MBM and that those in respect of the remaining area should be held by Hanwright.
96In cl 1.1, "blocks" where first used describes areas of land which are the reserves the subject of rights granted to Hanwright. Those "blocks" together are referred to as the Mount Bruce Temporary Reserves and described as being subject to the exercise of an option by MBM. The reference to the option is to the right given to HI by cl 4 in Part D of the 1968 Agreement which was to have "the blocks mentioned in the Preamble above ... transferred to MBM". The Preamble provided (as is noted earlier) that references to "blocks" included "all present and future rights of Hanwright". It may be accepted that this provision, similar in its terms to cl 1.4, creates some uncertainty as to whether the reference to Mount Bruce Temporary Reserves is to be understood as including the exploration rights to which the relevant land areas or reserves are subject. That uncertainty does not, however, affect the meaning to be given to "MBM area" in cl 2.2.
97In cl 1.4 the context makes clear that the expression "blocks and reserves" refers to the land areas identified by the relevant block numbers and does not include the rights to which those blocks or reserves are subject. That is because the "present and future rights" are said to be in relation to those "blocks and reserves" which are described as including the "ore bodies located therein".
98At the time they made their agreement the parties must be taken to have contemplated that, as had occurred between the making of the 1967 Hanwright State Agreement and the making of the 1970 Agreement, the boundaries to temporary reserves might be adjusted or the rights in relation to particular areas cancelled and new rights granted, either by reference to the same or different block numbers identifying the same or differently defined areas.
99Also, it was not contemplated that the division agreed to by cl 2.2 would happen immediately. That clause records an agreement that the Mount Bruce Temporary Reserves "should be divided". For that to occur would have required the agreement and involvement of the executive and legislative arms of government. It was, for that reason, necessary to make clear that the subject matter of the division was not limited to the rights held in respect of the identified reserves at the time of the 1970 Agreement.
100Clause 2.2 maintains the distinction between rights and the areas in respect of which those rights are held. It provides that the Mount Bruce Temporary Reserves should be divided so that in respect of the reserves (meaning areas) identified by particular block numbers "MBM acquires the entire rights thereto". The reference to the "entire rights" is to be understood in accordance with cl 1.4 and as being to all present and future rights in respect of those reserves or areas. Thus, the subject matter of the division is those present and future rights with respect to particular areas which are described as the "Hanwright area" and "MBM area".
101This construction of these expressions is consistent with the other provisions of the 1970 Agreement. The shorthand expressions "Hanwright area" and "MBM area" are also used in cll 6, 6.12, 9 and 12. In those provisions, the references are to "sale of iron ore from", the acceptance of "ore from", "ore mined from" and "mining of", in each case, the relevant area. Also, the references in cll 3.1 and 3.2 to ore being "won" by MBM from the "MBM area" are consistent with its being the physical area from which the ore is obtained.
102More significantly, cl 3.1 provides that the royalty obligation is to be "on the same conditions as apply" to the 1962 Agreement. In that agreement, the obligation was to pay 2½ per cent of the amount received on the sale or disposal of iron ore produced "from the Temporary Reserve land" (cl 9). Recital (g) of that agreement draws a distinction between the rights in or in respect of the temporary reserves and the land comprising those reserves. Contrary to MBM's submission, it is only the latter which is defined as the "Temporary Reserve land". The 1962 Agreement contains provisions addressing the circumstance that the party liable to pay the royalty (under that agreement, the Purchaser) has sold or assigned or otherwise disposed of its interest in the Temporary Reserve land. Those provisions as to sale or disposal are described as applying to "any areas of land in respect of which an obligation to pay any amount has arisen or may arise pursuant to Clause 9" (cll 19, 24(3)). These provisions are incorporated into the 1970 Agreement and are consistent with the language of cll 3.1 and 3.2 understood as attaching the royalty obligation to ore obtained from an area of land as distinct from rights in respect of it.
103Finally, as Macfarlan JA also observes, parties often use shorthand descriptions in agreements to avoid repetition of much longer forms of expression which would otherwise be necessary to refer to the same subject matter. It is often the case that the shorthand description used is one which the parties have adopted in their common language or which is associated by them with the defined subject matter. As Lord Hoffmann observed in Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101 at [17] such shorthand descriptions or labels "are usually chosen as a distillation of the meaning or purpose of a concept intended to be more precisely stated in the definition. In such cases the language of the defined expression may help to elucidate ambiguities in the definition or other parts of the agreement." In cl 2.2 the parties described the subject matter of the present and future rights which were to be divided as an area because, as Hanwright contends, they were referring to the areas of land that were the subject of the rights to be divided.
104BARRETT JA: For the reasons stated by Macfarlan JA and amplified by Meagher JA, the outcome on appeal should be as stated by Macfarlan JA at [85]. The parties should be directed to bring in proposed short minutes as his Honour proposes.