OSWAL -v- YARA AUSTRALIA PTY LTD [No 3] [2011] WASC 255 (14 September 2011)

2 As the terms of the preliminary issue suggest, I am only concerned at this point of the proceedings with issues of contractual construction.

3 The focus of the construction exercise distils to two of the above written instruments. The first is a deed of 24 March 2008, made between four parties, known as the Shareholders' Deed (which I will refer as 'the SD' or 'SD'). The parties to the indenture were Mr Pankaj Oswal in the capacity of trustee of the Burrup Trust (the Burrup Trustee), Yara Australia Pty Ltd, first defendant in these proceedings (and plaintiff by counterclaim), Burrup Holdings Limited (BHL) (the third defendant to the action and counterclaim and the fifth defendant by counterclaim) and Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) (BFPL). The appointed receivers and managers of BFPL (Messrs Carson, McEvoy and Theobald) are the seventh defendants by counterclaim. They were added as parties to the proceedings under my orders of 17 May 2011, see Oswal v Yara Australia Pty Ltd [No 2] [2011] WASC 146.

4 Whilst Mr Pankaj Oswal is a party to that instrument in the capacity of trustee:

(a) The Burrup Trustee, as Pankaj Oswal is sometimes referred, is not presently a party to either the claim or counterclaim in the proceedings.

(b) Mr Pankaj Oswal personally is named as second defendant to the action by the plaintiff (his wife, Mrs Radhika Oswal). Mr Pankaj Oswal is also second defendant to the counterclaim brought by Yara Australia Pty Ltd (Yara) in the proceedings.

(c) Pankaj Oswal and his wife, Radhika Oswal, as the second defendant and plaintiff respectively in the proceedings, have been represented from the outset by separate firms of solicitors, no doubt because of differing commercial interests arising from the proceedings.

(d) Neither Pankaj Oswal nor Radhika Oswal personally was a party to the SD.

5 The second key instrument for examination is a written agreement of 19 September 2008, referred to as the Share Sale Agreement (the SSA). Two parties to the SD became parties to the SSA, namely Yara and the Burrup Trustee. However, the two corporations, BHL and BFPL (who were parties to the SD) were not parties to the SSA.

6 The remaining parties to the SSA were Mrs Radhika Oswal personally and her husband Pankaj Oswal personally (to whom I will on occasion refer for ease of reference and convenience simply as Radhika and Pankaj respectively).

7 The SD and the SSA are the key instruments. Their terms and content read as a whole and together are so important in the overall construction exercise that it will be necessary for me to set out large components of their contents. During submissions, almost every word in every line of every clause in these documents was referred to as carrying some significance, insight or nuance in the overall construction exercise. It should not be thought that any word, phrase, clause or punctuation has escaped my eye in the overall construction task at hand. For convenience I have decided to set out significant portions from these instruments in a Schedule at the end of these reasons. My selection of clauses found in the Schedule ought not be assessed as any sort of indication that I have not had regard to the full content of each of these instruments.

8 By way of overview at this point, I will observe that recitals to the SD record it as an agreement between just two 'Shareholders' (Yara and the Burrup Trustee). It is a shareholders' agreement that is relevant not only to the board management of BHL (in which the two 'Shareholders', the Burrup Trustee and Yara, are recorded as having respectively, a 70% and 30% shareholding in BHL) by its directors, but also to the boards of all Group Member corporations related to BHL.

9 One of BHL's wholly owned subsidiaries, BFPL, owns an ammonia plant, operationally established on the Burrup Peninsula of Western Australia since around 2006. The plant was established as a greenfields startup operation commencing around 2000.

10 The Burrup Trust was established under a Deed of Trust executed in 2001. Originally it was called the Vashundra Trust. But it changed name to the Burrup Trust shortly after it had been established (see exhibit 2, tab 9).

11 Recitals within the SD stipulate that it is an agreement entered between the Burrup Trustee and Yara, in respect of their (at the time) respective 70% and 30% shareholding interests in BHL. Whilst BHL and BFPL are parties to the SD, they are not 'Shareholders' as that term is defined and used in the SD.

12 Many of the covenants in the SD concern only 'Shareholders'. The 2008 SD replaced an earlier shareholders' agreement of 2005 between the same two parties, but involving a further person, Mr Vikas Rambal (as trustee of the Vikas Rambal Family Trust (the Rimbal Family Trustee)), who, at the time, held a 15% shareholding interest in BHL.

13 The Rimbal Family Trustee sold the 15% shareholding interest in BHL to the Burrup Trustee in 2007, thereby raising the shareholding interest of the Burrup Trustee from 55% to 70%.

14 Departure from a formerly tripartite BHL shareholding arrangement between 'Shareholders' under the 2005 Old Shareholders' Deed (OSD) to just a two party 'Shareholders' agreement is reflected under the terms of the SD of 24 March 2008.

15 The 2008 SD contains some covenants applicable between its four parties. But of particular significance to this preliminary issue are the BHL board voting and management covenants, applicable just as between the two designated 'Shareholders' to the SD, who then held respectively, 70% and 30% shareholding interests in BHL.

16 Broadly speaking, the SD reflects a quasiincorporated coventure project between the two remaining Shareholders, and sets out how the Shareholders agree to manage their venture concerning the operation of the Burrup ammonia plant. That plant, by 2008, had been successfully established as an operational business. There was a planned share float (IPO) and public listing on the Australian Stock Exchange (ASX) for the last half of 2008.

17 The SD's regime of corporate board voting and governance arrangements altered the more typical directors' decisionmaking and director voting procedures that would otherwise apply in a corporation. Rather than seeing directors elected at a Shareholders' general meeting forming the corporation's board of directors, within which there would be either executive or nonexecutive directors holding one vote each, the SD (and the OSD before it) implemented a very different corporate board governance structure.

18 The OSD and the SD both set down regimes of corporate governance through a mechanism of what are identified as 'Nominee Directors'. The OSD and the SD both specify that there can be no more than five 'directors' of the BHL board (see cl 4.1(b)). Under the SD, Yara and the Burrup Trustee, as the only two 'Shareholders', are entitled to appoint 'Nominee Directors' to the BHL board. Yara is granted a right to appoint one Nominee Director (as had been the case under the OSD). The Burrup Trustee is granted the right to appoint up to three Nominee Directors (as had been the case under the OSD). Those appointment rights are conditional upon the appointing 'Shareholder' of a Nominee Director or Directors holding and continuing to hold a minimum level of BHL shares (5%).

19 At BHL board meetings, Nominee Directors vote by a process that would mirror the outcome of a vote taken by poll conducted on the floor of a BHL Shareholders' general meeting. Nominee Directors of BHL are entitled to vote a numerical level of votes that is calculated by reference to their appointor Shareholder's holding of ordinary shares in BHL at the time of the vote. So, in the case of Yara, as of 24 March 2008, its Nominee Director on BHL's board held a 30% voting interest on a poll taken at BHL board meetings. The Burrup Trustee at that time could appoint potentially up to three Nominee Directors, who together had the entitlement to vote at a directors poll at BHL board meetings at a weighting equating to the Burrup Trustee's 70% ordinary shareholding.

20 This 2008 power allocation clearly displays a recognised differentiation between the respective power of the majority and minority Shareholders. However, there was a very important check or qualification overlaying this weighted board poll vote regime.

21 By another clause in the SD (cl 4.5(b)(ii)), all four parties, but particularly the two 'Shareholders', covenanted that a 'Special Majority' for some board decisions concerning a (wide) range of identified key subject matters concerning the operations of BHL was needed in order for board resolutions upon these nominated subject areas to be carried. The breadth of potential subject matters specified for the BHL board decisions that would require a 'Special Majority' is set out in Schedule 1 to the SD.

22 A Special Majority under the 2008 SD was set (see SD definition cl 1.1 'Special Majority' and subdefinition (a)) at 80% of the votes of the participating Shareholders. [Special Majority, defined under cl 1.1 of the OSD, had been set at 90%.]

23 In circumstances where the Burrup Trustee held a 70% majority voting interest, need for BHL board resolutions upon Schedule 1 subject matters to be passed at an 80% majority carries obvious ramifications. Yara, as the (30%) minority Shareholder, effectively held a right of veto against board resolutions taken for Schedule 1 subject matters through the votes of its Nominee Director.

24 Consistent with a good faith relationship between the two parties controlling BHL, as well as its group subsidiaries and related corporations, unanimity was essentially required between the two power blocks of 'Shareholders' upon important specified management decisions for BHL.

25 Recourse to Schedule 1 in the SD indicates that recurring board management issues such as the annual budget and business plan for BHL, deviations from that annual budget and business plan and any significant asset sales or acquisitions would all fall into the genre of BHL board resolutions requiring unanimous support from both BHL's two Shareholders in order to be validly carried as resolutions of BHL's board.

26 Thus for Yara, BHL board governance arrangements involving a right to appoint a Nominee Director, coupled with the SD requirement for Special Majorities set at 80% upon significant BHL management topics, reflected an elaborately balanced power sharing arrangement with the Burrup Trustee. Such an arrangement afforded Yara as the minority BHL Shareholder a measured, but not dominant governance participation. It is clear that this arrangement envisaged cooperation and consensus between the two power blocks upon important BHL management decisions.

27 This summary is of course an oversimplification of what presents under the SD's complex governance system that is expressed to be the entire agreement of all the four parties to the SD.

28 It is convenient, since it is at the heart of the ensuing construction exercise, to set out at an early point the precise Nominee Director voting governance provisions within the SD which deliver the unique BHL board governance power balance.

29 Clauses 4.1(c), (d), (e) and (f), 4.4(e) and (f) and cl 4.5 of the SD need to be assessed together within the SD as a whole. Relevantly, however, these parts of cl 4.1, 4.4 and 4.5 of the SD are seen to provide:

(c) (Appointment): For as long as it holds 5% or more of the issued share capital of Holdings, Yara may appoint one non-executive director to the Board of each company in the Company Group. For as long as he holds 5% or more of the issued share capital of Holdings, Pankaj Oswal may appoint the remaining 3 directors to the Board of each company in the Company Group. Holdings will appoint to the Board of each other company in the Company Group the persons nominated by the Shareholders in accordance with this clause.

(d) (Removal): Provided that the Shareholder has complied with clauses 4.1(c) and 4.1(f), a Director may only be removed by the Shareholder who appointed him. To remove a Director, the Shareholder who appointed him must give notice to the relevant company in the Company Group. The removal notice takes effect on the date that the removal notice is deemed given under clause 21(e).

(e) (Manner of appointment and removal): Every appointment and removal of a Director takes effect when the written notice of appointment or removal is received at the Registered Office. However, in the case of an appointment, the appointment takes effect when the written consent to act as a director is received at the Registered Office if that is later than the receipt of the notice of appointment.

(f) (Resignation): If at any time a Shareholder holds less than the percentage of Shares in Holdings referred to in clause 4.1(c), the Shareholder must ensure that its appointee Director(s) resign from the Board with effect from the date on which the Shareholder first held less than that percentage.

(e) (Quorum): A quorum for Board meetings is constituted by the attendance (in person, by telephone or by live audio-visual transmission) of a Director appointed by each Shareholder that is entitled to appoint a Director under clause 4.1(c).

(f) (Adjournment): If at least one Director appointed by each Shareholder entitled to appoint a Director in accordance with this deed is not present (either in person, by telephone or by live audio-visual transmission) at a Board meeting, the meeting must be adjourned and reconvened at such time and place as reasonably determined by the Directors present (provided that notice of the time, date and place of the reconvened meeting must be given to each Director not less than 72 hours before the meeting and the reconvened meeting must not be held sooner than 7 days after the date of the adjourned meeting).

(i) The Nominee Directors appointed by each Shareholder and present and entitled to vote at a Board meeting are collectively entitled to one vote at a Board meeting for each Share held by the Shareholder that appointed those Nominee Directors.

(ii) If a person is a Director and is also appointed as an alternate Director for one or more Directors, the person appointed as an alternate Director is entitled to as many votes as the Directors he or she is acting for would have been entitled had they been present, in addition to his or her own vote (provided that the Directors who appointed the person as an alternate Director are not present).

(iii) Where a Shareholder is not represented by a Nominee Director at a Board meeting reconvened in accordance with clause 4.4(f) then those Nominee Directors that are present at that reconvened Board meeting will have that number of votes as the number of Shares held by the Shareholder that appointed them bears to the total number of Shares held by all Shareholders who have Nominee Directors present and entitled to vote at that reconvened Board meeting.

(i) (Simple majority): Subject to clause 4.5(b)(ii) decisions by the Board must be made by a simple majority vote.

(ii) (Special Majority): Decisions on any matter set out in Schedule 1 must be made with the approval of a Special Majority of Directors.

Preliminary observations concerning cl 4.1(c) of the SD

30 To set the scene for what follows, there are some relatively straightforward observations I can make at the outset about the regime of BHL board governance that is set by reference to cl 4.1(c) of the SD.

31 First, I note the definitions component of the SD under cl 1.1 where the terms 'Directors', 'Nominee Directors', 'Shareholders' and 'Shareholder' are defined. These four terms are respectively defined as:

'Directors' means the directors of Holdings (or where the context permits or requires the directors of each other company in the Company Group) for the time being and includes any alternate director duly appointed and acting as a director and 'Director' means one of them.

'Nominee Directors' in relation to a Shareholder means the Directors nominated to the Board by that Shareholder in accordance with clause 4.1(c) that are present at the Board meeting and 'Nominee Director' means anyone of them.

'Shareholders' means the people who hold Shares from time to time, and 'Shareholder' means one of them.

32 From this I discern that a Nominee Director is a special class of director appointed by a Shareholder to BHL's board under cl 4.1(c) of the SD. But there may be other (ordinary) BHL directors as well. A Nominee Director is a subset of the more generic and wider position of director that is also recognised in the SD.

33 Second, by reference to cl 4.1(c), Yara's Nominee Director is to be a 'nonexecutive director'. The (potentially appointed) three Nominee Directors of the Burrup Trustee are not given the same limited, i.e. 'nonexecutive', designation as Yara's Nominee Director. From this I infer that one of potentially up to three Nominee Directors appointed by the Burrup Trustee may also occupy the executive positions of Managing Director (see cl 4.3) and, or, Chairman (see cl 4.2). It is an uncontroversial fact that Pankaj has personally held the positions of Managing Director and Chairman of BHL for most of BHL's operational existence (there is to follow in these reasons a section setting out a chronology of the background and surrounding facts to the key instruments which I find proven and established on this preliminary issue).

34 Third, I note the significance of an appointment of Nominee Directors, not only for BHL, but also carrying downstream consequences for the composition of the boards of 'each company in the Company Group'. The term 'Company Group' is defined in cl 1.1 of the SD as 'Holdings and each other entity within the Group of which Holdings is a Group Member including without limitation BFPL'. The term 'Group Member' needs to be understood by reference to the definition of 'Group' in cl 1.1, which is in terms:

'Group' in respect of a body corporate means:

(a) a Holding Company of the body corporate;

(b) a Subsidiary of the body corporate; and

(c) a Subsidiary of a Holding Company of the body corporate,

and a 'Group Member' is a body corporate that is a member of the Group.

35 The terms 'Holding Company' and 'Subsidiary' are defined in the definition clause 1.1 in relatively orthodox terms (except that 'Subsidiary' also includes a trust, where the trust would have been a subsidiary of an entity that is controlled if the unit or other beneficial interest of the trust was a share).

36 Fourth, whilst the Nominee Directors of Yara or the Burrup Trustee are appointed to the board of BHL, there is also found within cl 4.1(c) the correlative covenant of BHL promising to appoint to the boards of each other company in the Company Group the same persons nominated by the Shareholders. In other words, Yara and the Burrup Trustee get their nominees appointed directly to the board of BHL, but it is BHL which thereafter appoints those same BHL Nominee Directors to the boards of other companies within the Company Group. It may be observed that there is no restriction imposed in the SD as regards the identity, character, qualifications or antecedents for the person who is the subject of a nomination of a Shareholder to fill the role of a BHL Nominee Director.

37 Fifth, the first two sentences of cl 4.1(c) address Yara (by the word 'it') and the Burrup Trustee (by the word 'he'). However, in contrast, the last sentence of cl 4.1(c) refers to persons who are the (director) nominees of (a more generically applicable word) 'Shareholders'. The SD's definition of Shareholders extends beyond Yara and the Burrup Trustee, in order to reach those who hold shares in BHL 'from time to time'. This suggests some potential application for cl 4.1(c) as a whole to persons holding shares in BHL beyond just Yara and the Burrup Trustee.

38 Sixth, I observe that the first and second sentences of cl 4.1(c) are prefaced by the phrase, 'For as long as'. Accordingly, the Burrup Trustee and Yara are entitled to appoint Nominee Directors 'For as long as' the Shareholder holds a minimum percentage shareholding (5%) of the issued share capital in BHL. A question then arises as to whether this minimum percentage holding requirement is exclusively tied to Yara and the Burrup Trustee, or whether it can apply more expansively to a 'Shareholder' who is a permitted successor, substitute or assignee of BHL shares from Yara or the Burrup Trustee. I return to that question later in these reasons.

39 Seventh, cl 16.2(c) of the SD provides for some circumstances of 'automatic termination' of the SD for a Shareholder party. One of these circumstances is the termination of the SD for any Shareholder 'when it ceases to hold, directly or indirectly, any Shares'. In addition, by cl 16.2(a)(ii), the SD automatically terminates upon a listing of BHL on a stock exchange, or when any of its shares are quoted or listed on a stock exchange. As regards initial public offerings (IPOs) and BHL, see cl 9.1(b) which deals with transfers of BHL shares without restriction in the face of an IPO concerning the shares of BHL on a stock exchange.

40 Eighth, in the second sentence of cl 4.1(c) of the SD there is a mathematical incongruity in terminology concerning the Burrup Trustee appointing 'the remaining three directors to the board'. Yara has the right to appoint one Nominee Director. Since the Burrup Trustee has the ability to appoint 'the remaining three directors to the board' that in aggregate allows only a maximum of four Nominee Directors. However, a minimum of five directors is required by BHL's Constitution (see cl 3.1(a) of BHL's Constitution, which is exhibit 1, tab 3), as a limited corporation.

41 The mathematical non sequitur is explained historically by reference to the origins of a like Nominee Director clause in the OSD (exhibit 1, tab 2). The OSD's cl 4.1(c) had provided for the Rimbal Family Trustee to hold a right to appoint one Nominee Director at the time when the Rimbal Family Trustee held a 15% shareholding in BHL, along with Yara (at 30%) and the Burrup Trustee (at 55%) (see the OSD, exhibit 1 tab 2 at cll 4.1(b) and (c)). The three relevant blocks under the OSD could potentially appoint between them the five required directors (Nominee Directors) to BHL's board.

42 Clause 4.1(b) of the SD provides that the board of each company in the corporate group must consist of no more than five directors. But there is, as I noted, clear recognition under the SD not only of Nominee Directors, but of directors generally. With BHL's Constitution requiring a minimum of five directors, and four being the maximum number of Nominee Directors capable of being appointed under cl 4.1(c) of the SD from the two Shareholder blocks, then either the board of BHL (Constitution cl 3.3), or a general Shareholders' meeting of BHL (Constitution cl 3.4) could appoint or elect the required number of extra directors, so as then to produce a BHL board of not less than five directors. However, ordinary director(s) simply have one vote to cast, rather than exercising the poll weighted voting power of a Nominee Director derived from cl 4.5(a)(i) of the SD.

43 Ninth, by reference to the workings of cl 4.5(a)(i), on the hypothesis that the Burrup Trustee had appointed all three of a potential three Nominee Directors that trustee might appoint, the three Nominee Directors collectively would only be entitled to vote at the level of the Burrup Trustee's shareholding interest (65%, after completion on the sale of a 5% BHL shareholding to Yara agreed under the SD in 2008). The pragmatic workings of an apportionment of this type of poll voting power, spread as between up to three Nominee Directors of the Burrup Trustee if appointed, is not dealt with expressly by the SD.

44 Tenth, cl 4.5(a)(iii) of the SD addresses a situation under which a Shareholder may not be represented by a Nominee Director at a BHL board meeting. In that scenario, votes cast by Nominee Directors attending and voting are assessed by reference to a different aggregate vote base. A majority is assessed by reference to 'the total number of Shares held by all Shareholders who have Nominee Directors present and entitled to vote'.

45 Eleventh, there must be recognised an overall relative strength in the Burrup Trustee's position under the SD by being able to appoint up to three Nominee Directors, measured against Yara's lesser entitlement to appoint only one nonexecutive Nominee Director. This is demonstrable under cl 4.1(c) of the SD. It was also the case under the predecessor Nominee Director provisions of the OSD. The right to appoint (up to) three Nominee Directors enjoyed by the Burrup Trustee remains applicable, even were (hypothetically) the Burrup Trustee to dispose of up to 65% of a (then 70%) BHL shareholding. On such a 'sell off' scenario, the Burrup Trustee would still be entitled to appoint three Nominee Directors to BHL, as well as to expect BHL to then appoint those (up to three) nominated directors of the Burrup Trustee to the other companies in the Company Group. Yet, as regards voting on a poll by directors at BHL board meetings, in the wake of such a hypothetical (65%) share selloff by the Burrup Trustee, the three Nominee Directors of the Burrup Trustee would only be able to cast votes (by cl 4.5(a)(i)) on a board poll at a total weighting of 5%. On the 65% sell off hypothesis the Burrup Trustee would suffer a risk of being outvoted by another 'Shareholder' party under the SD that had appointed a Nominee Director whose poll voting rights carried a greater numerical weighting from its holding of BHL shares, such as Yara at 35% (subject always to the intrusion of Special Majority board subject matter scenarios, set under Schedule 1 of the SD).

46 Twelfth, the practical utility for the Burrup Trustee appointing more than one Nominee Director to BHL, when one Nominee Director can cast all weighted votes at whatever the numerical BHL shareholding then held was at the time of the vote, needs to be assessed from a perspective that extends beyond just considering BHL's board management. The potential downstream effects from the appointment of BHL Nominee Directors upon the composition of boards of other corporations within the Company Group (towards which an application of voting by poll at directors' board meetings under cl 4.5(a)(i) arrangements would not apply), must be kept in mind. Three appointments to a downstream corporate board (of five) may be enough to deliver numerical board control of a BHL Group Member, even from a limited 5% shareholding in BHL.

47 Thirteenth, although the first two sentences of cl 4.1(c) expressly identify Yara and the Burrup Trustee by name, the last sentence, as I have indicated, refers to Shareholders, a word defined by reference to people who hold shares 'from time to time'. Under cl 1.2(c) of the definition clause of the SD (seen to be prefaced by the words applicable to cll (b) through (n), 'and unless the context indicates a contrary intention'), 'a reference to any party includes that party's executors, administrators, successors, substitutes and permitted assigns, including any person taking by way of novation'.

48 This successor clause in the SD is of key significance in resolving the parties' starkly divergent construction positions concerning the potential transferability (or portability) of BHL Nominee Director appointment rights held under cl 4.1(c) of the SD, particularly where they are seen to be expressly conferred upon a party to the SD by the introductory phrase, 'For as long as'.

49 Fourteenth, the essential character of contractual rights held under a corporate board management arrangement, agreed between two parties who are effectively coparticipants under what presents as an incorporated quasi joint venture arrangement, needs to be appreciated and respected. Private, contractual rights, held between coventurer parties, under an agreement over corporate management rights, are discussed by Hollington, Shareholders' Rights (4th ed, 2004) [330] and [340]. The author observes, in terms I accept:

A shareholders' agreement is ... a private matter between the parties to the contract, enforceable between them according to ordinary principles of the law of contract ... If a transferee of shares belonging to a party to the agreement is to be bound by and take the benefit of it, the transferee must adhere to it by further agreement on its part ... a court will enforce such an agreement as between the shareholders who were parties to that agreement by injunction or otherwise, unless it conflicted with a specific statutory provision. There may be difficulties in enforcing such an agreement against successors entitled to the shares, but this can be overcome by an appropriate drafting of the agreement.

50 I also agree with Kourakis J, who in Elders Forestry Ltd v Bosi Security Services Ltd [2010] SASC 233; (2010) 242 FLR 360, after summarising case authorities in this arena at [130] [135] concerning rights of a shareholder party, particularly in the context of evaluating the assignability of such rights, observed at [136]:

In my view, the above passages support my conclusion that the Shareholders' Deed as amended affected the very nature of the share and its inherent rights and obligations.

51 Fifteenth, within the SD there is, as will be seen, an elaborate set of provisions controlling and regulating any transfer of shares in BHL (see cl 9 stipulating various situations where share transfers are permissible or are controlled). There is also a close interrelationship between cl 9 and cl 10 of the SD. Clause 10 deals with preemptive rights enjoyed by SD Shareholders, in case of a party seeking to transfer BHL shares. For a new or incoming Shareholder in BHL, there is to be found relevantly within cl 9 of the SD a discernible and elevated emphasis upon the scenario of 'agreement' between Shareholders, made otherwise against what is more usually provided for as between Shareholders. Such agreements otherwise are to be paramount; see in that respect cl 9.1(c) and the preface to cl 9.7 of the SD.

52 The situation of express (Shareholder) 'agreement' to the contrary may be thought (generally speaking) to always be an option open for Shareholder parties, i.e. to consensually act otherwise than in accordance with a boilerplate regime set down. Nevertheless, the SD expressly reiterates and emphasises the option of consensus upon a different, once agreed, course, thereby entrenching the overall structural importance of the parties' express agreement to a course of action contrary to what is otherwise provided for by the SD.

53 Sixteenth, also within the regime of regulated share transfer and preemption under the SD, there presents a discernible importance in the requirement for what is found under cl 11 as an 'Assumption Deed'. Such an instrument becomes applicable either under cl 11.1 on an issue of BHL shares, or under cl 11.2 on a transfer of BHL shares. The term 'Assumption Deed' is defined by the definitions clause 1.1 of the SD, as:

'Assumption Deed' means a deed of assumption substantially in the form of Annexure A.

The Shareholders must procure the Board [of BHL] to refuse to register the Transfer of any Shares to a person who is not already a party to this deed unless that Transfer is made pursuant to or for the purposes of an IPO or that person has executed an Assumption Deed.

(my emphasis in bold)

55 The express requirement for an Assumption Deed to be entered by an incoming BHL Shareholder manifests at a number of places in the SD, including by cl 9.2(a) (by reference to cl 9.7) and cl 9.7(a).

56 Seventeenth, from cll 4.1(c) and 4.1(f) of the SD it will be noted that if the minimum percentage holding falls below the specified minimum percentage (i.e. below 5%) then the Shareholder in question must at that point ensure that its Nominee Director(s) resigns, with effect from the date on which the Shareholder first holds less than that specified percentage of BHL shares. Within this mandatory resignation procurement provision I note a use of more generic terminology (i.e. 'Shareholder') [rather than by directly identifying the actual parties to the SD, as is seen under the first two sentences of cl 4.1(c)]. This tends to support what I detect as some scope for persons who in due course take a permitted allotment or transfer of shares in BHL from a 'Shareholder' under the SD (thereby becoming a 'Shareholder' under the SD) being able to obtain and exercise cl 4.1(c) Nominee Director rights as 'Shareholders'. However, the circumstances in which an incoming BHL Shareholder might be able to obtain and exercise cl 4.1(c) Nominee Director rights will require a more detailed subsequent consideration in these reasons.

57 I note the obligation upon a 'Shareholder' to cause its Nominee Directors who are its 'appointee(s)' to resign from the 'Board' (see cl 4.1(f)). In context, I read this to apply to all boards to which a Nominee Director has been appointed either directly to BHL's board, or by BHL to the boards of Group Members. Resignation by the Nominee Director is to be effective from the date on which the Shareholder first holds less than the designated percentage of shares in BHL. However, the SD obligation under cl 4.1(f) to 'ensure' is a covenant by the Shareholder rather than by the appointee director. Failure by the 'Shareholder' to comply with the obligation to ensure that its appointee director resigns at the appropriate time, would look, potentially, to constitute a breach of the SD by the Shareholder, potentially sounding in damages or some other remedy against it.

58 Questions of the status or validity of such a Nominee Director's continuing participation as a director of BHL or its Corporate Group Members, or the correlative consequences for the validity of resolutions participated in by a director who does not resign in such circumstances, also present as open questions.

59 Eighteenth, I have already observed there is no constraint seen within the SD as to the identity or qualifications of the actual nominee who is to fill the position of a Nominee Director, for the purposes of cl 4.1(c). The appointing party holding that right may nominate whoever they see fit to fill the position on BHL's board. The unfettered nature of the appointment right as regards a chosen nominee is, in my view, of relevance in assessing subsequent arguments as to the asserted nontransferability of the contractual right.

Share Sale Agreement of 19 September 2008 (the SSA)

60 How the SSA, signed just under six months after the SD, interrelates with and affects the operation of the SD, particularly as between its two Shareholders (Yara and the Burrup Trustee), in a context of the possible transportability of cl 4.1(c) Nominee Director rights, is at the heart of the disputes in focus under the preliminary issue.

61 Unlike the SD, the SSA was not entered as a deed, and, as I have observed, it was a four party agreement involving only two of the four parties to the SD (namely, Yara and the Burrup Trustee).

62 The SSA is foremost, as its name rather suggests, concerned with the agreed share sale arrangements by which Yara was to acquire a further 5% of ordinary shares in BHL. On completion, the sale acquisition would lift Yara's minority shareholding position in BHL from 30% to 35%. Yara was to acquire the additional 5% shareholding interest in BHL at a sale price, defined in the SSA as a 'Completion Payment', which was US$141 million.

63 What presents as of immediate significance towards the SSA is that under the SSA (signed off on 19 September 2008) Yara's acquisition of a further 5% shareholding interest in BHL was to be from Pankaj personally (i.e. not from the Burrup Trustee). The eventual 5% BHL share acquisition by Yara from Pankaj personally, settled in October 2008, is not at all factually controversial. Nor is the correlative fact that Yara's further 5% BHL shareholding interest was not acquired from the Burrup Trustee, but rather from Pankaj personally.

64 So then, what changed between 24 March and 19 September 2008 as regards the legal and beneficial ownership of the (5%) (55,002,071) ordinary BHL shares that Pankaj personally sold to Yara under the SSA for US$141 million?

65 How it came to pass, between the time of the SD (24 March 2008) and the time of the SSA (19 September 2008), that Pankaj personally obtained the full beneficial interest (he already held the legal interest by his capacity as the trustee of the Burrup Trust) to 35% of the 70% shareholding in BHL shares formerly held by the Burrup Trustee is something of an epic factual enquiry in its own right.

Pankaj's personal interest in 35% of BHL's shares

66 On one view of the facts, Pankaj may not have acquired his full legal and beneficial shareholding interest in 35% of the shares in BHL until some time on 18 September 2008. In other words, Pankaj's personal legal and beneficial holding of 35% of the shares in BHL may not have been perfected until just one day before entry of the SSA - under which Pankaj then sold 5% of his acquired 35% shareholding to Yara.

67 According to the evidence of a Mr Basil Lenzo, a two time former director of BHL and solicitor engaged to document corporate compliance arrangements by BHL, it was only on 18 September 2008 that Mr Lenzo personally made entries in BHL's manual share register recording the legal and beneficial holding of shares in BHL by Pankaj (and of his wife Radhika) as to 35% each.

68 On that day Mr Lenzo also sent copies of the BHL register now showing his most recent entries in the share register of BHL to Yara. However, as will be seen, the share register entries made that day were considerably backdated by Mr Lenzo. What Yara's representatives saw on 18 September 2008, courtesy of Mr Lenzo, showed Pankaj and Radhika acquiring their respective beneficial interests as BHL shares on 26 April 2007. As the register stood after that date, Radhika and Pankaj held 574 shares each and Yara held the remaining 492 BHL shares (30%).

69 Whatever view is reached about the precise timing of Pankaj's (and Radhika's) acquisitions of personal beneficial interests of these BHL shares, there is not and can be no dispute that Yara ultimately did acquire its 5% extra BHL shareholding (taking it to a 35% shareholding interest in BHL) from Pankaj, for which it paid US$141 million.

70 At no later than 18 September 2008, the date by which Pankaj must have acquired his full beneficial interest in 35% of the shares formerly held by the Burrup Trustee, Radhika also acquired her 35% legal and beneficial shareholding. Effectively then, by no later than 18 September 2008, the 70% (majority) shareholding interest in BHL, once held by the Burrup Trustee, had become vested and was now held equally (35% each) as between Pankaj and Radhika. That vesting of the BHL shares in Pankaj and Radhika arises in circumstances where there appears to have been no instrument signed by the Burrup Trustee transferring a 35% BHL shareholding to Pankaj or Radhika.

71 Radhika had never been a party to the SD, or for that matter, to the OSD which preceded it. However, Radhika and Pankaj were both personally named as express Primary Beneficiaries of the Burrup Trust Deed. Pankaj was the trustee of that essentially discretionary trust.

72 Recitals in the SSA stipulate clearly that Pankaj held 35% of the BHL shares formerly held by the Burrup Trustee, that he was selling 5% of those shares to Yara and that Radhika held the other 35% shares legally and beneficially. Above that, express warranties to Yara as to that precise prevailing ownership position of 70% of BHL's shares were given by Pankaj and Radhika by cl 5(a) of the SSA.

73 The resultant shareholding position in BHL now reverted to three distinct Shareholder parties again (akin to the BHL Shareholder position between March 2005 and April 2007, when the Rimbal Family Trustee was a 15% Shareholder in BHL under the OSD in conjunction with the Burrup Trustee and Yara) rather than just Yara and the Burrup Trustee as the only two Shareholders under the SD. Three parties now holding all shares in BHL, after the 5% sale under the SSA to Yara was completed, were:

74 Sale of 5% of the shares in BHL from Pankaj to Yara for US$141 million, was implemented, settled and paid for by 28 October 2008.

75 No party seeks rescission of the 5% BHL share sale to Yara. Nevertheless, heavy controversy arises around and from the asserted implications of this sale, particularly as regards consequences for post sale BHL board management rights tied to Nominee Directors under the SD, now evaluated with the SSA. These controversies arise in the aftermath of the acquisitions of legal and beneficial ownership in 70% (in aggregate) of the BHL shares by Pankaj and Radhika, and the following sale of 5% of Pankaj's acquired 35% legal and beneficial interest to Yara.

76 The SSA makes express reference to some key future BHL management issues (see the SSA at cll 5(b), 6, 8, 9 and 10). Nevertheless the interpretive controversy surrounding the argued implications of personal BHL share acquisitions by Pankaj and Radhika, the sale, and the SSA, assessed together, are intense.

77 Pankaj, Radhika and the Receivers all assert that Yara, effectively, has agreed, by the SSA, to accept Pankaj and Radhika as 'Shareholders' for the purposes of the SD. Beyond that, it is said that Yara has agreed under the SSA to accept Pankaj and Radhika, in replacement for the Burrup Trustee, with them now holding (together) the majority shareholding interest in BHL (albeit at 65% after the 5% sale to Yara, not 70%). There is said to be an agreed continuance (vis a vis Pankaj and Radhika) of the Nominee Director appointment and BHL board poll voting arrangements of the SD.

78 At the heart of this dispute is effectively a power struggle for the control of board management in BHL, emanating from Yara's denial of any right of Pankaj and Radhika, either alone or together, to appoint Nominee Directors to BHL.

79 The present (interpretive) controversy between Pankaj, Radhika and the Receivers on the one side, effectively aligned on construction issues as against Yara on the other, is heavily centred upon and fought around cl 5(b) of the SSA.

80 Clause 5(a) and the critical two sentences in cl 5(b) of the SSA provide:

(a) The Oswal Parties represent and warrant that:

(i) Pankaj Oswal in his personal capacity is the legal and beneficial owner of ordinary fully paid shares in the capital representing 35% of the total issued ordinary shares in the capital of the Company; and

(ii) Radhika Oswal is the legal and beneficial owner of ordinary fully paid shares in the capital representing 35% of the total issued ordinary shares in the capital of the Company.

