North Queensland Pipeline No 1 Pty Ltd v QNI Resources Pty Ltd [2021] QSC 190

CONTRACTS - CONSTRUCTION AND INTERPRETATION OF COMERCIAL CONTRACTS - GOOD FAITH CLAUSES - THE IMPLIED OBLIGATION OF GOOD FAITH - FORCE MAJEURE CLAUSES - COSTS - TAKE OR PAY CLAUSES

Where the plaintiffs entered into a gas transportation agreement with the defendants - Where the agreement required the plaintiffs to reserve capacity in the pipeline for the defendants - Where the defendants were required to pay a Firm Forward Shortfall Charge - Where the quantities of gas introduced in the pipeline by industrial customers differed from the quantity taken out, the defendant were to pay an Imbalance Charge - Where the shares in the defendants' companies were transferred from BHP Billiton PLC to Clive Palmer or entities associated with him - Where the defendants entered voluntary administration, followed by liquidation -Whether the interpretation of the gas transport agreement was proper - Whether a force majeure argument could be raised - Whether the imbalance charge and the Firm Forward Shortfall Charge constitute penalties - Whether good faith can be implied into the contract - Whether, if good faith is implied, it was breached - Whether there is an issue about the calculation of compound interest in the event that the plaintiffs were entitled to a money judgment.

Work Health and Safety Act 2011 (Qld)

Work Health and Safety Regulation 2011 (Qld)

Andrews v ANZ Banking Group Ltd [2012] HCA 30; (2012) 247 CLR 205, distinguished.

Associated British Ports v Ferryways NV [2008] EWHC 1265, considered.

Aurizon Network Pty Ltd v Glencore Coal Queensland Pty Ltd [2019] QSC 163; (2019) 1 QR 392, followed.

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, applied.

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, considered.

Commonwealth Bank v Barker [2014] HCA 32; (2014) 253 CLR 169, considered.

EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78; (2010) 41 WAR 23, considered.

Esso Petroleum Resources Pty Ltd v Southern Pacific Petroleum NL [2005] VSCA 228, considered.

E-Nik Ltd v Department for Communities and Local Government [2012] EWHC 3027 (Comm), considered.

Mann v Paterson Constructions Pty Ltd [2019] HCA 32; (2019) 267 CLR 560, distinguished.

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104, applied.

M & J Polymers Ltd v Imerys Minerals Ltd [2008] EWHC 344, considered.

Paciocco v Australia & New Zealand Banking Group Ltd (2016) 258 CLR 525, distinguished.

QNI Resources Pty Ltd v Park [2016] QSC 222, referred to.

QNI Resources Pty Ltd v Queensland Nickel Pty Ltd (in liq) [2017] QCA 167, referred to.

Queensland Nickel Sales Pty Ltd v Mount Isa Mines Limited [2019] QCA 32, applied.

Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516, considered.

Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206, applied.

Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245, considered.

Thomas v Balanced Securities Ltd [2011] QCA 258; [2012] 2 Qd R 482, considered.

Tobin Ray v Classic FM [1998] EWHC Patents 333; [1998] FSR 622, applied.

Vodafone Pacific Ltd v Mobile Innovations Ltd [2004] NSWCA 15, considered.

• [1] Some 17 years ago, in 2004, the plaintiffs (the Pipeliners) designed, financed, built, commissioned and commenced to operate a high-pressure natural gas pipeline from the gasfields near Moranbah, north to Yabulu, an industrial suburb of Townsville. The pipeline is 370 kilometres long. It is capable of transporting up to 108 terajoules of gas per day.
• [2] The objective was to transport gas in the pipeline for third party industrial customers of natural gas. As it turned out there were only two such industrial customers, the Townsville Power Station and Queensland Nickel Pty Ltd (Queensland Nickel).
• [3] The customers purchased gas from third party suppliers in Moranbah. The gas was then received into the pipeline at an injection point in Moranbah, and transported in the pipeline to one of two delivery points - either at Yabulu (the location of the Townsville Power Station) or at Mt Stuart near Townsville. The gas delivered to Queensland Nickel was delivered to a metering and delivery point at Yabulu and then via an underground pipe to Queensland Nickel's Refinery.
• [4] Of course, the transportation of gas in this way involves input of the gas at the southern end of the pipeline and then extraction of gas from the pipeline at the northern end. The gas in the pipeline at any one time comprises gas introduced into the pipeline by the customers, and what is called 'linepack'. Linepack is the quantity of gas owned by the Pipeliners[1] which needs to stay in the pipeline in order to enable the pipeline to operate under pressure.

• [5] In 2005, the Pipeliners entered into a gas transportation agreement (GTA) with Queensland Nickel for the transportation of gas on the pipeline.[2] It was a long-term agreement with an initial period of 15 years. The initial period was to expire in 2022.[3] The GTA provided for an option to extend for five years.
• [6] It is not in dispute that Queensland Nickel entered into the GTA with the Pipeliners in its capacity as manager of the Queensland Nickel joint venture and as agent for the joint venture participants, namely QNI Resources Pty Ltd (QNR) and QNI Metals Pty Ltd (QNM).
• [7] At the time the GTA was entered into Queensland Nickel was a subsidiary of BHP Billiton PLC. Sometime in 2009, the Refinery, as well as the shares in Queensland Nickel, were purchased from BHP Billiton by Mr Clive Palmer or entities associated with him. The joint venture participants, QNR and QNM were also transferred from the control of BHP Billiton to the control of Mr Palmer in 2009.
• [8] From 2005 until 2016, gas was transported pursuant to the GTA and Queensland Nickel paid invoices for that transportation of the gas. Of course, the gas introduced into the Moranbah end of the pipeline by the industrial customers was not physically the same as the gas extracted at the Townsville end. However, there were controls which ensured that the quality of the gas remained constant.
• [9] The GTA obliged the Pipeliners to reserve capacity in the pipeline for Queensland Nickel which gained a right to transport gas along the pipeline each day up to a maximum daily quantity expressed in gigajoules (GJ) or terajoules (TJ).[4]
• [10] The service charges which were to be paid by Queensland Nickel to the Pipeliners involved various components. One component, for example, was the Firm Forward Charge which comprised a tariff rate multiplied by the lesser of the Delivered Quantity of gas and the maximum daily quantity of gas (MDQ). In some situations the quantities of gas introduced into the pipeline by industrial customers such as Queensland Nickel differed from the quantity taken out. That caused what the GTA described as an 'imbalance'. There were charges for either positive or negative imbalances. More on those charges later.

• [11] On 18 January 2016, Queensland Nickel entered into voluntary administration. On 22 April 2016 liquidators were appointed to Queensland Nickel.[5]
• [12] Once Queensland Nickel was placed into liquidation, the Pipeliners looked to QNR and QNM to pay sums they said were owed under the GTA. Statutory demands were issued. The attempts by QNR and QNM to set aside the statutory demands were unsuccessful. QNR and QNM then paid certain 2016 invoices under protest. Those are what are described by the parties as the 2016 Invoices. The amount paid by QNR and QNM was $9,134,187.
• [13] The Pipeliners pursue what they say is owed under the GTA for invoices issued from January 2017 to 10 May 2021 (the Outstanding Invoices). The sum the Pipeliners seek is for the Outstanding Invoices is $26,611,755.[6] QNR and QNM counterclaim seeking to recover the amount of $9,134,187 they paid under protest in respect of the 2016 Invoices.
• [14] There were originally four broad issues, namely:

• [15] However, during the course of the hearing, two new issues were added,[8] namely:

(b) an issue about the calculation of compound interest in the event that the plaintiffs were entitled to a money judgment.

• [16] Each of those six issues is considered below.

• [17] There are two broad areas of disagreement about the interpretation of the GTA. The first is the meaning of the abbreviation 'QNI' where it is used in the GTA. That issue is not a decisive issue but a discussion of that issue is helpful because it identifies the parties, their roles and the operation of the GTA. The second broad issue concerns the proper interpretation of clause 41.6.3 of the GTA.

• [18] The parties argued about the meaning of the expression 'QNI' in the GTA.
• [19] The starting point is that the description of the parties at the commencement of the GTA is as follows:

(a) Enertrade (NQ) Pipeline No 1 Pty Ltd ABN 64 100 946 281 ('ENQP1') and Enertrade (NQ) Pipeline No 2 Pty Ltd ABN 60 100 946 263 ('ENQP2') both of Level 10, Comalco Place, 12 Creek Street, Brisbane, Queensland (collectively ENQP1 and ENQP2 are referred to as the 'Pipeliners' and each as a 'Pipeliner'); and

(b) Queensland Nickel Pty Ltd ABN 85 009 842 068 of Level 14, Riverside Centre, 123 Eagle Street, Brisbane, Queensland in its capacity as manager of the Queensland Nickel Joint Venture and as agent for and on behalf of the joint venture participants QNI Resources Pty Ltd ABN 14 054 117 921 ('QNR') and QNI Metals Pty Ltd ABN 56 066 656 175 ('QNM') (referred to as 'QNI').

• [20] It can be seen that, in the case of the Pipeliners, there are individual definitions or labels for the two individual participants and a group definition for those entities together. The individual definitions or labels are 'ENQP1' and 'ENQP2', and the group definition for both 'ENQP1' and 'ENQP2' is 'Pipeliners'.[9]
• [21] In the case of the Queensland Nickel joint venturers, the individual joint venturers are abbreviated to 'QNR' and 'QNM'. The abbreviation 'QNI' at the end of paragraph 1(b) is a little less clear. Queensland Nickel is described as a party to the GTA in its capacity as manager of the Queensland Nickel Joint Venture and as agent for and on behalf of the two joint venture participants, QNR and QNM. On that basis, the label 'QNI' could apply to QNR and QNM together, or it could refer to all three QNI entities, namely QNR, QNM and Queensland Nickel, or it could be intended to refer to Queensland Nickel only (albeit in its two capacities).
• [22] QNR and QNM contend for the last of those alternative interpretations, namely that the abbreviation 'QNI' refers to Queensland Nickel in its capacity as manager of the Queensland Nickel Joint Venture and as agent for and on behalf of the joint venture participants QNR and QNM.[10] In other words, they say the abbreviation 'QNI' is shorthand for Queensland Nickel in both its capacities, and it is not shorthand for the two joint venture participants QNR and QNM, or for all three entities, Queensland Nickel, QNR and QNM. The Pipeliners contended that, in the GTA the abbreviation was intended to refer to all three entities in accordance with some decisions of this court and the Court of Appeal during the litigation over the statutory demands.

• [23] QNR and QNM contend that their interpretation is supported by the following:

(a) Where the draftsperson has sought to refer to multiple entities, such as the reference to 'Pipeliners') the draftsperson has used the expression 'collectively' as in the first part of the heading/description of the parties quoted above;

(b) That is also the terminology used in a separate document, the Credit Support Deed,[11] signed contemporaneously;

(c) That interpretation makes sense in the context where it is Queensland Nickel that entered into the gas supply contracts for gas that is then transported by the Pipeliners by the 'firm forward haulage service' provided to Queensland Nickel.

• [24] Both parties contended that the terms of the Credit Support Deed supported their arguments about the interpretation of the GTA. Certainly, the court is entitled to have regard to, as an aid to interpretation, a document executed contemporaneously with the primary document and which forms part of the same transaction.[12] However, it is doubtful that the interpretation of the Credit Support Deed is of much assistance in interpreting the GTA. Queensland Nickel is not a party to that agreement and the abbreviation 'QNI' is expressly defined as Queensland Nickel.

• [25] Byrne SJA considered the interpretation issue at an earlier stage in this litigation when Queensland Nickel applied to set aside a statutory demand made by Pipeline No. 2.[13] His Honour was not willing to attach too much significance to interpretations based on grammar, or on the use of singular rather than plural expressions. His Honour decided that the language of clause 1(b) was clear enough: the expression 'QNI' referred to the entities named in the paragraph, that is Queensland Nickel and the joint venture participants for which it acted as agent - QNR and QNM.
• [26] Queensland Nickel appealed Byrne SJA's decision.[14] In the Court of Appeal Holmes CJ (with whom Fraser and McMurdo JJA agreed) broadly agreed with Byrne SJA that the abbreviation 'QNI' embraced all the entities referred to in the subclause.[15] Holmes CJ pointed out that clause 41.6.3 (discussed below) refers to obligations that cannot be performed severally by QNI which then become the joint liability of QNR and QNM. Her Honour took the view that the reference to the several performances of QNI's obligations was entirely inconsistent with the argument that QNI referred to only Queensland Nickel.
• [27] Holmes CJ took the view that clause 41.6.3 had no purpose if it were not to impose obligations and liabilities on QNR and QNM as members of QNI. It is certainly true that the evident intention of clause 41.6.3 is to impose liabilities on QNR and QNM - an aspect discussed in more detail below. However, clause 41.6.3 can be viewed as saying either:

(a) to the extent that an obligation cannot be performed severally (i.e. separately or individually) by the three entities comprising QNI, then QNR and QNM are to jointly perform that obligation; or

(b) to the extent that an obligation cannot be performed severally (i.e. separately or individually) by Queensland Nickel, then QNR and QNM are to jointly perform that obligation.

• [28] Her Honour also referred to clause 6 which required each 'QNI Participant' to remain creditworthy. Her Honour's view was that that reference to each 'QNI Participant' meant that the expression 'QNI' could not possibly have been limited to Queensland Nickel. However, as QNR and QNM point out, the expression 'QNI Participant' is defined in the GTA to mean 'QNR and QNM and their successors and assigns and each is referred to as a QNI Participant'.[16] QNR and QNM argue that that definition would be superfluous if QNI was intended to always refer to each of Queensland Nickel, QNR and QNM.[17]
• [29] The use of the expression 'QNI Participant' recognises that there are multiple entities on the QNI side of the transaction, and also that they have different capacities. Thus, the joint venture participants are QNR and QNM, at least for the time being, because the GTA contemplates that the number, identity, and percentage interests of the joint venture participants may change. The joint venture participants have a different capacity to Queensland Nickel which has a role as manager of the Queensland Nickel Joint Venture as well as agent for and on behalf of the joint venture participants.
• [30] That said, there is force in the Chief Justice's view that the draftsperson's use of the expression 'QNI Participant' is consistent with 'QNI' having a composite element. There is less force in the opposite view that the definition of 'QNI Participant' would be superfluous if 'QNI' was a composite expression. There is still a need to delineate the separate obligations of the joint venture participants. Indeed there is an importance in providing that the joint venture participants are obliged to stay creditworthy given the obligations in clause 27.1 to the effect that a QNI Participant's failure to pay any amount payable on the due date gives rise to certain rights.

• [31] On the other hand, QNR and QNM rely on clause 27.3 which provides that, in the event of a permanent closure of the QNI Plant, 'QNI' is required to give to the Pipeliners a certified copy of a resolution of the board of directors to permanently close the QNI Plant. That rather suggests that, at least at that point of the GTA, the expression 'QNI' is intended to refer to one corporate entity. Curiously, the expression 'QNI Plant' is defined,[18] but without any reference to the corporate entity that actually owns and operates the QNI Plant at Yabulu.
• [32] Clause 2.7(a) of the GTA also supports the view that 'QNI' means Queensland Nickel only. That clause provides that 'QNI' has the option to extend the term of this contract. Given that the contract was executed by Queensland Nickel and is the only contracting party for the three QNI entities, the likelihood is that in clause 2.7(a) the draftsperson was referring to Queensland Nickel possessing the option to extend - albeit on behalf of the joint venture participants.
• [33] Curiously, the front page of the GTA rather supports QNR and QNM's argument. The front page has this description in this format:

• [34] Clause 41.9 of the GTA contains a provision usually found in commercial contracts to the effect that the headings and notes in the contract are for convenience only and do not affect interpretation. It is doubtful that the title page qualifies as a 'heading or note', but it seems to me that the title page would have little or no weight in the interpretation exercise. A better guide to the interpretation of the agreement can be gained from the substantive provisions of the GTA.
• [35] Thus, there are conflicting and rather mixed indications of the proper meaning of the expression 'QNI' in the GTA.