(b) Pankaj Oswal, the Burrup Trustee and Radhika Oswal undertake to execute all documents necessary to join Pankaj Oswal in his personal capacity and Radhika Oswal to the Burrup Shareholders Deed in place of the Burrup Trustee and with such other amendments as agreed by the Buyer and the Oswal Parties. Until such document has been executed, Pankaj Oswal in his personal capacity and Radhika Oswal agree to comply with the Burrup Shareholders Deed as if they were a party to the deed in place of the Burrup Trustee.

81 Pankaj, Radhika and the Receivers all assert, within their respective multiple interpretation arguments, that by reason of cl 5(b) of the SSA, Pankaj and Radhika have been since 2008, with the agreement of Yara, in effect, consensually substituted for and have 'stepped into the shoes' of the Burrup Trustee as the other 'Shareholder(s)' under the SD with Yara.

82 Pankaj and Radhika contend that, by reason of the agreement of Yara under the SSA, particularly cl 5(b), they may exercise contractual rights to appoint up to three Nominee Directors to the board of BHL. They assert that their appointed BHL Nominee Director(s) can cast votes of an aggregated poll weighting level of 65% of the BHL shareholding interest which they together now hold in BHL. On that basis, they say that together they remain as the majority voting bloc at BHL board level. That is by way of contrast to Yara's 35% BHL director poll vote weighting, via one Nominee Director (subject to scenarios requiring a BHL board's Special Majority, at 80%, under Schedule 1 of the SD).

83 Yara strongly asserts that it has never agreed under the SSA to any substitution as regards the holding or enjoyment by Pankaj and Radhika of cl 4.1(c) Nominee Director management rights. Yara points to what it relies upon as a personal delimitation of this contractual right from the words 'For so long as' in cl 4.1(c) of the SD, and to automatic Shareholder termination provisions applicable to a Shareholder, as seen under cl 16(c) of the SD.

84 Yara says that with the Burrup Trustee, on any view of the facts, having ceased to be a BHL Shareholder at least one day before the SSA, from that point Yara, as the remaining (35%) BHL Shareholder under the SD, was the only party holding Nominee Director appointment rights to BHL's board. That, Yara says, was and remains the position until it agrees otherwise by amendments it accepts to the SD, as it could do, but has not yet agreed to do, under cl 5(b) of the SSA (first sentence).

85 Within a framework of multiple and elaborate interpretation arguments, both sentences of cl 5(b) of the SSA - indeed almost every word within cl 5(b) - are said in some way or another, to carry heavy significance in the rivalling construction evaluations regarding the potential transferability of Nominee Director appointment rights to Pankaj and Radhika under cl 4.1(c) of the SD.

86 Such levels of differentiation have been attributed to each of the two sentences comprising cl 5(b) of the SSA that, for convenience, Yara in submissions even referred to those sentences as cl 5(b)(i) and cl 5(b)(ii) respectively. They are not so differentiated by the SSA. I will not perpetuate that artificial dichotomy. The two sentences making up cl 5(b) SSA as a matter of overall construction need to be construed together as one overall functional clause. Then they must be, as harmoniously as possible, assimilated within the framework of the content of other clauses within the SSA assessed as a whole.

87 The first sentence of cl 5(b) of the SSA expressly envisages the necessary 'documents' being executed by Pankaj and Radhika, by which they would become joined to the SD (in circumstances where they personally had not been parties to that deed prior to 19 September 2008).

88 Joinder of Radhika and Pankaj as parties to the SD, as a matter of legal concept, might be accomplished in any number of ways. A deed of variation by outgoing, remaining and incoming parties, for instance, could deliver the joinder result. But within the SSA's proximate framework to the SD, Annexure A contains within it another pro forma deed by which any incoming transferee or allottee of BHL shares could be made a party (in circumstances expressly contemplated by the SD) to the covenants of the SD. That joinder machinery is conveniently provided for by the SD in the form of a unilateral instrument called the Assumption Deed (as defined). Being unilateral, an Assumption Deed is in the nature of a deed poll, rather than an indenture (adopting the nomenclature dichotomy between deeds).

89 Radhika ultimately (see ts 483) approached the determination of the preliminary issue on the basis that to date, no relevant Assumption Deed had been executed or delivered by her (i.e. no submission is advanced at this time by Radhika regarding implications for this hearing of an existing Assumption Deed signed, sealed and delivered by her, substantially in the terms of the pro forma deed poll in the form of Annexure A to the SD).

90 Radhika's ultimate stance on this aspect of the preliminary issue as articulated through her senior counsel in closing, as I understood it, was effectively that she may in due course, if necessary, still execute and deliver an Assumption Deed substantially in the terms of the pro forma deed poll instrument seen as Annexure A to the SD. Fulfilling that requirement would be a matter of documentary detail. But her primary construction position on the preliminary issue is that it is not even necessary for her to go so far. This is because of the preferred construction she, Pankaj and the Receivers all advance essentially stemming from the result of what is said to be afforded to them under the work of the second sentence in cl 5(b) of the SSA.

91 In addition, Radhika and the Receivers raise alternative arguments. One of these concerns the possible workings of the SD alone, in the circumstance where Radhika and Pankaj as Primary Beneficiaries of the Burrup Trust have come to each hold fully vested legal and beneficial interest in one half of that Trust's former 70% shareholding interest in BHL by no later than 18 September 2008, based on a vesting in them of these shares under the Burrup Trust and followed by Mr Lenzo's registration that day (albeit backdated) of their personal holdings as Shareholders in BHL.

92 Pankaj's interpretation position on the preliminary issue is akin to that of Radhika's, namely, that there is no substantive need on his part for a Deed of Assumption to be executed and delivered by him. But Mr Theobald, one of the Receivers, claiming to hold Pankaj's power of attorney under certain mortgage and share security arrangements entered by Pankaj over his 30% shareholding interest in BHL, has very recently (as late as June 2011) executed and delivered, acting as Pankaj's attorney, what is asserted to be a Deed of Assumption on Pankaj's part for the purposes of the SD and the SSA, if necessary.

93 It seems undeniable as a fact that by not later than midnight on 18 September 2008, one day before the SSA was entered, the former 70% shareholding in BHL by the Burrup Trustee ended. This was necessarily so in order for Pankaj and Radhika to each become 35% legal and beneficial owners of shares in BHL, for Pankaj and Radhika to enter the SSA by which they expressly covenant to Yara under cl 5(a) of the SSA and ultimately for Pankaj to validly sell 5% of his 35% BHL shares to Yara. On those bare facts, Yara then points to cl 16.2(c) of the SD which provides (as regards its SD termination implications as a Shareholder for the Burrup Trustee on those facts):

(c) (For outgoing Shareholder): This deed will also be terminated for any one Shareholder when it ceases to hold, directly or indirectly, any Shares. In that case, the provisions of clause 16.2(b) still apply.

94 So Yara says that a total shareholding cessation by the Burrup Trustee, as outgoing BHL 'Shareholder' under the SD, at not later than midnight on 18 September 2008, left Yara as the sole remaining 'Shareholder' in the SD which continued in operative effect despite the departure of the Burrup Trustee. That was the case albeit BHL and BFPL remained parties to the SD as well (but importantly, never as Shareholders).

95 Yara then contends that as the sole BHL Shareholder that remained a party to the SD from 19 September 2008 (then at 30% but, on completion of the sale from Pankaj under the SSA on 24 October 2008, rising to 35%) its one validly continuing BHL Nominee Director (Mr Holba) was effectively left in control of BHL's board. This is the position asserted by Yara notwithstanding that Pankaj was then serving as (founding) Chairman and Managing Director of BHL and that there was no hint or suggestion from any quarter then that Pankaj would soon be relinquishing his hold on those key BHL management positions to anyone, let alone to Yara's Nominee Director.

96 Yara says that whilst Pankaj and Radhika might have each validly become 35% shareholders of their BHL shares, they were never parties to the SD. Termination (automatically) of the Burrup Trustee's rights under the SD, at not later than midnight on 18 September 2008, necessarily meant that from then on there were no existing Burrup Trustee contractual rights under the SD in existence and therefore no rights capable of passing from the Burrup Trustee on 19 September 2008 to Pankaj and Radhika under the SSA.

97 Consequently, Yara says that, until it agrees otherwise (and it does not), Pankaj and Radhika personally hold no rights to appoint Nominee Directors to BHL's board (and from there, flowing to BHL's Group Members).

98 Yara also says that whilst Pankaj and Radhika as shareholders in BHL might vote their aggregate 65% BHL shareholding at a general meeting of shareholders, and thereby elect an ordinary director or directors to BHL's board, that ordinary BHL directors do not enjoy the same weighted voting power that is afforded to Nominee Directors on a poll of directors at BHL board meetings.

99 Ordinary directors elected at a general meeting of BHL's Shareholders may only cast one vote each on a poll at the directors' meeting. That one vote would then be measured (potentially) against 385,014,497 other votes which, by the SD, Yara's Nominee Director would be able to cast. A voting split at a poll of directors' votes conducted on that basis, sees Yara (holding a 35% minority shareholding in BHL) with overwhelming BHL majority board voting power (assuming a BHL board meeting poll vote was Yara, 385,014,497 for, opposed by, potentially, four votes against). On that basis, a vote of directors would deliver a 99.999% majority favouring Yara's resolutions. That level of voting power is more than sufficient for Yara to carry all BHL board resolutions, even at a Special Majority (80%) threshold required for those board decision subject matters as are identified under Schedule 1 of the SD.

100 On this basis Yara, effectively, contends it obtained overwhelming board control of BHL as from 19 September 2008, albeit at a 30% (increasing to 35%) minority shareholding.

101 In response, Pankaj, Radhika and the Receivers all say that a construction outcome, whereby Yara as 35% Shareholder in BHL could effectively exercise 99.999% voting control at BHL board meetings is a bizarre outcome that is a manifestly uncommercial result in the circumstances. They submit that the end result Yara effectively pursues by way of construction is not one that reasonable parties, objectively assessed as being in the positions of parties to the SSA as of 19 September 2008, could ever have sensibly contemplated. They contend that the end result Yara seeks cannot be the ultimate proper interpretation of the two key written instruments operating together, assessed against their backgrounds and surrounding events.

102 The Receivers essentially support the construction position of the SD and SSA that is contended for by Radhika. The Receivers were appointed to BFPL in December 2010 by the ANZ Bank under an exercise of security rights by the Bank over all BFPL's assets, as well the Bank's security held over all of Pankaj's remaining (30%) shareholding in BHL and 7.5% of Radhika's 35% shareholding in BHL.

103 A key plank of Yara's construction arguments regarding cl 5(b) of the SSA, particularly by reference to the proper understanding of the second sentence of cl 5(b), centres around the correct meaning of the word 'comply', seen used in the phrase 'comply with' in the second sentence of cl 5(b) of the SSA.

104 Yara says the word 'comply' as used there, and correctly understood, means no more than that Pankaj and Radhika would 'obey' or, to be bound by the obligations of parties to the SD.

105 Yara argues that the second sentence of cl 5(b) of the SSA merely implements an interim 'deeming' arrangement (by the phrase 'as if'), whereby Pankaj and Radhika commit only to observing obligations as if they were parties under the SD. Yara says this delivers no more than a result of Pankaj and Radhika committing to Yara to accept SD obligations. Yara says cl 5(b) carries no further entitlements to enjoy rights or benefits under the SD as 'Shareholders' for Pankaj and Radhika.

106 Rights and benefits under the SD, Yara says, are governed by the work of the first sentence in cl 5(b) of the SSA, but the deeming effects of the second sentence of cl 5(b) do not envisage Pankaj and Radhika obtaining rights or benefits. Under the second sentence Pankaj and Radhika merely accept SD obligations on a deemed interim basis (see the word 'Until').

107 Yara goes further, pointing to the first sentence of cl 5(b). It hypothesises that even if all 'necessary documents' as envisaged under that sentence were executed by Pankaj, Radhika and the Burrup Trustee, whilst that may afford some (even most) rights and benefits to Pankaj and Radhika as 'Shareholders', Yara says it still would not be enough to deliver to Pankaj and Radhika Nominee Director appointment rights under cl 4.1(c) of the SD.

108 The inherent nontransmissibility of rights argument is put at a conceptual level, above Yara's factual contention, that cl 4.1(c) rights were not in existence to be transferred to Pankaj and Radhika by the Burrup Trustee, as those rights automatically ceased by midnight on 18 September 2008, when the Burrup Trustee ceased to hold any shares in BHL.

109 Alternatively, again, at minimum, Yara would say that conceptually, even if a transmission of cl 4.1(c) rights was theoretically possible by a clear and express agreement to that end, the SSA would in any event fall significantly short of achieving that end.

110 Multiple rebutting arguments to the contrary by Radhika, Pankaj and the Receivers, particularly about the true meaning of the word 'comply', understood within the overall context of cl 5(b) in the SSA, are made in response. In particular, the force and effect of the key phrase 'in place of', which can be seen to be used in both lines of cl 5(b) of the SSA, is emphasised as regards advocating the permitted transmissibility of cl 4.1(c) Nominee Director rights both in concept, as well as in operative effect under the SSA (particularly by reference to the second sentence of cl 5(b)). Emphasis is also directed towards the use of the word 'all', as regards an assumption of all 'rights' by cl 2.1(a) of the pro forma Assumption Deed, seen annexed to the SD. The Receivers say that 'all' really does mean all rights, not just some rights.

111 Further subissues emerge within the preliminary issue. One arises from Radhika's unilateral attempt in late 2010 to appoint her own Nominee Director to the board of BHL. That nominee was Mr Ramesh Sodum. He was joined as sixth defendant to the counterclaim by Yara. Mr Sodum has not participated at all in the litigation. He has not even entered a memorandum of appearance responding to Yara's counterclaim against him.

112 The attempted appointment of Mr Sodum by Radhika to BHL's board as her cl 4.1(c) Nominee Director was not an attempted Nominee Director appointment made by Pankaj and Radhika acting together. Rather, it was an effort entirely by Radhika qua her undoubted interest then as a 35% BHL shareholder. How cl 5(b) of the SSA, properly construed, can bear the interpretation that, as an incoming BHL shareholder replacing the Burrup Trustee, Radhika holds and enjoys several rights under the SD (in contrast to rights jointly held with Pankaj) is not immediately apparent.

113 Some clauses within the SD bear upon the several/joint rights issue, see cl 1.2(m) of the SD, referring to rights and liabilities that are several (not joint, or joint and several). See also cl 18.3 of the SD as regards several obligations. However, SD definition clauses apply 'unless the context indicates a contrary intention' in the SD. Definition cl 1.2(a) in the SSA refers to rights conferred on two or more persons benefiting them 'jointly and severally'. That definition provision in the SSA is also only applicable 'unless the contrary intention appears'. Moreover, the definition of 'Oswal Parties' in cl 1.1 of the SSA is 'means the Burrup Trustee, Pankaj Oswal, Radhika Oswal, jointly and severally'.

114 The core issues which broadly present for resolution in this construction exercise relate to express terms found within the SD and the SSA. Nevertheless, any exercise in construction must be implemented within a background context of relevant mutually known surrounding facts and circumstances around the two key instruments, even though both the SD and the SSA contain comprehensive entire agreement clauses. Prevailing facts at each relevant date for the SD and SSA need to be ascertained. There will be extra potential background facts relevantly applicable for the SSA as it is later in time than the SD in 2008 by almost six months.

115 So, in the present case, it is first necessary to assess relevant and surrounding background facts leading up to the SD of 24 March 2008. For the SSA, the background and surrounding facts comprise those facts plus facts in a further period up to 19 September 2008.

116 Before examining the factual backgrounds for these two instruments by reference to their commercial purposes (objectively assessed) and origins (genesis) of the commercial transactions, it is necessary to say something of the pleadings of the respective parties, particularly for the three parties who actively participated in the determination of the preliminary issue, namely Radhika, Yara and the Receivers. The other parties in the action and the counterclaim, for the moment, have elected to delimit their active participation and agreed to abide the court's decision on the preliminary issue. The nonparticipating parties, including Pankaj, did not participate in the preliminary issue, other than by (earlier) providing discovery to the extent requested.

117 Radhika commenced this litigation by issue of her writ on Christmas Eve, 2010 at a time when she and her husband Pankaj were still residents of Western Australia. That altered in early 2011. Indorsed to Radhika's writ was a statement of claim, rather than an indorsement. That was a permissible course, see the Rules of the Supreme Court 1971 (WA) (RSC), O 6 r 3.

118 Radhika's prayer for relief at that time sought only declarations that:

1. On the proper construction of the two key documents (the SD of 24 March 2008 and the SSA of 19 September 2008):

(a) Mr Sodum was validly appointed by the plaintiff as a director of the third defendant;

(b) at any directors' meeting of the third defendant, Mr Sodum is entitled to 385,014,497 votes on any resolution; and

1. the Purported Resolutions [as defined in what was then par 24 of the statement of claim referring to written resolutions at a directors' meeting of the third defendant, Burrup Holdings Limited, of 17 December 2010 seeking to suspend the employment of BHL's managing director, to appoint an interim replacement managing director and to appoint further directors to the board of the third defendant] are invalid and of no force and effect.

119 The plaintiff's statement of claim was amended twice, with the (final) reamended statement of claim being indorsed to the plaintiff's reamended writ of summons filed 27 May 2011.

120 The SD was referred to in pars 14 through 17 of the plaintiff's reamended statement of claim.

121 Paragraph 14 referred to Pankaj as being a party to the SD in his capacity as trustee for the Burrup Trust. This is the discretionary trust created by another deed entered on 22 June 2001 between Peter Moltoni (as settlor) and Pankaj (as trustee). This trust was formerly known as the Vasundhara Trust (see par 1(2) of the reamended statement of claim).

(a) Radhika is not a party to the SD of 24 March 2008;

(b) Pankaj was only party to the SD in his capacity as the trustee of the Burrup Trust (the Burrup Trustee); and

(c) Radhika was a named beneficiary of the Burrup Trust (par 1(2) of the reamended statement of claim), as was Pankaj.

None of those observations raise controversial facts.

123 Radhika's 2010 Christmas Eve writ named four defendants.

(a) As first defendant, Yara was referred to (par 2(2)) as being registered Shareholder of 385,014,497 shares, or 35% of the issued share capital in BHL.

(b) Pankaj was named as second defendant to the proceedings, in his own right. The statement of claim refers to Pankaj as the registered Shareholder of 30% of the issued share capital of BHL, and selfappointed Nominee Director of BHL.

(c) Radhika named the unlisted corporation Burrup Holdings Limited (Receivers and Managers Appointed) [sic] as third defendant to her writ. The reference to BHL as receivers and managers appointed was an error - later corrected by an amended writ of summons issued on 4 March 2011. The statement of claim uncontroversially refers to BHL as owning and operating the anhydrous ammonia plant on the Burrup Peninsula in Western Australia through its subsidiary, BFPL.

(d) As firstnamed fourth defendant, the writ named Mr Tor Holba. Paragraph 5 of the initial statement of claim contends Mr Holba is a Nominee Director of BHL appointed by Yara pursuant to the SD.

(e) As a secondnamed fourth defendant, the writ named Mr Vinojit Ambalavaner. Paragraph 6 of Radhika's reamended statement of claim refers to Mr Ambalavaner as being a Nominee Director appointed to BHL by Pankaj in about July 2009, pursuant to cl 5(b) of the SSA.

It also pleaded that Mr Ambalavaner ceased to be a director of BHL from 3 February 2011. Mr Ambalavaner told the court of his resignation personally at a directions hearing on 17 February 2011 (ts 41).

124 Paragraph 19 of Radhika's reamended statement of claim refers to recitals in the SSA to the effect that Radhika and Pankaj in their personal capacities each held 35% in their own right of the shares in BHL, with Yara holding the remaining 30% of the issued share capital. It is not controversial that Pankaj personally sold 55,002,071 of his BHL shares to Yara under the SSA, constituting Yara's acquisition of a further 5% of the share capital.

125 Notwithstanding that the respective recitals in the SD and the SSA suggest that Pankaj and Radhika had only acquired their 35% legal and beneficial shareholdings in BHL in the period between March and September 2008 (upon the vesting of their entitlements as beneficiaries under the Burrup Trust), one plea in Radhika's statement of claim suggests to the contrary. Paragraph 9 of the reamended statement of claim contends that, by written resolution dated 13 March 2007, the Burrup Trustee exercised a power provided by cl 17 of the trust deed and thereby caused the Trust's shareholding in BHL to be vested in Radhika and Pankaj in equal shares. Paragraph 10 of the reamended statement of claim contends that vesting of the 35% interest in Radhika was not registered until 18 September 2008 (i.e. one day before the SSA). This is a murky aspect of the dispute to which I will return. But there is no doubt Yara validly acquired an extra 5% of BHL shares under the SSA from Pankaj personally, for US$141 million.

126 What emerged under the reamended statement of claim concerning the two key written instruments of 2008 was an interpretation dispute over the right of Pankaj (either alone, or in conjunction with Radhika), for as long as Pankaj holds more than 5% of the shares in BHL as he does, to appoint up to three Nominee Directors to the board of BHL who would vote with the weighting of 65% of the BHL shares at directors' meetings.

127 By her reamended statement of claim of 27 May 2011, Radhika contended at par 23 seven alternative constructions of the SSA on the basis of it being allegedly agreed in the SSA as between herself, the Burrup Trustee, Pankaj in his personal capacity and Yara, that various permutations of entitlement that would entitle her to appoint Nominee Directors to BHL's board and for those Nominee Directors to exercise Nominee Director voting rights in respect of her 35% shareholding interest in BHL.

128 The seven alternate constructions of cl 4.1(c) of the SD, by reason of cl 5(b) of the SSA, are (par 23):

(1A) for as long as Pankaj and Radhika between them held 5% or more of the issued share capital of BHL:

(A) Pankaj and Radhika were jointly and severally entitled to appoint three directors to BHL; and

(B) the nominee directors so appointed were collectively entitled to 1 vote at a board meeting for each share held by Pankaj and Radhika;

(1B) alternatively, for as long as Pankaj and Radhika between them held 5% or more of the issued share capital of BHL:

(A) Pankaj and Radhika were severally entitled to appoint in total three directors to BHL; and

(B) the nominee directors so appointed were collectively entitled to 1 vote at a board meeting for each share held by Pankaj and Radhika;

(1C) alternatively, for as long as Pankaj and Radhika between them held 5% or more of the issued share capital of BHL:

(A) Pankaj and Radhika were jointly entitled to appoint a total of three directors to BHL; and

(B) the nominee directors so appointed were collectively entitled to 1 vote at a board meeting for each share held by Pankaj and Radhika;

(1) alternatively, for as long as Pankaj and Radhika between them held 5% or more of the issued share capital of BHL:

(A) Pankaj and Radhika were each entitled to appoint at least 1 director to BHL and between them, no more than 3 directors of BHL; and

(B) the nominee directors appointed by each of Pankaj and Radhika were collectively entitled to 1 vote at a board meeting for each share held by Pankaj and Radhika as the case may be;

(2) alternatively, for as long as Pankaj and Radhika between them held 5% or more of the issued share capital of BHL:

(A) Pankaj was entitled to appoint 3 directors and Radhika was entitled to appoint 1 director to BHL; and

(B) the nominee directors appointed by Pankaj were collectively entitled to 1 vote at a board meeting for each share held by Pankaj;

(C) the nominee director appointed by Radhika was entitled to 1 vote at a board meeting for each share held by Radhika.

(3) alternatively, for as long as Pankaj and Radhika between them held 5% or more of the issued share capital of BHL:

(A) Pankaj was entitled to appoint 3 directors to BHL; and

(B) the nominee directors appointed by Pankaj were collectively entitled to 1 vote at a board meeting for each share held by each of Pankaj and Radhika;

(4) alternatively, for as long as Pankaj and Radhika between them held 5% or more of the issued share capital of BHL:

(A) Radhika was entitled to appoint at least 1 director to BHL and between Radhika and Pankaj, no more than 3 directors of BHL; and

(B) the nominee directors appointed by Radhika were collectively entitled to 1 vote at a board meeting for each share held by each of Pankaj and Radhika.

129 Radhika pleads further alternative causes of action based upon an asserted need for rectification of the SSA and conventional estoppel (based upon asserted mutual conduct of the parties under the SSA post 19 September 2008). She also claims statutory relief for alleged oppression against Yara and BHL for denying Radhika her asserted right to appoint Mr Sodum as her Nominee Director to BHL in November 2010 and from there, presumably, for BHL to appoint Mr Sodum to BHL Corporate Group Members - see cl 4.1(c) third sentence of the SD. Radhika's further causes of action are all to be resolved at a later time, if that is necessary after the issues of construction are resolved on the preliminary issue.

130 I now turn to the defence and counterclaim of Yara.

131 On 24 January 2011, Yara filed its first defence and counterclaim. By the counterclaim, Yara sought to add additional parties as defendants. Radhika is named as first defendant to the counterclaim, and Pankaj second defendant. The third defendant to the counterclaim was BHL (Receivers and Managers Appointed), replicating an error on the writ as first issued by Radhika. That error has been corrected. It is clear that the third defendant is BHL as a corporation in its own right untrammelled by any sort of private or statutory control. Receivers and managers have not been appointed to assets or undertakings of the third defendant. Yara's counterclaim made Mr Holba and Mr Ambalavaner the dual fourth defendants.

132 Yara added BFPL and Mr Sodum as fifth and sixth defendants to its counterclaim.

133 BFPL is mentioned in Radhika's statement of claim, but the corporation was not made a party to her action. Yara did make BFPL a defendant to the counterclaim. It is important to remember that BFPL is a party to the SD, but neither it nor BHL is a party to the SSA. The seventh defendants were appointed as the Receivers and Managers of BFPL by the ANZ Bank.

134 Mr Sodum is named as sixth defendant to the counterclaim on a basis that he is the person who Mrs Oswal attempted to nominate as her own Nominee Director to BHL on 22 November 2010. Yara disputes Radhika's entitlement, on the proper construction of the SD and the SSA, to appoint any Nominee Director (par 19 of Yara's defence) even jointly with Pankaj, let alone in her own right independently of Pankaj.

135 No memorandum of appearance has been filed by or on behalf of Mr Sodum in the proceedings. He has not made any defence to Yara's counterclaim.

136 On one interlocutory application concerning discovery, Yara's written submissions foreshadowed that it proposed to join the Burrup Trustee to the action - over and above his current participation as second defendant and second defendant to the counterclaim. That step has not occurred to date.

137 By Yara's second further amended substituted defence and counterclaim (the last iteration being its amendments of 17 June 2011 pursuant to my orders of 16 June 2011), Yara pleads at par 23 in response to Radhika's seven alternate constructions that:

(a) If the construction pleaded in par 23(3) of the statement of claim were the proper construction of the [SSA] (which is denied), Radhika would have no entitlement to appoint any Nominee Director, including the sixthnamed defendant by counterclaim (Sodum);

(b) To the extent that the construction ... applies (which is denied):

(i) Radhika, Pankaj and Yara have not purported to jointly appoint, nor have they jointly appointed, any Nominee Director;

(ii) Radhika and Pankaj have not purported to jointly appoint, nor have they appointed, any Nominee Director; and

(iii) in the circumstances pleaded in pars 23(b)(i) and (b)(ii) herein, none of Radhika or Pankaj had appointed any Nominee Director jointly, as required, or at all.

138 It is necessary for me to say a little more about the position of BFPL and the Receivers and Managers as the fifth defendant and seventh defendants to the counterclaim, respectively.

139 On 10 February 2011, I entered this matter in the Commercial and Managed Cases (CMC) List. The matter came on for a first directions hearing on 17 February 2011. At that time counsel for BFPL appeared, adding (ts 3) that he also represented the same Receivers and Managers who were said to be appointed by the ANZ Bank over 37.5% of the shares in BHL. So in effect the same three persons who were the Receivers and Managers appointed over the assets and undertaking of BFPL were appointed as Receivers and Managers over 37.5% of the BHL shares.

140 A memorandum of appearance filed by solicitors on behalf of BFPL (Freehills) is dated 8 February 2011. It appears to have been filed at court the same day. After the directions hearing on 17 February 2011, a further memorandum of appearance was filed in these terms (on 22 February 2011):

Enter an appearance for the fifth defendant by counterclaim.

Enter an appearance for Ian Carson, David McEvoy and Simon Theobald, the receivers and managers of:

1. all of the shares in Burrup Holdings Limited ACN 097 138 353, registered in the name of Pankaj Oswal in his personal capacity at any time;
2. 82,503,106.5 shares in Burrup Holdings Limited ACN 097 138 353, registered in the name of Radhika Oswal in her personal capacity;
3. all of the shares in Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) ACN 095 441 151.

141 I dealt separately with a subsequent application on behalf of the Receivers and Managers personally to be joined to the proceedings as seventh defendant to Yara's counterclaim: see Oswal v Yara Australia Pty Ltd [No 2] [2011] WASC 146. Those reasons deal with a chamber summons filed on 19 April 2011, seeking the joinder of Messrs Carson, McEvoy and Theobald as parties. It was necessary for that application to be brought because Yara objected to the participation of the Receivers and Managers other than on the basis that they have been appointed over the assets and undertaking of the fifth defendant, BFPL. I allowed the joinder of the Receivers to Yara's counterclaim on that application.

Summary as to shareholding position for BHL after the completion of the sale under the SSA

142 In summary then, after completion on the sale of 5% of BHL's shares to Yara under the SSA, the shareholding position in BHL was:

143 But, taking account of the apparent security interests held by way of mortgage over all of Pankaj's 30% BHL shareholding and over 7.5% of Radhika's BHL shareholding, the effective BHL Shareholders' general meeting (voting) split would present as:

(a) Joint receivers and managers - 37.5% shareholding interest held as security;

144 As to the effect of the SD and the SSA at BHL board level, the key question is whether or not Yara has appointed BHL's only Nominee Director capable of exercising the voting power of 385,014,497 votes. Yara's votes would stand against (potentially) only four contrary votes from other elected directors.

145 The significance of a dispute concerning BHL board level voting interests as between the Shareholders of BHL (and from there to the composition of the boards of Group Members) is better appreciated when understood in light of the fact that BFPL has had receivers and managers appointed and its major asset, the Burrup Fertiliser Plant, is presently on the market.

146 On 18 March 2011, following upon Radhika's amended writ of summons and amended statement of claim, Yara filed a substituted defence and counterclaim seeking declaratory relief by reference to the proper construction of the SD, the SSA and the Constitution of BHL. The declaratory relief sought by Yara concerns not only matters associated with a pure interpretation of the SD and the SSA as the two key written instruments of 2008, but also some practical ramifications as regards the validity of some ensuing resolutions of BHL's board of directors, including a recovery proceedings resolution of 13 October 2010 against Pankaj personally and a resolution of 17 December 2010 regarding the appointment of further directors sought by Yara to BHL's board.

147 Pankaj filed a defence to his wife's action on 23 March 2011 and a defence to Yara's counterclaim on 29 March 2011. These pleadings have subsequently been amended. On 16 June 2011 Pankaj was granted leave to not participate in the hearing of the preliminary issue. He essentially abides the result of the preliminary issue.

148 On 5 April 2011, a defence and counterclaim was filed on behalf of the fifth defendant by counterclaim (that is, by BFPL). The defence was also on behalf of 'the receivers and managers of (37.5%) the shares in BHL'. Paragraph 4 of that defence of the fifth defendant contended:

After 24 March 2008 but before 19 September 2008, the shares in BHL [referring to 70% of the shares in BHL]:

(a) were owned by the Trustee; and

(b) were transferred by the Trustee to Pankaj and Radhika.

When the Trustee transferred the shares referred to [the 70% of the shares in BHL referred to in par 4], it was the common intention of the Trustee, Pankaj and Radhika, that Pankaj would assume all the rights enjoyed by the Trustee under the Shareholders Deed.

150 The Receivers' amended substituted defence and counterclaim (filed 15 June 2011 with my leave given on 16 June 2011) at pars 15(c) and 15(d) states as follows in respect of the construction of cl 4.1(c) of the SD:

(c) Upon the proper construction of cl 4.1(c) of the Shareholders Deed, it provides that -

(1) so long as Pankaj as trustee of the Burrup Trust or his executors, administrators, successors, substitutes or permitted assigns hold 5% or more of the issued share capital of BHL, Pankaj or his executors, administrators, successors, substitutes or permitted assigns (as the case may be) may appoint the remaining 3 directors to the board of BHL and each company in the BHL group; and

(2) the directors so appointed are collectively entitled to one vote at a board meeting for each share held by Pankaj as trustee of the Burrup Trust or by his executors, administrators, successors, substitutes or permitted assigns (as the case may be).

(d) in the premises, upon the proper construction of the Shareholders Deed and in the events that occurred, for so long as Pankaj and Radhika between them hold 5% or more of the issued share capital of BHL, they may appoint three directors to the board of BHL and each company in the BHL group, and the directors so appointed are collectively entitled to one vote at a board meeting for each share held by Pankaj and Radhika.

151 It will be seen that this construction position (in part) has been picked up and adopted in Radhika's reamended pleading as one of her alternative constructions (see par 23(1C) of Radhika's reamended statement of claim of 27 May 2011).

152 The counterclaim by the Receivers seeks declarations by reference to the shareholdings of both Pankaj and Radhika, concerning the power to appoint Nominee Directors to the board of BHL and to BHL's subsidiaries, and the voting entitlements of those Nominee Directors.

153 The construction positions advanced by Radhika and by the Receivers became more closely aligned by the commencement of the hearing of the preliminary issues. The real aspect of conceptual divergence between them was Radhika's contention as to her own independent right to appoint a Nominee Director to BHL. That construction position from Radhika lies in contrast to a more confined joint appointment position advanced by the Receivers.

Arguments not being resolved on the Preliminary Issue

154 Arguments raised by Radhika as to rectification, conventional estoppel and statutory oppression are essentially fall back alternative causes of action raised by her amendments. But the starting position of Radhika from all her pleadings is the correct contractual interpretation of the instruments in question, particularly the SSA of 19 September 2008. It is only if she and the Receivers are shown to be wrong in their preferred contractual interpretations of the SD and the SSA that it would then become necessary to consider fall back scenarios.

Genesis, background and surrounding circumstances

155 Tempting as it is to immediately proceed to an attempted interpretation of the terminology found used within the SD and the SSA (particularly cl 5(b)), that is not a permissible course, at least until the background to these instruments and any relevant surrounding materials have been examined.

156 In Hughes v St Barbara Mines Ltd [No 4] [2010] WASC 160 [594] and [595], I discussed principles concerning construction of commercial contracts. I refer to but will not repeat that general discussion.

157 On this preliminary issue, considerable reference was made in the course of submissions by respective senior counsel to the reasons of the New South Wales Court of Appeal in Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603, particularly to a comprehensive discussion of construction principles by Campbell JA and further observations as to construction by Allsop P and Giles JA.

158 As regards any application of the objective theory of contract in the process of construction, it is instructive to revisit the reasons of Sir Anthony Mason in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1981 [1982] HCA 24; 1982) 149 CLR 337, 350 made in turn by reference to earlier observations of Lord Wilberforce in Reardon Smith Line v HansenTangen [1976] 1 WLR 989, 995. In Codelfa, Mason J said:

In a speech concurred in by a majority of the members of the House of Lords [Lord Wilberforce] acknowledged that it is legitimate 'to have regard to ... "the surrounding circumstances" '. He went on to say:

'In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating'.

159 In Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 [22], Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ, as regards contractual construction, approved the same statement of principle by Lord Wilberforce in Reardon Smith Line (995 996).

160 Mason J at (351) cited a further passage from Lord Wilberforce in Reardon Smith Line (996):

It is often said that, in order to be admissible in aid of construction, these extrinsic facts must be within the knowledge of both parties to the contract, but this requirement should not be stated in too narrow a sense. When one speaks of the intention of the parties to the contract, one is speaking objectively - the parties cannot themselves give direct evidence of what their intention was - and what must be ascertained is what is to be taken as the intention which reasonable people would have had if placed in the situation of the parties. Similarly when one is speaking of aim, or object, or commercial purpose, one is speaking objectively of what reasonable persons would have in mind in the situation of the parties.

161 Within Codelfa itself, it is helpful in the present preliminary issue to revisit what Mason J said concerning the limited admissibility of evidence concerning prior negotiations leading up to a contract. His Honour said (352):

Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.