• [36] The interpretations of the GTA adopted by Byrne SJA and by the Court of Appeal are highly persuasive.[19] And, it is important to remember that before Byrne SJA, and before the Court of Appeal, QNR was arguing that it was not bound by the GTA at all and that therefore the statutory demand should be set aside. That argument was a brave one because the GTA recorded that Queensland Nickel entered into the GTA on its own behalf and on behalf of QNR and QNM. By that stage, gas had been supplied to Queensland Nickel pursuant to the GTA for 12 years, and no evidence was led to the effect that Queensland Nickel was not in fact the agent for QNR and QNM.
• [37] The argument here is less radical. The real dispute here concerns the correct interpretation of each party's rights under a specific clause (clause 41.6.3). Indeed, neither party contended that there was anything decisive to this court's resolution of the issue of what entities are comprised by the expression 'QNI'.[20]
• [38] Byrne SJA explained that the GTA may not be an exemplar in drafting,[21] and the Chief Justice recognised the prospect that the use of the expression may be the product of clumsy drafting.[22] Certainly, the attention of the draftsperson may have been on recording the complex commercial deal rather than ensuring that there was a consistency of expression. The strong impression gained after undertaking this survey of the different parts of the GTA is that the expression 'QNI' is susceptible of different interpretations at different points in the agreement.
• [39] In any event, that issue concerning the abbreviation 'QNI' may not be particularly significant for two reasons. The first is that, as I have mentioned, neither party contended that the view the court takes of the draftsperson's use of the expression 'QNI' was decisive. That was because, and this is the second reason, the view one takes of the expression 'QNI' is subsidiary to the more important interpretation issues considered below.

• [40] QNR and QNM contend that, contrary to the Pipeliners' arguments, the primary obligation of the Pipeliners is not to provide a capacity to transport the gas, but rather an obligation to actually transport gas purchased from third parties and to deliver the gas to specified delivery points. Thus, QNR and QNM argue that Queensland Nickel owes a primary obligation to pay the Service Charges as specified by clause 5.4.
• [41] The submission emphasised by QNR and QNM is that:

The obligation on Queensland Nickel to pay the Service Charges does not arise by reason of cl 41.6.3 with [clause] 5.4 being merely explanatory. That cl 5.4 imposes the primary obligation to pay is clear from the fact that the machinery provisions relating to payments (cl 21 Billing and Payment) refer to the obligation to pay the various charges "referred to in clause 5.4" (cl 21.1(a)).[23]

• [42] Thus, paragraph 58 of the defence is in these terms:

No liability until performance by Queensland Nickel determined

58. In further answer, the defendants say as follows:

(a) to the extent cl 41.6.3 imposes obligations on the defendants, it does so only as a secondary obligation in the nature of a guarantee or surety; an essential precondition of which is the failure of performance by Queensland Nickel;

(b) to trigger the obligation in cl 41.6.3, there must be a failure to perform by Queensland Nickel;

(c) the plaintiffs have pursued Queensland Nickel, by proving in the liquidation of that entity;

(i) Proofs of debt lodged by the plaintiffs in the liquidation of Queensland Nickel dated 7 March 2016.

(d) if (which is denied) the defendants have a liability to guarantee the obligations of Queensland Nickel, it is not possible to ascertain the 'extent' (cl 41.6.3(a)) of any failure until:

(i) the liquidators of Queensland Nickel have adjudicated on the proofs of the debt; and

(e) There is no failure to perform on the part of Queensland Nickel until the above steps have been completed, with the effect that the defendants have no liability until such failure to perform has occurred.

Breach of cl 41.6.3 of the GTA gives rise to a claim in damages not debt

59. Even if (which is denied) the defendants are liable under clause 41.6.3 of the GTA the defendants deny that cl 41.6.3 imposes a primary obligation on the defendants to pay specified sums or debts to the plaintiffs under the GTA and say further that:

(a) to the extent cl 41.6.3 of the GTA imposes obligations on the defendants it does so only as a secondary obligation in the nature of a guarantee or surety arising from a failure by Queensland Nickel to perform an obligation under the GTA;

(b) as a matter of principle, and/or as a matter of the proper construction of cl 41.6.3 of the GTA, any breach of an obligation by Queensland Nickel to pay an amount to the plaintiffs results in a breach of the surety obligation on the defendants to 'see to it' that Queensland Nickel performed its obligation;

(c) the breach of that obligation on the part of the defendants gives rise to a claim only in damages (and not in debt);

(d) the plaintiffs bring a claim only in debt against the defendants, and have expressly disavowed pursuing any case (even in the alternative) against the defendants in damages;

That was the premises on the plaintiffs approach to the interlocutory application in North Queensland Pipeline No 1 Pty Ltd & Anor v QNI Resources Pty Ltd & Anor [2020] QSC 158.

(e) in the premises the defendants are not and were not liable to the plaintiffs for amounts claimed in the Amended Statement of Claim.[24]

• [44] Thus, it can be seen that QNR and QNM seek to characterise their obligations under clause 41.6.3 as 'secondary' obligations owed by QNR and QNM in the nature of a guarantee or surety. Therefore, it is argued, QNR and QNM only become liable in the event that Queensland Nickel fails to perform its 'primary' obligation. And, even then, any liability is limited to a right to sue for damages (rather for debt).
• [45] The Pipeliners argue that clause 41.6.3 imposes on QNR and QNM a primary liability to pay.[25] The Pipeliners contend that there are five separate reasons why clause 41.6.3 should be interpreted in that way.[26]
• [46] It is therefore necessary to resolve the proper interpretation of clause 41.6.3 of the GTA.

(a) to the extent that an obligation cannot be performed severally by QNI (an 'Integral QNI Obligation'), QNR and QNM shall be jointly liable to perform that Integral QNI Obligation; and

(b) all liability to pay, or cause to pay, an amount of money (including, for avoidance of doubt, liability to pay money in respect of failure to perform an Integral QNI Obligation) shall:

(i) while the Queensland Nickel Joint Venture exists between QNR and QNM and the aggregate of the percentage interests each such person holds in that joint venture is 100%, be borne by QNR and QNM severally (and not jointly or jointly and severally), according to the percentage interests which each holds from time to time in the Queensland Nickel Joint Venture which, at the date of this contract are:

(ii) otherwise, be borne by QNR and QNM jointly and severally.

• [48] The first observation that can be made about clause 41.6.3 is that the words of clause 41.6.3(a) in particular, make it clear that 'QNI' is there being spoken about as a distinct and separate entity from QNR and QNM. In other words, here the context demonstrates that the contract is referring to QNR and QNM as being jointly liable to perform an obligation owed by QNI, that is, Queensland Nickel.
• [49] It would make no sense for the abbreviation 'QNI' here to be referring to all three entities (Queensland Nickel, QNR and QNM) because the effect would be that, if an obligation cannot be performed severally by the three entities, then two of those entities, QNR and QNM, who were already obliged to perform the obligation, are required by the clause to be jointly liable to perform that QNI obligation.
• [50] The second observation concerning clause 41.6.3 is that it is not helpful to try to characterise the obligations under that clause as primary or secondary. That invites an interpretation of the GTA which gives some obligations priority over others. The GTA itself does not, at least in an explicit way, adopt such a tiered system of obligations.
• [51] The third observation is that clause 41.6.3(a), that is the first limb of clause 41.6.3, envisages that QNR and QNM shall be jointly liable to perform an obligation that cannot be performed by Queensland Nickel. In other words, QNR and QNM are jointly liable if Queensland Nickel is unable to perform. Thus, the liability of QNR and QNM is contingent on Queensland Nickel being unable to perform all or part of its obligations.
• [52] Fourth, it can be seen that clause 41.6.3(b), the second limb, provides that QNR and QNM are to bear responsibility for a proportion of their liability in accordance with the percentage interest which each holds from time to time in the Queensland Nickel Joint Venture. Thus, at the time of the execution of the GTA, the proportion was to be split by QNR and QNM in the proportion of 80:20 respectively. That was to be the position for so long as their joint venture existed and the percentage interests were apportioned in that way. If the joint venture altered the percentage interests held by each then the apportionment under clause 41.6.3 was to be commensurately altered. And if, for some reason, the joint venture ceased to exist at the time the particular obligation arose, then QNR and QNM were required to share liability under the clause jointly and severally.

134. First, cl 41.6.3(b) is the operative clause regarding liability for payment. The language of cl 41.6.3(b) indicates that where liability to pay money is concerned (including in respect of the failure of an 'Integral QNI Obligation') cl 41.6.3(b) covers the field and cl 41.6.3(a) has no application.

135. Secondly, cl 41.6.3(b) is expressed in absolute terms (i.e. 'all liability to pay, or cause to pay, an amount of money shall ... be borne by [Resources] and [Metals] ...') and there is no qualification on the words 'all liability to pay', such as by reference to a requirement that Queensland Nickle must first fail to pay the relevant amount.

136. Had the parties intended the Defendants' liability to be contingent on Queensland Nickel's failure to pay, they would have used express language like that in cl 41.6.3(a). Instead, cl 41.6.3(b) is framed in absolute terms and is not conditioned on any anterior failure to pay. Those features are suggestive of the parties' objective intention that the Defendants would be primarily liable.

137. Thirdly, apart from cl 41.6.3, no other clause in the GTA address liability to pay. There is no provision in the GTA to the effect that Queensland Nickel has a liability to pay and that the Pipeliners must look to it for payment.

138. To the extent clauses like cl 5.4 state that 'QNI must pay' certain charges, such wording does not indicate where the actual liability for payment falls. Clause 41.6.3(b) explicitly addresses this. Clause 5.4 simply explains that an obligation to pay falls on the 'QNI' side of the contract.[27]

• [59] On the other hand, QNR and QNM argue that:

28. It is clear that a parties' contractual obligation to pay a fixed sum can be construed as giving rise to an action for damages.

29. In Sunbird Plaza Pty Ltd v Maloney (1987) 166 CLR 245 at 256, Mason CJ endorsed Lord Reid's analysis that there are two types of guarantee: (i) a promise to pay a sum of money which is enforceable if the debtor does not, and (ii) a promise by the guarantor to ensure the principal debtor's performance. The latter type of promise gives rise to an action for damages for breach of contract against the surety, and not a debt.

30. Assuming cl 41.6.3 does not impose a liability on QNR and QNM, the nature of the liability imposed on QNR and QNM includes a 'liability to pay money in respect of a failure to perform an Integral QNI obligation.' It is clearly an obligation of the second kind contemplated by Mason J in Sunbird as a promise by the guarantor (in this case QNR and QNM) to ensure the principal debtor's (in this case Queensland Nickel) performance.

31. In those circumstances the defendants are only liable in damages. In circumstances where on the basis of a deliberate forensic decision the Pipeliners have elected to abandon any claim in damages against the defendants (see Defence [59]), their claim can be dismissed, and the amount of the 2016 Invoices ought to be repaid by way of restitution on cross-claim.[28]

• [60] As explained, it is clear that clause 41.6.3 has two limbs. Both must be given effect.[29] They operate differently. The first limb operates if there is an obligation, which need not be an obligation to pay money, that cannot be performed by Queensland Nickel. In that event QNR and QNM are jointly liable to perform that obligation. The second limb operates if there is a liability to pay money. All liabilities to pay money under the GTA are to be borne by QNR and QNM in their designated proportions under their joint venture agreement or, if the joint venture does not exist, by them jointly and severally.
• [61] Thus, the likely commercial purpose of clause 41.6.3 from the point of view of the Pipeliners was to give the Pipeliners something akin to an assurance. For all money obligations QNR and QNM were liable in their designated proportions (e.g. 80:20). But non-monetary obligations are not so easily divided. For example, pursuant to clause 10 of the GTA Queensland Nickel is obliged to give to the Pipeliners annual, monthly and weekly nominations of the quantities of gas to be delivered at each delivery point. And so, for the non-monetary obligations of Queensland Nickel, the parties agreed that, in the event that Queensland Nickel was unable to perform those obligations, QNR and QNM would become jointly and severally liable to perform those non-monetary obligations.[30]
• [62] From the point of view of Queensland Nickel, QNR and QNM it also makes commercial sense that the manager, Queensland Nickel would be primarily responsible for the non-monetary obligations, and that the joint venturers themselves would bear the monetary costs in the proportions they held from time to time.
• [63] It is true that the first limb of clause 41.6.3 has the hallmarks of a guarantee. The promise by QNR and QMN is that they shall be jointly and severally liable for the obligations of Queensland Nickel to the extent that an obligation cannot be performed severally by Queensland Nickel. In that sense it resembles the general nature of a guarantee described by Jordan CJ in Jowitt v Callaghan.[31]
• [64] However, the focus in this case is the second limb of clause 41.6.3. The plaintiff seeks payment under the second limb.[32] The express words of the second limb do not bear the character of a guarantee. The second limb expressly requires that all liabilities to pay amounts of money under the GTA are to ' in their designated proportions. That promise by QNR and QNM, or at least by Queensland Nickel on behalf of QNR and QNM, is not a contingent promise that QNR and QNM shall be liable for the obligations of Queensland Nickel in the event that, or to the extent that, an obligation of Queensland cannot be performed by QNI. It is a direct attribution of liability.

• [66] Can those 'secondary' promises be implied? Or, put another way, despite the express words, is it possible to construe the second limb as, in reality, a guarantee by QNR and QNM of Queensland Nickel's obligations?[34]
• [67] The operative part of the second limb is that 'all liability to pay...shall...be borne by QNR and QNM severally'. One possible argument is that those words assume that there are existing liabilities under other clauses of the GTA so that, in substance, the clause is a guarantee by QNR and QNM of the monetary liabilities of Queensland Nickel under the contract.
• [68] There are some significant problems with that interpretation of the second limb. First, the substance of a guarantee is a contract between A and B that B will secure the performance of C.[35] The promise here is not of that character. There is not only no reference to the obligations of Queensland Nickel (i.e. C) but there is no reference to QNR and QNM securing Queensland Nickel's performance or becoming liable in the event that Queensland Nickel does not perform.
• [69] Second, as the Pipeliners point out in their submissions,[36] the wording of the second limb is expressed in absolute terms as 'all liability to pay'. The use of the word 'all' suggests that what was intended was that all liabilities to pay 'an amount of money' under the GTA were to be paid by QNR and QNM. That is in contradistinction to the introduction to the first limb which sets out a precondition to the liability of QNR and QNM, namely Queensland Nickel's inability to perform its obligation.
• [70] That language of 'all liability to pay' does not exclude the liability of Queensland Nickel for its obligations.[37] It simply specifies that all of the monetary obligations of the service acquirers are to be assumed 'directly' by QNR and QNM in their relevant proportions.

• [71] All parties accepted that the court should interpret this commercial contract bearing in mind the principles set out in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd:

[46] The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.

[47] In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.