162 Consideration is required therefore not merely of the text, but also of surrounding circumstances mutually known to the contracting parties and to the 'purpose and object' of a transaction, see Investors Compensation Scheme Ltd v West Bromwich Building Society [1997] UKHL 28; [1998] 1 WLR 896 per Lord Hoffman and Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 [40].

163 In Franklins v Metcash, Campbell JA identified two developments in the law relating to the interpretation of contracts by reference to Investors Compensation Scheme Ltd v West Bromwich Building Society; see reasons in Franklins v Metcash [273] and [281], [282], [299] and [300]. One development as identified, concerned the scope of admissible background or surrounding circumstances. This was now, it was suggested, so wide as to include 'anything which a reasonable man would have regarded as relevant' and that 'there is no conceptual limit on what can be regarded as background'. Campbell JA observed that it was not yet clear that the breadth of that foundation had yet been unequivocally accepted by the Australian High Court. I respectfully agree. Irrespective however, the scope of facts that can fall within this arena potentially presents as difficult to delimit.

164 In Franklins v Metcash, Campbell JA applied the approach I am also content to apply. At [305] he said:

It follows that I accept [counsel's] submission that the contract should be construed bearing in mind those facts that the parties knew, or that it can reasonably be assumed they knew, that can impact upon the meaning of the words of the contract. I also accept [counsel's] submission that it is not necessary to find ambiguity in the words of a written contract, the meaning of which is disputed, before the court can look at surrounding circumstances as an aid to construction.

165 It is no longer necessary to show ambiguity. I will again be guided by the observations of Buss JA in EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78; (2010) 41 WAR 23 [103] to which I referred in Process Minerals International Pty Ltd v Consolidated Minerals Pty Ltd [2010] WASC 266 [38]. See also Toll [40] and GMA Garnet Pty Ltd v Barton International Inc [2010] FCAFC 38, especially per Buchanan J [179] [194].

166 I also respectfully adopt the observations of Campbell JA in Franklins v Metcash, concerning the correct use of recitals in deeds or agreements in any construction exercise: see [379] [390].

167 Apart from conducting the construction exercise within the framework of surrounding circumstances and facts relevant to ascertaining the commercial purpose and object of the transaction (including genesis, background, context and relevant market), it is also appropriate to recall the observations of Gibbs J (as he then was) in Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109 110. I will not detail those well known observations again. They nevertheless are of abiding guidance. Additionally, to the same end, in McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579, Gleeson CJ said [22]:

A policy of insurance, even one required by statute, is a commercial contract and should be given a business like interpretation. Interpreting a commercial documents requires attention to the language used by the parties, the commercial circumstances which the document addresses, and the object which it is intended to secure.

168 As regards implementation of a businesslike approach to commercial contracts, Gleeson CJ in International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 234 CLR 151 [8] explained a linkage between ascertaining the commercial purpose of a contract and the need for a commercial contract to be given a businesslike interpretation. This is not just by reference to language used, but also to 'the circumstances addressed by the contract, and the objects which it is intended to secure'.

169 More recently, in Zhu v Treasurer of the State of New South Wales [2004] HCA 56; (2004) 218 CLR 530, Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ explained [82]:

The Deed Poll was a standard form instrument designed to apply to TOC's dealings with a wide range of persons. The execution of the Deed Poll pursuant to an obligation in, and at the same time as, the Agency Agreement meant it had to be given a construction conformable with the Agency Agreement. It was necessary to construe the Deed Poll so as to avoid it making commercial nonsense or working commercial inconvenience. Its commercial purpose - the purpose of reasonable persons in the position of TOC and the plaintiff - was relevant. That, in turn, required attention to 'the genesis of the transaction, the background, the context, the market' in which the parties were operating, as known to both parties.

I also note observations by Allsop P in Franklins v Metcash where his Honour, after referring to a number of the case authorities I have already mentioned, said [19]:

Similar expressions of the correct approach eschewing detailed semantic and syntactical analysis to lead to a construction contrary to business common sense can be seen by what Lord Diplock said in Miramar Maritime Corporation v Holborn Oil Trading Ltd [1984] AC 676 at 682 and Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191 at 201.

170 In Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181 [43], referring to the same passage from Lord Diplock's speech from Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191, Gleeson CJ, Gummow and Hayne JJ said ' "business common sense" is an objectively ascertained matter and thus referable to the evidence, and a matter about which there may be dispute'.

171 Before leaving general principles of contractual construction and recent insights in this field found in Franklins v Metcash, it would be remiss not to mention Campbell JA's earlier observations concerning contractual construction in Ryledar Pty Ltd v Euphoric Pty Ltd [2007] NSWCA 65; (2007) 69 NSWLR 603. There his Honour carefully explained the vital distinction as between the parties' common 'subjective intention' relevant to a rectification exercise (or in deciding whether or not a contract has actually been entered between parties) and a distinct 'common intention' of the contracting parties that is to be objectively ascertained. I refer in that respect to his Honour's observations at [258], [259], [261], [262] and [268].

172 Finally, again from Ryledar, I must mention as regards the proper bounds of any construction exercise, the observations of Tobias JA at [108] and [109]. In Ryledar, the primary judge (Palmer J) had said (in cited passages which, at [108], Tobias JA endorsed):

1. When the court is construing a commercial contract, it begins with the words of the document: there it often finds expressed the factual context known to both parties and the common purpose and object of the transaction. But the court is alive to the possibility that what seems clear by reference only to the words on the printed page may not be so clear when one takes into account as well what was known to both parties but does not appear in the document. When that is taken into account, the words in the contract may legitimately have one or more of a number of possible meanings. It is then the court's task to identify which of the possible meanings represents the parties' contractual intention.
2. However, when a party to a contract argues that the known context and common purpose of the transaction gives the words of the contract a meaning which, by no stretch of language or syntax they will bear then, in truth, one has a rectification suit, not a construction suit.

173 On this preliminary issue, an underlying tenor in submissions put by counsel for Radhika and the Receivers at times approached a suggestion that I ought predominantly concern myself with what was submitted to be the glaringly uncommercial consequences arising out of the construction approach contended for by Yara and almost to the exclusion of the text within the SSA. Such an invitation travels too far, in my view: see Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd [2008] NSWCA 5 [27] per Basten JA, with whom Giles and Tobias JJA agreed. By reference to Lord Diplock's observation in Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191 as to business commonsense, Basten JA at [27] said:

Although this principle has often been repeated, it should not be seen as permission for judicial rewriting of contractual provisions to accord with the result said by one party to accord with 'commercial reality', namely its financial interests.

To like effect see Owen J in The Bell Group Ltd (In Liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (20089) 39 WAR 1, 238 at [1625] albeit now to be read without confinement to a use involving 'resolving ambiguities' in an examination of extrinsic evidence.

174 With those general observations as to interpretive legal principle in mind, I now turn to assess the evidence adduced on the preliminary issue, most of which was documentary. In the main, there was minimal controversy between the parties as to the existence of these underlying facts. Their relevance and significance was more controversial.

175 Overwhelmingly the nature of the evidence raised by the parties in the preliminary issue was documentary. To that end, the parties submitted a trial bundle comprising seven volumes of materials. Exhibit 1 comprised five key written instruments, including the SD and the SSA. Exhibit 1, tab 6 comprised the Assumption Deed Poll executed by Radhika on 13 October 2009. In the end, as I mentioned, senior counsel for Radhika did not rely upon this instrument. However, general submissions were made about the conceptual impacts of a validly executed and delivered Assumption Deed, if executed and delivered substantially in terms of a pro forma instrument which was Annexure A to the SD.

176 The Receivers, as regards Pankaj, in the alternative, did rely on a Deed of Assumption instrument said to follow the terms of the pro forma Annexure A to the SD, bearing date 3 June 2011. This deed poll (see exhibit 2, tab 331) was executed by one of the Receivers, Mr Theobald, as attorney of Pankaj, acting pursuant to cl 9 of a share mortgage between Pankaj and the ANZ Banking Group Limited of 23 December 2009. Yara expressed reservations about being left prejudiced by a late emergence of this deed poll just before the hearing. But essentially that deed poll instrument really speaks for itself by its terms.

177 The rest of the trial bundle comprised six files of uncontroversial documents ranging across 333 individual tabbed documents (with further augmentations). The material is organised in broadly chronological fashion and its proposed utility goes towards showing mutually known contextual facts (or Codelfa facts as they were referred on occasion) said by one or other party to be relevant in this construction exercise, either as background to the commercial purpose and object of the transactions or as admissible mutually known surrounding circumstances bearing upon construction.

178 The time span for the documentary material ranged between December 2000 and June 2011.

179 I admitted as exhibit 2 all these residual trial bundle materials into evidence across six volumes. Specific reference to individual documents, if required within exhibit 2, can be achieved by reference to a distinctive tab number individually ascribed to each of the 330 plus documents within the trial bundle. The same material is then identified and categorised in the parties' agreed index to (the aggregated) seven volume trial bundle (comprising exhibits 1 and 2) which is exhibit 3. The agreed index itself was then revised and supplemented during the course of the hearing.

180 By the end of the hearing the most contemporary iteration of the agreed trial bundle index was exhibit 3.3. That (further amended) index (to the seven volume trial bundle) needs to be read as incorporating two further documents uncontroversially submitted by Yara at tabs 303A and 321C (see ts 595).

181 The agreed trial bundle index records that a number of documents were formally objected to, particularly by Yara. However, at the hearing before me, limited objections were pressed really only as to potential relevance. However, save as I mention in these reasons, none of the parties developed an elaborate submission as to the irrelevance of particular documents within the trial bundle during the course of the hearing. I indicated to the parties that, unless I was taken to a particular document within the trial bundle during the course of the hearing I would not likely be placing reliance upon it in the construction exercise. No party expressed dissent from that course.

182 Apart from controversy over the Assumption Deeds for Radhika and Pankaj, the other issue of controversy concerned the usage of statements in documents (other than as I will explain) related to negotiations leading up to the eventual entry by the parties into the SSA on 19 September 2008. Prior to 19 September 2008, a Terms of Agreement had been entered into by Yara, Pankaj and BHL on 8 September 2008 (see exhibit 2, tab 69). A Binding Terms of Agreement was signed off by Yara, Pankaj and BHL on 9 September 2008 (see exhibit 2, tab 80). Radhika and the Receivers seek to place reliance upon these 'terms sheets' as part of relevant mutually known surrounding circumstances leading up to the SSA.

183 I propose to approach these two 'term sheet' documents in line with the observations of Mason J in Codelfa. Mutually known relevant facts can permissibly be ascertained from such instruments. However, it is impermissible to place reliance upon them for what they reveal as to the subjectively held intents or desires of a signatory. That would be inconsistent with the overall objective nature of a construction exercise.

184 Otherwise however, most of the documentary materials that were tendered presented as largely uncontroversial as to their underlying facts.

185 In addition to documentary materials, Radhika led evidence from two witnesses, Mr Basil Lenzo and Ms Vanessa Lok.

186 Mr Lenzo's witness statement was tendered as exhibit 4.1 (exhibit 4.2 is an annotated copy of Mr Lenzo's witness statement incorporating specific references to documents as found within the trial bundle) and Ms Lok's witness statement was exhibit 7. Mr Lenzo is currently general counsel for BFPL. At times he has held the office of director of both BHL and BFPL. As regards BHL, he was a director as between 27 September 2006 and 16 May 2008, and then again between 31 October 2008 and 31 July 2009.

187 Ms Lok was a part time employee in Mr Lenzo's legal practice, CLP Legal, between December 2006 until September 2010. She is a dentist, as well as a qualified legal practitioner.

188 Both Mr Lenzo and Ms Lok's evidence was oriented towards the state of the share register for BHL, particularly as regards events leading up to 18 September 2008 when Mr Lenzo, as part of providing general counsel services to BHL, made some updating adjustments to the manual share register of BHL.

189 I will deal with Mr Lenzo and Ms Lok's evidence within the context of the overall chronology of facts, I find proven for this preliminary issue. I now approach that task.

Found facts submitted as bearing upon the constructions of the SD and SSA

190 On 14 June 2001, Shorewatch Pty Ltd was incorporated. This proprietary corporation was subsequently converted to a limited corporation which is BHL, the third defendant. Initial directors of the proprietary corporation were Pankaj and Mr Vikas Rambal. There was only one issued share in the company, which was owned by Pankaj (see exhibit 2, tabs 3 and 5). Some six months earlier, BFPL, a wholly owned subsidiary of BHL, was incorporated (see exhibit 1, tab 1).

191 On 22 June 2001, the trust known as the Burrup Trust was established under the Vasundhara Trust Deed (see exhibit 2, tab 8). Under this instrument, a trust arrangement which may broadly be described as a discretionary trust was established for what was then referred to as the Vasundhara Trust. The settlor of this trust was a Mr Peter Moltoni and Pankaj was the trustee. The definitions of Primary Beneficiary, Additional Beneficiary, Beneficiary, General Beneficiary and Appointor are of significance in the understanding of this document. Pankaj was named not only as trustee of this trust but also as guardian and appointor. He was also named, together with his wife Radhika and their daughter Vasundhara Oswal, as one of the three named Primary Beneficiaries (see Schedule at page 21 of the Vasundhara Trust Deed). According to par 30, the Vasundhara Trust was an instrument governed by the laws of Western Australia and where applicable the laws of the Commonwealth of Australia.

192 This trust deed was amended by deed of variation on 17 January 2002 (exhibit 2, tab 12). A longhand annotation to item 1 of the schedule (page 3) indicates that the word 'Vasundhara' is struck through and replaced in longhand with the word 'Burrup', amending the Schedule at item 1 to read 'The Burrup Trust'. The cover page bears a similar correction in longhand.

193 As regards events of March and April 2007, it is important within the Burrup Trust Deed to notice cl 12 and cl 17. It is more convenient to refer to them out of order. Clause 17 provides:

(a) a Guardian is then in office, clause 27 does not apply, and the Guardian consents; or

(b) no Guardian is then in office; then

the Trustee may from time to time before the Vesting Day whether or not the Trustee has made an appointment under clause 16.1, appoint, apply, or distribute, the whole or any part of the capital of the Fund to or for a General Beneficiary for the Beneficiary's own use and benefit or for the maintenance, education, advancement, or benefit, of a General Beneficiary.

194 By reference to the power to deal with capital under cl 17, cl 12.1 is seen to provide:

An amount set aside for a Beneficiary under clauses ... or 17 will be held by the Trustee as a separate fund on trust for that Beneficiary and until payment to that Beneficiary or any person in trust for that Beneficiary, the accretions to and income from that investment will belong to that Beneficiary.

195 The significance of those provisions becomes apparent in a resolution of the trustee (Pankaj) of the Burrup Trust of 13 March 2007, to which I will refer in due course. At this point, I simply highlight in cl 12.1 the phrase, 'separate fund on trust'. That expression is significant in the context of a distinction drawn between a separate fund created in a discretionary trust but still held on trust by the same trustee as against a creation of a separate trust.

196 On 16 July 2001, there was a resolution of the trustee (Pankaj) to change the name of the Vasundhara Trust to the Burrup Trust. The same day, Shorewatch Pty Ltd changed its name to Burrup Holdings Pty Ltd. At this time there was still only one issued share in Burrup Holdings Pty Ltd, held by Pankaj as trustee of the Burrup Trust. The Burrup Trust Deed was amended by the Deed of Variation (exhibit 2, tab 12) of 17 January 2002 to which I have referred.

197 There is little controversy over the fact that Burrup Holdings Pty Ltd via its wholly owned subsidiary BFPL was established to construct an ammonia plant on the Burrup Peninsula. The plant was subsequently completed and successfully established as an operational ammonia plant. The plant produces approximately 4% of the total world output of tradeable ammonia and is said to be the largest ammonia producer in the Asia Pacific region.

198 In December 2002, the first and only issued share in Burrup Holdings Pty Ltd was cancelled and 900 shares were then issued to the Burrup Trustee. At the same time 100 shares were issued to the Rimbal Family Trustee (see exhibit 2, tabs 16 and 17). On 13 December 2002, Andreas Walewski was appointed a director of the company.

199 March 2005 saw the introduction of Yara Australia Pty Ltd. A deed referred to as the 'Old Shareholders' Deed' (OSD) was entered on 31 March 2005 between Yara, the Burrup Trustee, the Rimbal Family Trustee, BHL and BFPL (although at that time BHL was still a proprietary corporation). The OSD is found as exhibit 1, tab 2. Prior to the introduction of Yara, the BHL shareholding, as has been seen, had been split in BHL as between the Burrup Trustee at 90% and Vikas Rambal at 10%. The proprietary corporation had only three directors, Pankaj, Mr Rambal and Mr Walewski.

200 On 12 April 2005, Yara was allocated 492 shares in BHL then amounting to a 30% shareholding interest in the issued share capital. At the same time 146 further shares were allocated to Mr Rambal, taking his issued shareholding (as trustee) in total to 246 shares then comprising 15% of the issued share capital. A further two shares were allocated to the Burrup Trustee taking that trustee's shareholding to 902 shares or 55% of the shareholding.

201 The same day, Mr Edward Cavazuti was appointed as a director of BHL. He was Yara's Nominee Director appointed pursuant to the Nominee Director provisions within the OSD. Such an arrangement is broadly reflected in the subsequent nominee arrangements I have described under the SD of March 2008 (save that under the OSD, Yara and Mr Rambal each held the right, they holding 30% and 15% shareholdings respectively, to appoint one nominee to the BHL board which was capped at five directors). The Burrup Trustee held the right under the OSD to appoint three Nominee Directors in respect of that trustee's 55% (majority) shareholding.

202 On 29 March 2005 (exhibit 2, tab 23), Yara International ASA, the Norwegian parent corporation of Yara, issued a media release entitled 'Yara strengthens its position in Asia'. I mention this extract:

Oslo (25-03-29):

Yara has signed an agreement with the owners of the new, world scale ammonia plant on the Burrup Peninsula in Western Australia, acquiring a 30% stake in Burrup Holdings Pty Ltd. The acquisition further strengthens Yara's position in Asia and Oceania ...

The ammonia plant, still under construction on the Burrup Peninsula, is the first chemical processing facility based on gas from the Australian North West continental shelf. The plant is world scale with a capacity of 760,000 tonnes per year and is expected to start production in the second half of [2005] ...

The final transaction is subject to approval from Australian authorities.

203 There were some changes in directorships on the board of BHL in the period between May and July 2006. Radhika became a director in the period between May 2005 and June 2006. In September 2006, Mr Cavazuti ceased to be Yara's Nominee Director on the board of BHL and was replaced by Mr Tormod Tingstad. At that time the board comprised Pankaj Oswal and Vikas Rambal. They had been BHL's directors from the incorporation of that corporation in June 2001 and were joined by Mr Walewski, Mr Tingstad, Basil Lenzo and Sivan Jeyarajah.

204 On 28 January 2007, Mr Rambal ceased to be a director of BHL. In the context of the OSD which then was applicable, the Rimbal Family Trustee agreed to sell that trust's shares to the Burrup Trustee. Disposition of 246 shares (15% of the issued share capital in BHL) to the Burrup Trustee resulted in that trustee holding 1,148 (70%) of the issued shares in BHL.

205 It appears uncontroversial that an actual transfer of the Rimbal Family Trustee shares to the Burrup Trustee was completed on 26 April 2007. Around that time the transfer was manually entered in BHL's share register by Mr Lenzo.

206 None of this is particularly controversial. It is to be noted that the OSD contained preemption provisions (cl 9 and cl 10) applicable to an existing Shareholder's proposed disposition of shares. Those provisions (see OSD cl 9.3 and cl 10) in the circumstances would have presented an opportunity to both Yara and the Burrup Trustee to seek to acquire some or all of the 15% shareholding of the outgoing Rimbal Family Trustee, if prepared to pay the requested price (cl 10.6). However, Yara did not seek to do so.

207 No issue arises concerning the eventual 70% BHL shareholding by the Burrup Trustee which ensued, subject to a qualification arising out of a resolution of the Burrup Trustee of 13 March 2007 (some six weeks before 26 April 2007). The terms of this resolution are found in exhibit 1, tab 29. It reads:

Resolution of Trustee

The Burrup Trust

I, Pankaj Oswal, being the trustee of the Burrup Trust and having obtained consent of the Guardian of the Burrup Trust, do hereby resolve pursuant to clause 17.1 of the Deed of Trust, to appoint for the absolute benefit of the named beneficiaries below, a part of the corpus of the Trust as detailed below. Henceforth the corpus so appointed and income or accretion of capital therefrom shall be held on separate trust and for the absolute benefit of the named beneficiaries in their own individual capacities.

Mr Pankaj Oswal - 574 shares in Burrup Holdings Pty Ltd

Mrs Radhika Oswal - 574 shares in Burrup Holdings Pty Ltd

[Signature]

Pankaj Oswal

Dated 13th day of March 2007

(my emphasis in bold)

208 This resolution dealt with 1,148 shares in BHL. That is, 70% of the then issued shares in BHL. That, however, was the Burrup Trustee shareholding position in BHL that only came to pass after 26 April 2007, when Mr Vikas Rambal, as trustee for his family trust, transferred the 246 shares to the Burrup Trustee. To that extent, the 13 March 2007 resolution anticipates an acquisition of 246 shares by the Burrup Trustee, six weeks before they were actually acquired by the Burrup Trustee from the Rimbal Family Trustee.

209 The terminology of this resolution, referring to cl 17.1 of the Burrup Trust Deed and an appointment for the absolute benefit of two named Primary Beneficiaries of this discretionary trust a part of the corpus of the trust to be held on 'separate trust' for the absolute benefit of Mr and Mrs Oswal, is noteworthy. I have already observed that cl 17.1 of the Burrup Trust Deed, as regards the capital of that trust, allows for an appointment, application or distribution of the whole or any part of the capital of the trust fund to a Primary Beneficiary. Clause 12.1, as I have also mentioned, makes reference to an amount set aside under cl 17 (inter alia) as a 'separate fund on trust for that beneficiary', rather than to the establishment of a new trust distinct from the Burrup Trust.

210 I assess the terms of this resolution, in overall context, as merely envisaging a separate fund being set aside within the Burrup Trust for the benefit of Pankaj and Radhika to the extent of 574 BHL shares for them each, rather than as a new or 'separate trust' being established that was distinct from the Burrup Trust. That is so notwithstanding the resolution does use the term 'separate trust'. But the reference in cl 12.1 of the Burrup Trust Deed to cl 17 and setting aside of a fund thereunder to be a separate fund that is 'held by the Trustee as a separate fund on trust for that Beneficiary ...' seems to better fit the overall circumstances of what eventuated more comfortably than a 'separate trust' (see also cl 39.1 of the Burrup Trust Deed referring to a 'discrete trust fund).

211 Essentially then, the BHL shares which were assets of this discretionary trust were now being carved out of the trust assets and specifically allocated to Pankaj and Radhika beneficially. The allocated and separate asset fund was still held under the terms of the Burup Trust Deed. But the arrangement for a separate fund meant that, as regards these BHL shares, Pankaj and Radhika's entitlement was no longer exposed to the discretion of the Burrup Trustee as regards allocations amongst beneficiaries of the discretionary Burrup Trust.

212 Part of Yara's case regarding the true meaning of this resolution is that the Burrup Trustee, as of 13 March 2007, ceased to 'hold' these 1,148 shares. I obviously disagree. In any event, multiple references in subsequent documents post 13 March 2007 refer to the Burrup Trustee still holding these BHL shares.

213 The 13 March 2007 resolution, in my assessment, merely effected an establishment of a separate fund comprising these shares within the overall continuing trusteeship of the Burrup Trust, rather than the establishment of a new or separate trust. The separate fund, albeit no longer exposed to discretionary allocation to others by the Trustee, still remained vulnerable to some possible indemnification recourse under the Burrup Trustee's rights under that trust deed (see cll 12.2 and 25).

214 It will be remembered that Recital A in the SD of 24 March 2008 stipulated that 'Pankaj Oswal is the trustee of the Burrup Trust and in his capacity as trustee of the Burrup Trust is the holder of 1,148 ordinary fully paid shares in Holdings representing 70% of the issued shares in Holdings'. Yara is a party to that deed and so to its recitals. In this exercise of construction, an articulation of a factual position by Yara that would be contrary to what is found clearly expressed under Recital A, in an otherwise enforceable and unvaried SD, would be unprecedented. No case was cited to me where a court had previously construed an instrument by reference to surrounding facts inconsistent with factual premises expressly stipulated by the recitals of the instrument under construction. I do not propose to do so. It will not be forgotten that cl 22.13 of the SD provides an elaborate entire agreement provision. This is not a case of Greer v Kettle [1938] AC 156 estoppel by deed being invoked against Yara. Rather, this is a case of the construction exercise necessarily proceeding by reference to the unaltered content of the written instrument under interpretation (absent a rectification).

215 Notwithstanding the establishment of a separate fund within the Burrup Trust of 1,148 BHL shares for Pankaj and Radhika, in a position consistent with Recital A in the SD, my overall assessment is that, by reason of the continued trusteeship of the Burrup Trust's trustee, the legal title in those shares continued to be held by the Burrup Trustee.

216 On 21 January 2008, resolutions were passed converting BHL from a proprietary company to a public company and to adopt a new Constitution (exhibit 1, tab 3). As at 6 August 2007, Mr Tingstad had ceased to be Yara's nominee on the board of BHL and was replaced by Mr Ken Wallace. As of January 2008, the board of BHL now comprised Pankaj, Ken Wallace, Basil Lenzo and Sivan Jeyarajah.

217 On 19 March 2008, it was resolved under a resolution of BHL members to split each share of BHL by issuing new shares (see exhibit 2, tab 56). On its face, the resolution appears to be executed by the Burrup Trustee. The resolution was relevant to a plan at that time to publicly list BHL on the ASX, and, to that end, to create a large number of potentially tradeable shares in the two existing Shareholders. The conversion resolution resolved to:

(a) split each fully paid share in BHL into 670,756.9638921 shares with effect from the day this resolution is passed, resulting in 1,100,041,421 shares in the capital of the company on issue (share split);

(b) cancel existing share certificates held by Burrup Trust (in respect of 1,148 shares that it held) and Yara Australia (in respect of the 492 shares that it held);

(i) Pankaj Oswal as trustee of the Burrup Trust for 770,028,995 shares; and

(ii) Yara Australia Pty Ltd for 330,012,426 shares.

218 Notwithstanding the conversion resolution, the identical 70%/30% shareholding ratio as between the Burrup Trustee and Yara continued.

219 Examination of BHL's share register reveals that, as at 19 March 2008, the actual issuing of replacement shares in the multimillions was not immediately actioned.

220 On 24 March 2008, the SD as between Yara, the Burrup Trustee, BHL and BFPL was executed. At the time BHL's directors comprised Pankaj, Ken Wallace, Basil Lenzo and Sivan Jeyarajah. It will be clearly seen from the recitals to the SD that the respective shareholdings of the two key Shareholders are identified as 1,148 shares for the Burrup Trustee and 492 for Yara, rather than in the levels of the millions of shares envisaged by the conversion resolution. Following the departure of the Rimbal Family Trustee, the Burrup Trustee and Yara seem to have been content to continue under the regime of the OSD for approximately a year before executing the SD.

221 From this point on in the chronology, events found cannot bear upon the construction of the SD. However, the facts and events over the ensuing six months can form the background leading up to the SSA (of 19 September 2008).

222 On 16 May 2008, Mr Lenzo ceased to be a director of BHL. He was replaced by Mr Roger Steinepreis and Mr Michael Perrott. On 21 July 2008, Mr Ken Wallace was replaced as Yara's Nominee Director by Mr Tor Holba (who is firstnamed fourth defendant in the action and in Yara's counterclaim).

223 A BHL prospectus lodged with ASIC carries the date of Monday 19 May 2008 (see exhibit 2, tab 62). A letter was signed by Pankaj, as Chairman and Managing Director of BHL. The letter is addressed 'Dear Investor'. It refers to a memorandum of understanding of 10 May 2008 with Yara ASA. In part the Chairman's letter says this:

Burrup Holdings is the owner of one of the world's largest producing single train merchant ammonia plants. Burrup Holdings' scale capacity and access to low cost gas feedstock support its position as one of the lowest cost exporters in the high growth Asia Pacific region.

A subsidiary of Yara International ASA ('Yara'), the largest trader of ammonia in the world, has signed a 20 year Offtake and marketing support agreement with Burrup Holdings' operating subsidiary, Burrup Fertilisers Pty Ltd ('Burrup Fertilisers') to market, distribute and sell ammonia into domestic and international markets. A long term working and equity relationship between Burrup Fertilisers and Yara ensures that Burrup Holdings' ammonia is sold at competitive prices, being based on transparent Middle East benchmarks with 100% of Offtake sold through the pricing cycle.

224 At par 1.7, under a heading 'Investment Overview' with a subheading 'Ownership Structure' the following appears:

Burrup Holdings is presently 70% owned by the Burrup Trust and 30% owned by Yara.

I note as well par 1.8 with the subheading 'Relationship between Burrup Holdings and existing Shareholders'.

225 There is nothing in these provisions which mentioned, by reference to a resolution of 13 March 2007, that the Burrup Trustee had ceased to be trustee or legal owner of 70% of the shares in BHL. In fact, quite the contrary.

226 Section 6 of the BHL prospectus, under the heading 'Board, Management and Corporate Governance', identifies Pankaj as Chairman and Managing Director.

227 On 16 May 2008, a resolution pursuant to r 12.8 of BHL's Constitution was signed off (see exhibit 2, tab 60). The last page of that resolution (after par 13) carries signatures of BHL's five directors. Under a heading 'Project Balaji - Transaction Overview', item 1 of the circulating resolution foreshadows that BHL was considering an Initial Public Offer (IPO) in conjunction with admission to the official list of the Australian Securities Exchange (ASX) and the quotation of BHL's shares on the ASX. A prospectus to that end is said to have reached the stage of a final draft. The resolution under cl 1 provided:

The Company (BHL) is proposing to undertake an initial public offer (Offer) of fully paid ordinary shares in the Company (Shares). The Shares to be offered will rank equally in all respects with those Shares already on issue.

The Company currently proposes to offer approximately 223.1 million Shares for sale and subscription at a price to be determined following a book build process. UBS AG, Australia Branch (UBS) has been appointed lead manager to the Offer.

In conjunction with the Offer, the Company will apply for admission to the official list of the Australian Securities Exchange (ASX) and quotation of the Shares on ASX (including those Shares that are to be retained by the current shareholders of Burrup Holdings, Mr Pankaj Oswal as trustee for the Burrup Trust (Burrup Trust) and Yara Australia Pty Ltd (Yara Australia) (together, Selling Shareholders)). Immediately following completion of the Offer, the Selling Shareholders will retain approximately 80% of the total Shares in the Company, with the Burrup Trust holding approximately 53% and Yara Australia approximately 27%.

228 Under item 6 of the resolution, BHL's directors resolved that 'the Company invite the public to subscribe for up to 223.1 million ordinary shares in the capital of the Company at an issue price of $1.75 - $2.25 per share payable in full on application, with the final Offer to be determined under the book build process'. The BHL prospectus lodged with ASIC, dated 19 May 2008, is exhibit 2, tab 62. The Chairman's letter, also dated 19 May 2008, by Pankaj as Chairman and Managing Director of Burrup Holdings, refers to BHL's primary business as production of fertiliser grade merchant ammonia. Reference is also made to a 20 year offtake agreement between Yara International ASA and BFPL relating to marketing, distribution and sale of ammonia in domestic and international markets. 100% of the offtake is to be sold at competitive prices through a 'pricing cycle'. The Chairman's letter also says:

Total proceeds of the Offer will be approximately A$446 million and will be used to repay Existing Shareholder Loans and to acquire Shares from Existing Shareholders. . It is expected that Burrup Holdings will have a market capitalisation of approximately A$2,231 million on completion of the Offer.

229 The BHL prospectus makes reference to its directors at s 6. Under subheading 6.1 reference is made to BHL's then five directors (comprising Mr Pankaj Oswal as Chairman and Managing Director, Mr Jeyarajah as Executive Director and Messrs Wallace, Steinepreis and Perrott as nonexecutive directors). As regards Pankaj as the Chairman and Managing Director, it is said:

Mr Oswal has been the chairman and managing director of Burrup Holdings since 2000. He was the initial founder of Burrup Holdings and its operating subsidiary Burrup Fertilisers, and was the main driver of the vision to build the ammonium plant on the Burrup Peninsula.

230 Subheading 6.4.2 deals with BHL's board structure and composition. It concludes:

Under Burrup Holdings' Constitution, voting requires a simple majority of the board. If an equal number of votes is cast for and against a resolution the Chairman has a second or casting vote unless only two directors are entitled to vote or the Chairman of the meeting is not entitled to vote.

231 That lastmentioned board governance scenario differs significantly from the Nominee Director board voting arrangements set under the OSD and the SD. Obviously, a change in BHL's board governance was envisaged, which would require departing from the SD management arrangements, once BHL became a publicly listed corporation with tradeable securities on the ASX. In that respect, it is relevant to acknowledge that the key parties to the SSA, in contemplating an IPO, prospectus and listing for BHL in May 2008, had been more than aware of a prospect that the existing SD Nominee Director board arrangements would only remain appropriate until a public listing of BHL's securities occurred. These provisions of the SD reflect a looming prospective cessation of the SD Nominee Director board management arrangements: see SD cll 16.2(a)(ii) and 9.1(b) and cl 10.1.

232 Exhibit 2, tab 69 and tab 80 embody written 'terms of agreement', then 'binding terms of agreement' of 8 and 9 September 2008 respectively, to which I have already referred. These documents are part of the parties' negotiations prior to entry into of the SSA on 19 September 2008. Considerable caution is therefore needed in relation to their use in an overall construction exercise, for the SSA. To the extent that they display relevant objective facts mutually known to the parties relevant to the process of construction, they may be considered. Otherwise however, to the extent that they display subjective intents or desires as expressed by one or other party regarding the terms of the eventual SSA, then they may not be considered: see Mason J in Codelfa.

233 I take from these two instruments the following objective facts. They both appear to carry signatures of Pankaj and Mr Tor Holba. Pankaj's signature is ascribed by reference to his typed name and the designation 'CMD BHL'. Mr Holba's signature carries a typed reference next to his name as 'Senior VP Upstream Yara International ASA'. Both instruments are in short form. They appear to use highly abbreviated, almost skeletal language. I was directed to a common cl 1 in each these instruments which provides 'Burrup Holdings Ltd (BHL) is owned 70% by Pankaj Oswal (PO) and 30% by Yara'. Yara suggested such terminology supported a view that Pankaj personally, not the Burrup Trustee, was legal owner of 70% of the shares in BHL at the time. It would, I think, be dangerous to draw that conclusion from such an abbreviated document. My contrary assessment is that the parties were then attempting to distil a bare essence for a BHL share sale deal. They were using shorthand in the process.

234 I can also ascertain as a surrounding fact that as between 8 and 9 September 2008, the terms of a proposed sale deal between Yara, Pankaj and BHL evolved rather quickly. By 9 September they were described as binding terms of agreement under cl 2 of the binding terms of agreement. I also can detect that the sale price under negotiation for the acquisition of the 5% interest in BHL shares by Yara reduced, over a one day period, from US$150 million to US$141 million. Overall however, I can take very little that assists a construction exercise from changes in a sale negotiation process, which was evolving prior to the SSA being finally consummated.

235 Apart from the central feature of a prospective sale and acquisition of a further 5% shareholding interest by Yara, the parties' discussions otherwise appear to have been focused within contexts of a looming possible IPO for BHL, a memorandum of understanding of 10 May 2008 in relation to the TAN project (which, in the prospectus, had been referred to as a nonbinding memorandum of understanding) and the potential expansion of the existing ammonia plant or a further downstream nitrogen project.

236 Evidence by Mr Lenzo (exhibit 4.1) gives some further background context to the events of September 2008 leading up to the SSA. His trial evidence explained the manually kept BHL share register which he, as general counsel for BFPL and at times for BHL, took responsibility at times for maintaining and updating. At par 8 of his evidence Mr Lenzo said:

Part of my role in providing general counsel services was responsibility for maintaining and, where necessary, updating the share register. In this regard, I prepared any necessary ASIC forms and share certificates and, where the signature of the company secretary was required, I arranged for Wolfgang Jovanovic, who was the company secretary, to sign.