[48] Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning.[38]

• [72] Viewed objectively and applying those principles, the text of the second limb in clause 41.6.3 makes plain that 'all liability to pay...shall...be borne by QNR and QNM severally...'. In other words, the text speaks of QNR and QNM having a direct liability to pay. The text would not signal to a reasonable businessperson that QNR and QNM only became liable in the event that Queensland Nickel did not pay.
• [73] The context does not suggest a different interpretation.
• [74] Nor is there an ambiguity in the language, let alone an external circumstance which QNR and QNM point to as requiring a different interpretation.
• [75] In the course of the earlier statutory demand proceedings Byrne SJA decided that clause 41.6.3 did in fact impose direct liability on QNR and QNM:

The notice of statutory demand is founded upon the notion that clause 41.6.3 makes Resources [i.e. QNR] directly liable to the pipeliners for the payment of the moneys which "QNI" is otherwise obliged to pay under the terms of the GTA. That interpretation of the effect of clause 41.6.3 accords with the language of the document and its evident commercial purposes. It has the practical consequence, in the present circumstances where there is no dispute with respect to quantum, of obliging Resources to pay its prescribed 80% share of the charges claimed.

The inclusion of clause 46.1.3 [sic, 41.6.3] in the GTA makes no sense unless the provision was intended to affect the contractual relations between Resources and the two pipeliners, not merely relations between the joint venture participants inter se or between one or other of them and Queensland Nickel - arrangements which would be expected to be the subject of the joint venture agreement and such other arrangements as those parties may choose to conclude.

Clause 41.6.3 has the effect for which the pipeliners contend and imposes the burden to pay the amount claimed.[39]

• [76] The decision of Byrne SJA was upheld on appeal.[40]
• [77] It follows that, for those reasons, I accept the Pipeliners submission that clause 41.6.3(b) should be interpreted as imposing a direct obligation on the QNR and QNM to pay monies under the GTA, or at least an obligation that is not contingent on Queensland Nickel's failure to pay.

• [78] If I am wrong in that conclusion there is an issue as to the consequences of the opposite interpretation of clause 41.6.3(b) of the GTA. Even if it was necessary to prove that Queensland Nickel failed to perform its monetary obligations under the GTA, it seems beyond argument that Queensland Nickel did in fact fail to pay the 2016 Invoices, which QNR and QNM then paid under protest in 2018. The Outstanding Invoices remain outstanding. The precondition to the liability of the guarantors has been satisfied.
• [79] QNR and QNM argue that:

(a) an essential precondition to the liability of QNR and QNM is the failure of performance of Queensland Nickel;

(b) there must be a failure to perform by Queensland Nickel requiring the Pipeliners to first pursue Queensland Nickel;

(c) the Pipeliners have pursued Queensland Nickel by proving in the liquidation of that entity;

(d) if (which QNR and QNM deny) the defendants have a liability to guarantee the obligations of Queensland Nickel, it is not possible to ascertain the 'extent' of any failure until the liquidators have adjudicated on the proofs of debt and made a payment to creditors;

(e) there is no failure to perform on the part of Queensland Nickel until the above steps have been completed.[41]

• [80] There is no proper basis for the argument that the indebtedness under clause 41.6.3 of the GTA arises only when the liquidators have adjudicated on the proofs of debt and have made a payment to creditors.
• [81] First, clause 41.6.3 does not contain such a provision.
• [82] Second, the reference to the 'extent' of an obligation is a reference to the first limb of clause 41.6.3. As explained, the Pipeliners sue on the second limb.
• [83] Third, even if clause 41.6.3 could be construed as requiring proof that Queensland Nickel has been unable to perform its payment obligations under the GTA, the fact is that:

(a) Queensland Nickel failed to comply with its obligations in respect of the 2016 Invoices (which QNR and QNM paid in 2018 under protest);

(b) Queensland Nickel failed to pay the Outstanding Invoices which cover the period from 1 January 2017 to 30 April 2021; and

(c) Queensland Nickel is in liquidation - and is deemed to be insolvent.

• [84] Those facts would enable the court to conclude that Queensland Nickel is unable to pay this debt. Certainly, there is no evidence to suggest that Queensland Nickel is able to pay its debts but refuses to do so.[42]
• [85] Fourth, even if one ignores the second limb of clause 41.6.3, the requirement that there be evidence of the extent to which an obligation cannot be performed cannot be interpreted in such an onerous way as to require the Pipeliners to prove that they have exhausted all avenues for recovery. The focus of the first limb is the extent to which the obligation cannot be performed. For a monetary obligation, the failure to comply with that obligation occurs when the money is not paid on the day it is due. Of course, if Queensland Nickel only paid part of the amount due then the extent of the obligation not performed is the amount unpaid on the due date. A reasonable businessperson can hardly be taken to have understood that the first limb of clause 41.6.3 required that, as a precondition to liability, it was necessary for the Pipeliners spend months, or even years, pursuing and exhausting all of its execution and liquidation rights against Queensland Nickel.
• [86] Fifth, the Pipeliners submit another interpretation of clause 41.6.3(a) which is also preferrable to the onerous interpretation adopted by QNR and QNM:

Clause 41.6.3(a) states that: "to the extent that an obligation cannot be performed severally by QNI...", Resources and Metals would then be jointly liable for that obligation. In other words: to the extent that an obligation cannot be separated out into parts that Resources can perform and parts that Metals can perform (so that they can be performed by them severally), they are both then jointly liable for the whole obligation. That is, they are both liable for the performance of the whole obligation and performance by one of them is performance by both of them.[43]

• [87] At paragraph [31] of their revised closing submissions QNR and QNM make this submission:

QNR/QNM submit that the liability imposed by GTA 41.6.3 is secondary to the obligation of Queensland Nickel. It is in the nature of a guarantor's obligation, that only arises following a breach by Queensland Nickel of its primary obligation under the GTA. It is further submitted that the nature of the secondary obligation in this case is such as to give rise only to a claim in damages for breach of Queensland Nickel's failure to perform the contract (even if the damages may be quantified by reference to fixed sums). Following earlier interlocutory proceedings, the Pipeliners elected to run their case (and resistance to the counter-claim) on the basis that the defendants were only liable for a debt, and accepted that if the defendants are liable in damages their claim would fail (see Defence [59(d)]).

• [88] That submission appears to rest on the rather controversial footing that the Pipeliners are restricted to a claim against the guarantors in damages rather than in debt. That footing is unsound. As the Pipeliners submit, Australian courts have long recognised that a creditor can sue a guarantor in debt. See, for example, the judgment of Mason CJ in Sunbird Plaza Pty Ltd v Maloney:

The respondents' promise was that the purchaser would perform its contractual obligations including the payment of all moneys payable under the contract. The promise falls within the second class discussed above, except, perhaps, in so far as the promise relates specifically to the payment of all moneys payable. In that respect the promise might well fall within the first category. Accordingly, if the balance of the purchase price had become payable, and had not been paid by the purchaser, the vendor might well have been entitled to sue the respondents for a liquidated amount, rather than claim damages for breach of contract. As it is, the balance of the purchase price did not become payable.[44]

• [89] And, the Pipeliners' counsel referred me to the decision of the Queensland Court of Appeal in Thomas v Balanced Securities Ltd where White JA, with whom Margaret Wilson AJA and Martin J agreed, explained: 'The nature of proceedings to enforce a guarantee, if the principal transaction guaranteed is a debt or liquidated sum is for a money sum and is appropriately framed in debt.'[45]
• [90] It follows that, even if the court were to accept that clause 41.6.3 operated as a guarantee, the Pipeliners were entitled to sue for the debt owed by Queensland Nickel.

• [91] QNR and QNM point out that Queensland Nickel went into administration on 18 January 2016 and liquidators were appointed on 22 April 2016. On 3 March 2016, Queensland Nickel was replaced by Queensland Nickel Sales Pty Ltd (QNS) as 'Manager' of the Queensland Nickel Joint Venture.[46] QNS was unable to secure appropriate licences. On that basis, explained in more detail below, QNR and QNM argue that they are entitled to rely on the force majeure clause in the GTA.

• [92] The force majeure clause in the GTA starts with a qualifying clause (clause 20.1):

(a) The event occurred without the fault or negligence of a party ("Affected Party"); and

(b) The Affected Party could not have prevented the event by acting as a Reasonable Prudent Operator and using Good Engineering and Operating Practices.

• [93] It can be seen that the focus of the clause is an 'event'.
• [94] Clause 20.2 gives examples of the 'events' that constitute Force Majeure Events, provided they comply with clause 20.1:

Without limiting clause 20.1, the following are examples of events that are Force Majeure Events provided they are of the nature specified in clause 20.1:

(a) force of nature, including without limitation earthquakes, floods, washouts, landslides, lightning, storms and the elements;

(b) fire, explosion, riots, civil commotion, malicious damage, sabotage, act of a public enemy, act of terrorism, war (declared or undeclared), blockade, revolution, radioactive contamination, toxic or dangerous chemical contamination;

(c) action or inaction by, or orders, judgments, directions, rulings, decisions or enforcement actions of, any court, Government Body, tribunal or other authority (including denial, refusal or failure to grant any authorisation despite timely reasonable endeavours to obtain same);

(d) strikes, lockouts, industrial and/or labour disputes, work bans, blockades or picketing;

(e) mechanical or electrical breakdown and failure of plant, equipment, pipelines or transmission lines; and

(f) situations of emergency relating to the Pipeline, or to any gas processing plant, gas production field or any other facilities that may affect QNI's deliveries of gas into or out of the Pipeline, being a risk of injury to or death or any person or damage to property (including the Pipeline) or the environment.

• [95] Clause 20.3 identifies events that are not Force Majeure Events, including changes in economic conditions.

QNR & QNM's Argument About the Force Majeure Event

(a) For Queensland Nickel to operate its refinery it was necessary, among other things, for it to hold a number of licences including an Environmental Authority and a Major Hazard Facility Licence (the Licence);

(b) On 3 March 2016, after Queensland Nickel was placed into administration, Queensland Nickel was replaced as 'Manager' of the Queensland Nickel Joint Venture by QNS;

(c) QNR and QNM then sought the transfer of the Licence from QNI to QNS;

(d) QNR and QNM were unsuccessful in effecting that transfer of the Licence;

(e) By a force majeure notice dated 10 March 2016 QNR and QNM relied on the following as a force majeure event:

action or inaction by, or orders, judgments, rulings, decisions or enforcement actions of, any court, Government Body, tribunal or other authority (including denial, refusal or failure to grant any Authorisation despite timely reasonable endeavours to obtain same);[47]

(f) By a further force majeure notice dated 14 July 2016 QNR and QNM further explained that the Licence to operate a Major Hazard Facility issued to Queensland Nickel by the relevant government body had not been formally transferred to the successor manager of the Queensland Nickel Joint Venture, and consequently the Yabulu Refinery could not be operated.

• [97] And so, the submissions for QNR and QNM conclude:

[40] Mr Wolfes' evidence (at [39]) is clear, "the defendants attempted to appoint QNS as the Successor Manager to operate the refinery". The defendants went so far as to commence proceedings against Queensland Nickel to seek the transfer of, among other things the licences from Queensland Nickel to QNS, but were unsuccessful at first instance: see QNI Resources Pty Ltd v Park [2016] QSC 222; 116 ACSR 321, and on appeal: see QNI Resources Pty Ltd v Queensland Nickel Pty Ltd (in liq) [2017] QCA 167.

[41] In those circumstances both the initial inability to have the licence transferred to QNS and the subsequent judgment to that effect preventing the defendants from obtaining the licences fall within the definition of a force majeure event in cl 20.2(c) of the GTA.

[42] As a result of the event of force majeure none of Queensland Nickel, QNR and QNM were able to operate the Refinery (which was the sole purpose for needing the gas transported by the Pipeliners), and were unable to perform their obligations under the GTA to pay the Pipeliners.[48]

• [98] Clause 20.4(a) provides that, if a party becomes aware of any matter likely to constitute a Force Majeure Event which prevents it from performing an obligation under the GTA (defined as, the 'Affected Obligation'), that party must give notice of that fact and provide relevant particulars including particulars of the event and 'what the Affected Obligation is.'[49]
• [99] Clause 20.4(b) then provides that, if a Force Majeure Event occurs and once the party affected has given notice, the Affected Obligation is 'suspended' until that party is able, making reasonable efforts, to perform the Affected Obligation.
• [100] Clause 20.5 then provides as follows:

If QNI Services are curtailed in accordance with clause 20.4, QNI's Service Charges will, subject to clause 5.13, be unchanged, but the Pipeliners will record the actual quantities of gas received and delivered on behalf of QNI during the Suspension Period. Subject only to clause 5.13 in relation to a Force Majeure Event affecting the Pipeliners, QNI's obligation to pay charges to the Pipeliners will not be suspended, reduced, or otherwise affected by a Force Majeure Event.

• [101] It will be necessary to return to that wording. However, the clear intention is that a force majeure event will not suspend Queensland Nickel's obligation to pay charges under the GTA.

• [102] One difficulty is identifying the 'event' which QNR and QNM say comprises the Force Majeure Event under clause 20.1 of the GTA. QNR and QNM contend that the Force Majeure Event comprises both the initial inability to have the Licence transferred to QNS, and the subsequent judgments of the court preventing the defendants from obtaining the Licence. Those two elements are said to be a combined 'event' which falls within the definition of a Force Majeure Event in clause 20.2(c). In other words, QNR and QNM rely on their inability to transfer the Licence from Queensland Nickel to QNS.
• [103] However, assuming that there was an inability to affect the transfer of the Licence, there are some curious aspects to the argument. It will be recalled that Queensland Nickel entered into the GTA as joint venture manager and as agent for QNR and QNM. Queensland Nickel held the relevant Licence at least until it was placed into administration. The placing of Queensland Nickel into administration meant that QNR and QNM took steps to replace Queensland Nickel with QNS as the joint venture manager. The difficulty transferring the Licence to the new manager means that, on one view, the Force Majeure Event is said to be constituted by a sequence comprising one contracting party's insolvency, and then its decision to transfer the management of the joint venture to another party, and then an inability to transfer the licence to operate its principal asset to the new management entity.
• [104] Thus, the possibilities are that the 'event' could be:

(b) the decision by QNR and QNM that QNS should replace Queensland Nickel as the joint venture manager;[50]

(c) the fact that QNR and QNM were unsuccessful in effecting that transfer of the Licence to QNS, or at least the securing of a new licence in favour of QNS; or

• [105] QNR and QNM argued that the relevant event was step (c) above.[51] However, there is something quite odd about the idea that the QNR and QNM can select one of three necessary elements in that sequence and ignore the others. And, it does so in circumstances where the objective was to replace Queensland Nickel, the contracting party, with another entity. Put another way, QNR and QNM argue that Queensland Nickel, the contracting party, was unable to effect a transfer or a divestiture of all of its interest under the GTA and that constitutes a Force Majeure Event.
• [106] Another related oddity is that clause 20.4 provides a regime which gives a contractual right to a party who, by reason of the Force Majeure Event, cannot do something that it is required to do under the GTA. That party can give a notice and then benefit from a suspension under clause 20.5. However, if the 'party' taking advantage of that contractual right is Queensland Nickel then, how is it that the inability to transfer the Licence has caused Queensland Nickel to fail to carry out its obligations under the GTA? In reality, it is the insolvency of Queensland Nickel that has impaired its ability to discharge its obligations under the GTA.
• [107] If the 'party' taking advantage of the contractual right is QNR and/or QNM, then how is it that the inability to secure or transfer the Licence to the new manager has caused QNR and/or QNM to fail to carry out their obligations under the GTA?
• [108] Suffice it to say that these issues were not fully canvassed before me, the force majeure clause is surprisingly broad, and the parties were content to argue the case on other grounds discussed below.

• [109] Both parties accept that the Force Majeure Event can only be a Force Majeure Event under clause 20.1 if the event occurred without the fault or negligence of the party claiming the benefit of the clause. However, the parties took contrasting positions regarding the onus of proof.[52]
• [110] QNR and QNM pleaded 'circumstances amounting to force majeure pursuant to clause 20 of the GTA.'[53] In my view, having pleaded reliance on the force majeure clause, it was QNR and QNM that were required to discharge the onus of proof by showing that a Force Majeure Event had occurred.[54]
• [111] In any event, the evidence does not establish that the 'event', which QNR and QNM contend was its unsuccessful attempts to secure the Licence in favour of QNS, occurred without the fault or negligence of QNR and QNM. There is no evidence that QNR and QNM, or QNS, or QNR and QNM on behalf of QNS, applied to the regulator for the Licence. There is no evidence as to why the Licence was refused, or whether any attempts were made to satisfy the regulator of its concerns.
• [112] Presumably QNR and QNM rely on their inability to obtain a licence for QNS under section 578 of the Work Health and Safety Regulation 2011 (Qld) or on their inability to secure a transfer of the Licence under section 600 of those regulations. Thus, it is necessary to explain how those regulations operate.
• [113] In the case of an application for a licence the applicant is required to lodge an application in the way and in the form approved by the regulator.[55] The regulator must grant the application for the Licence if it is satisfied that the application has been made under this regulation, the safety case for the facility has been prepared under Part 9.3, Division 4, the operator is able to operate the major hazard facility safely and competently, and the operator is able to comply with any conditions that will apply to the Licence. And the regulator may refuse to grant a licence if becomes aware of circumstances that satisfy it that the operator or officers of a corporate operator are not suitable persons to exercise management or control over the major hazard facility. The regulator must refuse an application if satisfied that the operator has given information that is false or misleading or if it has made any material omissions of information. The application is required to be decided within 6 months and a proposed refusal is to explained by reasons. There is an opportunity to make submissions.

(a) The facts set out in a letter from QNR and QNM to the Pipeliners dated 14 July 2016;[66] and

(b) QNR and QNM's pursuant of litigation against Queensland Nickel (which was under administration and then in liquidation) to seek the transfer of, among other things the Licences from Queensland Nickel to QNS, but were unsuccessful at first instance: see QNI Resources Pty Ltd v Park[67], and on appeal: see QNI Resources Pty Ltd v Queensland Nickel Pty Ltd (in liq).[68]

• [120] It is necessary to deal with both aspects.

• [121] Mr Wolfe's letter of 14 July 2016 advises that:

The license to operate a Major Hazard Facility (MHF) issued to QN by Hazardous Industries and Chemicals Branch of Workplace Health and Safety Queensland is yet to be formally transferred to the successor manager of the Queensland Nickel Joint Venture. QNI is prohibited from operating the Yabulu Refinery without a MHF license.

• [122] The use of that language is curious, particularly in a letter that was relatively important and can be taken to have been carefully drafted. To say that 'the Licence is yet to be formally transferred' is merely an assertion that no transfer of the Licence had been completed. There is no claim that an application had actually been made, or that an application was being pursued, or (more significantly) that the transfer was being held up by government inaction.
• [123] The letter continued:

The Environmental Authority EPPR009409 issued to QN [Queensland Nickel] by the Department of Environment and Heritage Protection was, subsequent to 10 March 2016, formerly [sic] transferred to the successor manager of QNI.

• [124] Thus, the letter recorded that the Environmental Authority had been transferred.[69]
• [125] The letter stated that there were 'instruments' that Queensland Nickel (in liquidation by this stage) had refused to transfer to the successor manager and that Queensland Nickel had refused to transfer to the successor manager title in the various property of the Queensland Nickel Joint Venture. Mr Wolfe stated that the dispute with the administrators over those instruments and property was now being litigated in the Supreme Court and he attached a copy of the statement of claim.
• [126] Mr Wolfe concluded his letter in this way:

Lamentably, we were left with no alternative but to litigate in order to resolve this impasse. The likely duration of the litigation is difficult to assess.

We can assure you that all reasonable efforts have been made to mitigate the effect of the events and circumstances constituting the Force Majeure.

We request your acknowledgment and acceptance of the Force Majeure Event in due course.

• [127] The letter, in my view, provides no support for the argument that the 'event', namely QNS' non-acquisition of the Licence, occurred without the fault or negligence of QNR and QNM. It is distinctly not evidence of any reasonable attempts to secure the Licence. At best, the letter is evidence that, by 14 July 2016, the Licence had not been obtained by QNS.

• [128] The Supreme Court proceedings were described by Bond J as a question to whether His Honour should exercise his discretion to grant QNR, QNM and QNS leave to proceed against Queensland Nickel, a company in liquidation.[70] His Honour stated that the critical issue was whether the applicants had persuaded him that there was a serious question to be tried as to their entitlement to the relief they have sought in a proposed statement of claim.
• [129] The claims in respect of which leave to proceed was sought were claims for:

(a) a declaration that certain call notices purportedly issued by Queensland Nickel were not notices validly issued in accordance with the joint venture agreement;[71]

(b) a declaration that any property held in the name of Queensland Nickel was joint venture property within the meaning of the joint venture agreement;

(c) a declaration that Queensland Nickel did not have any beneficial rights to or in the joint venture property; and

(d) an order that, in accordance with cl 5.6(d) of the joint venture agreement, Queensland Nickel transfer any such property to QNS.[72]

• [130] Thus, at least one target of the litigation was the joint venture property, namely:

(c) 'all other rights, titles, interests, claims and benefits held or acquired from time to time, directly or indirectly, for the purposes of the Joint Venture'; and

(d) 'all other property of whatsoever kind and wheresoever situate (including, without limitation, transportation, port and other service facilities, raw materials, work in process, stores, insurance proceeds, choses in action and rights and benefits conferred by or pursuant to any agreement hereafter entered into at any time for the purposes of the Joint Venture) from time to time hereafter held, constructed or acquired for the purposes of the Joint Venture'.[73]

• [131] Bond J stated that the term 'joint venture property' would necessarily encompass:

(b) monies received or receivable from the sale or other exploitation of those products;

(c) the benefit of the various contracts, leases and licences which a working Refinery would generate; and

(d) real and personal property held or used for joint venture purposes.[74]

• [132] Under the joint venture agreement all of that property was beneficially owned by the two joint venturers, QNR and QNM, as tenants in common in proportion to their interest in the joint venture (i.e. 80:20).[75]
• [133] It is not clear whether His Honour's reference to 'licences' would include a Major Hazard Facility Licence issued by the Work Health and Safety regulator. Licences of that type may or may not have some commercial value and may or may not be fairly characterised as property.[76] However, given the wide definition of 'joint venture property' it is necessary to assume that the Major Hazard Facility Licence is comprehended by the expression 'joint venture property'.
• [134] In its proposed statement of claim QNR, QNM and QNS pleaded that Queensland Nickel held property legally owned by QNR and QNM. That property was said to comprise:

(a) cash in a number of bank accounts with National Australia Bank in the name of Queensland Nickel;

(b) cash in the form of several term deposits with National Australia Bank and Bank of Queensland;

(c) amounts receivable from customers in respect of products sold;

(d) products located at the Refinery awaiting sale and product in transit to customers where title had not yet passed to the customer;

(e) real property in the name of Queensland Nickel;

(f) personal property in the custody of Queensland Nickel including more than 40 motor vehicles; and

(g) the benefit of various contracts, leases and licences to which Queensland Nickel was party.[77]

• [135] Plainly, then, the object of the proposed proceedings was for QNS to assume ownership and control of the assets of the business for QNR and QNM.
• [136] His Honour refused the application for leave to proceed because Queensland Nickel had, at the least, a proprietary or beneficial interest in the joint venture property to the extent of its right to be indemnified for joint venture expenses properly incurred. For that reason, QNR, QNM and QNS did not persuade His Honour that there was a serious question to be tried as to their entitlement to the relief they proposed to seek against Queensland Nickel.
• [137] An appeal failed.[78] In dismissing the challenges to the exercise of Bond J's discretion, Gotterson JA (with whom Douglas and Applegarth JJ agreed) said the dismissal of the appeal would not prejudice a grant of leave to proceed in respect of such a differently framed statement of claim.[79]
• [138] Does that litigation assist QNR/QNM's argument that they made reasonable but unsuccessful attempts to secure the Licence? For a number of reasons, the litigation does not assist.
• [139] First, the litigation did not concern the transfer of the Licence - at least in any direct sense. QNR, QNM and QNS sought to prosecute a claim for all of the assets held by Queensland Nickel. A wide variety of assets were sought. The joint venture assets that were sought may have comprehended the Licence. But the Major Hazard Facility Licence was not specifically sought in the litigation.
• [140] The submissions on behalf of QNR and QNM asserted that they 'went so far as to commence proceedings against Queensland Nickel to seek the transfer of, amongst other things the licences from Queensland Nickel to QNS'.[80] In my view the evidence is more diffuse than that. They sued for all of Queensland Nickel's assets, and the Licence may have been comprehended by that suit.
• [141] QNR and QNM's submissions went even further than the submission quoted above. They contended that:

...it is difficult to see what facts the Pipeliners could point to as giving rise to fault or negligence on the part of QNR and QNM, in failing to have the Licences transferred to QNS (or some other entity) to operate the Refinery. To the contrary, they have demanded the transfer of those licences, commenced proceedings to seek to have the Licences transfers (sic, transferred), and were ultimately unsuccessful.[81]

• [142] As explained, the import of that submission is inaccurate. There was no evidence of any specific demand for the transfer of the Licence. And there was no proceeding that expressly sought the transfer of the Licence. Instead, there was a more ambitious, but less targeted, proceeding that sought all of Queensland Nickel's assets.
• [143] Second, assuming that the Licence was a prize that was sought by those conducting the litigation, there is no way of knowing the proportionate value of that prize. It may be, for example, that the principal target of the litigation was the cash in bank accounts and the real property, and that the Licence had little or no real value given the ability to seek a fresh licence (see below). It might be thought that the proportionate value of the Licence is not of great significance. However, the context here is that QNR and QNM argue that they made reasonable, but unsuccessful, attempts to secure the Licence. That argument lacks force if the attempts to secure the Licence were merely incidental or coincidental to litigation that had other primary targets.
• [144] Third, as explained above, the Major Hazard Facility Licence could be either transferred or issued afresh by the regulator. Presumably a transfer would require the signature of the transferor, Queensland Nickel. But, if that avenue were blocked, why would QNR and QNM not pursue a fresh licence? Certainly, there is no evidence of an application for a fresh licence. And there is no explanation as to why a fresh licence was not pursued. Of course, it may be that the failure to secure the other Queensland Nickel assets made the application for a fresh licence uncommercial. If that were the case it does not assist QNR/QNM's argument that they made reasonable but unsuccessful attempts to secure the Licence.
• [145] Fourth, the application before Bond J was an application for leave to proceed. Having failed to obtain leave, there is no evidence to suggest that QNR and QNM then applied for a fresh licence or otherwise prosecuted its claim for the Licence. And, of course, the Court of Appeal left open the prospect of differently pleaded claim.
• [146] For those reasons, I am not satisfied on the balance of probabilities that the Force Majeure Event, namely the failure to secure the Licence, occurred without fault or negligence. There is no evidence of the prosecution of an application for a licence, or of the prosecution of a transfer of the Licence. That is in circumstances where the tender of that evidence fairly rests with QNR and QNM. The absence of that evidence enables the court to infer that there was no or no reasonable attempt to secure the Licence.

• [147] The Pipeliners argue that no proper notice was given of force majeure under the GTA. Clause 20.4 provides that:

(a) A party that becomes aware of any matter likely to constitute a Force Majeure Event as a result of which that party cannot do something it has to do under this contract, when it has to do it (Affected Obligation) must, as soon as practicable give Notice of that fact, and of all relevant particulars to the other parties.

(ii) as soon as practicable, the Affected Party gives Notice to the Authorised Person of the other parties specifying:

1. particulars of the event (as far as the Affected Party know them); and

1. how long the Affected Party expects the delay in its ability to perform the Affected Obligation to last,

The Affected Obligation is suspended until the Affected Party is able, making reasonable efforts to perform the Affected Obligation (this period is the "Suspension Period").

• [148] Clause 20.4 is expressed in mandatory terms.[83] In particular, subclause 20.4(a) uses the word 'must'. And the substantive operation of subclause 20.4(b) is mandatory because it provides that, if the Force Majeure Event occurs, and if there is a notice with the proper particulars, the affected obligation is to be suspended. The suspension does not arise unless those two conditions are satisfied.
• [149] QNR and QNM rely on notices dated 10 March 2016 and 14 July 2016. Neither of those notices specify the 'Affected Obligation'. QNR and QNM respond to that deficiency in this way:

It may be accepted that neither the 10 March 2016 nor the 14 July 2016 notice explicitly made reference to an "Affected Obligation". But it was clear by inference from the context that the central obligation under the GTA, being payment of moneys under GTA 5.4 to the Pipeliners could not be fulfilled. The Pipeliners were aware that Queensland Nickel was in external administration, and it was always open to the Pipeliners to request further particulars if they were genuinely in doubt.[84]

• [150] There are a number of problems with that contention. The first is that here QNR and QNM rely on Queensland Nickel's administration, and presumably its insolvency, as a fact that the Pipeliners knew at the time. They do not rely on the inability to obtain a licence, the alleged Force Majeure Event, as a fact the Pipeliners were aware of. And so, QNR and QNM's case becomes a little confused. They say that the Pipeliners were aware that Queensland Nickel enter into administration, and its insolvency, and presumably also the consequence that payments under the GTA were not likely to be fulfilled. And yet all of that has little to do with what QNR and QNM allege was the Force Majeure Event - Queensland Nickel's inability to secure the Licence.
• [151] The second problem is that the money obligations under the GTA have a different nature. As will be explained below, some are payable for gas transported. Some are payable for the reservation of capacity. There is no explanation as to why the Pipeliners ought to have assumed from the two notices that all payments due under the GTA should be treated as unable to be fulfilled.[85]
• [152] The third problem is that the assumption may not have been made by the Pipeliners given that under clause 41.6.3(b) QNR and QNM had a direct liability for monetary obligations (as discussed above).
• [153] The fourth problem is that inferences have no role to play in clause 20.4. The requirement is for written notice. Similarly, requests for particulars have no role to play. Clause 20.4 expressly requires that the notice include proper particulars.
• [154] It follows that there was no Force Majeure Event under the GTA and no proper notice was given of force majeure under clause 20.4 of the GTA.

• [155] The Pipeliners argued that, even if there was a Force Majeure Event under the GTA, the consequence was specified by clauses 20.4 and 20.5. Clause 20.4 has the effect that, if a Force Majeure Event occurs, and notice is given, then the affected obligation is merely suspended until that party is able, making reasonable efforts, to perform the affected obligation. Clause 20.5 then specifies the consequences, namely:

If QNI Services are curtailed in accordance with clause 20.4, QNI's Service Charges will, subject to clause 5.13, be unchanged, but the Pipeliners will record the actual quantities of gas received and delivered on behalf of QNI during the Suspension Period. Subject only to clause 5.13 in relation to a Force Majeure Event affecting the Pipeliners, QNI's obligation to pay charges to the Pipeliners will not be suspended, reduced or otherwise affected by a Force Majeure Event.