237 Mr Lenzo referred to the manually kept and updated share register for BHL, but which subsequently changed to an electronic register using CAS computer software around July 2008 (par 8 of Mr Lenzo's statement).

238 Mr Lenzo referred to an earlier 2007 entry he had caused to be made in the BHL register, recording the transfer of shares from the Rimbal Family Trustee to the Burrup Trustee. He told the court (par 15):

This share transfer was part of the settlement of the dispute between Pankaj Oswal and Vikas Rambal. That agreement was reached in January 2007 following a court ordered mediation. Settlement took place on 26 April 2007, so I asked Ms Vanessa Lok [part time employee of Mr Lenzo's legal firm, CLP Legal] to enter the share transaction as at that date.

239 The register of BHL members to which Mr Lenzo refers shows a transfer on 26 April 2007 of 246 shares to 'Oswal Pankaj as trustee of the Burrup Trust'. A corresponding register entry showing the same date, 26 April 2007, records the transfer by Mr Rambal as trustee of the Vikas Rambal Family Trust of the 246 BHL shares, leaving a balance held by the Rimbal Family Trustee as zero.

240 Consequent upon the 2007 transfer, 'Oswal Pankaj as trustee of the Burrup Trust' was shown as holding 1,148 shares (70%) in BHL.

241 In the period between 26 April 2007 up to 18 September 2008, based on Mr Lenzo's evidence, there were no further entries he made or authorised concerning BHL's share register. However, on 18 September, a critical day, that changed.

242 I turn to the events of 18 September 2008, first by reference to Mr Lenzo's witness statement.

243 At par 16 of his witness statement Mr Lenzo related:

1. The next entry was made by me 18 September 2008. I was not aware of any share transfers, in particular from Pankaj Oswal as trustee of the Burrup Trust to Pankaj Oswal and Radhika Oswal between 26 April 2007 and 18 September 2008. The only matter in relation to the shares of which I was aware was the resolution of the members of BHL on 19 March 2008 to split the shares. This was in anticipation of an initial public offering and listing of BHL.
2. Following that resolution, I did not update the register or cause new share certificates to be issued prior to September 2008. I had anticipated that Link Market Services Ltd would take over the management of the share register on listing of the company. As it happened, the IPO was aborted because of the Varanus Island accident in mid 2008.
3. In September 2008, Pankaj Oswal was negotiating to sell 5% of BHL shares to Yara. I, Michael Anghie and Ross Amaral flew to London to assist with negotiations with Yara. Michael Anghie was a partner at Ernst & Young and was advising on the transaction. Ross Amaral, who was at that time consulting to Burrup Fertilisers Pty Ltd in marketing, was sent by Mr Oswal to assist with the negotiations.

244 Mr Lenzo does not mention the Terms Sheet instruments of 8 and 9 September 2008, to which I have earlier referred in the chronology.

1. In anticipation of the settlement of this agreement, it was necessary for me to update the share register and create share certificates reflecting the share split and sale to Yara.
2. I recall that drafts had been circulated of the Share Sale Agreement recording the sale of 5% of the shares to Yara. I also recall that the draft showed that the seller was Pankaj Oswal as trustee of the Burrup Trust which was consistent with my then understanding of the shareholding.
3. A day or so before the agreement was signed, Mr Oswal provided me with a document and said to me words to the effect, 'The shares are in Radhika and my names and I am selling 5% from my parcel'.

246 Mr Lenzo refers to receiving a copy of a resolution of 13 March 2007 which I have already referred to as exhibit 2, tab 29. From Mr Lenzo's statement he appears to have first viewed a copy of this resolution some 18 months after the date the resolution carries on its face. No earlier reference is found to this 2007 resolution. For instance, there is no reference to it in the SD of 24 March 2008, or in the draft prospectus delivered to ASIC in May 2008. Pankaj did not give evidence at the preliminary hearing. Therefore, he as the author was not able to be questioned about the March 2007 resolution and why it would only appear to have surfaced at the time Mr Lenzo says he saw it in September 2008.

247 The statement attributed by Mr Lenzo to Pankaj concerning the 2007 resolution is also curious. The 70% shareholding in BHL was actually held then in the name of the Burrup Trustee (at that time) on BHL's manual share register. So, a statement by Pankaj that the shares are 'in Radhika and my names', if made, was obviously and factually wrong. Mr Lenzo must have known, given his familiarity with the BHL share register, that 70% BHL shares were not so registered in those names. I therefore treat the evidence about the March 2007 resolution with considerable caution.

248 Nevertheless, despite curiosities, the thrust of Mr Lenzo's evidence is directed to explaining that he acted in September 2008 upon Pankaj's verbal instruction that the sale of a 5% BHL shareholding to Yara was to be from Pankaj's 'parcel' of 574 shares, representing 35% of the then issued ordinary shares in BHL (and overlooking the operative effects of the conversion resolution of the BHL directors of 19 March 2008, obviously not then implemented, to reissue many millions of shares to the two BHL Shareholders in lieu of old shares).

249 Mr Lenzo, for reasons unexplained, had not at that point acted on the 19 March 2008 share conversion resolution. So, the SD (of 24 March 2008) identifies the only two BHL Shareholders still holding 1,148 and 492 ordinary fully paid shares respectively, reflecting 70%/30% majority/minority shareholding interests in BHL at that time.

250 By reference to par 21 of Mr Lenzo's statement, information emanating from Pankaj that he was to be the seller to Yara, not the Burrup Trustee, was emerging very much at the 11th hour. The known fact is that the SSA was signed off on 19 September 2008.

251 Sometime on 18 September 2008, Mr Lenzo entered in the BHL share register a transfer of 1,148 shares away from the Burrup Trustee, which he backdated to 13 March 2007. In this regard it is important to bear in mind the chronological significance of an earlier entry in the BHL register authorised by Mr Lenzo which had recorded a transfer to the Burrup Trustee on 26 April 2007 of 246 shares from the Rimbal Family Trustee.

252 The recorded transfer of shares away from the Burrup Trustee (dated 13 March 2007, but actually made in the register on 18 September 2008 by Mr Lenzo) left it holding no shares in BHL. On the same day, Mr Lenzo next recorded in the register, by reference to BHL share certificates 2, 4 and 7, the transfer of 574 ordinary shares each to Pankaj and Radhika personally as occurring on 26 April 2007. But there was no transfer from the Burrup Trustee to Pankaj or Radhika for 26 April 2007. The Trustee's resolution of 13 March 2007 was not a transfer document. In any event, the Trustee's resolution of March 2007 is six weeks before the Burrup Trustee even received the required extra 274 shares (15%) from the Rimbal Family Trustee in April 2007 (to achieve a 70% BHL holding).

1. The entries concerning the 13 March 2007 transfer were made by me on or around 18 September 2008 and are in my handwriting. They were based on my understanding of the legal effect of the document given by me by Mr Oswal titled 'Resolution of trustee' ... Based on that document, I saw that the share vesting that happened on 13 March 2007, so I entered the entry for Pankaj Oswal as trustee of the Burrup Trust as at that date, and that is why the date 13.3.07 appears after 26.4.07.
2. In respect of the entries for Pankaj and Radhika, I entered the date of 26 April 2007 because that is when Vikas Rambal's shares were transferred to Pankaj as trustee of the Burrup Trust. I took the view that the combined effect of the trustee's resolution and the settlement with Vikas Rambal meant that the shares to Radhika and Pankaj should be registered as at 26 April 2007.

254 None of this makes much legal or chronological sense. Mr Lenzo continued:

1. Mr Oswal did not direct me to make the entries referred to in paragraph 24, 25 and 26.

255 For construction purposes, Mr Lenzo's evidence appears to be led to show that any statutory presumption (see s 1306(5)(a) Corporations Act) concerning the correctness of BHL's share register is rebutted by evidence to the contrary. That objective has clearly been achieved by the proof of demonstrable factual inaccuracies in the BHL register attributable to Mr Lenzo.

1. On Thursday evening (18 September 2008), after I had made the entries, I sent a copy of the register by email to the solicitors who were representing Yara in the sale negotiations, Clayton Utz, and copied the email to representatives of Yara and others, including Mr Oswal.

He identifies in this respect his email and an attachment (exhibit 2, tabs 148 and 149).

257 Before referring to documents to which Mr Lenzo refers under his par 28, I observe, by reference to other documents within exhibit 2, that drafts for a share sale agreement exchanged between participant parties looked to be well advanced by Friday 12 September 2008 (see exhibit 2, tab 89). Drafts for the share sale agreement involving the 5% acquisition of BHL shares by Yara were then being prepared and exchanged on the premise that the seller of the 5% BHL shareholding would be the Burrup Trustee (see exhibit 2, tab 90). That changed.

258 On Monday 15 September 2008, an email was dispatched from Mr Amaral, an adviser to Mr Pankaj Oswal (being part of a team of advisers then operating from London), to Mr Peter Wilkes, a legal practitioner at Clayton Utz Perth acting for Yara (see exhibit 2, tab 94). It appears that the information regarding Mr Lenzo's knowledge of the trustee's resolution of 13 March 2007 had not as of then (15 September 2008) reached Mr Amaral. Mr Amaral then told Mr Wilkes:

Peter,

Further to our discussion today, please find the following additional information:-

The seller is as follows: Pankaj Oswal as trustee of the Burrup Trust selling on behalf of Pankaj Oswal as beneficiary of the Burrup Trust ...

The total shares on issue are as follows 1,100,041,421 and the shares being sold are 55,002,071.

How are you progressing with the document and your instructions from Yara, and in particular the arrangement regarding payment to Pankaj this week.

259 Thereafter, draft documents, in particular draft share sale agreements, continued to be exchanged (see exhibit 2, tab 107) electronically. I refer to them for the fact of their existence (rather than the content of the negotiations) and also for the fact the proposed share seller nominated by the SSA drafts at this time was the Burrup Trustee.

260 Other related draft documents were prepared and discussed during this period including a draft Deed of Acknowledgement and Irrevocable Appointment between the Burrup Trustee, Yara and BHL (see exhibit 2, tab 113) and a draft Deed of Undertaking between BHL, BFPL, the Burrup Trustee and Yara. Yara's solicitors in Perth appear to have carried the primary responsibility for preparing the drafts, then circulating them for comment. In addition to circulating the drafts to the parties, Mr Wilkes' emails were copied to persons globally, including representatives of Yara's parent corporation in Norway.

261 On Thursday 18 September 2008 at 11:40:15, Mr Wilkes emailed Mr Amaral, Mr Anghie (in London) and Mr Roger Davies (of solicitors Blake Dawson Waldron) in these terms:

Roger, Michael and Ross,

Are the documents I circulated at 10.20 pm last night in final agreed form?

I would like to arrange for the circulation of PDF execution copies as soon as possible this morning. I propose we execute in counterparts. Yara will execute by two directors or a director and a company secretary in Singapore today.

It is my understanding that as per the discussions and exchanges that have occurred between Ross and Yara the transfer will occur tomorrow, subject to us receiving the executed counterparts of the documents, share transfer form and share certificate for the 8%.

262 Reference to 8% share certificates in BHL concerns an interim security arrangement by which Yara was actually to receive an extra 3% of shares as security. Such an arrangement was necessary because of delays in obtaining Foreign Investment Review Board (FIRB) approval for the 5% sale were holding up a settlement. The terms of the security were that Yara was initially to make a loan of the completion payment funds (US$141 million) to the Burrup Trustee as the seller and take security over 8% of BHL shares (3% of the 8% being a buffer) pending approval by the FIRB that was needed before settlement on the 5% sale could follow.

263 This interim secured loan arrangement would enable funds from Yara to flow through to the seller in the interim. Once FIRB approval was obtained the 3% BHL share security buffer could be returned, with the debt due to Yara then being effectively discharged by application of the loan funds towards payment of the US$141 million sale price. None of these arrangements are controversial. But I observe that close to the time of finalisation of the SSA, the proposed seller and party to be providing 8% of the BHL shares by way of the interim security arrangement before sale was still the Burrup Trustee.

264 On Thursday 18 September 2008 (bearing in mind it would appear that Messrs Amaral, Anghie and Lenzo were all in London, dealing by email with Mr Wilkes in Perth), Amaral sent the following email to Mr Trygve Faksvaag of Yara's parent in Norway at 17:09:00:

Hi Trygve

Understand from Basil that the shares are actually in the name of Pankaj Oswal. So for the sake of good order, we need the documentation changed from 'Pankaj Oswal as trustee of the Burrup Trust' to 'Pankaj Oswal'.

Kind regards

Captain Ross Amaral

Executive General Manager - Shipping and Marketing

(my emphasis in bold)

265 This shortly expressed communication from Mr Amaral appears to have led to a request for a copy of the trustee's resolution of 13 March 2007 which Mr Amaral sent at 17:30:25 to numerous parties including Mr Wilkes, Mr Davies, Mr Anghie and Mr Faksvaag. His email is addressed to another Clayton Utz solicitor based in Perth, Ms Nicky Giovkos. Mr Amaral's communication reads:

Hi Nicky

Please find a copy of the Resolution as requested.

Hope this helps to clarify things.

266 Associated communications by email concerning BHL share certificates and transfer forms continued across Thursday 18 September 2008 in Perth, London and Norway.

267 Ms Giovkos was emailed by Mr Amaral at 18:21:29. She was advised:

Hi Nicky

Basil will get the share transfer forms organised.

268 Mr Lenzo then sent his communication to Mr Wilkes and Ms Giovkos on 18 September 2008 at 18:53:27 as regards share certificates (19, 20 and 21) for 8% of BHL shares held by Pankaj and transfer forms (all dated 18 September 2008) for Yara's review. He said, 'I have also attached a current spreadsheet which represents the current respective holdings (before sale transaction) in accordance with the Share Split resolved in March this year' (exhibit 2, tabs 139, 140 and 141).

269 At 19:20:45 on Thursday 18 September, Mr Amaral advised Mr Wilkes by email:

Hi Peter,

Tried calling you and left a message.

Just chasing the current status on where you are with the docs and as to when we can expect them.

I understand that we have had a last minute change in the name (Pankaj Oswal), so just want to know if we are going to receive anything today or with [sic - will] this happen tomorrow morning.

Pleased to hear back.

270 At 8.17 pm on Thursday 18 September 2008, Ms Giovkos sent an email to Mr Lenzo, which was copied to various persons acting in the transaction for Yara, as well as to Mr Pankaj Oswal's and BHL's advisers. She wrote:

Dear All

Attached are revised copies of the following documents with our amendments in markup:

1. Share Sale Agreement,
2. Deed of Undertaking; and
3. Deed of Acknowledgement and Irrevocable Appointment.

As discussed with Basil Lenzo and Ross Amaral today, we have included Pankaj Oswal in his personal capacity as a party to the documents (and therefore as vendor of the Sale Shares). There are various places in the Share Sale Agreement and Deed of Undertaking where the former references to Pankaj Oswal were to him as owner of the shares not owned by Yara. Therefore we have included a definition of 'Oswal Parties' defined as 'Pankaj Oswal and Radhika Oswal' to address these references. We have also inserted an undertaking to the effect that Pankaj Oswal in his personal capacity and Radhika Oswal will execute all documents necessary to amend the Burrup Shareholders Deed to join them as parties to the deed which can be done later.

Yara have not had an opportunity to review the documents and therefore may have some comments on the attached drafts.

271 The passing communications leading up to 8.17 pm on Thursday 18 September 2008 precede and explain Mr Lenzo's reference in his witness statement to his communications with Peter (Wilkes) and Nicky (Giovkos) in par 28 of exhibit 4.2 (under exhibit 2, tabs 148 and 149), regarding BHL's register of members 'as it currently stands'.

272 Mr Lenzo's statement continues, as regards the share split issue:

1. While I was updating the register, I also created a separate document to become part of the register, which records the share split. The handwriting that appears in the document is mine.

273 Mr Lenzo refers to exhibit 2, tab 36. The BHL register of members displays his entries for Pankaj Oswal and Radhika Oswal for 18 September 2008, showing respective holdings of 385,014,447 shares each by reference to share certificates numbered 8 through 14 for Radhika Oswal and 15 through 29 for Pankaj Oswal (see also exhibit 2, tab 163A).

1. I have examined the original of the register (attachment A to this statement). It is clear from examining the original of that document that the day and month of my entry of 13.03.07 for Pankaj Oswal as trustee for the Burrup Trust [I interpolate this earlier explained by Mr Lenzo to have been made on 18 September 2008] have been whited out and changed to 26.4.07. I recognise that the handwriting of the entry on top of the white out is that of Ms Lok. I cannot now recall whether I discussed it with her or instructed her to amend the entry.

275 Ms Vanessa Lok's evidence in her witness statement (exhibit 7, par 16) about her 'whiting out' the date first written as 13.3.07 by Mr Lenzo (in September 2008) was:

1. From seeing the original, it is clear that I whited out an entry and wrote '26.4' over the top. I have a vague recollection of making this amendment. I believe that I made this amendment because it did not make sense that an entry for 13.3.07 followed an entry dated 26.4.07. I believe that I raised my query about the dates and discussed it with Basil Lenzo as I did not make any entries without discussing them with Mr Lenzo. I do not believe that I would have made the change unless Mr Lenzo agreed to it. I do not now recall what was discussed.
2. I do not now recall when I made this entry.

276 On this evidence, I conclude that whiting out of the date first written as '13.3.07' in the BHL Register occurred subsequent to 18 September 2008 and was made by Ms Lok, under Mr Lenzo's direction.

277 I return to my chronology of events which are found as facts. Mr Wilkes responded to Mr Anghie's email sent at 9.50 pm that day (I assume from London). Mr Anghie specifically addressed a formulation of what was then a proposed draft cl 5(b) in the SSA. Mr Anghie (mistakenly) addressed a proposed cl 5(b) in the SSA as 'clause 5(b) of the Shareholders' Deed' (see exhibit 2, tab 161). Bearing in mind the inadmissibility of subjectively expressed desires or beliefs as to intended outcomes arising in negotiations, I merely note the fact of an earlier passing communication upon the form of a proposed cl 5(b) of the SSA, as surrounding factual circumstances leading up to the SSA.

278 Mr Wilkes' swift response to Mr Anghie followed (exhibit 2, tab 162). He said:

Michael,

It is likely that other amendments will be needed to the Shareholders' Deed to address the fact that the Burrup Trust's interest has been split between two parties and to deal with rights to appoint directors and the like. I assume that we will simply refer to Pankaj and Radhika as the Oswal Parties and treat them as a block but have not had time to consider this. The bottom line is that there will need to be other amendments.

(my emphasis in bold)

Mr Wilkes proposed a variation to the formulation of draft cl 5(b) in the SSA concerning future amendments to accommodate Mr Anghie's point of concern. Again I can draw nothing from a negotiation over wording of the clause to permissibly assist in the construction task.

279 The parties' advisers' attention was at a late stage directly focused upon cl 5(b) of the SSA. Last minute drafting changes occurred not only to the SSA, but also to the draft Deed of Undertaking, Deed of Acknowledgement and Irrevocable Appointment. All these documents then seem to have been signed off on 19 September 2008 in London, Perth and Norway.

280 Last minute changes to the SSA provide a degree of overall background context, especially when it comes to examining the final iteration of the SSA, and particularly the final form of cl 5(b). Yara asserts that it manifested a cautious approach towards late changes to the SSA, particularly by reason of Yara's asserted 'uncertainty' and 'surprise' at these late happenings. However, I cannot reach those findings on the evidence. True there was a late change rendering Pankaj as the Seller. But on the evidence that change was accommodated professionally and without rancour. Well resourced, professional advisers acted quickly and effectively to assimilate required amendments.

281 On 17 October 2008, FIRB advised that there was no objection to the proposed acquisition by Yara of a further 5% shareholding interest in BHL (see exhibit 2, tab 255).

282 Completion on the 5% sale from Pankaj to Yara under the SSA eventually followed. This is explained in a communication from Ms Giovkos by email to Mr Anghie of 21 October 2008 (exhibit 2, tab 257):

1. Clause 4.4 of the Share Sale Agreement provides that Yara must pay the completion payment (US$141 million) to Pankaj on completion. Yara has already paid Pankaj US$141 million but that amount is considered to be a loan under the Deed of Acknowledgement and Irrevocable Appointment payable by Pankaj to Yara on the Repayment Date (i.e. the date of Completion under the Share Sale Agreement). On completion, the Completion Payment payable by Yara is automatically set off against the loan due and payable by Pankaj to Yara and is treated as full satisfaction of the payment of that amount of the loan due and payable by Pankaj.

283 Exhibit 2, tab 264 is the form to transfer 55,002,071 shares in BHL from Pankaj to Yara for a consideration of US$141 million, with the date of purchase being specified as 24 October 2008.

284 So from 24 October 2008, Yara now held 35% of the ordinary shares in BHL. Pankaj personally held 30% and his wife held the remaining 35% shareholding.

285 Some time no later than midnight on 18 September 2008, the 70% shareholding interest in BHL formally held by the Burrup Trustee now became both legally and beneficially vested in Pankaj and Radhika in equal levels (574 shares each). The BHL share register, written up by Mr Lenzo on 18 September 2008, showed Pankaj and Radhika as having taken their transfers of 574 shares each as at 26 April 2007. But the backdated date of 26 April 2007 was plainly incorrect. The resolution of the trustee of 13 March 2007 (which Mr Lenzo had first seen in September 2008) would not constitute a transfer. Nor do I find it to be a record of a vesting of those BHL shares in Pankaj and Radhika on 13 March 2007. I find that a transfer of legal and beneficial ownership was recorded by Mr Lenzo in the BHL register on 18 September 2008.

286 My correlative finding of fact is that the former 70% BHL shareholding by the Burrup Trustee did not cease on 13 March 2007, or on 26 April 2007. It ended not later than at some time before midnight on 18 September 2008, one day prior to entry of the SSA.

287 Under cl 16.2(c) of the SD, the SD automatically terminates for 'any one Shareholder' once that Shareholder ceases to hold shares. Pankaj and Radhika personally had together now become legal and beneficial owners of the 70% BHL shareholding formerly held by the Burrup Trustee on 18 September 2008. Even so, they were not yet parties to the SD. Accordingly, they were not yet 'Shareholders' under the SD, as the Burrup Trustee had been.

288 As of 19 September 2008, before the SSA was signed off, by reason of the termination of the SD for the Burrup Trustee, Yara was the only remaining Shareholder party in the SD. BHL and BFPL remained parties to the SD, but they were not parties to the SD as participating 'Shareholders'.

289 After completion of the sale of the 5% of BHL shares on 24 October 2008, the respective shareholdings of the parties were:

(a) Pankaj - 330,012,424 shares out of 1,100,041,421 shares, constituting 30% of the issues shares of BHL;

(b) Radhika - 385,014,497 shares out of 1,100,041,421 shares, constituting a holding of 35% of the issues shares of BHL; and

(c) Yara - also holding 385,014,497 shares out of the issued share capital of 1,100,041,421 shares constituting a 35% shareholding.

290 I move to briefly mention some subsequent facts beyond 19 September 2008, although they do not bear upon construction. I have not lost sight of the fact that the relevant background facts regarding the SD of 24 March 2008 need to be assessed as at that date. So therefore, the further six months of subsequent developments up to 19 September 2008 could only augment background facts or surrounding circumstances concerning the SSA.

291 Arrangements between parties now holding three blocks of shares in BHL appear to have been carried on uneventfully for the remainder of 2008, all of 2009 and most of 2010. The anticipated IPO and public listing of BHL did not eventuate. Reference has already been seen in the passing documentary communications to a Varanus Island gas explosion incident of late 2008. That incident heavily disrupted natural gas supplies to mainland West Australian gas consumers, particularly to large industrial consumers such as BFPL's Burrup Fertiliser plant.

292 The board of BHL continued to meet and conduct the business of BHL, mostly by the medium of circular resolutions signed by its directors. Pankaj continued without apparent objection to perform the dual roles of Managing Director and Chairman of BHL. BHL directors' meetings continued to be held. Minutes of those meetings do not suggest any voting polls being taken of the directors, or the exercise of Nominee Director weighted voting polls at board meetings of BHL.

293 Post 19 September 2008 events are more relevant to Radhika and the Receivers' alternative causes of action raised against Yara, grounded upon conventional estoppel. Those claims are presently deferred.

294 As regards cl 5(b) of the SSA, the possible ramifications of cl 5(b) of the SSA going to the capacity of Pankaj and Radhika to appoint and enjoy the benefits of Nominee Directors on BHL's board only appear to have emerged as problematic in the latter part of 2010.

295 On 31 July 2009, Mr Sivan Jeyarajah ceased to be a director of BHL. At that time Mr Vinojit Ambalavaner (secondnamed fourth defendant in the action and counterclaim) was appointed by Pankaj as a Nominee Director of BHL. An issue is raised by Yara about the validity of Mr Ambalavaner's appointment. However, Mr Ambalavaner resigned in early 2011. As at 31 July 2009, BHL's board comprised Pankaj, Mr Holba (Yara's nominee) and, subject to Yara's objection, Mr Ambalavaner.

296 On 19 October 2009, an Assumption Deed poll by Radhika is said to have been executed and witnessed (see exhibit 1.5). However, the authenticity, authorship, communication and an effective delivery of that instrument as a deed has been strongly put in issue by Yara. As I have indicated, that instrument is no longer relied upon by Radhika, notwithstanding references to it in the pleadings, as well as in the preliminary issue as formulated.

297 Correlative issues emerge relating to the validity of Radhika's attempt to appoint Mr Sodum as her exclusive Nominee Director of BHL during November 2010 (see exhibit 2, tabs 305, 306, 318, 321 and 332). Radhika acted unilaterally in making that nomination, rather than jointly with Pankaj. For reasons I will explain, her solo course in appointing Mr Sodum presents as problematic.

298 On 17 December 2010, various resolutions were proposed by Mr Holba, Yara's Nominee Director, regarding the appointment of additional directors nominated by Yara. The validity of these resolutions is challenged by Pankaj, Radhika and the Receivers.

299 On 24 December 2010, Christmas Eve, Radhika commenced these proceedings.

Some concluding factual observations: Assumption Deed by Pankaj

300 There is a further matter of factual contention to deal with, namely a relatively recent Assumption Deed on behalf of Pankaj.

301 It will be remembered that the SD contains at Annexure A a pro forma (four clause) deed, defined as an Assumption Deed.

302 Recital B in that pro forma Assumption Deed refers to an 'effective date'. The operative part of cl 2.1(a) provides that a new Shareholder 'assumes all rights enjoyed by the Transferor/other Shareholders under the Shareholders Deed' (my emphasis).

303 The pro forma cl 2.1(b) provides for a new Shareholder to 'be bound, with the necessary changes, by the terms, conditions, restrictions and obligations' in the SD. Dual conceptual components which are dealt with separately and expressly by cl 2.1, first, as to rights, and then as to obligations, are apparent.

304 It will be remembered that the pro forma Assumption Deed is defined by the SD as a 'deed of assumption "substantially" in the form of Annexure A'. The requirement for an Assumption Deed is specifically referred to within the operative provisions of cl 9.7(a) of the SD as a condition for the transfer of BHL shares to an incoming third party.

305 It is clear that the SD requires an incoming BHL Shareholder, having satisfied the applicable preemptive provisions concerning transfers, to execute, then deliver, an Assumption Deed before they may receive an allotment of shares (regulated under cl 11.1) or a transfer of shares (regulated under cl 11.2). From a privity perspective, the consequence is to effectively enable the incoming Shareholder to enjoy rights, as well as be bound by the obligations of the SD.

306 An Assumption Deed is made by only one party, i.e. it is a deed poll. Therefore, it lay feasibly within the capacity of an incoming BHL Shareholder to timeously meet a requirement for execution and delivery of such a deed of its own volition (assuming that requirements of the SD regarding preemption (cl 10) and transfer (cl 9) were otherwise all met). There would be no need to secure concurrence to the document in any other quarter.

307 It will be remembered that under cl 5(b) of the SSA, Pankaj, Radhika and the Burrup Trustee 'undertake to execute all documents necessary to join Pankaj Oswal in his personal capacity and Radhika Oswal to the Burrup Shareholders' Deed in place of the Burrup Trustee'. The provision is not specific in terms of designating actual documents 'necessary' in order for joinder to be achieved. But, bearing in mind the express reference to the Assumption Deed found in both the SSA and the SD, use of the SD's pro forma Assumption Deed presents as the obvious documentary mechanism to achieve the joinder. Assumption Deeds that were validly completed and delivered by Pankaj and Radhika would have the effect of joining them to the overall regime of the SD thereby addressing privity issues. The dual limbs of cl 2.1 of the pro forma Assumption Deed would expressly confer upon Pankaj and Radhika both the rights ('all rights') and obligations applicable to a Shareholder under the SD.

308 It was also open to have achieved a joinder objective by other documentary mediums, for instance, by a deed of variation to the SD or, as was the case following the 2007 exit of the Rimbal Family Trustee (concerning then a 15% shareholding interest in BHL), by a fresh shareholders' deed to be made with Pankaj and Radhika as personal parties thereto.

309 Nevertheless, the obvious and most viable method for achieving joinder and overcoming privity issues under the SD was for Pankaj and Radhika to individually execute and deliver Assumption Deeds, substantially in terms of the pro forma Assumption Deed. Such a documentary medium carried the advantage of being fully within the capacity of Pankaj and Radhika to perform quickly and individually, without securing participation or agreement of anyone else.

310 However, a question remains: Could full effectual Assumption Deeds ultimately secure the full joinder of Pankaj and Radhika not only to the SD as parties and as Shareholders, but also on a basis of them being joined 'in place of' the Burrup Trustee? That question raises deeper considerations canvassed later in these reasons.

311 On 23 December 2008, Clayton Utz (via Mr Wilkes and Ms Giovkos) (exhibit 2, tab 275) sent to Mr Lenzo, as legal counsel for BHL, a proposed Assumption Deed poll for both Pankaj and Radhika under cover of a letter which advised:

Please find enclosed the following original documents to be executed by Mr Pankaj Oswal (Mr Oswal) and Mrs Radhika Oswal (Mrs Oswal) with respect to the Shareholders' Deed dated 24 March 2008 between Yara Australia Pty Ltd, Mr Oswal as trustee of the Burrup Trust, Burrup Holdings Limited (Holdings) and Burrup Fertilisers Pty Ltd (Shareholders' Deed):

1. Assumption Deed Poll to be executed by Mr Oswal (5 copies); and
2. Assumption Deed Poll to be executed by Mrs Oswal (5 copies).

Could you please arrange for the documents listed above to be executed by Mr and Mrs Oswal. Please ensure a counterpart is executed for each party to the Shareholders' Deed as well as a counterpart for Holdings' records.

312 The draft proposed assumption deed poll is seen at exhibit 2, tabs 276 and 277. It is to be noted that Recital B proposed the effective date of 26 April 2007 (not 18 September 2008).

313 On 18 August 2009 at 11:22:34, Soon Hee Koh, on behalf of Yara Asia Pte Ltd, sent an email to Mr Lenzo in these terms:

Hi Basil,

I know you are off skiing this week, but when you are back in the office, could you advise status of the assumption deeds to be signed by Pankaj and Radhika for resale of shares in BHL, as per below email?

314 The enclosed email referred to a reminder from Ms Giovkos to Soon Hee that the executed Assumption Deeds had not been provided. Ms Giovkos wrote:

According to Basil they have been signed by Pankaj and Radhika but he was having trouble locating them.

315 Exhibit 2, tab 281 indicates that, as at 16 and 18 September 2009, the completed Assumption Deeds were still being sought by Yara's representatives.

316 The matter was followed up again on 28 September 2009 by email from Soon Hee Koh to Mr Lenzo:

Hi Basil,

Any word on the assumption deeds please? If it would be difficult to locate the existing signed copies, then perhaps we should arrange for new ones to be signed and delivered to Claytons?

317 In November 2010, Norton Rose, solicitors acting for Radhika, wrote to the company secretary of BHL (Mr Jovanovic) on 26 November 2010 in relation to Radhika's attempt to appoint Mr Sodum as her Nominee Director (see exhibit 2, tab 306). Clayton Utz (solicitors for Yara) responded to Norton Rose on 28 November 2010 (exhibit 2, tab 308) referring to the 18 November 2010 letter. Clayton Utz wrote:

Mrs Oswal may move a motion for the appointment of a director at a general meeting, and that right is permitted by the Shareholders' Deed: Constitution of BHL clause 3.4; Shareholders' Deed clauses 20.1 and 4.1(c).

However, Mrs Oswal has no right to appoint a Nominee Director (as that term is defined in the Shareholders' Deed) under c1 4.1(c) of the Shareholders' Deed. That right is reserved to Yara and Mr Oswal by the express language of clause 4.1(c).

We also note that the provisions of clause 11.2 [of] the Shareholders' Deed require the shareholders to procure BHL to refuse to register any transfer of shares unless the transferee has signed an Assumption Deed (as that term is defined in the Shareholders' Deed). Yara is unaware of Mrs Oswal ever signing an Assumption Deed. If she has, please immediately provide a copy of it to us, together with the date upon which any such Assumption Deed was executed.

318 Receivers and Managers were appointed by the ANZ Banking Group Ltd to BFPL on 16 December 2010. The same Receivers have been appointed over Pankaj's 30% shareholding in BHL pursuant to terms of a share mortgage. Further, the same Receivers have been appointed over 7.5% of Radhika's 35% shareholding in BHL at the same time.

319 A day after the Receivers were appointed, Yara contended that Yara's Nominee Director, Mr Holba, was the only validly appointed Nominee Director appointed to the board of BHL.

320 Yara also asserted on 17 December 2010 that Pankaj was suspended as Managing Director of BHL.

321 Before proceeding to further consider the true meanings of provisions in the SD and the SSA, particularly as regards the right (if any) of Pankaj and Radhika to appoint Nominee Directors, it is necessary to mention Yara's contentions regarding clauses concerning transfer and preemption under the SD and their potential application to events prior to 19 September 2008.

Limited rights of transfer, coupled with preemption rights for BHL shares by SD, cl 9 and cl 10

322 Yara submits that a vesting of the entire legal and beneficial ownership of the 70% BHL shareholding to Pankaj and Radhika, some time before midnight on 18 September 2008 (certainly before the SSA was entered on 19 September 2008), was inconsistent with cl 9.1(a) and cl 9.3 of the SD. Yara complains that a transfer notice ought first to have been given to Yara by the Burrup Trustee. Under cl 10 of the SD, another 'Shareholder' under the SD (i.e. Yara) holds the opportunity to preempt for itself and so acquire any BHL shares being dealt with. Yara says it was denied, in effect, that preemption opportunity by what occurred.

323 Yara points to the definition of 'transfer' in cl 1.1 as being extremely widely drawn, with its terms including to 'convey or otherwise dispose of any Shares'.

324 Clause 9.1(c) of the SD provides for some exceptions concerning transfers of BHL shares outside the otherwise closely regulated regime of cl 9 and cl 10. One such key exception in the SD is under cl 9.1(c) 'where all the Shareholders otherwise agree'. Clause 9.3 of the SD is made subject to cl 9.1 and therefore, made subject to cl 9.1(c).

325 Here I find that by reason of the terms of the SSA, that the two SD Shareholders (Yara and the Burrup Trustee) have 'otherwise agreed' to the personal acquisitions of BHL shares by Pankaj and Radhika. Their agreement about individual share ownership is demonstrably found in the SSA, to which Pankaj, Radhika and Yara were all parties. So was the Burrup Trustee, as outgoing former 'Shareholder' under the SD.

326 The terms of the SSA are more than explicit as to the legal and beneficial ownership by Pankaj and Radhika in 35% each of the issued shares in BHL. Under the SSA, which is not sought to be rescinded, Yara acquired 5% of a legal and beneficial shareholding from Pankaj, personally, (by its completion payment of US$141 million). Furthermore, Yara obtained in the SSA the express covenants of Radhika, Pankaj and the Burrup Trustee as to the legal and beneficial ownership of the respective 35% shareholdings of Pankaj and Radhika (see the representations and warranties by cl 5(a)(i) and (ii) SSA). Yara then settled on the sale of the 5% of BHL shares with Pankaj on that basis.