• [156] The last part of that clause is important: 'QNI's obligation to pay charges to the Pipeliners will not be suspended, reduced, or otherwise affected by a Force Majeure Event.' In other words, the risk of Force Majeure Events is borne by Queensland Nickel.
• [157] On the other hand, QNR and QNM contended that the consequence of a finding of force majeure under the GTA means that the next question for the court is: what is the consequence of the Force Majeure Event?[86] QNR and QNM say that, in the context where there is a Force Majeure Event, clause 20.5 operates as a penalty.
• [158] QNR and QNM accepted that the assessment of whether a provision is penal is to be made at the time of contracting. However, they argued that that prospective analysis does not prevent the court from looking at how the contract may apply in the circumstances of a future event of force majeure - such as occurred in this case. In particular, QNR and QNM point to the fact that the Pipeliners are entitled to be relieved of their obligations in the event of a Force Majeure Event, but Queensland Nickel is not.[87]
• [159] The parties disagreed about whether the penalties doctrine was engaged at all.

• [160] In Andrews v ANZ Banking Group Ltd the High Court (French CJ, Gummow, Crennan, Kiefel and Bell JJ) said:

[9] Mason and Deane JJ observed in Legione v Hateley that, as the term suggests, a penalty is in the nature of a punishment for non-observance of a contractual stipulation and consists, upon breach, of the imposition of an additional or different liability.

[10] In general terms, a stipulation prima facie imposes a penalty on a party (the first party) if, as a matter of substance, it is collateral (or accessory) to a primary stipulation in favour of a second party and this collateral stipulation, upon the failure of the primary stipulation, imposes upon the first party an additional detriment, the penalty, to the benefit of the second party. In that sense, the collateral or accessory stipulation is described as being in the nature of a security for and in terrorem of the satisfaction of the primary stipulation. If compensation can be made to the second party for the prejudice suffered by failure of the primary stipulation, the collateral stipulation and the penalty are enforced only to the extent of that compensation. The first party is relieved to that degree from liability to satisfy the collateral stipulation.[88]

• [161] QNR and QNM argue that Queensland Nickel's primary obligation is to make the payments to the Pipeliners in accordance with clause 5.4 of the GTA and that the collateral obligation is that Queensland Nickel must make those payments even where the contract recognises that performance may become impossible or even unlawful for either party because a Force Majeure Event occurs.[89]
• [162] One problem with this argument is that, as a matter of substance, the force majeure clause is not collateral (or accessory) to the payment obligations. The key is that there is a relationship between the collateral stipulation and the primary stipulation. Thus, in Paciocco v Australia & New Zealand Banking Group Ltd,[90] the bank sought to impose late fees (a collateral stipulation) on credit card customers who failed to pay the minimum monthly payment by a specified date (the primary obligation). Here, as in Queensland Nickel Sales Pty Ltd v Mount Isa Mines Limited,[91] there is no such relationship between the two stipulations. The force majeure clause is not engaged by reason of a failure to pay under any of the payment clauses.[92] The force majeure clause is engaged by the occurrence of a force majeure event and proper notice.
• [163] A second problem with the argument is that, pursuant to the principles stated by the High Court in Andrews v ANZ Banking Group Ltd, it is necessary for the collateral stipulation to impose upon the first party (here Queensland Nickel) an additional detriment, the penalty, to the benefit of the second party (here the Pipeliners). The force majeure clause does not bear that character. No additional burden is imposed by the force majeure clause.[93] The effect of the clause is to allocate the risks of force majeure events as between the contracting parties. Rather than imposing an additional detriment on Queensland Nickel, the force majeure clause merely provides that, in the event of the occurrence of a force majeure Event, and proper notice, the non-monetary obligations may be suspended but Queensland Nickel's payment obligations will be unaffected. That reflects a choice as to risk allocation.
• [164] The effect of the force majeure clause is not to impose any additional detriment on Queensland Nickel by reason of the failure of the primary stipulation.

• [167] In any event, QNR and QNM have not discharged the onus of proving that the effect of the force majeure clause, whereby Queensland Nickel had a continuing obligation to make the payments specified by clause 5.4 even in the face of a force majeure event, can be viewed as penal.[95]
• [168] The principles that apply to penalties can be summarised in this way:[96]

(a) The essential basis for a finding that a clause is penal is that its sole or predominant purpose is to punish the other party for the non-performance of the primary stipulation.[97]

(b) One way of testing whether the impugned stipulation is penal - intended to punish - is to inquire whether the sum that it stipulates to be payable on breach is to ask whether the stipulated sum is extravagant or out of all proportion to, or unconscionable in comparison with, the maximum amount of damage that might be anticipated to follow from the breach.[98]

(c) 'Damage' in this sense is not limited to damages recoverable upon breach of contract, but may extend to damage, or losses, caused by the impairment of other legitimate commercial interests that were intended to be protected by the stipulation.[99]

(d) The analysis is to be made at the time, and taking into account the circumstances applicable, when the contract was made; not at the time of breach; the analysis is prospective, not retrospective.[100]

(e) Mere disproportion between the stipulated sum and the possible damage is not enough to indicate 'penalty'; the disproportion must be such that it is unconscionable for the lender to rely on the stipulation.[101]

• [169] Even setting aside the awkward application of those principles to a force majeure clause, the application of those principles to this case leads to the conclusion that the clause is not penal.
• [170] First, the deal was struck in 2005 between two sophisticated commercial parties.[102] The Pipeliners were then joint venture companies controlled by a Queensland government owned corporation.[103] The ultimate holding company for Queensland Nickel as well as QNR and QNM, was BHP Billiton Plc. The GTA was a long-term contract involving significant infrastructure. Those facts suggest that the negotiation was likely to be at arms-length with each party jealously guarding their own commercial interests.
• [171] Second, the GTA records that the Pipeliners were pursuing the design, financing, construction, commissioning, operation and maintenance of the Pipeline.[104] It is true that the pipeline was either fully constructed, or mostly constructed, at the time the GTA was executed.[105] However, the reference to construction and financing highlights that the Pipeliners incurred the significant capital cost of constructing the pipeline, a capital cost that they hoped to recoup by the GTA and, presumably, a similar agreement with Townsville Power Station, and possibly with other industrial customers. That establishes a legitimate commercial interest in the continuation of payments. Financing, insurance and maintenance costs, for example, may not cease on the happening of a force majeure event: a consistent income is likely to be important.
• [172] Third, a significant aspect of the GTA was that it reserved capacity in the pipeline for Queensland Nickel.[106] That was a capacity that Queensland Nickel could trade to third parties - even without the consent of the Pipeliners.[107] The Pipeliners had no similar right. Thus, the reservation of capacity justifies the continued application of commercial charges. In that respect the GTA was analogous to three English cases cited by the Pipeliners, namely:

(a) M & J Polymers Ltd v Imerys Minerals Ltd[108] in which Burton J considered whether a 'take or pay' clause for the supply of chemicals amounted to a penalty;

(b) Associated British Ports v Ferryways NV[109] where the contract provided for priority use of berths by Ferryways, turnaround times, the construction by APB of a new linkspan, index-linked charges and an annual minimum throughput for Ferryways where charges were to be paid in the event of shortfall;

(c) E-Nik Ltd v Department for Communities And Local Government[110] where the court held that provisions in an IT consultancy services agreement requiring one party to pay for a minimum amount of services (whether supplied or not) was not an unenforceable penalty. The agreement obliged the IT services company to ensure it 'kept' itself available to provide the contractual minimum level of services (as and when required).

• [173] QNR and QNM put their penalty argument in this way:

In any event, in requiring Queensland Nickel to pay the full amount (or thereabouts) otherwise payable under the contract even in circumstances where the services contracted for are not being provided and cannot be provided through no fault of its own, it is clear that the clause is out of all proportion to the legitimate commercial interest sought to be protected by GTA 20.5. It is apt to result in a windfall to the Pipeliners (as it has), in circumstances where the force majeure event may prevent performance for years (as in the present case). There is no mechanism for prorated application or a discount on the rates provided - rather the harsh operation comes from the fact the GTA contemplates the possibility that it may become impossible for Queensland Nickel to perform its payment obligations, but at the same time insists on performance irrespective of those circumstances.[111]

• [174] That submission assumes that the GTA records a simple services transaction involving Queensland Nickel paying for the Pipeliners service comprising the transportation of gas. For the reasons explained, that is not a fair characterisation of the transaction. The submission is also a little myopic. It may or may not be the case that Queensland Nickel was not at fault for the absence of a licence, or its insolvency. But those events certainly occurred without the fault of the Pipeliners. Indeed, that is the point of a force majeure clause. It is designed to allocate the risk of an 'act of god' or similar event as between the parties.
• [175] There is no evidence of a 'windfall', let alone a windfall that would have been manifest as a likely windfall when the GTA was negotiated and signed in 2005. The clause merely entitles the Pipeliners to continue to receive the payments they were entitled to under the contract. That may well be in circumstances where the Pipeliners continue to be responsible for financing, insurance and maintenance costs. Indeed, there is no evidence that would enable me to conclude that the operation of the pipeline was profitable or unprofitable in circumstances where Queensland Nickel ceased to transport gas and merely incurred liability for non-transportation related charges.
• [176] For those reasons the sole or predominant purpose of the force majeure clause is not to punish. The clause is not a penalty.

The Further Penalty Issue: Are the Imbalance Charges Penalties?

• [177] QNR and QNM made further submissions that the imbalance charges payable under clause 14.7 were a penalty.
• [178] Viewed broadly, on any given day there may be an imbalance. That imbalance will be the difference between the amount received into the pipeline from Queensland Nickel and the amount delivered to Queensland Nickel from the pipeline.[112] The imbalance might be positive in the sense that Queensland Nickel has delivered into the pipeline more than it has taken out. In that case the excess is effectively being stored in the pipeline until the imbalance can be rectified pursuant to the regime in the GTA.
• [179] Or the imbalance may be negative in the sense that Queensland Nickel has taken out more gas that it has delivered into the pipeline. In that situation, Queensland Nickel would be using or borrowing the Pipeliners' linepack to operate its Refinery.
• [180] The GTA provides a complex regime for dealing with imbalances.
• [181] As it happened, when Queensland Nickel was placed into administration, it held a positive imbalance of 10 TJ.[113] That meant that Queensland Nickel was effectively storing that quantity of gas in the pipeline.
  • [182] Pursuant to clause 14.3 of the GTA it was Queensland Nickel's obligation to take reasonable steps to control and, if necessary, adjust receipts and deliveries of gas, in order to ensure that, on any day, the imbalance did not exceed the imbalance limit of zero. Clause 14.4 gave the Pipeliners a right, but not an obligation, to issue a notice to require Queensland Nickel to correct the imbalance if the imbalance exceeded the imbalance limit. Queensland Nickel was required to use reasonable endeavours to comply with any such imbalance correction notice. Clause 14.5 gave the Pipeliners the right to issue Operational Flow Orders to Queensland Nickel in the event that Queensland Nickel failed to comply with an imbalance correction notice. And clause 14.9 gave the Pipeliners further rights to correct Queensland Nickel's imbalance.
  • [183] Clause 14.8 of the GTA gave Queensland Nickel various options for eliminating an imbalance:

QNI may correct or eliminate an Imbalance by undertaking any one or more of the following:

(a) increasing or decreasing the quantity of gas made available by QNI at the Receipt Points;

(b) increasing or decreasing the quantity of gas taken at the Delivery Points;

(c) utilising an ancillary service offered by the Pipeliners as contemplated in clause 14.3; or

(d) settling some or all of QNI's Imbalance by utilising another User's countervailing Imbalance provided that QNI and each User contemplating the settlement advises the Pipeliners by Notice of its agreement to proceed with the settlement and the Pipeliners approve the settlement process, such approval not to be unreasonably withheld.

• [184] As that summary of the imbalances regime makes clear, it was Queensland Nickel's responsibility to correct imbalances. In that context clause 14.7 provided as follows:

(a) The Imbalance Charge for a Day will be the Chargeable Imbalance for that Day multiplied by 200% of the Firm Forward Tariff for that Day.

(b) The Chargeable Imbalance for a Day is the Absolute Imbalance for that Day minus the Imbalance Tolerance for that Day, provided that if the Absolute Imbalance does not exceed the Imbalance Tolerance:

(i) on every Day of a continuous period of seven (7) Days starting on that Day; and

(ii) on every Day or a continuous period of then (10) Days ending on that Day,

then the Chargeable Imbalance for that Day will be zero.

• [185] The Pipeliners argue that the imposition of the charge under clause 14.7 does not engage the penalties doctrine because there is no primary stipulation that has failed.[114] On the other hand, QNR and QNM argue that, as a matter of substance, clause 14.7 is collateral to a primary stipulation in favour of Pipeliners and that it imposes an additional detriment, the penalty, to the benefit of Pipeliners.[115]
  • [186] In my view, QNR and QNM are correct about the substance of clause 14.7 and its context. The Imbalance Charge under clause 14.7 only applies in the event that Queensland Nickel has failed to keep the imbalance within certain limits. It is true that the Imbalance Charge under clause 14.7 is not premised on Queensland Nickel exceeding its Imbalance Limit.[116] The Imbalance Charge is premised on Queensland Nickel's Absolute Imbalance:

(b) so exceeding that Imbalance Tolerance for a continuous period of 17 days.

• [187] Thus, where the Absolute Imbalance exceeds the Imbalance Tolerance for a continuous period of 16 days, the Chargeable Imbalance is zero. The evident commercial purpose was to forgive temporary imbalances, but to permit the Pipeliners to charge a fee for persistent imbalances.
• [188] That there are thresholds, in terms of quantity and time, does not alter the underlying character of clause 14.7. The intention was to impose a collateral charge for Queensland Nickel's failure to keep the imbalance within limits.[117]

• [189] As the principles of penalties are engaged, the next question is whether clause 14.7 is penal in that its sole or predominant purpose is to punish Queensland Nickel for the non-performance of the primary stipulation.
• [190] First, QNR and QNM argue that, even with the benefit of the Imbalance Tolerance, the Imbalance Charge is levied in circumstances where the imbalance has not, and could not conceivably, result in a loss to the Pipeliners.
  • [191] That submission is not convincing. There are clear commercial objectives which underlie the imbalance regime in clause 14. As the Pipeliners explain, it is uncontroversial that:

(a) a positive imbalance is effectively storage of the Defendants' gas on the Pipeline; and

(b) a negative imbalance is effectively the taking or borrowing of the Pipeliners' gas.

• [192] There is an obvious commercial justification in charging a person who is either obtaining a service (storage) or taking, even borrowing, a valuable commodity (gas).[118]
• [193] However, there is more to it than that. Subject to the nomination procedures in clause 10, it is Queensland Nickel that has control of the quantity of gas it inputs into the pipeline and it is Queensland Nickel that has control over the quantity of gas it extracts from the pipeline. For that reason the parties agreed that it was Queensland Nickel's obligation to take reasonable steps to control and, if necessary, adjust receipts and deliveries of gas, in order to ensure that, on any day, the imbalance did not exceed the imbalance limit of zero.[119]
• [194] And, an imbalance, whether positive or negative, has the potential to affect the Pipeliners' management of the pipeline and its other industrial customers. It is wrong, in my view, to think of the pipeline as a static asset with only two industrial customers. The scheme of the GTA is consistent with the pipeline being managed in a dynamic way that enables the Pipeliners to make full use of the infrastructure. An imbalance, whether positive or negative, affects the use of the pipeline and can impact the ability to receipt or deliver gas.
• [195] As the Pipeliners point out, the storage or taking of gas via imbalances is done without permission or notice to the Pipeliners. It is not planned in the way that the firm forward transport services are, or in the way that a negotiated storage or sale of gas would be. There is obvious commercial justification in charging a higher price for something that is given (or taken) 'on demand' and without notice.
• [196] The GTA demonstrates a level of acceptance of this concept of an increased payment for unplanned actions. For example, the Authorised Overrun Service (which is a service for the transport of gas that exceeds the MDQ on a Day, on notice provided in the weekly nominations) is charged at a tariff that is 1.3 times the Firm Forward Tariff. An Unauthorised Overrun (being an amount that is delivered but not previously notified or authorised) is charged at 2 times the Firm Forward Tariff.[120]
• [197] Also relevant here is the point made above. The imbalance charges apply only if the imbalance is persistent and exceeds a specified tolerance level. Thus, it is likely that, at the time of contracting, these sophisticated commercial parties contemplated that there were sensible commercial reasons for the imbalance charges and for the events that triggered the imbalance charges.

• [198] Second, QNR and QNM argue that, whilst either party can take steps to avoid an imbalance, it is only Queensland Nickel upon whom the imbalance charges will be imposed if the imbalance remains uncorrected, even if the ability to correct Queensland Nickel's imbalance is beyond its control.
• [199] It is not accurate to say that the ability to correct Queensland Nickel's imbalance was beyond its control. The GTA provided mechanisms for Queensland Nickel to control its imbalance and it was Queensland Nickel's obligation to take reasonable steps to control the imbalance. Possibly QNR and QNM contend that the placing of Queensland Nickel into administration, and then liquidation, had the effect that Queensland Nickel was unable to take steps to correct the imbalance. The evidence does not establish any reason why an administrator or liquidator, or even the new joint venture manager (QNS), could not have taken steps to correct the imbalance. In any event, the subsequent insolvency of Queensland Nickel does not assist in establishing that, in 2005, when the deal was struck, clause 14.7 was penal in nature.[121]
• [200] The idea that it is only Queensland Nickel upon whom the imbalance charges will be imposed if the imbalance remains uncorrected is a consequence of the parties agreeing that imbalances were Queensland Nickel's responsibility. As explained above, it is likely that there were sensible commercial reasons for that allocation of risk and responsibility.
• [201] Third, QNR and QNM contend that it is significant that the same imbalance charge is payable whether or not the imbalance is positive or negative, even though the consequences of the two are very different, and the mechanisms available to Pipeliners to avoid critical imbalances (and therefore some of the losses associated with the imbalances) will vary between them.[122]
  • [202] The evidence is that both positive and negative imbalances can have an impact or a cost. Positive imbalances can reduce or eliminate the capacity to store gas in the pipeline which can impact the ability to receipt or deliver gas and can make it necessary for the Pipeliners to carefully monitor and align the timing of the receipt and delivery of gas, to ensure that the receipt of gas does not over-pressurise the pipeline and constrain receipts of gas. Negative imbalances can reduce the daily delivery capacity of the pipeline to below its capacity of 108TJ per day. Those impacts can have led to loss of income or costs.

• [207] QNR and QNM allege the Pipeliners have been unjustly enriched at QNR and QNM's expense, due to their obligation to pay charges under the GTA. QNR and QNM contend that this results from a total failure of consideration arising because 'no services' were provided by the Pipeliners under the GTA.
• [208] QNR and QNM raised two related issues. The first is factual - have the Pipeliners reserved and have they continued to make available their firm forward haulage service on each day pursuant to the GTA? The second is a mixed question of law and fact - whether the factual circumstances give rise to a 'total failure of consideration'.

• [209] QNR and QNM submit the Pipeliners have not proved that they made the relevant services available to carry all 60 TJ of the GTA's firm forward capacity on any date on which the minimum linepack fell below a quantity that accounts for either:

(a) the operational minimum (75 TJ), together with the positive Queensland Nickel imbalance of 10 TJ[127] - a total of 85 TJ; or

(b) the absolute minimum (68 TJ), together with the positive Queensland Nickel imbalance of 10 TJ - a total of 78 TJ.

• [210] QNR and QNM further submit that in either case the point remains the same, on any day the linepack fell below 85 TJ, or 78 TJ,[128] the Pipeliners failed to 'reserve and continue make available' the firm haulage service on each day by failing to have the necessary linepack available to carry all contractual minimums on that day. QNR and QNM have identified 28 separate days on which the Pipeliners failed to have at least 85 TJ of linepack available in the pipeline.
• [211] Those 28 days are identified in a schedule to QNR and QNM's Revised Closing Submissions. That is 28 days in the period of more than 5 years and 4 months since 2 April 2016 (i.e. 28 days out of approximately 1945 days). Of those 28 days the linepack fell below 78 TJ on 5 separate days.

• [212] The Pipeliners respond that a failure of consideration is not established, and restitution is not appropriate in this case for the following four reasons.
• [213] First, the Pipeliners submits that a restitutionary remedy would subvert the contractual allocation of risk that has been negotiated and agreed by the parties in the GTA. The use of the pipeline was entirely at the option of the Queensland Nickel entities. It makes the nominations, supplies the gas, and then uses it in the Refinery.
• [214] Second, QNR and QNM have received a substantial portion of the consideration bargained for under the GTA. They have the benefit of the ongoing reservation of capacity in the pipeline for QNR and QNM. The Pipeliners have made available, and continue to make available, the reserve capacity. Thus, on any given day, Queensland Nickel, QNR and QNM have had the ability, if they wished, to transport gas through the pipeline.
• [215] Third, the Firm Forward Shortfall charge is expressly a minimum charge that is not dependent upon gas transportation. Likewise, the Imbalance Charge, is not dependent upon gas transportation. These charges contrast to other charges, such as the Firm Forward Haulage charge, that are directly calculated on the basis of the volume of gas moved through the pipeline and delivered.
• [216] Finally, the Pipeliners submit that QNR and QNM have mischaracterised the GTA in relying on the lack of 'services' having been provided as indicative of an assumed state of affairs having disappeared and as warranting restitution. Those 'services' are not particularised but presumably QNR and QNM refer to transportation of gas in the pipeline. If so, the fact that gas is not being transported means that the Queensland Nickel entities are not paying the Firm Haulage charge, or other transportation charges.

Accordingly, the Pipeliners have not proved that they made the relevant service available to carry all 60TJ of firm forward capacity on any date on which the minimum linepack fell below a quantity that accounts for their operational minimum (75,000GJ), or their absolute minimum (68,000 GJ) and the QNI imbalance of 10,223 GJ.[129]

• [218] That submission assumes that the Pipeliners were obliged to prove that, on every day during the term of the GTA, the services were available. The submission also assumes that the transgressions on 28 days, or on 5 days, demonstrates a failure by the Pipeliners to provide the services they contracted to provide. Neither assumption was supported by submissions, and neither appears to be sound.
• [219] In Mann v Paterson Constructions Pty Ltd Nettle, Gordon and Edelman JJ explained that:

The "qualifying or vitiating" factor giving rise to a prima facie obligation on the part of the enriched party to make restitution is a total failure of consideration, or a total failure of a severable part of the consideration. In this context, consideration means the matter considered in forming the decision to do the act: "the state of affairs contemplated as the basis or reason for the payment". In many cases the relevant basis will be the benefit that is bargained for. In those cases, "[t]he test is whether or not the party claiming total failure of consideration has in fact received any part of the benefit bargained for under the contract or purported contract".[130] (footnotes omitted)

• [220] As QNR and QNM submit, there must be a total failure of consideration. Hence, once the agreed return has been identified, the provision of part of the agreed return for the payment will generally defeat a restitutionary claim.[131] The receipt of any substantial part of the benefit bargained for under a contract in the context of incomplete performance will not constitute a total failure of consideration.[132]
• [221] Here, it is plainly the case that Queensland Nickel received a substantial part of the benefit bargained for under the GTA. It received the benefits of the GTA in full for the 11-year period from 2005 to 2016 in the context of an agreement that had a term of 15 years. To say that Queensland Nickel received no service ignores that period of 11 years.[133]
• [222] Once Queensland Nickel was placed into administration, and then into liquidation, Queensland Nickel had the benefit of the ongoing reservation of capacity in the pipeline. The Pipeliners have made available and continue to make available the reserved capacity. On any given day, Queensland Nickel, or its proposed successor QNS, or QNR and QNM had the ability, if they wished, to transport gas through the pipeline.[134]
• [223] The GTA contemplated that, during the lengthy term of the GTA, there may be times when gas was not transported in the pipeline and so would not be used by the Nickel entities, but it reserved the capacity for transportation of the gas to occur. Thus, the GTA specified certain charges, some of which were payable irrespective of how much gas was transported (such as the Firm Forward Shortfall charge, and the Imbalance charge).
• [224] It is true that the GTA provided for the transportation of gas through the pipeline, but only where the gas was sourced and provided to the Pipeliners by the Nickel entities, and the quantity for transport was nominated by Queensland Nickel pursuant to clause 10 of the GTA.
• [225] The GTA, viewed objectively, does not simply provide a gas transportation service. The GTA entitled Queensland Nickel to transport gas but also to reserve capacity. I agree with the Pipeliners' submission that the GTA would look very different if Queensland Nickel had the benefit of being able to use the gas whenever they wished, but did not have to pay any charges if they did not elect to transport gas. And, I would add, the GTA would look very different if the transaction were merely a fee for quantities of gas transported.

• [227] In Mann v Paterson Constructions Pty Ltd Kiefel CJ, Bell and Keane JJ emphasised that restitutionary claims must respect contractual regimes and the allocations of risk made under those regimes.[136]
• [228] Here, to permit restitution for failure of consideration would inflict some violence on the contractual bargain. As explained, the GTA was a long-term contract with 'take or pay' elements.[137] The parties expressly agreed on what events could be regarded as Force Majeure Events and on what events were not Force Majeure Events. Changes in economic conditions were agreed not to be Force Majeure Events.[138] The consequences of Force Majeure Events were spelled out. The parties agreed that payments would not be affected. The payment obligations of the manager, Queensland Nickel, would be assumed by the joint venturers.[139] There were complex provisions entitling either party to terminate for breach,[140] including in circumstances where the opposing party committed an 'Insolvency Default'.[141] Queensland Nickel was entitled to terminate, on notice, in the event that its plant closed.[142] To superimpose a restitutionary regime over that complex and negotiated contractual regime would involve eroding the parties' autonomy to configure their own legal relations and it would redistribute the risks without paying due respect to their bargain.[143]

• [229] It is necessary to return to the factual question of what capacity was reserved and available to Queensland Nickel.
• [230] Mr Williams' expert report asserts that the 'pipeline [operated] at no more than 40% of its capacity at any point in time between 17 February 2016 and 30 April 2021'.[144] Further, Mr Williams' report, and Mr Giri while under cross-examination, gave evidence that the pipeline has a maximum capacity of 108 TJ/day, including the system use gas needed to enable the transfer of gas.[145] Thus, there remained 64.8 TJ of capacity available on any given day.
• [231] In cross-examination Mr Giri said that were no other users wanting to use the existing capacity, at least not during the term of the GTA.[146]
• [232] The fact that no new user entered into a contract with the Pipeliners during the relevant period, along with the 64.8 TJ of untapped capacity, support the finding that the Pipeliners did reserve and continue to make available to Queensland Nickel the capacity required under the GTA.
• [233] As explained above, it is true the linepack fell below 85 TJ on 28 days, and below 78 TJ on 5 days during the term of the GTA.[147] QNR and QNM argued that, for that reason, the Pipeliners failed to 'reserve and continue make available' the firm haulage service on each day by failing to have the necessary linepack available to carry all contractual minimums on that day.
• [234] It seems to me to be quite unrealistic to examine the figures in an abstract way and to assert that the reservation was not maintained on a proportionately small number of days and to say that therefore Queensland Nickel did not receive the benefit of the bargain. The GTA operated in a fluid, dynamic way with flexibility in the demand of both users and some flexibility in linepack. It is perfectly conceivable that, on those isolated days, the reserved capacity would be available because either customer might require less capacity or the linepack may be adjusted.
• [235] It follows that the circumstances relied upon do not establish a total failure of consideration and the contractual regime means that restitution is not appropriate.

• [236] QNR and QNM argue for an implied term. They contend that the court should imply into the GTA a term to the effect that the Pipeliners have an obligation to:

Act in good faith by acting reasonably and with fair dealing to take all reasonable steps available to [them] under the GTA to eliminate or correct the QNI imbalance before seeking to charge the Imbalance Charge (Plaintiffs' Obligation of Good Faith).[148]

• [237] QNR and QNM say that the Pipeliners breached that implied term by 'continuing to charge the Imbalance Charges' in circumstances where:

(i) offer QNR and QNM an ancillary service under clause 14.3;

(ii) take steps to correct the imbalance pursuant to clause 14.9;

(iii) offer to Queensland Nickel a Storage Service; and

(b) they were aware that, after the Refinery ceased operations, it was no longer possible for Queensland Nickel and/or QNR and QNM to increase the quantity of gas taken at the Queensland Nickel delivery Point.[149]

• [238] A term may be implied at law or in fact to give effect to the presumed intention of the parties.[150] It is necessary to consider those two possibilities: that a term of good faith can be implied by law; and that a term of good faith can be implied by fact.[151]

Implied Term of Good Faith: A Summary of the Authorities

• [239] The development of the law in relation to the implication of an obligation of good faith is described in detail by Jackson J in Aurizon Network Pty Ltd v Glencore Coal Queensland Pty Ltd.[152] In summary:

(a) Since 1992, the New South Wales Court of Appeal has accepted the existence of an implied contractual duty of good faith and fair dealing in the performance and exercise of contractual rights and powers, in commercial contracts either generally or in particular contexts;[153]

(b) The Full Court of the Federal Court has also accepted the implication of such a term, in a way that is broadly consistent with the New South Wales case law;[154] and

(c) The Victorian Court of Appeal has rejected the more general approach of the New South Wales authorities but accepted that a good faith term could be implied in fact.[155] That position was restated in 2013, in Androvitsaneas v Members First Broker Network Pty Ltd.[156]

• [240] At present, there is no binding decision of the Queensland Court of Appeal, or the High Court, that establishes that such a term is implied into all contracts, or all commercial contracts. To the extent that there are intermediate appellate decisions in other States which support such an implication, there is authority in Victoria and Tasmania to the contrary.[157]

• [241] A term may be implied at law where the contract falls into a particular nature or class. Typically, a term is implied at law to uphold the rights conferred under a contract, which would otherwise be rendered nugatory or worthless. Necessity is a key element. To this effect, the majority in Commonwealth Bank v Barker said:

The broad concept of 'necessity'... may be defined by reference to what 'the nature of the contract itself implicitly requires'. It may be demonstrated by the futility of a transaction absent the implication. It is not satisfied by demonstrating a reasonableness of the implied term.[158]

• [242] In this case, QNR and QNM are not able to satisfy the requirement of necessity (for the GTA, or for a class of contracts), as they were able to deal with the imbalance themselves, including by trading imbalances with another user or by selling the gas. The absence of a positive obligation on the Pipeliners to take steps to remove the imbalance does not render the GTA "nugatory, worthless or seriously undermined".
• [243] Further, when it comes to a term of good faith being implied at law, the law is unsettled.[159] In Vodafone Pacific Ltd v Mobile Innovations Ltd,[160] the New South Wales Court of Appeal urged caution before taking the step to imply good faith at law in commercial contracts. In that case Giles JA said:

I do not think the law has yet gone so far as to say that commercial contracts are a class of contracts carrying the implied terms as a legal incident, and the width and indeterminacy of the class of contracts would make it a large step.[161]