327 Therefore, whatever might once have been complained of by Yara over asserted noncompliance by the Burrup Trustee with preemption provisions of the SD before 18 September 2008, there is no doubt that by the SSA, and as of 19 September 2008, Yara has acknowledged the legal and beneficial ownership of Pankaj and Radhika in the 70% BHL shareholding and proceeded with a sale transaction that took its acquisition of 55,002,071 ordinary fully paid BHL shares, comprising 5% of the total issued shares in BHL, from Pankaj personally.

328 By performing the SSA, Yara has, as of 19 September 2008, necessarily accepted and affirmed the BHL share ownership of Pankaj and Radhika personally at that time.

329 Pankaj and Radhika acquired respective 35% legal and beneficial shareholding interests in BHL from the Burrup Trustee. This was at no later than on 18 September 2008. Acquisitions by Pankaj and Radhika of their BHL shares cannot now be the subject of challenge by Yara. That horse has long since bolted.

330 Nevertheless, Pankaj and Radhika's taking of their respective 35% shareholdings in BHL, as legal and beneficial owners by no later than 18 September 2008, is only one aspect of the present controversy. Of greater complexity on the preliminary issue is the allied, but distinct, question concerning their disputed acquisition, holding and enjoyment of contractual rights once held by the Burrup Trustee under the SD by Pankaj and Radhika, either individually, jointly and severally, or jointly.

331 The answer to that more difficult question bears upon the ongoing future board management of BHL emanating from the SD's contractual governance rights to appoint Nominee Director(s) to the board of BHL (flowing downstream from BHL to the boards of BHL's Group Members) under cl 4.1(c) of the SD.

332 I proceed to consider the parties' differing positions as regards rights to appoint Nominee Directors under the SD assessed concurrently with, or separate from, the SSA. For the SSA, the focus is particularly upon the extent of the work of cl 5(b) therein.

Rival respective positions: Nominee Directors of BHL

333 Given its pivotal significance, I will repeat that cl 5(b) of the SSA provides:

(b) Pankaj Oswal, the Burrup Trustee and Radhika Oswal undertake to execute all documents necessary to join Pankaj Oswal in his personal capacity and Radhika Oswal to the Burrup Shareholders Deed in place of the Burrup Trustee and with such other amendments as agreed by the Buyer [i.e. Yara] and the Oswal Parties [defined as 'means the Burrup Trustee, Pankaj Oswal and Radhika Oswal, jointly and severally']. Until such document has been executed, Pankaj Oswal in his personal capacity and Radhika Oswal agree to comply with the Burrup Shareholders Deed as if they were a party to the deed in place of the Burrup Trustee.

334 Yara's position is that the right to appoint Nominee Directors to BHL (with downstream consequences for BHL's Corporate Group Members) is a personal contractual right held by the Burrup Trustee and was not transferrable. Moreover, by no later than 18 September 2008, Yara says that the Burrup Trustee, on any view of the underlying facts, ceased to be a party to the SD, leaving Yara from that time as sole SD 'Shareholder'.

335 Yara's position is that, by reference to the first sentence of cl 5(b), even in circumstances where Pankaj and Radhika both do at some point validly execute and deliver pro forma Assumptions Deeds, Pankaj and Radhika do not obtain extinguished, not to mention inherently personal (and so, nontransferable), rights to appoint Nominee Director(s) to BHL as formerly held by the Burrup Trustee.

336 That outcome, on Yara's arguments, effectively leaves it, through its Nominee Director, Mr Holba, potentially casting 385,014,497 votes for or against any BHL board resolution. With a maximum of only five appointable directors to BHL's board (see cl 4.1(b) of the SD), Yara's voting power through Mr Holba on a poll of directors, measured against all potential adverse votes emanating from a maximum of four other ordinary BHL directors, delivers Yara BHL board control, at a level enough for Yara to even pass by itself Special Majority board resolutions (set at 80% under SD cl 4.5(b)(ii), by reference to the content of the first schedule to the SD).

337 Yara recognises that its overall construction position for the SD and the SSA delivers to it overwhelming board control of BHL and possibly, on boards of Group Members (if directors appointed by BHL under cl 4.1(c) of the SD to those Group Member boards at the nomination of the Burrup Trustee must resign).

338 Nevertheless, Yara points to drafting changes in the SSA documentation before the final consummation of that agreement on 19 September 2008. These were, Yara says, changes entirely attributable to the last minute change of seller of the 5% of BHL shares from the Burrup Trustee to Pankaj. Yara says that the first sentence of cl 5(b) of the SSA expressly contemplates that Yara and the Oswal Parties would endeavour to agree in future upon amendments to the SD that were required, essentially as a result of the implementation of the late changes. Yara says the first sentence should be assessed as affording a proper degree of opportunity to digest and then deal as Yara thinks necessary with the fully considered ramifications of two new BHL shareholders being assimilated into the SD's arrangements. Accordingly, there should be no surprise in these rushed circumstances in a commercial result favouring Yara.

339 A wholly contrary construction is contended for by Radhika (Pankaj agreeing) and the Receivers. They focus upon the work of the second sentence in cl 5(b) of the SSA, above the first sentence. In particular, they point to the word 'comply' in the second sentence of cl 5(b) which they argue should be read broadly to mean, in effect, something beyond just to 'observe' or to 'obey', approaching a true meaning in context of fully 'participate under'. They emphasise the twice used phrase 'in place of' indicating the consensual substitution of, or the succession of, Radhika and Pankaj for the Burrup Trustee in the SD.

340 The surrounding factual edifice used for the construction approach advanced by Radhika and the Receivers is heavily tied to what they contend is the commercial absurdity of a result whereby Yara only acquires an extra 5% BHL shareholding, but effectively obtains thereby 99.999% control of BHL at board level. That is especially so where factually it is the case that Pankaj as the 'main driver and vision' behind the Burrup Fertiliser Plant (see the BHL prospectus document in the fact chronology) had given no indication in 2008, or relevantly ever, of voluntarily relinquishing the key management positions he had always held as Chairman and Managing Director of BHL.

341 Radhika and the Receivers say that there is no need for Assumption Deeds or, for that matter, any particular documents necessary to be executed by Pankaj or Radhika in order to have obtained full participation rights as Shareholders with Yara under the SD. They say that, by the second sentence of cl 5(b), Pankaj and Radhika not only suffer obligations under the SD, they derive all benefits of a 'Shareholder' under the SD. In other words, under the SSA, Pankaj and Radhika say that they became 'Shareholders' under the SD in all respects 'in place of' the Burrup Trustee. From that platform they thereby obtain and hold a right to appoint up to three Nominee Directors to BHL's board under cl 4.1(c) of the SD, for as long as they continue to hold 5% or more of BHL's ordinary shares.

342 However, Radhika and the Receivers are divergent in the one key aspect. Radhika contends for a wholly several entitlement in her right to appoint at least one Nominee Director through her 35% personal BHL shareholding. In contrast, the Receivers only argue that Pankaj and Radhika have a right, in place of the Burrup Trustee, to jointly appoint up to three Nominee Directors to BHL's board.

343 Securing a right to appoint Nominee Directors via the first sentence of cl 5(b) (i.e. involving in practical terms a need at least for Assumption Deeds from both Pankaj and Radhika), is very much a second tier construction approach for Radhika and the Receivers, albeit just tolerable, if that is the only route otherwise available to obtain cl 4.1(c) Nominee Director rights.

344 Radhika, the Receivers and Yara all seem to accept that Assumption Deeds, substantially in the form of Annexure A to the SD, which are signed, sealed and delivered by Pankaj and Radhika will be sufficient to effectively join both Pankaj and Radhika in their personal capacities as parties to the SD. But had (hypothetically) Pankaj and Radhika timeously executed and delivered Assumption Deeds, such events, on Yara's view, would not be enough even then for them to obtain cl 4.1(c) Nominee Director rights. That is so even though Yara appears to accept that Pankaj and Radhika may thereby otherwise have acquired most if not all other SD rights.

345 At ts 425 Yara's senior counsel Mr Sheahan SC, explained:

It's not about rights under the Shareholders' Agreement more generally. May we say we completely accept that if the Oswals had signed and delivered deeds of assumption they would have been entitled to rights under the Shareholders' Agreement, almost all the rights - we haven't done a survey.

If that had happened our submission is that it would still have been the case that they would not have had the clause [4.1c] rights but they would have had all the other rights under the Shareholders' Deed.

346 Yara submits that, by cl 4.1(f) of SD, Pankaj should have resigned or been procured to resign as a Nominee Director of BHL (and from the boards of all Group Members) from 18 September 2008, because the 'Shareholder' party that had appointed him (the Burrup Trustee) had ceased to hold BHL shares.

347 Yara fundamentally submits that cl 4.1(c) rights, objectively assessed, are of an intrinsic character which is incapable of being transferred, because:

(a) they are identified in the SD by reference to specifically identified parties who must hold minimum (i.e. 5%) Shareholder requirements; and

(b) the language 'For so long as' confines these rights to Yara and the Burrup Trustee (see also cl 16(c) of the SD regarding automatic termination).

348 By reference to cll 5(a) and (b) of the SSA, senior counsel summarised Yara's position (ts 431) in these terms:

What we see in clause 5 is (Yara) trying to come to grips with a new piece of information with which it has been confronted which goes to its vital interests and which it deals with, as we submit, in a conservative, workable fashion.

It deals immediately with what has to be dealt with and leaves other things to be resolved in the future and if those other things were not resolved in the future, then what we are left with is the debate we are having ... which is that these parties had a charter. What is its proper construction so far as these clause 4.1(c) rights? It doesn't matter whether they thought about these things. What does the charter provide for?

We say that you look at clause 5. It is a sensible clause. It doesn't do what our learned friends want it to do. It is not the natural meaning of the words used. It doesn't impose any obligations on Yara in terms at all. All the language of clause 5 from start to finish is the imposition of obligations on Pankaj and Radhika, from start to finish, and that is natural given the context.

349 Finally, even if the cl 4.1(c) rights (held by an SD Shareholder) were to be assessed as theoretically capable of valid transfer, Yara nevertheless says that the rights could hardly be transferred in circumstances where they had (automatically) come to an end. Here, Yara says, all rights of the Burrup Trustee ended sometime on 18 September 2008, on cessation by the Burrup Trustee as a BHL 'Shareholder'.

350 It would be an error to assess the two sentences within cl 5(b) of the SSA remotely. They obviously relate and work together. Moreover, they need to be construed in the context of the SSA as a whole, and then by reference to that agreement's objectively assessed commercial purpose and background facts. Accepting all that, the chosen text of the SSA remains pivotal.

351 I move to observe upon certain features of cl 5 as a whole in the SSA. First, in cl 5(a) there is found reference to the Oswal Parties (as defined) 'representing and warranting' to Yara. Under cl 5(b) there is an undertaking of Pankaj, Radhika and the Burrup Trustee to do certain things in the first sentence, as well as reference in the second sentence to Pankaj and Radhika agreeing to 'comply'. There is little within cl 5, both in subcl (a) and subcl (b), directly concerning actions by Yara, save only in respect of possible future amendments to the SD that might be agreed in the future between Yara and the Oswal Parties.

352 Second, I deal discretely in the next section of these reasons with the ordinary meaning of the word 'comply' as used in the phrase 'comply with' in the second sentence of cl 5(b) of the SSA. But as a precursor to those observations I observe now that there are difficulties, as I would see it, in overstretching the meaning of 'comply' to an extent that the exercise in pure contractual interpretation in context morphs towards becoming in actuality, a rectification exercise.

353 Third, I note a use of the word 'until' in the second sentence of cl 5(b) of the SSA clearly indicating, as I would assess it, interim arrangements.

354 Fourth, as a correlative observation to the third, if the second sentence of cl 5(b) were to be assessed (on the Receivers and Radhika's preferred line of construction) as an enduring conferral of, not only obligations, but also of all SD benefits (including rights under cl 4.1(c) of the SD to appoint Nominee Directors), that construction would render the work of the first sentence within cl 5(b) of the SSA as essentially otiose. Adverting in the first sentence to a possibility of future agreed amendments to the SD would also be a surplusage in that context.

355 Fifth, there is a difference in language between the level of activity expected under the first and second sentences of cl 5(b). The first sentence speaks of Pankaj and Radhika (more actively) joining the SD. That involves a positive event or occurrence. However, the second sentence is not actively expressed under its chosen language, namely, 'comply with'. That distinction and differentiation in language is not, I think, accidental.

356 Sixth, I note the terminology 'as if' in the second sentence. That sets up a deeming scenario concerning the compliance which is expected. A deeming scenario, rather than one of actuality as regards privity by true joinder (by the first sentence), presents as the correct objective interpretation of the intended range of work for the second sentence.

357 Seventh, cl 5(b) does, in my view, mirror the conceptual and linguistic dichotomy used as between rights and obligations in cll 2.1(a) and (b) of the pro forma Assumption Deed. The drafting approach recognises the fundamental conceptual distinction between obligations and rights. Each is addressed separately and distinctly. Given the proximate existence of a pro forma Assumption Deed as a relevant background fact, at the time the SSA came to be prepared, a logical and convenient adoption of the same conceptual drafting dichotomy as between rights and obligations is found, in my view, in the second sentence of cl 5(b) (on an interim basis, securing the adherence by Pankaj and Radhika to SD obligations to apply as if they were parties to the SD). This cannot be assessed as accidental. An interim regime is set down by the second sentence as regards obligations only, pending the anticipated timeous execution of necessary joinder documentation. That, in my view, presents as logical and consistent in assessing together both the sentences that comprise cl 5(b). Pro forma cll 2.1(a) and (b) of the Assumption Deed expressly address both benefits as well as obligations under the SD, in the wake of an actual joinder (not a deemed interim situation). The language 'comply with' used in the second sentence may then be seen then to align itself very comfortably with a compatible concept of being 'bound by', as used in cl 2.1(b) of the pro forma Assumption Deed.

358 Eighth, the necessary documentary activity envisaged under the first sentence of cl 5(b) was not only for Pankaj and Radhika, but also for 'the Burrup Trustee', who is one of the Oswal Parties as defined by the SSA. Yara suggested there was a background environment of surrounding surprise or uncertainty afflicting it, created by the late change in the seller's identity (from the Burrup Trustee to Pankaj) in the SSA. Yara then argued that this prevailing background uncertainty was a sound and logical rationale for, on 19 September 2008, the parties being assessed (objectively) as then being content to merely preserve their respective positions, to give everyone, particularly Yara, time to digest the full ramifications of the late change. So there is, it is put by Yara, a logical rationale for the somewhat open ended cl 5(b) words 'and with such other amendments as agreed by (Yara) and the Oswal Parties'.

359 I am not at all attracted by this submission. The parties to the SSA (objectively assessed) were commercially sophisticated, well resourced and well advised. Where needed, they appear to lack nothing in resources by way of high level legal or corporate strategic advice, even at the eleventh hour. I can find absolutely nothing in the background or surrounding facts that suggests uncertainty, surprise or consternation to assist Yara's background construction argument that, by reference to cl 5(b) of the SSA, Yara, in effect, was shelving or deferring its position upon important issues, such as the future board composition of BHL, for a more leisurely subsequent deliberation.

360 I am of the view that the first sentence's reference to future amendments to the SD to be agreed by Yara and the Oswal Parties is in the nature of noble, but basically rhetorical, clutter. The phrase is obviously surplusage, as parties are always at liberty to agree upon consensual future amendments to an instrument such as the SD.

361 What the first line of cl 5(b) of the SSA conveys strongly, however, is that the parties (objectively assessed) were much alive to and directly focused upon the relevance and application of the SD to their future commercial relationship. Correlatively, I discern no hint that Yara viewed the SD as an instrument under which the Burrup Trustee had, by the time of the SSA, ceased to hold any relevant association. In fact, the objective position presents as very much to the contrary by an express inclusion of the Burrup Trustee as a party to the SSA, and an even more direct reference to an involvement of the Burrup Trustee within cl 5(b) itself.

362 Ninth, Yara argues that it would have been a straightforward drafting exercise to cater in the SSA for the explicit accession, by Pankaj and Radhika personally to all rights of the Burrup Trustee under the SD, by using clear language such as 'bound by the obligations imposed and entitled to their rights conferred by the Burrup Shareholders' Deed'. Such language, Yara points out, is not used in the SSA.

363 The force of that criticism, however, rather depends upon whether or not a view is reached that the completion and delivery of Assumption Deeds by both Pankaj and Radhika (with the pro forma subclause therein, cl 2.1(a) and (b), particularly cl 2.1(a) using the terminology 'assume all the rights enjoyed by') is sufficient to effect a transfer of the right of the Burrup Trustee to appoint Nominee Directors under cl 4.1(c) to Pankaj and Radhika. That key question requires discrete consideration. Before that, I revert to my deferred consideration of the meaning of the word 'comply' in the second sentence of cl 5(b).

Meaning of 'comply' in the context of the phrase 'comply with' in cl 5(b) of the SSA

364 The correct meaning in context of the word 'comply', used within the phrase 'comply with' (where that phrase is found in the second sentence of cl 5(b) of the SSA) is such an important feature in all sides' construction cases that its consideration requires separate analysis.

365 Dictionary meanings were heavily relied upon. Radhika and the Receivers refer to the Macquarie Dictionary (4th ed). There, the meaning of 'comply' is found:

Comply 1. to do as required or requested - phrase 2. comply with to act in accordance with (wishes, commands, requirements, conditions, etc) [apparently from Italian complire fulfil, complete, from Spanish cumplir, from Latin complēre COMPLETE].

366 The second Macquarie Dictionary meaning of 'to act in accordance with' the SD was the applicable meaning advocated for in the second sentence of cl 5(b) of the SSA.

367 Yara relied upon the Oxford English Dictionary as a more definitive record for the English language, including the etymology of words. Yara relied particularly on meaning 5b, below, as regards the correct meaning of 'comply' in the context of its use in the phrase, 'to comply with' in cl 5(b).

Etymology: Appears first about 1600. In sense 1, it answers to Latin complēre to fill up, fulfil, accomplish, COMPLETE adj. This verb became in Romantic complīre, whence Italian compire, compiere, Provençal complir, Old French complir (see COMPLISH v.), all in the original sense. But in Old Catalan compliror Spanish cumplir, the sense underwent the development 'to fill up, make up what is wanting, satisfy, satisfy the requirements or forms of courtesy' = comply with, in sense 2 below. In this latter sense, complire appears to have been adopted in 16th cent. Italian, by the side of the native compire in the original sense; and the Italian was evidently the immediate source of sense 2 (In the same way the Old Catalan or Spanish form and sense of the derivative n. complimento, complimiento, was the source of Italian complimento, and so of the 16th cent. French compliment, and 17th cent. English COMPLIMENT n.) As to the form of comply compare SUPPLY n. (Latin supplēre, Italian supplīre, Old French soupleyer (15th cent. Suppleyer, suppléer), late Middle English sowplé, 15th cent. Supple, supplie, supply. On the model of this, and with the same relation of form to Latin complēre, Italian complire, that supply bore to supplēre, supplier, but without the same antecedent history, comply appears to have come into use in the end of the 16th cent. (Old French complir was by that time obsolete.) In the sense-development in English there has been a tendency to association with PLY n., French plier, Latin plicāreto bend, so as to make 'bending to the will of another' a more prominent part of the notion: compare especially COMPLIANT adj. and n.

...

5. To act in accordance with, and fulfilment of, wishes, desires, requests, demands, conditions, or regulations; to fulfil the wishes or requirements of; to yield, accede, or consent to.

a. Formerly: To comply with a person.

...

b. Now: To comply with a person's desires, requests, requirements, conditions, etc. Also predicated of actions, arrangements, and the like. (This and c are the only surviving uses.) ...

368 The meaning of 'comply' obviously needs to be assessed where found in the SSA, particularly cl 5(b), and within the overall context of all the surrounding provisions and framework of the SSA itself.

369 I notice the use of the same phrase 'comply with' in the preface to cl 4.7 of the SSA, which concerns a failure to 'comply with' a notice to complete given under cl 4.6. The term 'complied with' is also used in cl 4.1(d) of the SD in regard to observing conditions stated in cll 4.1(c) and 4.1(f). These uses do not support the Receivers and Radhika's expansive construction of the meaning.

370 A true meaning needs to be arrived at in the context of the surrounding facts and circumstances, as well as in the surrounding terms of the SD.

371 By reference to the terms of the SD, I find that the pro forma Assumption Deed has an application and a surrounding key significance to incoming parties who acquire shares in BHL: see particularly, cl 11 dealing with issues of shares and transfers of shares.

372 'Assumption Deed' is defined in the definition clause of the SD (cl 1.1). It then has recurrent significance throughout the SD: see cl 9.2(a) and cl 9.7(a).

373 In pro forma cl 2.1 of the Assumption Deed the conceptual legal dichotomy is explicitly drawn between rights afforded under cl 2.1(a) and the position under cl 2.1(b) of being bound by obligations, terms, conditions and restrictions in the SD.

374 In my view, the overall structure of cl 5(b) of the SSA is likely to have been drawn with an eye to the content of cl 2.1 of the pro forma Assumption Deed and, particularly, I think towards cl 2.1(b) therein.

375 In the context of the second sentence of cl 5(b) of the SSA, under which Pankaj and Radhika agree to 'comply with' the SD on the hypothesis 'as if' they were parties to that deed in place of the Burrup Trustee, the word 'comply' used in the phrase 'comply with' must mean, in my assessment, Pankaj and Radhika's 'obedience to', or their being 'bound by' the provisions of the SD. Submissions to the effect that 'comply' used in cl 5(b) has a wider meaning beyond 'obedience' or being bound by, cannot be accepted as a matter of overall context.

376 There is a rather limited array of decided case authority concerning the meaning of the word 'comply'. In a different context, Burchett J in Claro v Minister for Immigration, Local Government and Ethnic Affairs [1993] FCA 581; (1993) 46 FCR 494, 503 says:

The second revised edition of the Macquarie Dictionary relevantly defines the word 'comply' as 'to act in accordance with wishes, requests, commands, requirements, conditions, etc'. Similarly, the Webster Universal Dictionary (International ed, 1975), relevantly defines 'comply' as '(a) To adopt a course of action at the wish, or command, of another: to comply with one's request; (b) to act in conformity with; to comply with the rules'. These definitions emphasise that to comply with a requirement is to do something. It is not sensible to talk about a person complying with a condition that someone else not do something, as in the case of reg 28(1)(i). Nor is it sensible to talk about a person complying or not complying with a condition that there is no material change in certain circumstances. Such a condition may fail, but it would be a misuse of language to describe the holder of the permit as having failed to comply with it.

377 Nevertheless, the decision in Claro is more consistent with Yara's position as to a narrower, true meaning of the word.

378 The phrase, correctly assessed, contemplates Pankaj and Radhika as being bound by SD obligations on a deemed basis until documents envisaged as being 'necessary' by the first sentence of cl 5(b) of the SSA are executed. An overall symmetry can then be detected between the two components in cl 2.1 of the pro forma Deed of Assumption and cl 5(b) of the SSA.

379 The second sentence of cl 5(b) provides a mechanism which sees obligations complied with by Pankaj and Radhika on an interim and deemed basis. In contrast, the first sentence of cl 5(b) is structured on the premise that a necessary execution of document(s) will actually join Pankaj and Radhika personally to the SD. Importantly, the working premise of their joinder is founded expressly on the basis of them being (together) joined 'in place of' the Burrup Trustee.

380 Accordingly, once Assumption Deeds are executed (and delivered) by Pankaj and Radhika, cl 2.1(a) of the pro forma Deed of Assumption secures for them all rights and benefits under the SD.

381 The more limited objective of seeking compliance with obligations on an interim basis via the second sentence of cl 5(b) of the SSA is, in my view, the correct understanding of the phrase 'comply with'. That construction is the more symmetrical and logical construction outcome.

Conclusions as to interpretation of cl 5(b) of the SSA

382 By reference to the phrase 'until such document has been executed', I assess the second sentence of cl 5(b) to establish an interim situation. Contemplation of a document or documents being executed, as I assess the clause, is an obvious reference back to the first sentence in cl 5(b) which concerns the anticipated execution of 'documents' necessary to join Pankaj and Radhika in their personal capacities to the SD, including if needed, documents to be executed by the Burrup Trustee. The obvious way of achieving that documentary detail is via the execution of individual Assumption Deeds by Pankaj and Radhika respectively, and their subsequent delivery as deeds poll. Terms of the pro forma Assumption Deed, by cll 2.1(a) and (b), cater expressly for the assumption of 'all' rights under the SD, as well as binding Pankaj and Radhika to the restrictions and obligations of the SD, on the basis of their actual joinder (not an interim, deemed) to the SD.

383 A regime in the SD requiring Assumption Deeds to be executed by incoming BHL Shareholders (before the corporation's listing or IPO) is a central and recurrent feature of the SD.

384 Satisfaction of a practical requirement of documentary detail for Assumption Deeds was readily within Pankaj and Radhika's individual capacities to meet by the execution and delivery of the necessary documents. As a matter of reasonable objective expectation, there is no reason why that condition should not be expected as at 19 September 2008 to be timeously satisfied by well resourced and commercially sophisticated parties. Such joinder documents, after all, are referred to in the first sentence of cl 5(b) as 'necessary' matters.

385 In the interim and until what was needed to be done by way of necessary documentation was actually done, a deeming ('as if') scenario was applicable under the second sentence of cl 5(b) of the SSA, concerning the interim compliance by Pankaj and Radhika with obligations under the SD, but not, as I conclude, benefits. The second sentence concerns Pankaj and Radhika personally agreeing to adhere to commitments under the SD. This was the instrument to which they would be expected to become fully and legally privy as parties once the necessary joinder documentation was in place.

386 I conclude that the phrase, 'comply with' in the second sentence cannot be stretched so far (by background or mutually known surrounding circumstances, or otherwise) as to extend in meaning to cover scenarios going beyond Pankaj and Radhika's interim adherence to 'Shareholder' obligations under the SD.

387 Insofar as an enjoyment of rights and benefits by Pankaj and Radhika under the SD as a 'Shareholder' is concerned, my assessment is that the second sentence of cl 5(b) of the SSA does not address that issue. The topic of rights and benefits for Pankaj and Radhika, by reason of their replacing the Burrup Trustee under the SD, is covered under the first sentence of cl 5(b) once the 'necessary' documents are executed. Those joinder documents legally cement the parties' privity relationship above and beyond any interim deeming scenario, delivered under the second sentence of cl 5(b). Upon actual joinder, Pankaj and Radhika enjoy 'all' rights and benefits under the SD.

388 An assertion by Pankaj and Radhika that they may have suffered prejudice by being excluded from BHL management participation (if that occurred), through the absence (post 19 September 2008) of timeously executed and delivered Assumption Deeds, does not bear upon the present task of construction. In any event, the necessary joinder documentation is straightforward and well capable of being timeously completed. If this documentation detail has not to date been attended to, so be it. That is not to suggest that an aspect of documentary detail cannot be attended to in the future. I would reject Yara's submission that it is now too late for Assumption Deeds to be executed and delivered by Pankaj and Radhika.

389 I am influenced towards these conclusions by the force carried in both sentences of cl 5(b) of the SSA by, what I assess as, its key phrase, namely, 'in place of the Burrup Trustee'. The phrase is first used as regards the joinder of Pankaj and Radhika personally to the SD. Then it is used again towards their interim 'compliance with' the SD's provisions. The phrase 'in place of' connotes more than just a bare joinder, in my view. In overall context, it connotes a precise joinder on the specifically designated basis of succession to, or substitution for, the place of the Burrup Trustee under the SD.

390 Having reached these construction conclusions, a more distilled question presents. The question is whether, hypothetically assuming validly executed and delivered Assumption Deeds (or something akin thereto, to effect the joinder in a documentary sense) from both Pankaj and Radhika personally at some point now or in the future, the combination of the Assumption Deeds plus the work of the SSA (by the first sentence of cl 5(b) therein) would be capable of delivering the result of Pankaj and Radhika obtaining cl 4.1(c) Nominee Director appointment rights. I now turn to that aspect of the preliminary issue.

Theoretical transferability of BHL Nominee Director rights under cl 4.1(c) of the SD: Rival arguments

391 An aspect of the residual question is resolving whether, in concept, cl 4.1(c) contractual rights might ever be capable of being validly transferred.

392 For this aspect of the controversy, Yara cites in its written submissions Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2006] FCAFC 40; (2006) 149 FCR 395 [32] (Full Federal Court). It is convenient to set out the extract from Pacific Brands Yara relied upon, which I respectfully adopt and apply as a convenient summary of applicable law concerning the theoretical potential for a valid assignment of contractual rights.

[A] contract may expressly or impliedly authorise assignment of rights in a contract which would not otherwise be assignable: Devefi Pty Ltd v Mateffy Pearl Nagy Pty Ltd (1993) 113 ALR 225 at 235; or, conversely, may expressly or impliedly prohibit assignment of rights otherwise prima facie assignable: Don King Productions Inc v Warren [2000] Ch 291 at 301-302. "Such contractual provisions are legally effective" as between the contracting parties: Don King at 301-302; Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85 at 103ff). Fourth, while the product to be derived from a contractual performance (the "fruits of performance") may be assigned; Devefi v Mateffy at 234; the right to that performance may, nonetheless, be unassignable because, having regard to the nature of the contract and the subject matter of the contractual right in question, that right is personal in the sense that the identity of the contractual obligee is material to the contractual relationship itself (ie it is a "personal contract": Peters v General Accident Fire & Life Assurance Corp Ltd [1938] 2 All ER 267 at 270; Moore v Collins [1937] SASR 195; or to the contractual performance to be rendered: Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd (1992) (1992) 57 BLR 57 at 77 (contract requiring a party to act on the other's instructions); see generally Seddon, N and Ellinghaus, M, Cheshire and Fifoot's Law of Contract (8th Aust ed, LexisNexis, 2002), [8-6]; Furmston (ed), 6.299 ff; Chitty on Contracts (29th ed, Sweet & Maxwell, 2004), Vol 1 19-053 ff; Farnsworth, s11.4. A contractual right, though, will not be personal if, construed in its setting, "it can make no difference to the person on whom the [corresponding] obligation lies to which of two persons [ie assignor or assignee] he is to discharge it": Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd [1902] 2 KB 660 at 668.

393 I also respectfully refer to and apply the summary of the law in this area as was recently provided by Corboy J, see reasons in Australian Zircon NL v Austpac Resources NL [No 2] [2011] WASC 186 [132].

394 I discern Yara's position to be that, although conceptually it may have been possible for these parties by a clearer agreement to validly effect the transfer to Pankaj and Radhika of the rights afforded under cl 4.1(c) of the SD, that nevertheless such a result was not achieved by the SSA. Specifically, it was not achieved, says Yara, by cl 5(b) of the SSA, by either of its sentences currently understood, alone or in combination. Yara says that a valid transfer of these rights could not be achieved even upon delivery of validly executed and delivered Assumption Deeds by both Pankaj and Radhika (were that to eventuate).

395 To better understand Yara's conceptual objections in this respect, the nature of the relationship and the BHL board management rights in context within the SD needs to be understood. I refer to my earlier observations at [30] and following concerning the nature and effect of cl 4.1(c) rights.

396 To support its conceptual objections against transfer, Yara advanced eight propositions within written closing reply submissions, which I will set out. The Receivers (supported by Radhika) responded seriatum to each of these eight propositions. It will be convenient if I set out the rival arguments side by side, so that they may be there viewed and assessed one against the other.

1. First, it is necessary that where a right is granted 'for so long as' a condition obtains, the right subsists so long as the condition is satisfied.

First point: the right to appoint has permanently terminated

1. The expression 'for so long as' in each employment in clause 4.1(c) means that the right of appointment commences when a party's shareholding rises above 5% and terminates, permanently, when the party's shareholding falls below 5%: Re Potter, Deceased [1970] VicRp 45; [1970] VR 352 at 355.

(a) Yara consented and agreed to, and ratified, the replacement or substitution of PO atf BT by Pankaj personally and Radhika or elected to affirm the validity and effectiveness of such replacement or substitution; or

1. Where, as here, a shareholder may appoint a Nominee Director if its holding equals or exceeds 5%, that right persists until the predicate fails. If a 30% shareholder sells 5%, he retains 25% - exceeding 5% - and thus retains the appointment right. If such a shareholder must seek the consent of others to exercise that right, he self-evidently no longer holds that right of appointment. He holds a different right (or none). But that is not the right granted by clause 4.1(c).

(b) Pankaj personally and Radhika were the successors, substitutes or permitted assigns of PO atf BT.

1. In either case the right to appoint directors never terminated.

1. Second, the 'for so long as' precondition in each limb is otiose if the appointment rights are assignable. Radhika and PPB contend that, since the definition of 'Shareholder' comprehends successors, each successor will share (in some unspecified way) in the rights of appointment. If the 'successor' theory is treated seriously, it will apply to successors, and successors of successors, and so on (and, for simplicity, the reference to successors in this discussion will include the original holder). There is nothing in the successor theory (or the definition of 'Shareholder' from which is is said to arise) which truncates the transmission of appointment rights.

1. Contrary to the assertion in ... Yara's closing submissions, the receivers do not contend that 'each successor will share (in some unspecified way) in the rights of appointment'. The receivers submit that Pankaj and Radhika, as the substitutes, successors or permitted assigns of PO atf BT must hold more than 5% of the shares, and for so long as they do hold that percentage, they are entitled collectively to appoint three directors who may vote the number of shares they collectively hold.

1. However, since each original shareholder holds more than 5%, the successors of that original shareholder will always, and necessarily (subject to one exception), together hold more than 5% of the BHL shares. Since any successors of each original holder's shares would between them hold more than 5%, the condition will never be unsatisfied. It therefore has no work to do.

1. Yara's submission about hundreds of successors is, accordingly, not to the point.

1. Although neither Radhika nor PPB address this problem directly, they seek to give work to the 'not less than' phrase by providing that one of Pankaj and Radhika must continue to hold 5%. That, however, merely conceals the problem. If Pankaj and Radhika sold to a third successor who thereafter held 5%, there is no reason advanced or apparent why it must be the first or second successor (or the hundredth) who holds the 5%. And it would be absurd if successors to 65% of the Oswal shares had rights under cl. 4.1(c) but would lose them if Oswal sold a further 1% to someone else (ie, thus falling to 4%).

1. Indeed, the requirement that any particular successor holder [sic: holds] 5% is not to treat the theory of succession seriously. If successors succeed to rights, there is no reason why they cannot collectively hold the 5% required. However, that merely demonstrates the conflict between the 'succession' theory and the express 'for so long as' requirement.

1. A court will seek, where possible, to give meaning to each provision of a contract and not render any provision ineffectual: Australian Broadcasting Commission v Australian Performing Right Association [1973] HCA 36; (1973) 129 CLR 99 at 109 to 110. Consequently, the proposed construction should be rejected.

1. Third, if the appointment rights did accrue to successors, it would be as a result of the definitions section prevailing over the specific clause in which the actual right appears.
2. Where there is a general provision which, if applied in its entirety, would neutralise a specific provision dealing with the same subject matter, the specific provision must be read as a proviso to the general provision: Goodwin v Phillips [1908] HCA 55; (1908) 7 CLR 1 at 14 per O'Connor J. Here, cl. 4.1(c) is a specific statement of rights to appoint and it would be inappropriate to alter the operation of the clause which expressly and specifically governs rights of appointment by reference to the general definitions in the interpretation clause.

Third point: definition section prevailing over the specific clause

1. Yara's proposition incorrectly assumes that the definition section does not apply to clause 4.1(c). Goodwin v Phillips is invoked in support of the submission. However, that case concerned implied repeal of an earlier statute by a later one. It has no application here. Perhaps Yara had in mind the principle of construction which states that words and even whole provisions must be rejected if they are inconsistent with and destructive of the main purpose of the contract. Again, that principle has no application in circumstances where it cannot be concluded, from the express language of the contract, that the rights under clause 4.1(c) of the new shareholders deed are purely personal to PO atf BT and are not assignable.

1. One example can be given which exposes Yara's central thesis as wholly untenable. Suppose the day after PO atf BT had entered into the new shareholders agreement, Pankaj died. On Yara's construction, neither Pankaj's executor nor any substitute trustee of the Burrup Trust would have any right to nominate directors under clause 4.1(c). The right would, quite literally, die with Pankaj. Such a result could not be further away from the assumed intentions of the parties. It would require the interpretation clauses 1.2(c) and 1.2(l) to be ignored and put at nought.

1. Fourth, there is no provision in any Shareholders Deed to give effect to the hypothesised rights of successors to appoint. This is significant in 2 ways. First, it tells against the contended for construction because the agreement does not contemplate, by any express or implied provision, the alleged result. Second, to the extent that there is any provision suggested, it tells against the hypothesised successor rights. That is because each candidate possibility for the implementation of successor rights is impossible or arbitrary. No process of implication can resolve the difficulties.

Fourth point: no provisions giving effect to the successors right to appoint

1. Yara says that clause 1.2(m) excludes rights being held jointly. That ignores the introductory words of the clause 'unless the context indicates a contrary intention'. Here the context is that Pankaj and Radhika had acquired the rights of PO atf BT, including the right collectively to appoint directors. A contrary intention is indicated.

1. The clause specifically pleaded and relied upon by Radhika to resolve this problem, clause 1.2(m), provides that a right of more than one shareholder will be held severally (and, expressly, not jointly or jointly and severally). The term 'severally' bears the meaning 'separately, diversely, distinctly, individually and respectively': OED; Williams, G., Joint Obligations, Butterworth 1949 at 41-3. 'Severally' comprehends truly independent rights, even if they are evidenced in the same instrument: Federation Insurance Ltd v Wasson & Others [1987] HCA 34; (1987) 163 CLR 303. Further, 'joint' rights are specifically excluded.

1. The fact that the rights are to be exercised collectively by Pankaj and Radhika is not a reason for denying them the right to appoint directors. ... For the reasons given at paragraphs 32 to 34 above, the various hypothetical situations raised by Yara are fanciful.

1. That clause excludes the possibility that successors hold the (hypothesised) rights of appointment jointly (or jointly and severally). Consequently, and necessarily, they would have to be held exclusively severally. The only ways in which that hypothesis could be given effect is:

1. Each leads to results that are impossible or nonsensical.

1. If the appointment rights were cumulative, then the number of Nominee Directors would multiply as the 'successors' split the holdings. This is simply impossible, since each Shareholders Deed expressly caps the number of directors of any kind at 5: cl. 4.1(b). If not defeated by express impossibility, a party could multiply the right to appoint by splitting the appointments amongst its subsidiaries, as is permitted by cl. 9.2 of the OSD and Shareholders Deed, allowing the appointment of more directors. It would be an odd and strained construction to adopt a result favouring vote splitting, which has been frowned upon in other corporate contexts: Re MIM Holdings Ltd (2003) 45 ACSR 559; [2003] QSC 181 at [19]. Board meetings would be impracticable: it should be remembered that a board meeting cannot readily take place unless all the appointed Nominee Directors are present: cl. 4.4(e) to (g). Consequently, cumulative rights would give any holder of 1 share the ability to prevent board meetings.

1. With fractional appointments, cl. 4.1(c) appointment rights would be precisely divided in proportion to the successor holder's holdings of the original holders' shares. This would result in the successors having the right to appoint 'fractional' Nominee Directors. This furnishes an insoluble procrustean problem: how to appoint 1.285 of a director? How to appoint 0.214 directors? There is no hint of a mechanism in the Shareholders Deed to accommodate such problems. The proper inference to draw from that silence is the fractional appointment is not contemplated by the NSD or OSD.

1. With a race to appoint, a successor holding 1 share would trump a successor holding, for example, 69.9% of the aggregate share capital if he delivered his appointment notice first. This is inconsistent with the relationship of co-operation constituted by the OSD and NSD: cl. 3.2(a) and 12.4(d). It is a capricious and implausible basis on which to give effect to a commercial contract of this kind. Further, in such a case, it could hardly be said that all successors had, in a practical way, been able to exercise the rights of the original holder.

1. If, against the text of cl. 1.2(m) emphasised by Radhika, the appointment rights were held jointly by 'successors', a single holder of 1 share in each 'silo' of original holders could, as a practical matter, delay or block the appointment of any new directors. Further, and oddly, the rights of each share would not be fungible. Each share would be valuable depending upon the appointment rights of the original holder, however many transfers previously. A holder of Yara's original 30% would have the unilateral right to appoint a Nominee Director. A holder of 30% of the Trustee's original shareholding would not. The register of members would require to perpetually record who the original holder was (ie. which particular shares were transferred). That is not information which the register of members is required to record. In short, the construction is strained and implausible.

1. The vote amongst holders is included for logical completeness: there is no suggestion anywhere in the OSD or NSD that this is a candidate available to resolve disputes amongst a cohort of successors. The result, were it implemented, would gut the rights of minorities amongst the cohort and they would not, therefore, receive a right resembling the right of the original holder. The majority would, thereupon, exercise a vote disproportionate to their actual shareholdings.

1. In short, the candidate constructions which give appointment rights to successors are either impossible or arbitrary and inconsistent with the character of the deed.

1. Fifth, the voting rights of successor directors are unascertainable. In the case of each of the cumulative, fractional and race to appoint cases, what number of votes would the Nominee Directors cast? The shares held by the particular appointor, or of the successors for that 'silo' of holdings (formerly held by an original holder)?

1. Yara did not obtain any of the rights under the new shareholders deed previously held by PO atf BT by its acquisition of 5% of the shares from Pankaj. It was not a 'substitute, successor or permitted assign' of PO atf BT for the purposes of his rights under the deed. Nor did it acquire any of Pankaj's rights under the new shareholders deed by virtue of purchasing the 5% parcel.

1. In the case of the race to appoint, it could not be said in any meaningful way that the other successors in that 'silo' had obtained, as successors, the rights held by the original holder. If the winner of the race exercised votes in respect of the 'silo', the rights of the other successors (from time to time) would be practically extinguished. If the winner only exercised votes in respect of his own shares, the rights of the other successors would be actually extinguished.

1. Under the share sale agreement, Yara bought 55 million shares from Pankaj personally. The terms of that contract clearly demonstrate that Pankaj was only selling those shares. There was no agreement to assign any of Pankaj's and Radhika's rights under the new shareholders deed.

1. In the case of joint exercise, would the shareholder exercise votes in respect of the shares owned within the 'silo', or all of its shares?

1. There is, in truth, no difficulty in ascertaining the voting rights of the directors appointed by Pankaj and Radhika (just as there never was any difficulty in ascertaining the voting rights of the directors appointed by PO atf BT). The directors collectively appointed by Pankaj and Radhika will collectively be entitled to vote the number of shares held by them, viz, 65%.

1. If one assumes that the assignee exercises the rights of appointment jointly with an assignor who continues to hold 5%, the argument of assignability creates the absurd prospect of votes at board level of greater than 100% of the shareholding.

1. This is not an academic problem: Yara holds 35% of the shares in BHL, in respect of 5% it is an undoubted 'permitted assign' of the Trustee (via Pankaj).

1. If the 'successor' theory is treated seriously, Yara necessarily participates in the appointment of the 3 Nominee Directors arising in respect of the 70% of BHL shares formerly held by the Trustee. No account has been advanced, and nor is one apparent why, if successors are granted rights to appoint Nominee Directors, Yara does not receive them.

(b) participate in the appointment of the 3 'Trustee' Nominee Directors.

1. Once the 'Trustee' director or directors are appointed, they cast 'one vote [...] for each Share held by the Shareholder' that appointed him or them: cl. 4.5(a)(i). Consequently, the number of votes cast will be:

(a) Yara's director: votes equivalent to 35% of the shares in BHL; and

(b) The successors to the 'Trustee' directors: votes equivalent to 100% of the shares in BHL (i.e. Yara (35%) plus Pankaj (30%) plus Radhika (35%);

resulting in a total of votes cast equal to 135% of the shareholding in BHL.

1. The result would be that, by acquiring 5% of BHL, Yara will go from 30% of board votes to (35/135=) 25.9% of board votes.

1. Sixth, given that the significance of Nominee Directors is the votes they cast (rather than the number of such directors per se), if successors were (on some unspecified broad theory) entitled to appoint Nominee Directors voting their respective shares, clause 4.1(c) need not take the form it presently has. It would have been possible to simply provide, for example, that each shareholder holding more than 5% is entitled to appoint a director who may vote the number of shares as his appointor. However, that is not the language the parties chose. It appears, instead, specifically designed to ensure that if original investors alienate some of their shares, they will retain the right to appoint directors who will vote commensurate with the original investor's shareholding, and the new shareholders will expressly not have such rights. In the present case, the new shareholders happen to be commercially aligned with the interests of the original shareholder. That was not a fact in contemplation when the OSD or NSD were executed. The shareholder parties to each of those deeds were concerned with the rights of the original shareholders, not the interests of successors. It is not appropriate to attribute an intention to those parties to provide for the interests of all or any successors merely because, in the events as they occurred, certain successors have a common interest with a (former) original holder.

Sixth point: the shareholders deed could have been drafted differently

1. To suggest that a clause could have been drafted differently, as Yara does, does not assist in determining the proper construction of the relevant agreements [Charrington & Co Ltd v Wooder (1914) AC 71 at 82].
2. Yara submits that clause 4.1(c) was specifically designed to ensure that, if original shareholders alienate some of their shares, they will retain the right to appoint directors. Subject to what we said at paragraphs 30-31 above, this is correct. But it does not follow that the new shareholders will not have such rights. It depends upon the circumstances, including any agreement between the original shareholder/transferor and the new shareholder/transferee and, as here, the agreement between the substitute shareholders, Pankaj and Radhika, and the other original shareholder, Yara.

1. Yara submits that the new shareholders deed is concerned with the rights of original shareholders, not the interests of successors. This submission is untenable and must be rejected. The shareholders deed expressly provides for and permits succession, substitution and assignment, including assignment by way of permitted transfers of shares to third parties. And, in the latter case, it provides for those parties to execute a pro forma assumption deed which is annexed to the shareholders deed, and under which deed the new shareholder obtains all of the rights and assumes the obligations of the former shareholder.

1. Seventh, the notion of assignability is inconsistent with the character of the relationships created by the OSD and the NSD. They are relationships of good faith, and in substance fiduciary (see clauses 3.2, 12.4, 13, 15, 19 and 20.4). Whether the character of the obligations is equitable or legal is not material. The powers of appointment and the attendant voting rights are a structure of corporate governance which reflects the relationships of good faith assumed between these people. Absent an express provision for assignability, rights of that kind should be treated as personal and not assignable.

Seventh point: notion of assignability inconsistent with the character of the relationship.

1. ...
2. Yara asserts that the relationship is effectively one of 'quasi partnership', but does not suggest facts or circumstances which would support that conclusion. Clauses 12.4, 18 and 19 of the shareholders deed point against the submission; and clause 18 expressly refutes the relationship as one of partnership.

1. The relevant principles were discussed in Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2006] FCAFC 40; (2006) 149 FCR 395. In that case the court was concerned with the assignment by a licensor of the benefit of an exclusive license of trade marks. The assignee purported to terminate the license for breach. The court held that the benefit of the license was not assignable.

1. Clause 12.4 specifies how each 'Shareholder' must act towards the other 'Shareholders' and clause 19 specifies how each 'Party' must act in relation the company. It is important to note that neither of these clauses suggests that it is intended to be limited to Yara and PO atf BT. Defined words are used clearly pointing against such limitation.

1. Circumstances which were important in holding the rights were not assignable included:

(a) indications that the relationship was intended to be an enduring one: Pacific Brands at [65], [67];

(b) provisions which revealed a level of 'reciprocal responsibility' of one party for the other: Pacific Brands at [64];

(c) indications that the identity of the donee of contractual powers was material (Pacific Brands at [65], [67]), including the possibility that they might be exercised very differently if assigned, eg, to a competitor of the obligor;

(d) the existence of confidentiality clauses: Pacific Brands at [66]).

1. Here the case is much stronger. The relationship is effectively one of 'quasi-partnership' (cf Pacific Brands at [64]). In the case of the particular power of nominating directors who would then have super-voting rights at board level, the prospect that they might pass would be of vital concern to shareholders. In that context the existence of textual indications that the particular rights were not intended to be assignable should be given particular weight. Here the combined effect of the words 'so long as' and the minimum shareholding requirement provides such a textual footing.

1. Pacific Brands is relevant in another respect. It was argued that consent to assignment was to be found in the general definition of 'parties' to include 'permitted substitutes or assigns'. The Court rejected the argument, distinguishing that case from one where a party contracts for itself and its assigns (Pacific Brands at [61] and [71]).

1. Ninth [sic Eighth], in construing the Shareholders Deeds, to the extent of a conflict between the operative provisions and the interpretation provisions, the proper construction will concentrate upon the commercial terms of the agreement and the effect intended to be achieved by them, rather than upon clauses sometimes characterised as boilerplate, because they are the clauses to which business people are more likely to attend to: Muriti v Prendergast [2005] NSWSC 281at [125] (White J). In the present case, the language of 4.1(c) contemplates a right enuring to specific persons which cannot be easily reconciled with the rights of successive holders.

1. Yara's eighth point (referred to in its submissions as the ninth point) implicitly recognises the difficulties and hurdles which the express terms of the shareholders deed impose upon Yara's central thesis.
2. Those difficulties cannot be swept away by labelling the express terms of the shareholders deed as boilerplate. As noted in the receivers' closing submissions, the term 'Shareholders', which is at the heart of the operation of the deed, is defined as 'the people who hold shares from time to time'. And it is in respect of those 'people' that the deed seeks to regulate ownership and management of the company: Recital E. Those 'people' without doubt include assignees and substitutes. It follows that, where the deed speaks of the rights and obligations of shareholders vis-à-vis one another or vis-à-vis the company, it speaks of shareholders who, from time to time, become shareholders by assignment.

1. Yara submits that the new shareholders deed terminated against PO atf BT by reason of his ceasing to hold any shares in BHL, pointing to clause 16.2(c) of the deed. Accordingly, it is said, PO atf BT could not pass any rights directly to Pankaj and Radhika, because such rights were not retained by him. This submission flies in the face of clause 5(b) of the share sale agreement which has two aspects.
2. First, by the first sentence, Pankaj, Radhika and the Trustee undertook to execute all documents necessary to join Pankaj and Radhika to the shareholders deed in place of the Trustee and with such amendments as agreed by Yara, the Trustee, Pankaj and Radhika. This indicates an intention of the parties that, at least for the purposes of substituting Pankaj and Radhika in place of the Trustee as parties to the deed, the Trustee remained a party to the deed. This was necessary for Yara's own protection, for, as we submitted at paragraph 98 of the receivers' closing submissions, if the shareholders deed terminated against PO aft BT on 18 September 2008, it would also have terminated as against Yara, and the shareholders would have been relegated to their rights under the constitution.
3. Secondly, by the second sentence, Pankaj and Radhika agreed, pending execution of the document, to comply with the shareholders deed as if they were a party to the deed in place of the Trustee. This indicates an intention of the parties that the rights and obligations of the Trustee under the deed should go to Pankaj and Radhika.

Conceptual transferability concluding analysis: cl 4.1(c) SD Nominee Director rights

398 In each instance I accept as correct each of the Receivers' eight responses to Yara's objections. Each submission presents to me as the more logical and overall persuasive. Additionally, I make the following further comments favouring the Receivers' stance on the permissible transferability (or portability) of cl 4.1(c) contractual rights to Pankaj and Radhika.

399 First, my assessment of the words 'For so long as', as the preface to the first two sentences of cl 4.1(c), is that properly assessed in context, these words are focused more upon the required minimum 5% BHL shareholding than upon the party named. I do not assess them as constituting an exclusively personal conferral of rights upon the two named parties. This is supported by the following reference to the term 'Shareholder' in the last sentence of cl 4.1(c) and the overall structure of the SD as a whole.

400 Second, there is a basal distinction to be recognised as between holding shares in BHL and holding a cl 4.1(c) right to appoint a Nominee Director or Directors. Holding shares in BHL does not equate to, or even approach the nature of, the distinct right to appoint a Nominee Director to the board of BHL, and for that Nominee Director to exercise poll weighted voting power at the level of the appointee Shareholder's shareholding. Conversely, a right to appoint a Nominee Director is very much tied to a minimum level holding of BHL shares. The Nominee Director right will be lost if the level of BHL shareholding, as the prerequisite minimum shareholding required for a Shareholder, falls below 5%.

401 Third, transfer and preemption provisions made applicable to transfers of shares in BHL are dealt with comprehensively by cl 9 and cl 10 of the SD. In that context, the word 'transfer' is itself broadly defined within the definition component of the SD under cl 1.1. Those transfer and preemption provisions are widely drawn. Clause 9.4 and cl 9.5 of the SD embrace circumstances stipulated for what is a 'Change in Control' (a defined term in the SD) in a 'Shareholder'. 'Change in Control' is itself then broadly defined within cl 1.1 to cover express subcomponents concerning corporate acquisitions or scenarios where Shareholders are trustees of any trust (such as for the Burrup Trustee). One of the scenarios expressly excluded from being assessed as a Change in Control for a Shareholder (who is the trustee of a trust) is where, by the definition subcomponent (b)(ii), a person who becomes beneficially entitled to BHL shares is a 'Relative' of the trustee (at any time). 'Relative' is then seen to be defined widely under cl 1.1 of the SD to include a spouse or linear descendant.

402 The scenario where a trustee holding BHL shares vests the beneficial interest of those shares under the trust to a Relative does not, as I would read and assess cll 9.4, 9.5 and 9.6 of the SD, generate a need for either a transfer notice under cl 9.3, or a 'deemed transfer' by cl 9.5 of the SD.

403 So a vesting of a beneficial interest in a primary beneficiary who is a Relative of the trustee will not trigger preemptive rights in another Shareholder under the SD pursuant to cl 10 (particularly under cl 10.6, regarding acceptances of transfer notices which constitute offers to sell offered shares to other Shareholders). From this I reach the conclusion, as a matter of overall construction of the SD, that there are some expressly recognised scenarios under the SD which are acknowledged exceptions to what is defined as a Change in Control (either in a corporate Shareholder or in a Shareholder who is a trustee).

404 Fourth, within the regime of cl 9 of the SD there is, as I have mentioned, discernible emphasis upon a scenario of consensual 'agreement' between Shareholders as constituting an overriding platform from which Shareholders may agree to circumvent the elaborate transfer and preemption regime set by cl 9 and cl 10 of the SD, otherwise applicable to a dealing in BHL shares. But subject always to agreement otherwise (see cl 9.7), an excepted BHL share transfer that falls outside a scenario of what is captured as a Change in Control would still require the incoming permitted transferee(s) to execute a Deed of Assumption (see cl 9.7(a)). The transfer and preemption provisions of the SD, assessed as regards a trustee Shareholder in relation to the permitted transfer of shares in BHL to a Relative, bear upon the assessment of the potential transferability of a cl 4.1(c) right to a trustee.

405 Fifth, the Receivers' submission concerning the hypothetical death of Pankaj, as the trustee, is compelling. It would be naïve to assess these SD parties (assessed objectively), leading up to 24 March 2008, as having accepted that an event such as the death or incapacity of the Burrup Trustee would deliver the consequence of leaving board control of BHL effectively within the power of Yara, as the sole remaining (minority) SD 'Shareholder'. Such a dramatic shift concerning BHL's board would be a significant undermining of an otherwise carefully worked out power balance and would present as most unrealistic for well advised and commercially sophisticated parties. On the hypothesized death or incapacity of the Trustee, parties to the SD must surely have accepted an uncontroversial transmission to a 'Relative' as a replacement trustee, as a successor or substitute for Pankaj, or the involvement in lieu of an executor or administrator. That conclusion is supported by the generic terminology of 'Shareholder', seen in the last line of cl 4.1(c), then again, in cl 4.1(d) and cl 4.1(f).

406 I would therefore assess the position to be on the hypothetical Trustee incapacity scenario, that there still remains, as a matter of concept, in appropriately controlled circumstances under the SD, a residual potential for the permissible transfer of cl 4.1(c) rights.

407 Sixth, the position is supported by the in principle legitimacy of a potential assignment of contractual rights by a clear agreement, see Pacific Brands [32] and Australian Zircon [132(c)]. As a matter of legal principle, there is no reason in concept why the parties cannot agree upon a transfer of Nominee Director rights to an incoming replacement party, where there is to be an outgoing SD 'Shareholder'. There is, in my view, resonance and symmetry in that conclusion with the clear recognition in cl 9 of the SD of the parties' capacity to 'agree' upon an exception as between themselves, or even as just between Shareholders, upon a different transfer regime to that otherwise laid down by the SD.

408 Seventh, the preceding observations affirming the conceptual transmissibility of these contractual rights need to be qualified by more practical considerations as to divisibility or, as I would assess it, the intrinsic nondivisibility of these Nominee Director appointment rights (in an absence of express agreement upon the issue of such rights being divided or apportioned).

409 On my assessment, Nominee Director rights under cll 4.1(c) (f) of the SD, read in conjunction with cll 4.4(e) and (f) and cll 4.5(a) and (b), do not only lend themselves to apportionment. Yara's second, fourth and fifth arguments (set out earlier, which I do not accept) nevertheless frame many divisibility problems which present. Apportionment of this right simply will not work in practice. It would deliver an intolerable level of confusion and complexity. That is particularly so since a cl 4.1(c) right also carries downstream rights (see the last sentence of cl 4.1(c)) regarding the nominee appointments to be made by BHL to other companies in the BHL Company Group.

410 Persons holding cl 4.1(c) rights remain at liberty, as between themselves, to reach a careful agreement about voting and management rights being conferred on an incoming holder of BHL shares under whatever new consensual regime they think fit. No doubt their agreement would need to be clearly expressed to achieve its objectives, given the complexities of what is involved.

411 But I do not assess cl 1.2(m), or cl 18.3 of the SD, concerning rights, duties, obligations and liabilities of Shareholders as being sufficient alone to deliver a valid apportionment outcome for cl 4.1(c) Nominee Director appointment rights to more than one incoming party. The essence of the right within cl 4.1, delivers in context, a clear contrary intention, in my view, as regards cl 1.2 which states, 'In this deed: (a) headings are for convenience only and do not affect interpretation; ... unless the context indicates a contrary intention'. In this case, as I assess, a clear contrary intention manifests.

412 Eighth, ascertainment of potential divisibility in a cl 4.1(c) right (absent express agreement) is not assisted by the generality in what is expressed by cl 1.2(a) of the SSA. Again, a contrary intention manifests.

413 In the absence of clear agreement on the issue of divisibility of the cl 4.1(c) right in the SSA, the nondivisibility of that right as held by the Burrup Trustee would be fatal to Radhika's assertion of her several right to appoint Mr Sodum in November 2010. It would leave open, however, some potential for a valid transfer of the right to appoint cl 4.1(c) Nominee Director(s) to Pankaj and Radhika jointly, 'in place of' the Burrup Trustee, under the workings of the SSA, particularly under the first sentence of cl 5(b). This follows on the basis of Pankaj and Radhika jointly being assessed together as the successor, substitute or permitted assignee of the Burrup Trustee for the purpose of cl 1.2(c) of the SD.

414 Ninth, absent express agreement upon the aggregate transferability of the Burrup Trustee's cl 4.1(c) right under the SSA, finding a stand alone transferability of the right elsewhere is more difficult. Nevertheless, as indicated, the example concerning hypothetical death or incapacity of the Burrup Trustee would present as persuasive. As I see it, vesting of the BHL shareholding of the Burrup Trust (a discretionary trust) to a Primary Beneficiary who is a Relative would be excluded from the definition of Change in Control under the SD. So also would be a change of trustee to someone who is a Relative of a Shareholder under cl 1.1(b)(i) and cl 1.1(b)(ii) of the definition of Change in Control. Such scenarios do not trigger preemption rights under cl 10 of the SD.

415 A party taking BHL shares would at least need to execute and deliver an Assumption Deed to gain cl 4.1(c) rights. Vesting of the BHL shares under a trust to a Relative may be effective to receive rights to the shares, but obtaining cl 4.1(c) rights requires something more. Where all shares vest in the one person, I see no conceptual reason (there being no potential right divisibility or apportionment issues arising) to inhibit the valid transmission of cl 4.1(c) rights to a Relative beneficiary who receives the entire vesting. Such situation may be viewed as one of permitted succession, substitution or assignment under the SD.

416 Tenth, there was a vesting by no later than on 18 September 2008 of beneficial interests in Pankaj and Radhika personally of a 35% shareholding in BHL, which they each took as Primary Beneficiaries of the Burrup Trust (indeed as Primary Beneficiaries for this already specific fund asset comprising the BHL shares). The vesting in Pankaj and Radhika, in my assessment, fell outside a Change in Control under cl 1.1(b) of the SD which was applicable to the Burrup Trustee. Under subcl (b)(ii) of the definition of Change in Control, Radhika, as a spouse, was clearly a Relative of the Burrup Trustee. As regards Pankaj himself, all that occurred is that he came to hold his beneficial entitlement in half the BHL shares over which he had previously been legal owner in his capacity as the Burrup Trustee. That scenario also would not, on my assessment, trigger a Change in Control under the SD.

417 My reading of cl 9.1(a) of the SD, with reference therein to cl 9.5 as an exception to when a Shareholder must not transfer shares, is that a change of trustee to a Relative, or a vesting in a Relative of a trustee, will be excluded from the preemption provisions of cl 10 of the SD. At their highest, by reference to cl 9.7(a), those scenarios only require the new trustee or newly vested holder of shares to execute an Assumption Deed, but no more.

418 Consequently, my assessment is that the full legal and beneficial vestings in Pankaj and Radhika of their respective 35% tranches of BHL shares, which took place not later than on 18 September 2008, was not (as Yara contended) illegitimate, or in breach of the preemption provisions of cl 10 of the SD. But even were that assessed to be the case, I would still conclude that Yara, by proceeding to complete on the sale to it under the SSA of a further 5% of BHL shares from Pankaj personally as seller, effectively waived, affirmed, or ratified any irregularities concerning Yara's preemption rights under the SD.

419 An even further refined issue now presents as whether, in the face of a conclusion affirming conceptual transferability for cl 4.1(c) rights as an indivisible block, Pankaj and Radhika jointly came to hold Nominee Director appointment rights either via the SSA or by some other route.

Did the cl 4.1(c) rights terminate before 19 September 2008?

420 Yara relies heavily upon temporal words at the commencement of cl 4.1(c) of the SD, namely, 'For as long as ...' as well as on the operation of the automatic termination clause under cl 16.2(c) of the SD.

421 It is uncontroversial that, not later than midnight on 18 September 2008, the Burrup Trustee no longer held shares in BHL by reason of those shares having vested in Pankaj and Radhika. The same day, courtesy of Mr Lenzo's manual entries made in the register of BHL on 18 September 2008, Pankaj and Radhika were each personally registered as legal owners of those BHL shares.

422 On the following day, 19 September 2008, Yara says that by the time the SSA was signed, any cl 4.1(c) rights once held by the Burrup Trustee no longer existed. Hence it is put that there were no longer, in any event, Nominee Director rights in the Burrup Trustee remaining in existence that were capable of being transferred to Pankaj and Radhika under the SSA.

423 However, I would reject that argument as overall, too clever by half. First, it ignores the presence of the Burrup Trustee as a party in its own right to the SSA. Second, the express terminology of the SSA suggests to the contrary. 'Oswal Parties' in the SSA are defined to include the Burrup Trustee (and with the Burrup Trustee being expressly made a separate party to the SSA), as well as Pankaj and Radhika personally. Third, the end consequence of the argument is highly uncommercial in the outcomes it would render upon all the parties involved in BHL at the time.

424 On my assessment, future Nominee Director rights for Pankaj and Radhika were addressed by the work performed by the phrase 'in place of', used twice within each sentence of cl 5(b) of the SSA. That phrase connoted, on my assessment, Pankaj and Radhika's joint succession, substitution or permitted assignment to all the rights and obligations of the outgoing Shareholder party, the Burrup Trustee. If the SD rights of the Burrup Trustee did technically end automatically on 18 September 2008, then, in my view, the overall content of the SSA, involving the Burrup Trustee expressly as it does, is still such that the SSA provisions would waive, negate or vary the SD's termination position or, if necessary, revive and reconfer all the rights of the Burrup Trustee so they could then fully transfer to Pankaj and Radhika 'in place of' the outgoing Burrup Trustee.

425 A conditional qualification to the conclusion that there is a transmission of all contractual rights to Pankaj and Radhika from the Burrup Trustee under the SSA, is a correlative documentary detail requirement for Pankaj and Radhika, as incoming BHL Shareholder parties, to execute Assumption Deeds at some point. The requirement of detail is imposed by the first line of cl 5(b) of the SSA, in order for them to enjoy and exercise benefits as parties to the SD. I would assess the Assumption Deeds requirement as something of a Perri v Coolangatta Investments Pty Ltd [1982] HCA 29; (1982) 149 CLR 537 condition going more to securing performance and enjoyment of the rights under the SD, rather than to their entitlement. This issue bears upon Pankaj's entitlement to remain as a Nominee Director of BHL in the absence of Assumption Deeds by himself and Radhika.

426 Furthermore, I assess there to be no time constraint imposed by the SSA as to when Pankaj and Radhika must execute and deliver their Assumption Deeds. An interim deemed situation via the second sentence of cl 5(b) provides for their compliance with SD obligations in any period until such instruments are executed and delivered. Once executed and delivered, pro forma cl 2.1(a) will address the issue of them assuming 'all the rights' of the Burrup Trustee. That phrase caters for 'all' rights under the SD, not some rights.

427 The conclusion as to the ongoing existence in the Burrup Trustee and the transfer of the cl 4.1(c) rights from the Burrup Trustee to Pankaj and Radhika under the SSA is fortified by hypothesising an alternate scenario.

428 Assume Yara were to be left alone at midnight on 18 September 2008, as the only remaining 'Shareholder' party to the SD. Yara's contention on that hypothesis is that departure of the majority Shareholder (the Burrup Trustee) left Yara (then holding 30% of the shares in BHL, but shortly to acquire a further 5%) with overwhelming board management control of BHL (via the workings of cl 4.5(a)(iii)) as the only Shareholder party to a continuing SD with a validly appointed Nominee Director).

429 That hypothesis is manifested under Yara's attempts in December 2010 to appoint further directors to BHL's board, beyond Mr Holba.

430 Yara points to the first line of cl 5(a) of the SSA and to an express potential for the SSA parties, as between themselves, to agree later upon 'such other amendments as agreed by the Buyer and the Oswal Parties'. This provision is said to have the parties (objectively assessed) addressing, as at 19 September 2008, only limited issues, i.e. the sale and settlement of the 5% BHL shares, and essentially deferring other issues for subsequent consideration and consensus, like the entitlement to Nominee Directors under the SD for the newcomer BHL shareholders. Yara says this is not an unrealistic commercial analysis of the events or of the SSA, particularly cl 5(b).

431 This argument fails in circumstances where I have already rejected Yara's contentions as to any relevant background of uncertainty, surprise or consternation on its part, as at 18 or 19 September 2008.

432 The end point of Yara's construction, delivering to it overwhelming management control of BHL until it agrees otherwise, is opportunistic in my view. It substantially overreaches any legitimate (objectively assessed) expectation Yara could have held about the effects of the SSA, at the time of the SSA sale transaction. In acquiring a further 5% shareholding in BHL, Yara could not have had a legitimate expectation (objectively assessed) of obtaining plenary board control of BHL, even on an interim basis pending further negotiations over management arrangements that it may or may not accept.

433 Yara still held only a minority shareholding interest in BHL, even at 35%. It still remained protected as regards management participation under the numerous SD Schedule 1 scenarios which required a Special Majority (80%) on a poll of directors, in the event of dispute between blocks of Shareholders upon such issues.

434 That Yara might be left as sole Shareholder party in the SD (continuing with BHL and BFPL) and with other Shareholder parties holding no Nominee Director rights until Yara agreed to that happening, on my assessment, approaches the level of commercial self delusion on Yara's part. The essence of the BHL board management arrangements between the two original Shareholders in the SD reflected something akin to a good faith coventure between the two majority and minority interest blocks in the chosen corporation vehicle. A carefully and equitably balanced BHL board power sharing arrangement embodied by the SD cannot be conceptually reconciled with an acceptance of the hypothesis that Yara took dominant management control of BHL on a departure of the Burrup Trustee.

435 Yara's opportunistic outcome is commercially indigestible. It is not an outcome readily to be countenanced unless the result is driven by clear words. Words to such effect cannot be ascertained. Yet all parties in the negotiations leading up to the SSA were well resourced and well advised by multiple lawyers and advisers acting on each side.

436 Yara's argument that the SD could continue effectively beyond 19 September 2008 for BHL with Yara as the sole Shareholder is, in its commercial moment, such an unrealistic scenario as would drive me, in the absence of another more viable alternative construction, to the conclusion that the SD had become frustrated and brought to an end in terms of its future performance as of 18 or 19 September 2008. A unilateral management outcome that would see the 35% minority Shareholder completely dominating the management of BHL until it accepted otherwise, in circumstances where there was another majority Shareholder block (Pankaj and Radhika together) holding 65% of the BHL shares, is so fundamentally at odds with the carefully balanced BHL power arrangement as to effectively end the ongoing performance of the SD: see Codelfa (360 363) (Mason J). Termination of the SD by frustration would see the board management of BHL revert back to an orthodox governance scenario of directors elected at a general meeting of BHL shareholders. There the aggregate 65% shareholdings of Pankaj and Radhika, together, would outweigh the voting power of Yara at 35%.

437 An outcome of termination by frustration of the SD as logically and philosophically more consistent with what was envisaged under cl 16.2(a)(i) of the SD. By that provision, if one Shareholder became holder of all shares and all rights in BHL then the SD's performance would be at an end. That scenario of course is not the case factually here, since Yara, by the SSA, only lifted its shareholding in BHL from 30% to 35% when the sale settled in October 2008. Nevertheless, as a matter of concept under the SD as constructed, the notion of one 'Shareholder' effectively dominating board management via one Nominee Director, against larger holders of BHL shares, would present as so commercially repugnant and unfair that it would be irreconcilable with the continuance from that point on of a viable SD.

438 However, in the face of the difficulties manifesting on Yara's board control hypothesis, there is, on my assessment, the more than viable alternative construction of the SSA and which averts the hypothetical scenario of the SD's termination of the SD by frustration at 18 or 19 September 2008.

439 Under the SSA, an agreed replacement in the SD of the Burrup Trustee by Pankaj and Radhika (jointly as a block) saw them effectively step into the shoes of the outgoing Burrup Trustee as the majority Shareholder from 19 September 2008. From then, Pankaj and Radhika together became the other 'Shareholder', now joining with Yara under the SD. A need for Pankaj and Radhika, at some point, to satisfy the first sentence of cl 5(b) of the SSA by the entry and delivery of their Assumption Deeds is what remains as a detail to perfect a viable and more commercially digestible construction outcome.

440 The construction conclusion, I think, is to be grounded not only upon its overall fairness and commercial digestibility but, more importantly, by the express terms of the SD. First and foremost is the force of the phrase 'in place of', used twice within cl 5(b).

441 Second, the conclusion is supported by the content and implications of provisions in the SSA including, in particular, cll 6, 8, 9 and 10 of the SSA. These provisions plainly envisage Pankaj and Radhika's effective and ongoing participation in the future management decisions of BHL. Within cl 6.1(b), cll 6.2, 8, 9 and 10 of the SSA there are clear manifestations (objectively assessed) of a future regime of BHL management involving the Oswal Parties (which in context, bearing in mind the sale transaction, must mean Pankaj and Radhika personally). Clause 6.1(b) refers to the ongoing applicability of provisions within the SD. So it must be inferred that the SD is to have ongoing significance and relevance for Pankaj and Radhika, as well as Yara, in BHL's board management. Yara would contend that this is an equivocal factor, consistent with a precise, but limited, specificity being designated by the SSA (as at 19 September 2008) as regards participation of Pankaj and Radhika in only some expressly identified future management issues - such as the IPO - and otherwise leaving the issue of Pankaj and Radhika's involvement in future BHL board management deferred as an issue, until all parties agree upon 'such other amendments' (by the first line of cl 5(b)). That confined participation analysis, in my assessment, once again overreaches, especially given that Pankaj was (and there was nothing to suggest he would not remain) Chairman and Managing Director of BHL. Objectively assessed, the notion that Pankaj, as from 19 September 2008, might somehow be beholden to Yara over his general future ongoing involvement in BHL's board management decisions must be seen as a flight of fancy on Yara's behalf.