• [244] I am not prepared to take that large step. Particularly so in the circumstances of this case, where the element of necessity is not present, and the contract is a relatively sophisticated commercial contract between 'commercial leviathans',[162] and the contract contains, as will be explained, terms which are contra-indicators of either a general or a more specific implied term of good faith.
• [245] In Esso Petroleum Resources Pty Ltd v Southern Pacific Petroleum NL Warren CJ sounded a warning about implying a term of good faith into commercial contracts:

Ultimately, the interests of certainty in contractual activity should be interfered with only when the relationship between the parties is unbalanced and one party is at a substantial disadvantage, or is particularly vulnerable in the prevailing context. Where commercial leviathans are contractually engaged, it is difficult to see that a duty of good faith will arise, leaving aside duties that might arise in a fiduciary relationship. If one party to a contract is more shrewd, more cunning and out-manoeuvres the other contracting party who did not suffer a disadvantage and who was not vulnerable, it is difficult to see why the latter should have greater protection than that provided by the law of contract.[163]

• [246] Her Honour also addressed the vagueness of a proposed implied term of good faith:

There has also been consideration of the capacity of a contractual party to look after itself and its own interests rather than turn to concepts of good faith for relief. These approaches, more aptly described as judicial reticence, regarding the application of the doctrine of good faith, may be construed as hesitation at the courts' involvement in contractual performance. If a duty of good faith exists, it really means that there is a standard of contractual conduct that should be met. The difficulty is that the standard is nebulous. Therefore, the current reticence attending the application and recognition of a duty of good faith probably lies as much with the vagueness and imprecision inherent in defining commercial morality. The modern law of contract has developed on the premise of achieving certainty in commerce. If good faith is not readily capable of definition then that certainty is undermined. It might be that a duty of good faith is no more than a duty to act reasonably in performance and enforcement, a long established duty. Of course, some commentators have regarded the duty to act reasonably as properly subsumed within the duty of good faith.[164]

• [247] For those reasons a generally applicable implied term of good faith should not be implied into the GTA.
• [248] In any event, counsel for QNR and QNM made only a rather tentative invitation for this court to imply a generally applicable term of good faith as a matter of law. QNR and QNM's counsel agreed with the analysis of the Pipeliners counsel to the effect that in Queensland it remains an open question whether a duty of good faith can be implied into all commercial contracts.[165] QNR and QNM then submitted that it was only on the defendants' alternative case for an implication in law, that the court would need to concern itself with divergent lines of intermediate appellate authority. The QNR and QNM submissions then focussed on what was described as an 'ad hoc' implication of a term of good faith but did not return to the alternative case that the court should imply a generally applicable term of good faith as a matter of law.
• [249] In any event, for the reasons stated, a generally applicable implied term of good faith should not be implied in this case.

• [250] The next question is whether an obligation of good faith can be implied in the particular circumstances of the GTA. Implying a term of good faith as a matter of fact is a difficult hurdle to overcome. A term may be implied in fact if the elements in BP Refinery (Westernport) Pty Ltd v Shire of Hastings[166] are satisfied. The proposed implied term:

(b) must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it;

(c) must be so obvious that 'it goes without saying';

(e) must not contradict any express term of the contract.

• [251] First, construing the GTA in a reasonable and businesslike manner, it is difficult to conclude that the pleaded term needs to be implied. Good faith takes into account the relative sophistication of both parties,[167] and in this case QNR and QNM can be taken to be capable of identifying measures that would protect and further their respective interests.
• [252] The obligation of good faith should not require a party to subordinate its own interest to those of the counterparty to the contract.[168] In this case, the pleaded implied term would require the Pipeliners to take steps to prevent Queensland Nickel from incurring a debt to the Pipeliners under the GTA. In that way the Pipeliners' obligation would be to protect and look after the interests of Queensland Nickel and to thereby subordinate their interests to those of QNR and QNM.
• [253] Second, the expression 'business efficacy' was defined by Bowen LJ in The Moorcook as:

In business transactions such as this, what the law desires to effect by the implication is to give such business efficacy to the transaction as must have been intended at all events by both parties who are businessmen...[169]

• [254] Similarly, in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales,[170] Mason J said that:

The courts have been at pains to emphasize that it is not enough that it is reasonable to imply a term; it must be necessary to do so to give business efficacy to the contract. [emphasis added]

• [255] Applying the minimalist approach introduced by Lightman J in Tobin Ray v Classic FM,[171] the pleaded term does not appear necessary for the business efficacy of the GTA, because the contract is capable of sensible operation in the absence of such term.
• [256] Third, the test whether a term is so obvious it goes without saying was defined by MacKinnon LJ in Shirlaw v Southern Foundries (1926) Ltd,[172] as:

Prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying; so that, if, while the parties were making their bargain, an officious bystander were to suggest some express provision for it in their agreement, they would testily suppress him with a common 'Oh, of course!'

• [257] Here, it is difficult to conceive that the pleaded term is so obvious it goes without saying.
• [258] Finally, a term should not be implied in fact if it is inconsistent with the express terms of the contract or its general tenor. The proposed implied term is inconsistent with the express terms of the GTA.
• [259] Here, clause 14.3 expressly requires that Queensland Nickel take reasonable steps to control and, if necessary, adjust receipts and deliveries of gas, in order to ensure that, on any day, the imbalance did not exceed the imbalance limit of zero. QNR and QNM's proposed implied term seeks to reverse that obligation and to make it the Pipeliners' obligation to eliminate or correct the QNI imbalance. That would be to re-make the contract.
• [260] An express term in a contract excludes the possibility of implying any term dealing with the same subject-matter as the express term.[173] The principle is based on the common sense precept that, if parties explicitly provide for the giving of rights in a stated way, it is unlikely that they have intended to subject themselves by implication to some regime of rights and duties of a similar kind which goes beyond the terms upon which they have agreed.[174]
• [261] Here, clause 14.3 expressly imposes the relevant obligation on Queensland Nickel. That excludes an implied term that, in effect, reverses the responsibilities.
• [262] For the reasons outlined above, QNR and QNM's pleaded implied good faith obligation is rejected.

• [263] Even if there was an obligation to act in good faith, it is difficult to discern a breach from the evidence. There is no evidence that:

(a) Queensland Nickel or QNR or QNM were ignorant of the imbalance charges; QNR and QNM have been pursued for those charges since 2016; in fact, on 29 March 2016 the Pipeliners' representative emailed Mr Mensink, Queensland Nickel's director and representative, advising of the imbalance position, advising charges were accruing on a daily basis, and saying that unless the imbalance was brought back within tolerance, the charges would continue to accrue daily;[175]

(b) the Pipeliners prevented QNR and QNM from remedying the imbalance; and

(c) the Pipeliners were asked to but refused to deal with the imbalance in a way provided for in the GTA.

• [264] In fact, it is not clear why no steps were taken to clear the imbalance. As explained previously, there is no reason as to why the administrators/liquidators or even QNS did not take steps to address the imbalance.
• [265] The allegation of breach appears to amount to an allegation that the good faith obligation required the Pipeliners - proactively, unilaterally, and without request by QNR and QNM - to prevent the imbalance charge from accruing or continuing under the GTA.
• [266] The Pipeliners respond that it cannot be a lack of good faith to fail to proactively offer solutions, and that Queensland Nickel or QNR and QNM could and should have at least raised or asked for (even in general terms).[176]
• [267] The problem is the mystery surrounding the circumstances of the continuing imbalance. In the circumstances, it is impossible to find that there was such an implied obligation of good faith, or that the obligation was breached.

• [268] Under the GTA interest is payable on any amounts outstanding. Clause 21.4 provides:

Subject to clause 21.6 [which relates to disputed bills], if a party does not pay the amount shown on a bill on time and in full, that party must pay interest to the other party on the amount outstanding.

Interest starts accruing on the day the amount was payable and stops accruing on the day the payee is actually paid in full. The interest rate is the Default Rate.

A payee can charge interest back to the day the original amount became due and payable, even if there is a court judgment against the payer for what the payer owes under this contract.

• [269] The 'Default Rate' is defined by clause 41.1 as 'for a day, means a rate of interest equal to 2% plus the Bank Bill Rate for that day.'
• [270] The 'amount outstanding' refers to clause 21.1 which specifies that the Pipeliners are required to give Queensland Nickel a bill, setting out the amount payable by Queensland Nickel and details of the various charge components. One of the charge components is 'other charges on QNI's account for the preceding month imposed in accordance with this contract'.[177]
• [271] QNR and QNM argue that the effect of GTA clauses 21.1 and 21.4 is that the Pipeliners were entitled to compound interest on a monthly basis, and not on the daily basis that the Pipeliners' expert, Mr Wood was instructed to perform his calculations.
• [272] In my view that submission is correct. The evident intention of those clauses was for the monthly bill to be issued on or before the 20th day of each month containing the charges for the previous month, including (if relevant) the other charges such as interest charged for that prior month.
• [273] It will be necessary for Mr Wood to recalculate interest on a monthly compounding basis rather than a daily compounding basis.

• [274] It follows that there will be judgment for the plaintiffs against the defendants in the proportions specified by the GTA (i.e. 80:20). The counterclaim will be dismissed.
• [275] I will hear the parties on the issues of the precise calculation of the debt, on the calculation of interest, and on costs.

[1] The ownership of the gas is dealt with in clause 17 of the GTA.

[3] The GTA was to expire 15 years after what is described as the 'Tranche 2 Commissioning Period' (i.e. 15 years from 31 March 2007): see clause 2.5s and Annexure A of the GTA.

[4] A joule, also called newton meter, is a unit of energy in the international system of units. There are a billion joules in a gigajoule and 1,000 times that quantity (i.e. a trillion joules)

[5] The background set out in paragraphs [1] to [8] is largely taken from the plaintiff's submissions. They are not in dispute.

[6] This is the total of the figures claimed against each of QNR and QNM at page 24 of the further amended statement of claim filed on 27 May 2021. However, the figures used by Mr Wood, the plaintiffs' expert appear to be different.

[7] During the course of the trial this argument was expanded to include an allegation that clause 14.7 is a penalty.

[8] As explained, the further hearing also added a further component to the penalty argument, namely whether clause 14.7 of the GTA was a penalty. For convenience, that issue is dealt with as part of the more general penalty issue.

[9] The two Pipeline companies Enertrade (NQ) Pipeline No 1 Pty Ltd and Enertrade (NQ) Pipeline No 2 Pty Ltd subsequently changed their names to the two plaintiff companies, namely North Queensland Pipeline No 1 Pty Ltd and North Queensland Pipeline No 2 Pty Ltd.

[10] Defendant's submissions at [20].

[11] PLF.0001.0002.3110 (ex DLG-23 to Mr Giri's first affidavit).

[12] EDWF Holdings 1 Pty Ltd v EDWF Holdings 1 Pty Ltd [2010] WASCA 78 at [104]; Lewison & Hughes, 'The Interpretation of Contracts in Australia', Law Book Co (2012) at [3.03].

[13] QNI Resources Pty Ltd v North Queensland Pipeline No. 2 Pty Ltd (no 2742 of 2017) 23 May 2017 at transcript page 6.

[14] QNI Resources Pty Ltd v North Queensland Pipeline No. 1 Pty Ltd [2017] QCA 297.

[15] QNI Resources Pty Ltd v North Queensland Pipeline No. 1 Pty Ltd [2017] QCA 297 at [33].

[16] Clause 41.1 of the GTA (at page 72).

[17] Paragraph [23] of the revised final submissions of QNR and QNM.

[18] See clause 41.1 of the GTA (at page 72).

[19] The decisions were properly interlocutory in nature: Milbor Investments Pty Ltd v Commonwealth Bank of Australia [1994] Vic Rp 61; [1994] 2 VR 290 at 296-7. And no party contended that the court was bound by the prior decisions. See, for example, Transcript at T4-10 line 27.

[20] See, for example, the submission of the defendants to the effect that 'prima facie references to "QNI" in the GTA should be construed as references to Queensland Nickel.' (defendants' revised closing submissions at [25].

[21] QNI Resources Pty Ltd v North Queensland Pipeline No. 2 Pty Ltd (no 2742 of 2017) 23 May 2017 at transcript page 6 line 23.

[22] QNI Resources Pty Ltd v North Queensland Pipeline No. 1 Pty Ltd [2017] QCA 297 at [33].

[23] Defendant's submissions at [25].

[24] Second Further Amended Defence filed 16 June 2021 at [58].

[25] Plaintiff's submissions at [131].

[26] Plaintiff's submissions at [133]-[142].

[27] Plaintiff's submissions at [134]-[138]. This is an incomplete quote of the plaintiff's submissions on this point.

[28] Defendant's opening submissions at [28]-[31].

[29] In construing a contract all parts of it must be given effect where possible, and no part of it should be treated as in operative or surplus: Lewison & Hughes, 'The Interpretation of Contracts in Australia' LBC 2012 at [7.03] page 291.

[30] A guarantee can apply to either the monetary or non-monetary obligations of a principal debtor: see the observations of Mason CJ in Sunbird Plaza Pty Ltd v Maloney (1987) 166 CLR 245 at 256: 'However, the payment of a debt is but one instance of the wide range of obligations the performance of which may be made the subject of a guarantee. Just as I may guarantee the payment of a debt so I may guarantee the performance of a contractual obligation which does not involve the payment of money.'

[31] [1938] NSWStRp 43; (1938) 38 SR (NSW) 512 at 516. See also Moschi v Lep Air Services Ltd [1973] AC 331 and Sunbird Plaza Pty Ltd v Maloney (1987) 166 CLR 245

[32] See, for example, the Plaintiff's Submissions at [134].

[33] (1987) 166 CLR 245 at 256 (per Mason CJ): 'There are, however, two common classes of guarantee of the payment of instalments by the principal debtor. The first is an undertaking by the guarantor that if the debtor fails to pay an instalment he will pay. This is a conditional agreement. The guarantor's obligation to pay arises on the debtor's failure to pay. The second is an undertaking by the guarantor that the debtor will carry out his contract. Then a failure by the debtor to perform his contract puts the guarantor in breach of his.'

[34] This discussion assumes that the GTA comprises sufficient memorandum in writing to comply with the Statute of Frauds requirements. See Re Hoyle, Hoyle v Hoyle [1892] UKLawRpCh 158; [1893] 1 Ch 84 at 99.

[35] See the discussion of Jordan CJ in Jowitt v Callaghan [1938] NSWStRp 43; (1938) 38 SR (NSW) 512 at 516.

[36] Plaintiff's submissions at [137].

[38] [2015] HCA 37; (2015) 256 CLR 104 at [46]- [48] (footnotes omitted).

[39] QNI Resources Pty Ltd v North Queensland Pipeline No. 2 Pty Ltd (No. 2742 of 2017) 23 May 2017 at page 8 lines 13 to 29.

[40] QNI Resources Pty Ltd v North Queensland Pipeline No. 1 Pty Ltd [2017] QCA 297. An application for special leave was dismissed: [2018] HCASL 67.

[41] This is a paraphrased version of paragraph 58 of the defence.

[42] Note the rather peculiar language of clause 41.6.3(a) which speaks of obligations that 'can not be performed severally by QNI'. That suggests and inability to perform rather a refusal to perform.

[43] Plaintiffs' Opening Submissions at [158].

[44] (1988) 166 CLR 245 at 257. This reasoning is contrary to the view taken by Lord Diplock in Moschi v Lep Air Services [1973] AC 331 at 348-9.

[45] [2011] QCA 258; [2012] 2 Qd R 482 at [60].

[46] Affidavit of Daren Wolfe affirmed 2 October 2020.