442 Further, cll 8, 9 and 10 of the SSA concerning product offtake, the future TAN project and the Burrup Deed (Schedule 3 in form to the SSA) all speak of the SSA parties exercising 'reasonable endeavours' to 'procure' outcomes regarding these issues which axiomatically concern BHL's future management. How would that procurement happen where Yara, post 19 September 2008, was the exclusive power in BHL's board decisions? Such provision would be otiose and irrelevant to the Oswal Parties (used in a context which can only mean Pankaj and Radhika). So Yara's position cannot have been the (objectively assessed) intent of reasonable commercial parties.

443 Yara's ultimate construction is inconsistent with the basic underlying commercial and equally balanced board power sharing arrangement that was envisaged by the SSA and SD. The SSA arrangements envisaged full participation from Pankaj and Radhika, in place of the Burrup Trustee, in the future management of BHL and its Group Members.

444 I deal only briefly with a further submission of the Receivers and Radhika, made in the alternative.

445 They contended that, even without the SSA, the vesting and registration of full legal and beneficial interest in 70% of the shares in BHL (35% each) in Pankaj and Radhika, at a point before midnight on 18 September 2008, without any assistance from the SSA, was enough not only to validly effect a transfer of the BHL shares (without infringing any provision of the SD, particularly transfer and preemption provisions under cl 9 and cl 10 of the SD), but also to achieve the correlative outcome of transferring the cl 4.1(c) Nominee Director appointment rights once held by the Burrup Trustee.

446 Bearing in mind the conclusion I have reached as to the effective work of the SSA (which will be complete as regards performance once accompanied by Assumption Deeds by Pankaj and Radhika) in achieving a transfer of cl 4.1(c) rights, it is not necessary for me to resolve this alternative submission, grounded as it is upon the bare effect of a vesting of the BHL shares in Pankaj and Radhika. However, I will render some conclusions.

447 I explained earlier that the BHL share acquisitions by Pankaj and Radhika fall outside the SD's definition of a 'Change in Control'. The ensuing registration of their shares in BHL was effected by manual entries in BHL's share register made by Mr Lenzo on 18 September 2008. Accordingly, Pankaj and Radhika came to hold full legal and beneficial ownership of their respective shares in BHL on 18 September 2008.

448 But the vesting and registration of these BHL shares would not necessarily deliver to Pankaj and Radhika as an equal apportionment of the Burrup Trustee's contractual rights under cl 4.1(c) of the SD. If such rights were to divide and pass, allied to their acquired ownership of the BHL shares, that would present, on my analysis, as a case of a 'several' entitlement in the as apportioned contractual right.

449 The nature of cl 4.1(c) rights is contractual and (absent agreement) in my assessment, indivisible. Such a right is capable of being transferred, but a vesting in Pankaj and Radhika of 35% shareholdings in BHL shares (followed by their registrations), whilst sufficient to address the issue of the acquired ownership of their shares, does no more. My view is that, even with effectual Assumption Deeds in place, absent express agreement on the issue, addressing the apportioning and passing of management rights, the cl 4.1(c) rights could not divide in half and transfer to Pankaj and Radhika in equal shares as a correlative consequence merely of their BHL share acquisitions by vesting and registration.

450 Here, a vesting and registration of an undivided 70% shareholding of the Burrup Trustee in Pankaj and Radhika jointly never occurred. If it had, it is an open question whether, in that situation, the cl 4.1(c) rights would pass (again assuming a perfected Deed of Assumption). Whilst that scenario does not present on the facts, I see no substantive conceptual obstacle to the transmission outcome being realised in such vesting circumstances.

Formal responses to the Preliminary Issue questions posed arising from these reasons

451 Finally, I can address the particular questions as were expressly posed for determination on the preliminary issue, which for convenience I will set out again.

That there be a trial separately from, and before, any further trial of the proceedings, of the following issues of construction:

(a) the rights to appoint Nominee Director(s) (as that expression is defined in the Shareholders' Deed) or any other director to the board of BHL;

(b) the voting entitlements of each Nominee Director or any other director at a board meeting of BHL;

(c) whether a written notice of appointment of a Nominee Director by a shareholder is required to be given to each party to the Shareholders' Deed; and

(d) in the context of issues (a), (b) and (c) above, the ownership of the shares in BHL,

on a proper construction of the following documents as referred to in the pleadings:

(1) The Shareholders' Deed; [of 24 March 2008]

(2) The Old Shareholders' Deed; [of 13 March 2005]

(3) The Share Sale Agreement; [of 19 September 2008]

(4) The Constitution; [of BCH of 22 January 2008 which is annexure B to the Shareholders' Deed a constitution applicable to a limited corporation rather than a proprietary limited corporation]

(5) The Old Constitution; [when Shorewatch Pty Ltd was first incorporated on 14 June 2001]

(6) The Deed of Assumption, [referring to a document that is found in exhibit 1 tab 5 and referred to there as an Assumption Deed Poll of 13 October 2009 by Radhika Oswal, albeit I note that this document is objected to by Yara as to its authenticity, authorship and communication]

as at and from:

(A) 13 March 2007;

(B) 26 April 2007;

(C) the date of entry into the Shareholders' Deed [24 March 2008];

(D) the date of entry into of the Share Sale Agreement [19 September 2008];

(E) the date of entry into the Deed of Assumption [13 October 2009]; and

(F) 24 December 2010.

452 My answer to each question as posed, by reference to each of the six dates (A) (F), are:

(a) The creation by resolution of a separate fund for the BHL shares for the benefit of Pankaj and Radhika did not affect the right to appoint Nominee Directors. As at 13 March 2007, rights to appoint Nominee Directors under the OSD continued to be held by the Burrup Trustee and Yara.

(b) The voting entitlements of Nominee Directors of the Burrup Trustee and Yara were governed by the OSD of 13 March 2005, which at that time had not been replaced. As at 13 March 2007, Yara's Nominee Director held a voting entitlement that reflected Yara's 30% holding of the shares in BHL. The Burrup Trustee's Nominee Director or Directors held a board voting entitlement reflecting the 55% holding of BHL shares. The remaining 15% voting entitlement was held by the Nominee Director of the Rimbal Family Trustee.

(c) As at 13 March 2007, the regime of the OSD applied. So question (c), framed by reference to the SD (of 24 March 2008), does not arise to be answered.

(d) As regards the ownership of the shares in BHL, as of 13 March 2007, the position is as indicated under the OSD, namely, for the Burrup Trustee (as to 55%), the Rimbal Family Trustee (as to 15%) and Yara (as to 30%).

The SD of 24 March 2008 had still not been entered. The parties' relationship was still governed by the OSD of 13 March 2005. The material change after 13 March 2007 was that the (15%) BHL shares formerly held by the Rimbal Family Trustee had now been entered in the register of BHL as passing to the Burrup Trustee. Accordingly then, the answers provided for 13 March 2007 to each of the questions (a) (d) vary only to this extent:

(a) The Rimbal Family Trustee now held no right to appoint Nominee Directors by reason of the application of cl 16 of the OSD.

(b) Voting entitlements of Yara's one Nominee Director remained the same but, the Burrup Trustee's three (potential) Nominee Directors could now vote at 70% of the shares held in BHL.

(d) As to the ownership of the BHL shares, the position subsequent to transfer of the 15% shareholding interest from the Rimbal Family Trustee to the Burrup Trustee was that the holding of the Burrup Trustee increased to 70%. The BHL shareholding of Yara remained at 30%.

(C) As at the date of entry into of the SD (24 March 2008)

Here the position is as identified under the recitals to the SD of that date.

The voting entitlements of Nominee Directors and the rights to appoint Nominee Directors were now governed by cl 4.1(c) of the SD. The balance of the answers required for questions (a), (b) and (d) does not alter from those already given. The answer to question (c) is:

My construction of cl 4.1(c) of the SD, read with cll 4.1(d), (e) and (f), is that notification of appointment is not required to be given to any party other than to BHL at BHL's 'Registered Office' (a defined term, see cl 1.1 of the SD's definitions referring to the registered office at that time which was Level 8, 225 St Georges Terrace, Perth). The same address is specified for BHL in cl 21(b). The appointment 'takes effect' upon its receipt at BHL's Registered Office. If it is not accompanied by a consent from the Nominee Director, the appointment takes effect subsequently, from when the director's consent is received at BHL's Registered Office. BHL must then take steps to appoint that Nominee Director to the boards of other Group Members, see the last line of cl 4.1(c).

(D) As of the date of entry into the SSA (19 September 2008)

(a) The right to appoint Nominee Directors or other directors was governed by cl 4.1 and cl 4.5 of the SD and by the SSA (particularly cl 5(b)). Ordinary directors could be appointed either by the existing directors of BHL (see the Constitution of BHL of 22 January 2008, cl 3.3) or they could be elected at a general meeting of BHL Shareholders (see cl 3.4). As of 19 September 2008, Yara's Nominee Director, Mr Holba, was entitled to vote at any poll taken at a directors' meeting at the level of Yara's shareholding interest in BHL at the time, namely, at 30%. The terms of the SSA envisaged that Yara would acquire a further 5% of the ordinary shares in BHL from Pankaj. When that transaction was completed on 24 October 2008, Mr Holba, as Yara's Nominee Director, became entitled to vote at a level of 35% on any poll at a meeting of directors.

From the entry of the SSA, Pankaj and Radhika jointly replaced (that is, they either succeeded to the position or were substituted for) the Burrup Trustee as a 'Shareholder' under the SD. Subject to Pankaj and Radhika both entering into and delivering Assumption Deeds substantially in the pro forma terms of Annexure A to the SD, they would together hold a right to jointly appoint up to three Nominee Directors who could vote the joint shareholding of Pankaj and Radhika of 65% of the shares in BHL (after completion on the sale of 5% of Pankaj's shares to Yara under the SSA on 24 October 2008).

Any other ordinary directors of BHL either appointed by the board or elected at a Shareholders' general meeting could, on a poll of directors, cast one vote.

(c) The answer applicable as at 24 March 2008, is repeated.

(d) As of 19 September 2008, Pankaj and Radhika personally were together the legal and beneficial owners of 70% of the ordinary shares in BHL, they each holding 35% of that corporation's ordinary shares, legally and beneficially. However, the SSA committed Pankaj to sell 5% of his 35% BHL shareholding to Yara. Completion on that share sale transaction occurred on 24 October 2008. On completion of the sale Yara then owned 35% of shares in BHL.

(E) As at the date of entry into the Deed of Assumption (13 October 2009) (Radhika)

This is a document Radhika no longer relies upon as constituting her Deed of Assumption. Nevertheless, I will address the questions (a) (d) posed as of 13 October 2009.

(a) I repeat the answer above as regards 19 September 2008.

(b) I repeat the answer above as regards 19 September 2008.

(c) I repeat the answer above as regards 24 March and 19 September 2008.

(d) As at 13 October 2009, Yara owned 35% of shares in BHL, Pankaj owned 30% and Radhika owned the remaining 35%.

For completeness, I note that I am not asked to answer any questions concerning security interests given over or attaching to Pankaj and Radhika's BHL shareholdings, simply the question of their ownership.

(F) As at 24 December 2010 (the date of issue of these proceedings by Radhika)

The answers to questions (a) to (d) remain the same as for 13 October 2009.

Extracts from SD and SSA** (A) The SD of 24 March 2008

453 It is convenient to set out provisions in the SD entered into between Yara, the Burrup Trustee, BHL and BFPL and the provisions of the SSA that relate to Yara and 'the Oswal Parties'.

454 The SD commences by expressing itself to be a deed and is executed and witnessed accordingly. Of particular importance in this instrument are the Recitals found in subpars A through E, which on their face reflect a scenario in which there were only 16,040 ordinary fully paid shares in BHL as at 24 March 2008. That assumption, however, needs qualification as will emerge in due course.

1. Pankaj Oswal is the trustee of the Burrup Trust and in his capacity as trustee of the Burrup Trust is the holder of 1,148 ordinary fully paid shares in Holdings representing 70% of the issued shares in Holdings.
2. Yara is the holder of 492 ordinary fully paid shares in Holdings representing 30% of the issued shares in Holdings.

1. Holdings is the holder of 99.99999% ofthe issued shares in BFPL and Pankaj Oswal is the holder of 0.00001% of the issued shares in BFPL.

1. Holdings and BFPL were established by Pankaj Oswal to construct, own and operate an anhydrous anmnonia plant on the Burrup Peninsula in Western Australia.
2. The Shareholders have entered into this deed to set out:

(a) the ownership and management of the Company Group and their aims and objects in relation to the Company Group; and

(b) how the Company Group will manage its affairs and carry on its Business.

456 The Definition and interpretation section contains important definitions for Assumption Deed, Board, Burrup Trust, Burrup Trust Deed, Business, Business Plan and Budget, Chairman, Change in Control (of a Shareholder), Commencement Date, Directors, Nominee Directors, Party, Plant, Relative, Shareholders, Shareholder, Special Majority and Transfer.

'Assumption Deed' means a deed of assumption substantially in the form of AnnexureA.

'Board' means the board of directors of Holdings and when the context permits or requires the board of directors of each company in the Company Group.

'Burrup Trust' means the Burrup Trust ABN 89 065 613 395 established under the Burrup Trust Deed.

'Burrup Trust Deed' means the trust deed dated 22 June 2001 as amended by a deed of variation dated 17 January 2002.

'Business' means the business of owning and operating the Plant and selling anhydrous ammonia to international or domestic markets and such other activities as the Shareholders may from time to time determine.

'Business Plan and Budget' means a business plan and budget for the Company Group from time to time, including without limitation:

(a) detailed operating, capital expenditure and cashflow budgets for the relevant Financial Year of each company in the Company Group and a pro-forma balance sheet for that Financial Year;

(b) any plans or proposals, future investments or other activities of the Company Group; and

(c) such other matters as the Directors from time to time resolve.

'Chairman' means the Chairman of the Board from time to time appointed under clause 4.2(a)(i).

'Change in Control' of a Shareholder means:

(a) the acquisition by any person, either alone or together with an associate (as defined in the Corporations Act), of a relevant interest (as defined in the Corporations Act) in more than 50% of the issued Shares in the Shareholder or the Holding Company of the Shareholder, but does not include any such acquisition resulting from an on-market or off-market acquisition of securities in a Shareholder or the Holding Company of a Shareholder that is listed on an official stock exchange; or

(b) where the Shareholder is the trustee of any trust:

(i) any change of the trustee of the trust to any person, other than a Relative of the trustee at any time; or

(ii) any person, other than a Relative of the trustee at any time, becomes beneficially entitled to more than 50% of the property or income of the trust.

'Commencement Date' means the date of this Deed.

'Directors' means the directors of Holdings (or where the context permits or requires the directors of each other company in the Company Group) for the time being and includes any alternate director duly appointed and acting as a director and 'Director' means one of them.

'Nominee Directors' in relation to a Shareholder means the Directors nominated to the Board by that Shareholder in accordance with clause 4.1(c) that are present at the Board meeting and 'Nominee Director' means any one of them.

'Party' means a party to this deed.

'Plant' means the Burrup Fertilisers Liquid Anhydrous Ammonia Production Plant.

'Relative' in relation to a person means:

(a) a spouse or de facto spouse of such a person;

(b) a parent, grandparent, son, daughter, sibling, or linear descendant of such a person, spouse or de facto spouse;

(c) an entity over which a person referred to in (a) or (b) has control or two or more such persons together have such control; or

(d) a Related Body Corporate of the person.

'Shareholders' means the people who hold Shares from time to time, and 'Shareholder' means one of them.

'Special Majority' means:

(a) in relation to a resolution ofthe Directors, a resolution that is passed by an affirmative vote of 80% or more of the votes cast by Directors entitled to vote on the resolution in accordance with clause 4.5(a); and

(b) in relation to a resolution of the Shareholders, a resolution that is passed by an affirmative vote of80% or more of the votes cast by Shareholders entitled to vote on the resolution.

'Transfer' means to sell, assign, transfer, convert, surrender, cancel, conveyor otherwise dispose of any Shares.

457 Within cl 1.2 of the SD, subcl (a) notes that subcll (b) through (n) are introduced by a preface which indicates that the meanings apply unless the context indicates a contrary intention. Of significance then are cll 1.2(c), 1.2(l) and 1.2(n).

(c) a reference to any party includes that party's executors, administrators, successors, substitutes and permitted assigns, including any person taking by way of novation;

(l) where a party executes this deed in its capacity as a trustee, a reference to that party includes any substituted or additional trustee;

(n) a reference to time is to the time in Perth, Western Australia.

458 I would also cite the content of Schedule 1, pars 1 through 7, which sets out the matters requiring approval by a Special Majority vote of BHL's directors.

The objectives of the Shareholders are to ensure the continued conduct of the Business, the production and sale of anhydrous ammonia for the benefit of the Company Group and its Shareholders and such other activities, including the development and operation of such other production facilities as determined by the Board in accordance with this deed.

To fulfil the objectives set out in clause 3.1, each Shareholder agrees:

(a) to co-operate and use its best endeavours to ensure that the Company Group successfully carries on the Business;

(b) not to use Confidential Information in a way which damages or is reasonably likely to damage the Company Group or any of the other Shareholders;

(c) not to delay unreasonably any action, approval, direction, determination or decision required of the Shareholder;

(d) to give approvals or make decisions required of the Shareholder in good faith and in the best interests of Holdings and the carrying on of the Business as a commercial venture; and

(e) to be just and faithful in the Shareholder's activities and dealings with the Company Group, the Business and the other Shareholders.

Subject to clause 3.4, each Shareholder must do all on its part necessary and possible to ensure that all the Directors appointed by it and all other employees of or consultants to the Company Group under its authority conduct themselves in a manner wholly consistent with the objectives and commitments set out in this clause 3.

3.4 Directors' obligations under Corporations Act and Constitution prevail

The Parties acknowledge and agree that if there is any inconsistency (whether expressly referred to or to be implied from this deed or otherwise) between clause 3.3 and any obligation imposed on a Director (in his or her capacity as a director of Holdings or of any other company in the Company Group) pursuant to the Corporations Act or the Constitution, the latter will prevail to the extent of the inconsistency.

Nothing in this clause 3 prohibits a Shareholder from charging the Company Group proper and reasonable fees for services the Shareholder provides to any company in the Company Group (directly or indirectly) the terms of which are approved by the Board in accordance with clause 4.5.

(a) (Board): Subject only to the particular responsibilities set out in clauses 4.2(c) and 4.3, which are delegated by the Board to the Chairman and Managing Director respectively, the Board of Holdings will be responsible for the overall direction and control of the management of Holdings including the formulation of policies to be applied in the conduct of the Business.

(b) (Maximum number): On and from the Commencement Date, the Board of each company in the Company Group must consist of no more than 5 Directors (excluding alternate directors).

(c) (Appointment): For as long as it holds 5% or more of the issued share capital of Holdings, Yara may appoint one non-executive director to the Board of each company in the Company Group. For as long as he holds 5% or more of the issued share capital of Holdings, Pankaj Oswal may appoint the remaining 3 directors to the Board of each company in the Company Group. Holdings will appoint to the Board of each other company in the Company Group the persons nominated by the Shareholders in accordance with this clause.

(d) (Removal): Provided that the Shareholder has complied with clauses 4.1(c) and 4.1(t), a Director may only be removed by the Shareholder who appointed him. To remove a Director, the Shareholder who appointed him must give notice to the relevant company in the Company Group. The removal notice takes effect on the date that the removal notice is deemed given under clause 21(e).

(e) (Manner of appointment and removal): Every appointment and removal of a Director takes effect when the written notice of appointment or removal is received at the Registered Office. However, in the case of an appointment, the appointment takes effect when the written consent to act as a director is received at the Registered Office if that is later than the receipt of the notice of appointment.

(f) (Resignation): If at any time a Shareholder holds less than the percentage of Shares in Holdings referred to in clause 4.1(c), the Shareholder must ensure that its appointee Director(s) resign from the Board with effect from the date on which the Shareholder first held less than that percentage.

(g) (Directors and officers insurance): Holdings, must and must cause each other company in the Company Group, to obtain directors and officers insurance, insuring each Director in respect of acts and omissions of that Director in his or her capacity as a Director of that company, other than in respect of fraud or breaches of trust or fiduciary duties, and otherwise for amounts and on terms approved by the Board.

(h) (Director's deeds): Holdings must, and must cause each other company in the Company Group to, enter into a deed with each Director whereby:

(i) to the extent permitted by law (including the governing law of this deed), the relevant company indemnifies that Director in respect of acts and omissions of that Director in its capacity as a Director of that company, other than in respect of fraud or breaches of trust or fiduciary duties;

(ii) the relevant company undertakes to insure that Director in respect of acts and omissions of that Director in his or her capacity as a Director of that company other than in respect of fraud or breaches of trust or fiduciary duties; and

(iii) the relevant company provides reasonable access to that Director to the company's records including a right of access after cessation of directorship, if the records concern liability arising whilst the Director in question was a director.

(i) (Expenses): Each company in the Company Group shall reimburse each Director in respect of all reasonable expenses incurred by the Director in performing its role as a Director of that company.

(j) (Alternate Directors): Any Director may appoint a person to be his or her alternate Director to act in his or her place at such times as the Director may determine and remove his or her alternate Director, subject to the discretion of the Shareholder or Shareholders who appointed the Director under clause 4.1(c) .

(k) (Rights of alternate Director): An alternate Director appointed in accordance with clause 4.1(j):

(i) may act in the place of the Director who appointed him or her;

(ii) is entitled to attend and vote and be counted in determining a quorum at any meeting of the Board except while the Director who appointed him or her is present;

(iii) has all the rights and powers of the Director who appointed him or her (except the power to appoint an alternate Director) and is subject to the duties of the Director who appointed him or her; and

(iv) may act as an alternate Director to more than one Director and is entitled to exercise the votes of each Director who appoints him or her where the appointing Director is not present.

(a) (Appointment and removal): The Directors, by a resolution approved by a simple majority:

(i) may appoint one of their number as Chairman of the Board; and

(ii) can remove that Chairman.

(b) (Casting vote): The Chairman does not have a casting vote in addition to any vote he or she may otherwise have as a Director.

(c) (Responsibilities): The Chairman is responsible for (amongst other things):

(i) chairing meetings of the Board;

(ii) providing leadership of the Board, ensuring its effectiveness on all aspects of its role and setting its agenda;

(iii) ensuring the provision of accurate, timely and clear information to Directors where the Chairman is required to provide, or procure the provision of, such information;

(iv) ensuring effective communication between the Company Group and the Shareholders;

(v) arranging the regular evaluation of the performance of the Board, its committees (if any) and individual Directors; and

(vi) facilitating the effective contribution of non-executive Directors and ensuring constructive relations between executive and non-executive Directors.

The Managing Director is responsible for (amongst other things):

(a) day to day running of all aspects of the Company Group's Business under delegated authority from the Board (including weekly management meetings as well as daily meetings with various managers as required);

(b) providing leadership of the Company Group's management team;

(c) liaising with and instructing the Company Group's external legal, technical, accounting, finance and other advisors;

(d) presenting the annual Business Plan and Budget to the Board for approval;

(e) implementing policies and strategies set by the Board;

(f) providing accurate and reliable information to the Board where the Managing Director is required to provide, or procure the provision of, such information;

(g) project cost controls, capital expenditure and operating expenditure budgets, cashflow and treasury functions;

(h) operation and maintenance of the Plant, including achievement of production goals and schedules, compliance with safety and environmental requirements, achievement of quality standards, management of information technology, minimisation of interfaces, control of operating costs, reduction or elimination of duplication, and optimisation of staffing levels;

(i) logistics and freight negotiations;

(j) compliance with corporations law and taxation legislation and other statutory obligations;

(k) risk management, including management of financial, environmental, construction, process and operational risks;

(l) business development and investigation of potential new projects; and

(m) all other matters within the usual scope of responsibilities of a managing director of a company in the Company Group's circumstances.

(a) (Frequency): At least 4 Board meetings for Holdings must be held each Financial Year unless otherwise determined by approval of the Directors.

(b) (Convening): A Director may at any time, and the company secretary will on the request of a Director, convene a meeting of the Directors and include on the agenda for that meeting such items of business or resolutions as proposed by such Director.

(c) (Notice of meetings): Directors must be given at least 7 Business Days' notice of a Directors' meeting, unless otherwise agreed by all Directors.

(d) (Agenda): The notice of a Directors' meeting must include an agenda and, unless all Directors otherwise agree, a Board meeting may only resolve matters specifically referred to in the agenda. Subject to clause 4.4(b) the Chairman and company secretary after consultation with the Directors, must determine the contents of the agenda.

(e) (Quorum): A quorum for Board meetings is constituted by the attendance (in person, by telephone or by live audio-visual transmission) of a Director appointed by each Shareholder that is entitled to appoint a Director under clause 4.1(c).

(f) (Adjournment): If at least one Director appointed by each Shareholder entitled to appoint a Director in accordance with this deed is not present (either in person, by telephone or by live audio-visual transmission) at a Board meeting, the meeting must be adjourned and reconvened at such time and place as reasonably determined by the Directors present (provided that notice of the time, date and place of the reconvened meeting must be given to each Director not less than 72 hours before the meeting and the reconvened meeting must not be held sooner than 7 days after the date of the adjourned meeting).

(g) (Quorum at reconvened meeting): Unless the matters to be considered at the reconvened meeting require the approval of a Special Majority of Directors pursuant to clause 4.5(b)(ii) (in which case the quorum shall be as stipulated under clause 4.4(e)), the quorum for a meeting reconvened in accordance with clause 4.4(f) is a majority of the Directors entitled to attend and vote at a Board meeting.

(h) (Personal interest): If a Director has a material personal interest in a matter to be discussed or determined at a Board Meeting, he or she must disclose that to the Board prior to or at that particular meeting. Subject to the Corporations Act and the Constitution, a Director who is ordinarily entitled to attend and vote at a Board Meeting but who is specifically excluded by any requirement of the Corporations Act or the Constitution from a particular meeting due to him or her having a material personal interest in a matter to be discussed or determined at that particular meeting, will be counted as a Director entitled to attend and vote at a meeting for the purposes of determination of the quorum in accordance with this clause 4.4.

(i) (Attendance by telephone): The contemporaneous linking together by telephone or other electronic means of a number of the Directors sufficient to constitute a quorum constitutes a meeting of the Board. A Director participating in a meeting by telephone or electronic means is taken to be present at the meeting. There must always be an ability for Directors to participate in any meeting of Directors by telephone or other electronic means.

(j) (Circulating resolutions): The provisions of clause 4.5 apply to resolutions of the Board passed by circulating resolution such that the Directors may pass a resolution without a Directors' meeting being held if a simple majority (or if required under clause 4.5, a Special Majority) of the Directors entitled to vote on the resolution sign a document that they are in favour of the resolution set out in the document provided that notice of the proposal to pass the written resolution is provided to all Directors prior to it being passed. This clause 4.4(j) applies despite any provision of the Constitution.

(i) The Nominee Directors appointed by each Shareholder and present and entitled to vote at a Board meeting are collectively entitled to one vote at a Board meeting for each Share held by the Shareholder that appointed those Nominee Directors.

(ii) If a person is a Director and is also appointed as an alternate Director for one or more Directors, the person appointed as an alternate Director is entitled to as many votes as the Directors he or she is acting for would have been entitled had they been present, in addition to his or her own vote (provided that the Directors who appointed the person as an alternate Director are not present).

(iii) Where a Shareholder is not represented by a Nominee Director at a Board meeting reconvened in accordance with clause 4.4(f) then those Nominee Directors that are present at that reconvened Board meeting will have that number of votes as the number of Shares held by the Shareholder that appointed them bears to the total number of Shares held by all Shareholders who have Nominee Directors present and entitled to vote at that reconvened Board meeting.

(i) (Simple majority): Subject to clause 4.5(b)(ii) decisions by the Board must be made by a simple majority vote.

(ii) (Special Majority): Decisions on any matter set out in Schedule 1 must be made with the approval of a Special Majority of Directors.

(a) (Attendance by telephone): The contemporaneous linking together by telephone or other electronic means of a number of the Shareholders sufficient to constitute a quorum constitutes a general meeting of the Shareholders. A Shareholder participating in a meeting by telephone or such electronic means is taken to be present at the meeting. There must always be an ability for Shareholders to participate in any meeting of Shareholders by telephone or other electronic means.

(b) (Voting):

(i) (Simple majority): Subject to the Corporations Act and clause 4.6(b)(ii), all decisions of the Shareholders in general meeting must be made by a simple majority vote.

(ii) (Special Majority approval): Decisions on any matters set out in Schedule 2 must be made with the approval of a Special Majority of all Shareholders.

(c) (Corporations Act and Constitution): In all other respects, the Corporations Act and the Constitution govern the matters relating to general meetings of Holdings.

A Shareholder must not Transfer Shares it holds or to which it is entitled except:

(a) as set out in clauses 9.2, 9.3 or 9.5;

(b) either pursuant to or for the purposes of an initial public offering in relation to a listing of Holdings on a stock exchange ('IPO'); or

(c) where all the Shareholders otherwise agree.

(a) (Permitted Transfer): A Shareholder may Transfer some or all of its Shares to a Related Body Corporate of that Shareholder (for the purposes of this clause only, 'Subsidiary') if, in addition to complying with clause 9.7, the Shareholder and the Subsidiary agree that the Shares must be re-transferred to the Shareholder if the Subsidiary ceases to be wholly owned by the Shareholder or its ultimate holding company.

(b) (Shareholder remains liable): A Shareholder remains liable for the performance of the duties, responsibilities and obligations assumed by any Subsidiary, except that performance by the Subsidiary will, to the extent so performed, discharge the Shareholder from the performance of those duties, responsibilities and obligations.

(c) Any Transfer of Shares pursuant to this clause 9.2 does not need to be in accordance with clause 9.1 or clause 10.1 of this deed.

Subject to clause 9.1, a Shareholder must not Transfer, directly or indirectly, its Shares unless it first issues a Transfer Notice to the Board in accordance with clause 10 and complies with clauses 10 and 11 inclusive in respect of that Transfer.

If there is a Change in Control of a Shareholder (other than under clause 9.2) that Shareholder must promptly notify Holdings and each other Shareholder of that Change in Control including details of the nature of the change.

If there is a Change in Control of a Shareholder (other than under clause 9.2) then, regardless of whether the Shareholder has served notice in accordance with clause 9.4,the Shareholder is deemed to have issued a Transfer Notice in accordance with clause 9.6 for all of its Shares and clause 10.2 applies as if there had been a Transfer of those Shares except that the Shareholder is not deemed to have specified a Prescribed Price (as defined in clause 10.2) and the Shareholders will procure the auditors of Holdings to value the Offered Shares (as defined in clause 10.1) in accordance with clause 10.6, but at the cost of the Shareholder who has undergone the Change in Control.

Where a Transfer Notice is deemed to be issued by operation of clause 9.5, clause 10 will apply to the sale of those Shares and each Shareholder waives any rights it may have against the other Shareholders to claim relief from forfeiture or to claim that the operation of this clause is a penalty.

Unless all the other Shareholders otherwise agree, the following conditions of Transfer must be satisfied before a Transfer of Shares is effective:

(a) where Shares are proposed to be Transferred to a third party (including a Subsidiary under clause 9.2 but not including a Transfer pursuant to or for the purposes of an IPO) the third party must execute and deliver to each other Shareholder an Assumption Deed;

(b) subject to compliance with the Corporations Act:

(i) all loans from Holdings to the Shareholder Transferring its Shares are repaid in full; and

(ii) all loans to Holdings from the Shareholder Transferring its Shares are repaid in full and replaced by loans from the transferee to Holdings and supporting securities commensurate with those held by or given by the transferor in relation to Holdings; and

(c) if the Transfer of Shares requires the approval of any relevant authority, then that Transfer is conditional on the approval of that relevant authority on terms acceptable to the transferor and transferees, acting reasonably.

Subject to clauses 9.l(b), 9.l(c) and 9.2, before Transferring any Shares (otherwise than pursuant to or for the purposes of an IPO, save where a Shareholder proposes to dispose of all or some of their Shares through the IPO to a single purchaser), the Shareholder proposing to Transfer the Shares ('Proposing Transferor') must give a notice ('Transfer Notice') to the other Shareholders ('Other Shareholders') and to Holdings that it wants to Transfer the Shares specified in the Transfer Notice ('Offered Shares'). A Transfer Notice may include a condition that if not all the Shares are sold then none will be sold. For the avoidance of doubt, the Parties acknowledge and agree that the provisions of this clause 10 will apply if a Shareholder proposes to dispose of all or some of their Shares through the IPO to a single purchaser (such that a single person or entity would purchase all of the Shares offered for sale through the IPO by that Shareholder, regardless of whether the number of Shares offered for sale through the IPO is all of the Shares owned by that Shareholder, or some lesser proportion of their Shares), but otherwise those provisions will not apply to any Transfer of Shares pursuant to or for the purposes of an IPO.

A Transfer Notice must specify the price per Share expressed in Australian Dollars or US Dollars ('Prescribed Price') at or above which the sale is to proceed. In all other respects, the Transfer Notice must be unconditional.

A Transfer Notice must have annexed to it a statutory declaration by an authorised officer of the Proposing Transferor as to whether or not the Proposing Transferor has received from any third party ('Offeror') a bona fide arm's length offer (which for this purpose includes a firm expression of willingness) to purchase the Offered Shares at or above the Prescribed Price. If it has, the authorised officer must declare in the statutory declaration the name of the Offeror, the price at which the Offeror is prepared to purchase the Offered Shares and any other terms of such offer.

The Proposing Transferor cannot revoke a Transfer Notice once given except with the consent of the Other Shareholders.

A Transfer Notice constitutes an offer to sell the Offered Shares to the Other Shareholders at the Prescribed Price. The offer must remain open for a period of 60 days commencing on the date of the giving of the Transfer Notice ('Offer Period').

(a) (Acceptance Notice): Any Other Shareholder entitled to accept the offer in accordance with clause 10.5 may, by notice ('Acceptance Notice') to the Proposing Transferor before 4.00 pm on the last day of the Offer Period, accept the offer and must state the number of Shares being accepted. An Acceptance Notice once given is irrevocable.

(b) (Request for valuation): Where no offer has been received from a third party at or above the price referred to in the Transfer Notice, any Other Shareholder wishing to lodge an Acceptance Notice but disputing the price of the Shares may ask for a valuation to be carried out by the auditors of Holdings or an independent firm of accountants nominated by the President for the time being of the Institute of Chartered Accountants in Australia (Western Australia Branch) (either of which is to be referred to as the 'Valuer' for the purpose of this sub-clause) at the Other Shareholder's cost. The Valuer must value the Shares on the basis of an arm's length sale between a willing but not anxious buyer and a willing but not anxious seller. The parties must use all reasonable endeavours to procure that such a valuation be obtained and advised to all Shareholders within 60 days of a request for valuation, and the Offer Period will be extended if required for 7 days after the valuation is obtained. The Valuer's valuation will become the Prescribed Price for the purpose of this subclause only if lower than the price specified by the Proposing Transferor.

(c) (Allocation of Shares pro rata): Where Acceptance Notices are received for a greater number of Shares than the Offered Shares, the Offered Shares will be allocated among the Other Shareholders so accepting as nearly as may be in proportion to their respective holdings of Shares.

If Acceptance Notices are received for all the Offered Shares the Proposing Transferor must immediately upon the close of the Offer Period, notify each Other Shareholder who has lodged an Acceptance Notice as to the number of the Offered Shares it is required to purchase, namely the number accepted by it or allocated to it, as the case may be. The Proposing Transferor must also give a copy of such notice to Holdings. Each such Other Shareholder must purchase that number of Offered Shares by payment of the Prescribed Price (or the price determined by the valuer where clause lO.6(b) applies) within 3 Business Days or such other period as may be agreed after the notice from the Proposed Transferor. Payment must be made in cleared funds and in the absence of agreement to the contrary will occur at the Registered Office at 12 noon on such third Business Day.