[47] Rather than being an identification of a force majeure event, this is simply a quote from clause 20.2(c) of the agreement.

[48] Paragraphs [40]-[42] of the Defendants' Opening Submissions.

[49] This and the following two paragraphs are paraphrased versions of the plaintiffs' opening submissions at [57]-[59].

[50] This appears to be a decision of QNR and QMN as Mr Wolfe refers to the defendants' attempt to appoint QNS as the successor manager. Mr Wolfe's affidavit at [39].

[52] See defendants' revised closing submissions at [58] and the plaintiffs' opening submissions at [77].

[53] Second Further Amended Defence at [48].

[54] The situation is analogous to the situation where an insured has established the existence of a contract of insurance and then the insurer has the onus of proving that the policy is no longer operative or that an exclusion applies: Kodak (A'asia) Pty Ltd v Retail Traders Mutual Indemnity Insurance Association [1942] NSWStRp 19; (1942) 42 SR (NSW) 231 (Jordan CJ).

[55] Work Health and Safety Regulation 2011 (Qld) subsection 578(1). Note that the regulator is a position appointed by the Governor in Council pursuant to the Work Health and Safety Act 2011 (Qld) and having the functions set out in section 152 of that Act.

[56] Work Health and Safety Regulation 2011 (Qld) subsections 580(1) and (2).

[57] Work Health and Safety Regulation 2011 (Qld) subsection 578(3).

[58] Work Health and Safety Regulation 2011 (Qld) subsection 578(4).

[59] Work Health and Safety Regulation 2011 (Qld) section 582 (time limit) and 583 (due process).

[60] Work Health and Safety Regulation 2011 (Qld) subsection 600(2).

[61] Work Health and Safety Regulation 2011 (Qld) subsection 600(3).

[62] Mr Wolfe affirmed an affidavit but his role as CFO of the Queensland Nickel group seemed to conclude in March 2016.

[63] Transcript T4-15 line 35. Those submissions of the defendants are a paraphrasing of the words of clause 20.2(c) of the GTA. See also the submission that 'the inability to have the licence transferred to QNS', and the related litigation (discussed below) constituted the force majeure event: Transcript T4-12 line 35.

[64] Defendants' Revised Closing Submissions at [51].

[65] Mr Wolfe's affidavit at [39]; see also the Defendants' Revised Closing Submissions at [54].

[66] The letter is ex DW-11 to Mr Wolfe's affidavit. It is also Doc Id: PLF.0900.0001.1372.

[67] [2016] QSC 222; 116 ACSR 321

[68] [2017] QCA 167; See Defendants' Revised Closing Submissions at [54] and Transcript T4-15 at line 40.

[69] Thus, the letter asserted that a transfer of the environmental authority had occurred. The absence of that licence/authority was therefore not relied on by QNR and QNM.

[70] Section 500(2) of the Corporations Act.

[71] The joint venture agreement referred to here is a 1992 agreement that records the relationship between the joint venturers and the manager inter se. It is ex DW-01 to Mr Wolfe's affidavit.

[72] QNI Resources Pty Ltd v Park [2016] QSC 222 at [53].

[73] See clause 1.1 (definitions clause) at page 6-7 which is paraphrased by Bond J at paragraph 14(b) of the reasons in QNI Resources Pty Ltd v Park [2016] QSC 222.

[74] QNI Resources Pty Ltd v Park [2016] QSC 222 at [14(c)].

[75] QNI Resources Pty Ltd v Park [2016] QSC 222 at [14(d)].

[76] Having regard to the regulations referred to above, it can be assumed that the process of obtaining or transferring a licence would be a substantive process involving satisfying the regulator about safety concerns.

[77] QNI Resources Pty Ltd v Park [2016] QSC 222 at [93].

[78] QNI Resources Pty Ltd v Queensland Nickel Pty Ltd (in liq) [2017] QCA 167.

[79] QNI Resources Pty Ltd v Queensland Nickel Pty Ltd (in liq) [2017] QCA 167 at [64].

[80] Defendants' Revised Closing Submissions at [54].

[81] Defendants' Revised Closing Submissions at [60].

[82] Relevant here is the rule in Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 as explained by Heydon, Cross on Evidence (12th Australian edition) at [1215]: '[The] unexplained failure by a party to give evidence, to call witnesses, or to tender documents or other evidence or produce particular material to an expert witness may (not must) in appropriate circumstances lead to an inference that the uncalled evidence or missing material would not have assisted that party's case.'

[83] The Defendants allege to the contrary: see Defendants' Revised Closing Submissions at [64].

[84] Defendants' Revised Closing Submissions at [64].

[85] Of course, the insolvency of Queensland Nickel is one explanation. But if the alleged force majeure event is an inability to secure a licence the inability is unclear, and the effect of the inability is unclear. For example, was the failure to secure the licence a permanent inability or temporary. What needed to be done to secure the licence?

[86] Defendants' Revised Closing Submissions at [66].

[87] Defendants' Revised Closing Submissions at [70].

[88] [2012] HCA 30; (2012) 247 CLR 205, 216 at [9]-[10]. This passage was accepted and relied on by Gotterson JA (with whom Fraser and McMurdo JJA agreed) in Queensland Nickel Sales Pty Ltd v Mount Isa Mines Limited [2019] QCA 32 at [119].

[89] Defendants' Revised Closing Submissions at [74].

[90] (2016) 258 CLR 525. The plaintiffs referred to another example - Kay v Playup Australia Pty Ltd [2020] NSWCA 33 where the collateral stipulation was the acceleration of the instalment payments and the removal of restraints and warranties.

[91] [2019] QCA 32 at [121].

[92] Although, of course, a failure to pay may turn out to be one of the consequences of a force majeure event.

[93] The plaintiffs put this argument in their Opening Submissions at [89].

[94] I leave open the question of whether, in another case, a force majeure clause could operate as a penalty.

[95] The onus of proving that a contractual stipulation amounts to a penalty rests with the person asserting it: Arab Bank Australia Ltd v Sayde Developments Pty Ltd [2016] NSWCA 328; (2016) 93 NSWLR 231 at [75]. See also the reasons of Gageler J said in Paciocco at [167]: 'The customers bore the evidentiary and persuasive onus throughout that inquiry.'

[96] This summary is a paraphrased version of the summary on McDougall J in Arab Bank at [74].

[97] Andrews v ANZ Banking Group Ltd [2012] HCA 30; (2012) 247 CLR 205, 216 at [9]; Paciocco at (Kiefel J at [17], [22], [32]; Gageler at [127], [157]-[166]; Keane at [221], [253], and [259]).

[98] Paciocco (Kiefel J at [29], [54]; Gageler J at [158] to [162]; Keane J at [221]).

[99] Paciocco (Kiefel J at [33], [42] to [47]; Gageler J at [145], [160] to [162]; Keane J at [216], [283]).

[100] Paciocco (Kiefel J at [62]; Gageler J at [169]).

[101] Paciocco (Kiefel J at [54], Gageler J at [164]; Keane J at [221], [240, [279]).

[102] See the later discussion of corporate leviathans.

[103] See Mr Giri's first affidavit (CRT.0001.0005.0095) at [25].

[104] GTA at clause 2.1(a). See also clause 9.1.

[105] See Defendants' Revised Closing Submissions at [83]. Note that the contract records a commissioning process over time, some of which pre-date and some of which post-date the date of the GTA: see GTA clause 2.5, 2.6, the definition of 'Start Date' in clause 41.1 and Annexure A.

[106] The reservation was managed by a regime where Queensland Nickel could nominate its proposed use of the pipeline: see GTA at clause 10. The reservation of capacity was embodied in the 'Firm Forward Shortfall' charge.

[108] [2008] EWHC 344 (especially at [46]).

[109] [2008] EWHC 1265 (at [50]).

[110] [2012] EWHC 3027 (Comm) (at [21], [25]).

[111] Defendants' Revised Closing Submissions at [84].

[112] That is a slightly simplified description of the imbalance: see clauses 14.1 and 14.2 of the GTA for a more detailed description.

[113] In fact, the quantity of the imbalance was 10,233 GJ but, for simplicity, the figure has been rounded to 10 TJ.

[114] Plaintiffs' Submissions on the New Issues at [36]-[44]. See the discussion above on the engagement of the penalties doctrine.

[115] Defendants' Revised Closing Submissions at [115].

[116] Plaintiffs' Submissions on the New Issues at [42].

[117] The primary stipulation is clause 14.3 of the GTA pursuant to which it was Queensland Nickel's obligation to take reasonable steps to control and, if necessary, adjust receipts and deliveries of gas, in order to ensure that, on any day, the imbalance did not exceed the imbalance limit of zero.

[118] Plaintiffs' Submissions on the New Issues at [53], [54].

[120] Plaintiffs' Submissions on the New Issues at [55], [56].

[121] Note that the GTA deals with potential insolvency by making QNR and QNM liable: see clause 41.6.3 discussed above.

[122] Defendants' Revised Closing Submissions at [125].

[123] See Plaintiffs' Submissions on the New Issues at [63]; Mr Giri's sixth affidavit at [26].

[124] See Plaintiffs' Submissions on the New Issues at [64]; Mr Giri's sixth affidavit at [26].

[125] Mr Giri's sixth affidavit at [26].

[126] Defendants' Revised Closing Submissions at [112].

[127] For simplicity I have rounded the exact figure from 10.223 TJ.

[128] Again, rounding has been applied.

[129] Defendants Revised Closing Submissions at [91].

[130] [2019] HCA 32; (2019) 267 CLR 560 at [168].

[131] See Defendants' Revised Closing Submissions at [98]; Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516 at [173]. See also the Plaintiffs' Opening Submissions at [106].

[132] Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344 at 350 (Mason CJ).

[133] The plaintiffs referred to the analogous case is Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd [2006] VSCA 6, where the Victorian Court of Appeal decided that the tenant's exclusive use and occupation of the premises was held to be good consideration.

[134] Plaintiff's Opening Submissions at [121]; Mr Giri's first affidavit at [100].

[135] [2019] HCA 32; (2019) 267 CLR 560 at [176].

[136] [2019] HCA 32; (2019) 267 CLR 560 at [14]- [18].

[137] Cases which include consideration of 'take or pay' agreements are M & J Polymers Ltd v Imerys Minerals Ltd [2008] EWHC 344 and Wagners Cement Pty Ltd & Anor v Boral Resources (Qld) Pty Ltd [2020] QSC 124.

[143] See MacDonald Dickens & Macklin (a firm) v Costello [2011] EWCA Civ 930; [2012] QB 244 at 251 at [23]; Lumbers v W Cook Builders Pty Ltd (In liq) [2008] HCA 27; (2008) 232 CLR 635 at [46]. These cases are referred to in the reasons of Kiefel CJ, Bell and Keane JJ in Mann v Paterson Constructions Pty Ltd [2019] HCA 32; (2019) 267 CLR 560 at [14]- [18] referred to above.

[144] Anthony Williams, Expert Witness Report at page 14 line 347-8.

[145] Transcript T1-13 line 20, T3-30 lines 8-11, 26-30; Anthony Williams, Expert Witness Report at page 10 line 201.

[147] Again, rounding has been applied.

[148] Second Further Amended Defence at [75].

[149] Second Further Amended Defence at [76].

[150] Breen v Williams (1996) 186 CLR 71, 102-103

[151] It is probable that the two concepts are really one concept or related concepts. However, it is convenient to look at the more general imposition of a duty in law, on the one hand, and the specific imposition of a term in the particular circumstances.

[152] [2019] QSC 163; (2019) 1 QR 392 at [219]- [245]. See also the useful discussion in Lewison & Hughes, 'The Interpretation of Contracts in Australia' Law Book Co 2012 at [6.14].

[153] Renard Constructions (ME) Pty Ltd v Minister for Public Works ( 1992) 26 NSWLR 234, Aurizon Network Pty Ltd v Glencore Coal Queensland Pty Ltd [2019] QSC 163; (2019) 1 QR 392 at [154].

[154] Aurizon Network Pty Ltd v Glencore Coal Queensland Pty Ltd [2019] QSC 163; (2019) 1 QR 392 at [156], also [237]-[238], [240].

[155] Aurizon Network Pty Ltd v Glencore Coal Queensland Pty Ltd [2019] QSC 163; (2019) 1 QR 392 at [234], [236].

[156] [2013] VSCA 212 at [108]. Later decisions seem to proceed on an acceptance of this position, see Vakras v Cripps [2015] VSCA 193 at [415]; Bensons Property Group Pty Ltd v Key Infrastructure Australia Pty Ltd [2021] VSCA 69 at [192].

[157] Tote Tasmania Pty Ltd v Garott [2008] TASSC 86; (2008) 17 Tas R 320 at [16]; cited by the Victorian Court of Appeal in Specialist Diagnostic Services Pty Ltd v Healthscope Ltd [2012] VSCA 175; Androvitsaneas v Members First Broker Network Pty Ltd [2013] VSCA 212.

[158] [2014] HCA 32; (2014) 253 CLR 169 at [36].

[159] United Group Rail Services Ltd v Rail Corporation New South Wales (2009) 74 NSWLR at [61]; Bundanoon Sandstone Pty Ltd v Cenric Group Pty Ltd [2019] NSWCA 87 at [156].

[160] [2004] NSWCA 15.

[161] At [191]. See also Wenzel v Australian Stock Exchange Ltd [2002] FCAFC 400; (2002) 125 FCR 570 at [80].

[162] Esso Petroleum Resources Pty Ltd v Southern Pacific Petroleum NL [2005] VSCA 228 at [4]; see the quote below.

[163] Esso Petroleum Resources Pty Ltd v Southern Pacific Petroleum NL [2005] VSCA 228 at [4]; see also in Lewison & Hughes, 'The Interpretation of Contracts in Australia' Law Book Co 2012 at [6.14].

[165] Defendants' Revised Closing Submissions at [134]. Note that those submissions say that it remains an open question whether a duty to cooperate can be implied into all commercial contracts. I have assumed that is a mistake and that the intended reference is to a duty of good faith. Of course, where performance of the contract cannot take place without the cooperation of both parties it is implied that there is a duty to cooperate. That has been accepted in a long line of cases since Mackay v Dick (1881) 6 App Cas 251 at 263.

[167] Esso Australia Resources Pty Ltd v Southern Pacific Petroleum NL [2005] VSCA 228 at [2] and [3] per Warren CJ (agreeing with Buchanan JA) citing Forklift Engineering Australia Pty Ltd v Powerlift (Nissan) Pty Ltd [2000] VSC 443 at [91] and [94].

[168] Paciocco v Australia and New Zealand Banking Group Ltd (2012) 236 FCR 1999. At [289], [290], [292]; Marmax Investments Pty Ltd v RPR Maintenance Pty Ltd [2015] FCAFC 127; (2015) 237 FCR 534 at [149].

[170] (1982) 149 CLR 337 at 346.

[171] [1998] EWHC Patents 333; [1998] FSR 622

[172] [1939] 2 KB 206 at 227

[173] This is an application of the principle expressum facit cessare tactitum: The express makes the implied cease. See the discussion of this topic in Lewison & Hughes, 'The Interpretation of Contracts in Australia' Law Book Co 2012 at [7.07].

[174] Biki v Chessells [2004] VSCA 70; [2004] ANZ Conv R 296 at [26] per Ormiston JA.

[175] See Mr Giri's first affidavit at [84(c)] and exhibit DLG-55.

[176] Clause 14.8 of the GTA allowed Queensland Nickel to deal with the imbalance themselves, at least by trading imbalances with another user or by selling the gas. See affidavit of Sean Coffey affirmed 12 July 2021 at [16], [34] and [48].