The Proposing Transferor will be bound, upon payment by each Other Shareholder, to Transfer the appropriate number of Shares to that Other Shareholder and to hand over a transfer duly executed by it in respect of those Shares with the certificates for those Shares. The Proposing Transferor's obligations to Transfer such Shares to each Other Shareholder is conditional on its receiving payment from that Other Shareholder for all the Offered Shares which that Other Shareholder is required to purchase from the Proposing Transferor.

If a Proposing Transferor, after having become bound to Transfer any Shares to any Other Shareholder, defaults in Transferring such Shares, Holdings:

(i) execute on behalf of and as attorney for the Proposing Transferor any necessary transfer; and

(ii) receive the purchase moneys;

(i) (subject to any other legal requirements in respect of the Transfer) cause the name of the Other Shareholder to be entered in the register of members of Holdings as holder of such Shares; and

(ii) hold the purchase moneys in trust for the Proposing Transferor.

The receipt by Holdings of the purchase moneys will be a good discharge to the Other Shareholder (who will not be bound to see to the application of those moneys) and after the name of the Other Shareholder has been entered in the register in purported exercise of the aforesaid powers, the validity of the proceeding will not be questioned by any person. Holdings must promptly endeavour to account to the Proposing Transferor for the purchase moneys.

10.10 Transfer permitted to third party, by default

If at the close of the Offer Period Acceptance Notices have not been received for all the Offered Shares, then the proposing Transferor must promptly (and in any event within 3 Business Days) notify Holdings and each Other Shareholders of this fact and subject to clause 10.1 the Proposing Transferor may at any time up to the expiration of 3 months after the close of the Offer Period Transfer all or any part of the Offered Shares to any other third party on a bona fide arm's length basis at any price per Share not being less than the Prescribed Price and on other terms and conditions not more favourable to the third party than the terms and conditions contained in the Transfer Notice.

If Holdings proposes to allot and issue Shares to a person who is not already a Shareholder otherwise than pursuant to or for the purposes of an IPO, the Shareholders must procure the Board to make the allotment and issue conditional on the proposed allottee first executing an Assumption Deed.

The Shareholders must procure the Board to refuse to register the Transfer of any Shares to a person who is not already a party to this deed unless that Transfer is made pursuant to or for the purposes of an IPO or that person has executed an Assumption Deed.

Where any Shareholder enters into this deed in its capacity as trustee of any trust that Shareholder warrants to the other Shareholders that:

(a) (sole trustee): it is the sole trustee of the relevant trust and that no action has been taken to remove or replace it;

(b) (vesting day): the distribution date or vesting day referred to in the relevant trust deed constituting the relevant trust has not arrived or been appointed;

(c) (power and authority): it has the power under the relevant trust deed to enter into and complete this deed and that all necessary consents and notices in relation to the exercise by the Shareholder as trustee of such power have been given before, and will not be revoked on or before, the Commencement Date; and

(d) (full indemnity): it has a right to be fully indemnified out of the relevant trust fund subject to the following restrictions and limitations:

(i) in the case of Pankaj Oswal as trustee for the Burrup Trust, except in the case of dishonesty or wilful breach of trust and provide that the liability is incurred by the trustee as trustee of the Burrup Trust.

Each Shareholder covenants and agrees with and for the benefit of the other Shareholders to:

(a) (not use Holdings' assets for own benefit): not at any time either directly or indirectly deal with or employ any assets, stock, supplies, money, credits or other effects from time to time belonging or owing to the Company Group for its own use or benefit;

(b) (conduct Business for Holdings): conduct all business and administrative aspects of the Business in all respects on behalf of and in the name of Holdings and not in its own name;

(c) (no act to prejudicially affect Company Group): not do or suffer any act or thing whereby the Business or any of the assets of the Business or any other property of the Company Group may become liable to be seized in execution, charged or affected or whereby the interests of the Company Group may be prejudicially affected or impaired;

(d) (utmost good faith): show the utmost good faith and attention to the affairs of Holdings and use its best endeavours to promote develop and extend the Business and the interests of Holdings generally; and

(i) a general meeting of Holdings; or

(ii) a meeting of the Board of a company in the Company Group,

a proposed resolution that requires the approval of a Special Majority of the Directors or Shareholders, as the case may be, is not passed; or

(b) a meeting of the Board of a company in the Company Group that has been reconvened in accordance with clause 4.4(f) a motion or resolution cannot be considered due to the lack of a quorum of Directors; and

after an interval of not less than 15 Business Days and not more than 40 Business Days from the date of such meeting a resolution in identical terms to the first resolution is put to a meeting of the same body and again is either,

(c) not passed; or

(d) in the case of a motion or resolution put to a meeting of the Directors of a company in the Company Group (which has been reconvened in accordance with clause 4.4(f)) cannot be considered due to a lack of quorum,

then a Deadlock occurs and the dispute resolution provisions of clause 15.1 will apply.

Subject to clause 15.1, nothing in clause 14 prevents all the Shareholders from agreeing to another solution for a Deadlock.

(i) one Shareholder becomes the holder of all the hares and all rights to subscribe for or convert any security into further Shares;

(ii) there is a listing of Holdings on a stock exchange or any or all of Holdings' Shares are quoted or listed on a stock exchange; or (iii) the Shareholders agree in writing to terminate this deed, then this deed will, without further action required by any Shareholder, automatically terminate.

(b) (Consequences): If this deed is terminated under clause l6.2(a) then, in addition to other rights, powers or remedies provided by law:

(i) each party is released from its obligations to perform this deed further, except those imposing obligations of confidentiality; and

(ii) each Shareholder retains the rights it has against each other Shareholder in respect of any past breach.

(c) (For outgoing Shareholder): This deed will also be terminated for anyone Shareholder when it ceases to hold, directly or indirectly, any Shares. In that case, the provisions of clause l6.2(b) still apply.

'Force Majeure' means an act, event or cause which is beyond the reasonable control of the Shareholders, including:

(a) act of God, peril of the sea, accident of navigation, war, sabotage, riot, insurrection, civil commotion, national emergency (whether in fact or law), martial law, fire, lightning, flood, cyclone, earthquake, landslide, storm or other adverse weather conditions, explosion, power shortage, strike or other labour difficulty (whether or not involving employees of the Shareholder concerned), epidemic, quarantine, radiation or radioactive contamination;

(b) action or inaction of a government or other competent authority (including a court of competent jurisdiction), including expropriation, restraint, prohibition, intervention, requisition, requirement, direction or embargo by legislation, regulation, decree or other legally enforceable order; and

(c) breakdown of plant, machinery or equipment or shortages of labour, transportation, fuel, power or plant, machinery, equipment or material.

If a Shareholder ('Affected Shareholder') becomes unable, wholly or in part, by Force Majeure to carry out an obligation placed on it under this deed:

(a) the Affected Shareholder must give to the other Shareholders prompt written notice of:

(i) reasonable particulars of the Force Majeure; and

(ii) so far as is known, the probable extent to which the Affected Shareholder will be unable to perform or be delayed in performing its obligation;

(b) the relevant obligation, so far as it is affected by the Force Majeure, will be suspended during, but no longer than, the continuance of the Force Majeure; and

(c) the Affected Shareholder must use all possible diligence to overcome or remove the Force Majeure as quickly as possible. The Affected Shareholder will not have to settle any labour or other dispute creating the Force Majeure on terms contrary to its wishes or to contest the validity or enforceability of any law, regulation or decree by way of legal proceeding.

(a) a partnership between the Shareholders (or any of them) and Holdings; or

(b) a relationship of principal and agent between the Shareholders or between the Shareholders (or any of them) and Holdings.

No Shareholder may act or has any authority to act as agent of or in any way bind or commit another Shareholder to any obligation, representation or warranty.

The rights, duties, obligations and liabilities of the Shareholders under this deed are several and not joint nor joint and several.

1. Relationship between the Shareholders and Holdings

(a) exercise all its rights, powers and remedies in relation to Holdings and each other company in the Company Group in a way that gives effect to the terms of this deed;

(b) cause all votes that may be cast either by it or by any other person under its control or influence at general meetings of Holdings to be cast in a way that gives effect to the terms of this deed; and

(c) subject to clause 3.4, procure that any Director of Holdings or any other company in the Company Group nominated by it or by any other person under its control or influence must cast all votes that may be cast at meetings of the Board in a way that gives effect to the terms of this deed.

Holdings and BFPL undertake to do such things as are necessary to give effect to the terms of this deed and to comply with their obligations under the deed.

1. Relationship between this deed and the Constitution

The Shareholders agree that the instruments that govern the relationship amongst themselves and between themselves and Holdings are this deed and the Constitution and-it is intended that this deed and the Constitution be read together.

As between the Shareholders, if there is any inconsistency (whether expressly referred to or to be implied from this deed or otherwise) between the provisions of this deed and those of the Constitution, the Constitution is to be read subject to this deed and the provisions of this deed prevail to the extent of the inconsistency.

Nothing in this deed is deemed to constitute an amendment to the Constitution. However, if it is necessary for any term of this deed to be effective that that term be included in Constitution, then each Shareholder must procure the amendment of the Constitution accordingly.

Each Shareholder undertakes with each other Shareholder to:

(a) exercise all rights, powers and remedies under the Constitution so as to give full force and effect to the terms of this deed; and

(b) observe and comply fully and properly with the Constitution to the intent and effect that the Constitution will be enforceable by the Shareholders amongst themselves and in whatever capacity.

This deed is governed by and is to be construed according to the laws of Western Australia.

(a) (Acceptance of jurisdiction): Each Shareholder irrevocably submits to and accepts generally and unconditionally the non-exclusive jurisdiction of the courts and appellate courts of Western Australia with respect to any legal action or proceedings which may be brought at any time relating in any way to this deed.

(b) (No objection to inconvenient forum): Each Shareholder irrevocably waives any objection it may now or in the future have to the venue of any action or proceedings, and any claim it may now or in the future have that the action or proceeding has been brought in an inconvenient forum.

Any provision of this deed which is illegal, void or unenforceable is only ineffective to the extent of that illegality, voidness or unenforceability, without invalidating the remaining provisions.

No waiver or indulgence by any party to this deed is binding on the Shareholders unless it is in writing. No waiver of one breach of any term or condition of this deed will operate as a waiver of another breach of the same or any other term or condition of this deed.

The Shareholders will promptly do and perform all further acts and execute and deliver all further documents required by law or reasonably requested by any other Shareholder to carry out and effect the intent and purpose of this deed.

(a) (No merger): The rights and obligations of the parties in respect of representations, warranties, undertakings and indemnities in this deed will be continuing representations, warranties, undertakings and indemnities and accordingly will not be merged or extinguished except on termination of this deed.

(b) (Continuing nature of deed): Notwithstanding termination, the provisions of this deed will remain in full force and effect as to the obligations of the parties remaining to be performed after termination.

This deed and the Constitution constitute the sole and entire agreement between the parties in relation to the subject matter they deal with and contain all of the representations, warranties, undertakings and agreements of and between the Shareholders. The Shareholders accept that they rely on only those matters expressly set out in this deed and the Constitution as they supersede all prior negotiations, contracts, arrangements or understandings with respect to the subject matter dealt with in this deed and the Constitution (including, but not limited to, the Shareholders Deed dated 31 March 2005 between Yara, Pankaj Oswal, Vikas Rambal as trustee for the Vikas Rambal Trust, Holdings and BFPL). There are no representations warranties, undertakings or agreements between the parties, expressed or implied, except as set out in this deed or the Constitution.

Schedule 1 [to the SD]

Matters requiring approval of a Special Majority of the Directors

1. (Business Plan and Budget): The approval of the annual Business Plan and Budget and any material departure from or variation to the annual Business Plan and Budget, provided that such approval in each case will not be unreasonably withheld by any Director and to the extent that the rationale, substance and approach adopted for the proposed Business Plan and Budget does not vary in any material respect to the rationale, substance and approach adopted for the most recently approved Business Plan and Budget then the proposed Business Plan and Budget will be approved.
2. (Activities outside Business Plan and Budget): The undertaking of any material activities or transactions by any company in the Company Group, including without limitation capital expenditure, operating expenditure, disposals of assets or incurring liabilities, which are not provided for in the then approved Business Plan and Budget provided that if the value of such expenditure, asset or liability when aggregated with all other such expenditure, assets or liabilities in the 12 month period preceding the proposed date of such expenditure, disposal or incurring such liability is less than US$7,000,000 then it is not material for the purposes of this clause.
3. (Share capital and securities): The issue of, or agreement to issue, Shares, convertible notes, options to take up unissued Shares, or other securities in the capital of any company in the Company Group or the offer of or invitation to subscribe for Shares or other securities of any company in the Company Group.
4. (Listing): Any proposal for the public listing of Holdings' Shares or the shares or securities of any company in the Company Group.
5. (Finance): Obtaining new or materially increasing existing external borrowings, where the total of all external borrowings exceeds the limits determined by the Directors and where no limits have been set then any new or increased external borrowings or provision of guarantees or indemnities by any company in the Company Group to any third party that exceeds the limits previously determined by a Special Majority of the Directors and where no limits have been set then any guarantee or indemnity or the grant of any Encumbrance over any assets of any company in the Company Group PROVIDED THAT a Special Majority of the Directors will only be required pursuant to this paragraph 5 to approve a terms sheet in respect of any new or materially increased external borrowing and otherwise the negotiation, settling and approval of documentation in connection with such external borrowing is within the discretion and authority of the Managing Director.
6. (Dividends): The determination of a reasonable policy for the declaration of dividends by the companies in the Company Group which policy is to take into account the circumstances of the Company Group and recognise the Shareholders desire to maximise returns to the Shareholders while making adequate provision for the future growth and development of the Company Group.
7. (Related party transactions): Any determinations or decisions with respect to any matters between a company in the Company Group and one or more Shareholders or any Related Bodies Corporate of any Shareholders including without limitation:

(a) entering into any contract, arrangement or undertaking with any such party;

(b) the determination of any matters relating to provision of funding to Holdings by any Shareholders or any Related Body Corporate of any Shareholders; and

(c) compromising or compounding or releasing or discharging any debt due to any company in the Company Group by any shareholder or any Related Body Corporate of a Shareholder. For the avoidance of doubt, this paragraph 7 does not apply to the Anhydrous Ammonia Offtake and Marketing Support Agreement dated 13 December 2002 between BFPL and Yara Asia Trade Pty Ltd.

459 What follows is the pro forma draft Assumption Deed which is Annexure A to the SD:

For the purposes of this deed the terms which are defined in clause 1 of the Shareholders' Deed have the same meanings when used in this deed.

2.1 New Shareholder to become a party to Shareholders Deed

The New Shareholder agrees to become a party to the Shareholders' Deed and to:

(a) assume all the rights enjoyed by the [Transferor/other Shareholders] under the Shareholders' Deed; and

(b) be bound, with the necessary changes, by the terms, conditions, restrictions and obligations set out in the Shareholders' Deed in every way as if the New Shareholder were named as a party to the Shareholders' Deed [instead of the Transferor/in addition to the other Shareholders].

However, the New Shareholder will not be liable for any:

(a) breach by the Transferor under the Shareholders' Deed that occurred; or

(b) liability of the Transferor under the Shareholders' Deed that was incurred,

For the purposes of the Shareholders' Deed the address of the New Shareholder to which all notices, consents, requests and other documents required to be given or sent is as follows:

This deed is governed by and construed in accordance with the laws from time to time of the State of Western Australia and the New Shareholder agrees to submit itself to the jurisdiction of the Courts of that State.

460 Following are clauses from the SSA which are of importance to construction issues discussed in these reasons.

Parties Pankaj Oswal of care of Level 8, 225 St George's Terrace, Perth, Western Australia (Seller)

Yara Australia Pty Ltd 076 301 221 of 20l Mill Street, Mezzanine Level, North Sydney, New South Wales (Buyer)

Radhika Oswal of care of Level 8, 225 St George's Terrace, Perth, Western Australia (Radhika Oswal)

Pankaj Oswal in his capacity as trustee of the Burrup Trust of care of 'Level 8, 225 St George's Terrace, Perth, Western Australia (Burrup Trustee)

Background

1. The total issued share capital of the-Company is 1,100,041,421 ordinary fully paid shares,
2. The Seller owns 35% of the issued shares in the Company, the Buyer owns 30% of the issued shares of the Company and the remaining 35% of the issued shares in the Company are owned by Radhika Oswal.

1. The Seller wishes to sell the Shares and the Buyer wishes to buy the Shares on the terms and conditions of this agreement.

1. Following the purchase of the Shares, the Buyer will own 35% of the issued shares in the Company and the Seller will own 30% of the issued shares in the Company.

Burrup Offtake Agreement means the agreement entitled 'Anhydrous Ammonia Offtake and Marketing Support Agreement' dated 13 December 2002 made between Burrup Fertilisers Pty Ltd and Yara Asia Trade Pte Ltd.

Burrup Shareholders Deed means the shareholders deed between the Buyer, the Burrup Trustee, the Company and. BFPL dated 24 March 2008.

Burrup Trust means the Burrup Trust ABN 89 065 613 395 established under the Burrup Trust Deed.

Burrup Trust Deed means the trust deed dated 22 June 2001 as amended by a deed of variation dated 17 January 2001.

Completion Date means the date on which Completion occurs.

IPO means the initial public offering contemplated in clause 6 under which the Company will be listed. on the ASX or another recognised international securities exchange agreed to by the parties.

MOU has the meaning given to that term in clause 9(a).

Oswal Parties means the Burrup Trustee, Pankaj Oswal and Radhika Oswal, jointly and severally.

Plant means the anhydrous ammonia plant on the Burrup Peninsula at Karratha, Western Australia which is operated by Burrup Fertilisers Pty Ltd as at the date of this agreement.

Purchase Price means the Completion Payment as adjusted in accordance with clause 7.

Seller's Warranties means the warranties set out in Schedule 1.

Shares means 55,002,071 ordinary fully paid shares in the: capital of the Company comprising 5%of the total issued ordinary .shares in the Company, being l,100,041 ,421 ordinary shares.

Shri Krishna Holdings means Shri Krishna Holdings Pty Ltd CAN 112 217 160.

Shri Krishna Shareholders Deed means the shareholders deed between the Buyer, Pankaj Oswal in his own capacity and as trustee for the Burrup Trust and Shri Krishna Holdings dated 31 March 2005.

In this agreement headings are for convenience only and do not affect interpretation and, unless the contrary intention appears:

(a) an obligation or a liability assumed by 2 or more persons binds them jointly and severally and a right conferred on 2 or more persons benefits them jointly and severally;

(c) the word 'including' or any other form of that word is not a word of limitation;

The purchase price payable for the Shares is the Completion Payment subject to possible increase in accordance with clause 7.

(a) on Completion, the Buyer must pay the Completion Payment to the Seller in accordance with clause 7 and clause 15; and

(b) if the Purchase Price is adjusted under clause 7, on the date prescribed in clause7 the Buyer must pay to the Seller the amount determined in accordance with clause 7.

(a) The Oswal Parties represent and warrant that:

(i) Pankaj Oswal in his personal capacity is the legal and beneficial owner of ordinary fully paid shares in the capital representing 35% of the total issued ordinary shares in the capital of the Company; and

(ii) Radhika Oswal is the legal and beneficial owner of ordinary fully paid shares in the capital representing 35% of the total issued ordinary shares in the capital of the Company.

(b) Pankaj Oswal, the Burrup Trustee and Radhika Oswal undertake to execute all documents necessary to join Pankaj Oswal in his personal capacity and Radhika Oswal to the Burrup Shareholders Deed in place of the Burrup Trustee and with such other amendments as agreed by the Buyer and the Oswal Parties. Until such document has been executed, Pankaj Oswal in his personal capacity and Radhika Oswal agree to comply with the Burrup Shareholders Deed as if they were a party to the deed in place of the Burrup Trustee.

(a) Each of the Oswal Parties and the Buyer acknowledge and agree that it is their intention to proceed with an IPO in relation to the Company and listing of the Company on ASX, or another recognised international securities exchange agreed to by the parties at an appropriate time in the future.

(b) Notwithstanding any provision in the Burrup Shareholders Deed, the decision on the exact timing of the proposed IPO in relation to the Company within the 15 months following 9 September 2008, will be made by the Oswal Parties and, if the Oswal Parties determine that the Company will proceed to IPO within that time, the Buyer must take all steps and execute all documents reasonably required by the Oswal Parties or the Company to facilitate the Buyer's participation in the IPO in accordance with clause 6.2.

The Oswal Parties and Buyer agree that if they proceed with an IPO and listing of the Company on ASX or another recognised international securities exchange agreed to by the parties, then each of the Oswal Parties and the Buyer must participate in the IPO by offering for sale that percentage of their respective shares in the capital of the Company determined as follows:

(a) if the Market Capitalisation at IPO is greater than or equal, to US$2,820,000,000 then each of the Oswal Parties and the Buyer shall offer pursuant to the IPO Disclosure Document at least that number of shares in the capital of the Company as is proportional to the number of shares they each respectively hold in the total issued share capital of the Company at the date of issue of the IPO Disclosure Document. [For example if no new shares in the Company are issued pursuant to the IPO and the Oswal Parties and the Buyer together offer 20% of the total issued share capital of the Company pursuant to the IPO Disclosure Document and their respective shareholdings in the Company represent for the Oswal Parties 65% and Buyer 35% of the Company's total issued share capital then the Oswal Parties shall offer 13% and the Buyer shall offer7% of the Company's total issued share capital pursuant to the IPO Disclosure Document];

(b) if the Market Capitalisation at IPO is equal to or greater than US$2,500,000,000 but less thanUS$2,820,000,000 then as a minimum Yara shall offer pursuant to the IPO Disclosure Document that number of shares as equates to not less than 3% of the total issued share capital of the Company; and

(c) if the Market Capitalisation at IPO is less than US$2,500,000,000 then Yara is not obliged, to offer or sell any of its shares in the capital of the Company pursuant to the IPO Disclosure Document.

If the Company lodges an IPO Disclosure Document within 15 months from 9 September 2008 and the Market Capitalisation at IPO is greater than US$2,820,000,000 then the Purchase Price shall be increased such that the Buyer must pay to the Seller the difference between:

(a) the Completion Payment; and

(b) the Completion Payment that would have been received by the Seller if the Seller had sold the Shares for a total price equal to the price at which shares representing 5% of the total issued share capital of the Company would have sold at the price offered pursuant to the IPO Disclosure Document (and if there is more than one offer price for different categories of investors then the weighted average of all offer prices for all shares offered pursuant to the IPO Disclosure Document).

If any amount is payable under clause7.1 the Buyer must pay that amount to the Seller in immediately available funds within 10 Business .Days of the date of listing of the Company on ASX or another recognised International securities exchange agreed to by the parties.

If the amount specified in clause 1.1(a) is more than the amount specified in clause7.1(b), then there shall be no adjustment to the Purchase Price, and no amount is payable by the Seller to the Buyer.

The Oswal Parties and the Buyer confirm and agree, and the Oswal Parties must use all reasonable endeavours to procure that the Company and BFPL agree, that (subject-to and conditional on Completion occurring on or before the End Date), if the Company or BFPL proceed with:

(a) any expansion of the existing Plant; or

(b) any further downstream nitrogen project from, in association or connection with the existing Plant; or

(c) any further downstream nitrogen project which utilizes gas supplied under the gas supply agreements in existence at the date of this agreement relating to the Plant or to which BHL or BFPL are a party at the date of this agreement,

then the Company or BFPL, as appropriate agree to enter into with the Buyer and/or its nominated Related Body Corporate (and the Buyer and/or its nominated Related Body Corporate shall have-the option to enter into) an exclusive long term domestic and export marketing agreement in respect of all products produced from or as a result of such expansion, such long term agreement to be upon terms which are substantially the same as the terms of the Burrup Offtake Agreement with respect to ammonia and at prices to be agreed based upon appropriate reference prices and/or pricing mechanism for other products produced by the Plant.

The Buyer and the Oswal Parties agree and the Buyer and the Oswal Parties must use all reasonable endeavours to procure that the Company and BFPL confirm and agree, subject to and conditional on Completion occurring on or before the End Date:

(a) the terms of the memorandum of understanding between the Buyer and the Company entered into on 10 May 2008 in relation to the TAN Project(MOU);

(b) that the terms of the MOU will be finalised in a formal agreement and exclusive off-take agreement;

(c) the parties will negotiate in good faith the terms of the formal documents to give effect to the MOU and will use their best endeavours to agree to the-terms of such documentation as soon as possible after the date of this agreement;

(d) that at the option of the Oswal Parties, at Completion either -

(i) Shri Krishna Holdings will be wound-up, and the Shri Krishna Shareholders Deed will be terminated; or

(ii) the Oswal Parties will purchase all of the shares in Shri Krishna Holdings held by the Buyer for $1,00, release the Buyer from any and all claims in relation to Shri Krishna Holdings and the Shri Krishna Shareholder Deed shall be. terminated.

The Oswal Parties and the Buyer must procure that the Company and BFPL enter into a deed in the form set out in Schedule 3 to confirm their agreement to the provisions set out in clauses 8 and 9 of this agreement and deliver an original counterpart of that deed duly executed by the Oswal Parties, the Company and BFPL within 5 Business Days of executing this agreement. It is acknowledged that the obligations of the parties under the deed referred to in this clause 10 will only come into force if Completion occurs on or before the End Date.

The Seller warrants to the Buyer that each of the Seller's Warranties is true and correct as at:

(a) the date of execution of this agreement; and

(b) the time immediately prior to Completion.

The Buyer warrants to the. Seller that each of the Buyer's Warranties is true and correct as at:

(a) the date of execution of this agreement; and

(b) the time immediately prior to. Completion.

Each Warranty is to he treated as. a separate warranty and is not limited by reference to any other warranty or any other provision of this agreement.

Each Warranty will remain in full force and effect after Completion and a Warranty Claim is not limited to breaches identified prior to Completion.

The parties acknowledge that the Buyer and Seller have entered into this agreement in reliance on the Warranties.

Without limiting any other remedy available to the Buyer or Seller, the Seller or Buyer (as the case may be) must pay to the other party on demand:

(a) an amount equal to all Indemnified Losses suffered or incurred by the other party arising out of or in connection with the breach or any Warranty; and

(b) an amount equal to any additional Tax assessable on the other party arising out of or in connection with the receipt by the other party of a payment under this clause 12.6 or otherwise in respect of the breach of Warranty.

12.7 Seller and Buyer to notify potential breaches

If before Completion the Seller or Buyer (as the case may be) becomes aware of any fact, matter or circumstance which results in or is reasonably likely to result in a breach of any Warranty given by it before Completion the Seller or Buyer must promptly provide to the other party notice describing that fact; matter or circumstance in reasonable detail.

(a) (sole trustee) it is the sole trustee of the Burrup Trust and that no action has been taken to remove or replace it;

(b) (power and authority) it has the power under the deed constituting the Burrup Trust to enter-into and complete this agreement and that all necessary consents and notices in relation to the exercise by the party as trustee of such power have been given; and

(c) (full indemnity) it has a right to be fully indemnified out of the Burrup Trust fund except in the case of dishonesty or wilful breach of trust and provide that the liability is incurred by the trustee as trustee of the Burrup Trust.

This agreement constitutes the entire agreement between the parties in relation to its subject matter and supersedes all previous agreements and understandings between the parties in relation to its subject matter.

This agreement is governed by the law applying in Western Australia.

The Seller has the legal right and full power and capacity to execute, deliver and perform its obligations under this agreement and has obtained all necessary authorisations and consents and taken all other actions necessary to enable it to do so.

This agreement constitutes (or will when executed constitute) valid legal and binding obligations of the Seller in accordance with its terms.

The execution, delivery and performance of this agreement by the Seller does not and will not result in a breach of or constitute a default under:

(a) any agreement to which the Seller is party;

(b) any law or regulation or any order or judgment of any court or Regulatory Authority to which the Seller is a party or by which the Seller is bound.

The Seller is the sale legal owner of the Shares and has complete and unrestricted power and authority to sell the Shares to the Buyer.

The Shares constitute 5% of the issued share capital of the Company and have been validly issued and fully paid up.

There is no Encumbrance, option, right of pre-emption, right of first or last refusal or other third party right over any of the Shares or any of the shares in the Subsidiaries, other than pursuant to the Burrup Shareholders Deed.

As at 9 September 2008, the total amount owing by all Group Companies:

(a) to any bank, financier or similar financial institution in respect of borrowings or other financial indebtedness was approximately US$360,000,000; and

(b) to all shareholders of the Company was approximately US$30,000,000.

CITATION : OSWAL -v- YARA AUSTRALIA PTY LTD [No 3] [2011] WASC 255 (S)

YARA PILBARA HOLDINGS PTY LTD (Formerly known as BURRUP HOLDINGS LTD)

YARA PILBARA HOLDINGS PTY LTD (Formerly known as BURRUP HOLDINGS LTD)

YARA PILBARA FERTILISERS PTY LTD (Formerly known as BURRUP FERTILISERS PTY LTD)

IAN CARSON, DAVID MCEVOY AND SIMON THEOBALD AS THE RECEIVERS AND MANAGERS

Costs orders - Preliminary issue - Answers on preliminary issue not determinative - No clear outcome for residual litigation - Unresolved issues - Turns on own facts

1 KENNETH MARTIN J: On 14 September 2011 I delivered reasons providing answers to a series of questions framed at six different time periods on agreed preliminary issues: see Oswal v Yara Australia Pty Ltd [No 3] [2011] WASC 255 (primary reasons). No substantive orders were made at that time, although I am advised that an appeal against my decision has been instituted by the first defendant (Yara) and that other parties have filed crossappeals to the Court of Appeal, which are all presently pending.

2 Further issues concerning the same parties subsequently arose in a related action I dealt with: see Oswal v Yara Australia Pty Ltd [2011] WASC 355, delivered 19 December 2011.

3 The question now arises as to dispositive orders following my reasons of 14 September 2011, including as to costs. Somewhat unusually, all parties have moved for costs orders in their favour in the aftermath of those reasons and the answers provided in respect of questions posed as preliminary issues: see primary reasons [451] and following.

4 There have also been some subsequent developments involving these parties and others which have arisen throughout 2012, suggesting the 'sting' may have subsided in what remains to be determined in the present action. In particular, a 49% shareholding in Yara Pilbara Holdings Pty Ltd (YPH), which is the company formerly known as Burrup Holdings Ltd, has been sold to Apache Fertilisers Pty Ltd (Apache). Yara has acquired a further 16% of shares in YPH, taking its shareholding to a majority 51% position.

5 All parties filed extensive written submissions and further affidavit materials for the purpose of having me evaluate arguments over entitlements to the costs of the trial of the preliminary issues.

6 In the end, in the somewhat unique circumstances of the present case, I am of the view that I must reserve all costs issues surrounding the hearing and determination of the preliminary issues, at least until the end outcomes in this litigation become clearer and can translate into substantive final orders or declarations, either on Mrs Oswal's claims, or on the relief Yara seeks by its counterclaim.

7 In brief summary, the following considerations have led me to the view that costs issues should be reserved:

1. The preliminary issues I agreed to resolve at the parties' requests dealt only with contractual construction, mainly in relation to the meaning of certain key clauses in a shareholders' deed and a share sale agreement (the SD and the SSA as defined in the primary reasons).
2. In the wake of answers provided on the construction issues, only the seventh defendants by counterclaim (the former receivers of Yara Pilbara Fertilisers Pty Ltd (YPF), which is the company formerly known as Burrup Fertilisers Pty Ltd) have moved for final consequential orders resolving the claim in this action.

1. The former receivers and managers moved for the complete dismissal of Mrs Oswal's claims. However, dismissal is not appropriate at this time. It is apparent from her pleading that Mrs Oswal raises other causes of action going well beyond issues of pure contractual construction, including statutory oppression, estoppel and rectification. Those arguments have not been considered, let alone resolved. Until then it would be premature to unilaterally terminate Mrs Oswal's action. For instance, it is possible she may still seek declaratory relief concerning her individual right to appoint a director or directors to the board of YPL at some future point, invoking considerations beyond mere contractual construction relating to the SD and the SSA.

1. The position, then, is that final orders cannot be made at this time on either Mrs Oswal's claim or on Yara's counterclaim.
2. The question is whether the outcome of the preliminary issues was such that a successful or substantially successful party or parties can be identified in whose favour costs orders should be made. My view as to that proposition is in the negative.
3. The outcome of the hearing of the preliminary issues, in my view, saw no party as entirely successful in having all propositions they had sought to establish before me accepted. There remain robust arguments from each side about who was substantially successful or tactically successful upon their construction arguments. The reality is that the determination of the preliminary issues involved a complex exercise in contractual construction. Each side ran numerous arguments. The primary reasons attempted to resolve the significant construction arguments raised. But it still remains to be seen how the answers provided to the questions posed will affect the ultimate outcome of this litigation.
4. Absent a clear winner, in my view it would be more prudent, not to mention just, to wait to resolve costs issues associated with the determination of preliminary issues until the end outcomes concerning Mrs Oswal's claim and Yara's counterclaims are known.
5. I am led to that position first because, as the primary reasons reflect, on the assessment of extremely complex arguments, no party fully succeeded in establishing everything it was seeking to show in terms of the construction positions advocated at the hearing.
6. Next, I am advised that Yara has commenced an appeal against the primary reasons and other parties have filed crossappeals. These appeals presently remain unresolved. So it is possible that my answers to the preliminary issues may be varied, and that the final outcome of this action and counterclaim then be guided by alternative construction outcomes framed elsewhere. Potential for the situation to change by reason of further inputs is a reason to wait before finalising costs orders associated with the preliminary issues.
7. As already mentioned, I am informed YPH shareholding control has altered and that Yara is now the 51% majority shareholder, with Apache holding a 49% share. But Mrs Oswal is pursuing proceedings in the Supreme Court of Victoria, challenging the validity of the ANZ Bank's realisation through sale of her 35% YPH shareholding. I am told that that challenge is framed in a context of issues which have been raised by Mrs Oswal over the validity of ANZ's securities and thereby its rights to realise Mrs Oswal's 35% shareholding in YPH. Outcomes in the unresolved Victorian litigation also have some potential to impact against this action. So does another action pursued by Mr Oswal in the Supreme Court of Victoria, where he challenges the reasonableness of the marketing and sale process concerning Mr Oswal's 30% shareholding in YPH.
8. Although my answers to some of the preliminary issues might be read as providing a basis for concluding that Mrs Oswal's attempted appointment of the sixth defendant by counterclaim (Mr Sodum) as director of YPH was inherently flawed, I have, as indicated, only considered to date issues of construction concerning the SD and the SSA. It remains to be seen whether further noncontractual causes of action could possibly bear upon my final assessment of the validity of Mr Sodum's appointment as Mrs Oswal's exclusively appointed nominee director to YPH.

1. I have by no means finally resolved, and would need to hear more argument upon, questions regarding the status of Mr Pankaj Oswal as a continuing nominee director of YPH in the period after the execution of the SSA. Considerations applicable to the resolution of those questions extend well beyond issues of contractual construction.

1. Yara's counterclaim also raises a number of further issues, particularly concerning declarations it seeks as to the validity of resolutions carried by the board of YPH promoted by Yara's nominee director Mr Tor Holba in the last months of 2010. I have not as yet heard argument on, let alone resolved issues raised by, Yara's counterclaim concerning the validity of those resolutions. Those issues could raise factual disputes and require evaluations going beyond pure contractual construction.
2. I expect that the legal costs incurred in the hearing of the preliminary issues on behalf of the receivers and managers appointed to YPH will have been met out of realisations from the receivership process or, if not, by indemnification from the appointing secured creditor, ANZ. I see no question of real urgency in a resolution of these costs issues due to the receivers and managers being out of pocket, exposed to personal liabilities or to prejudice associated with their proper participation in the trial of the preliminary issues. Hence, some degree of deferment concerning these costs, until end outcomes in Mrs Oswal's claim and on Yara's counterclaim in this action are clearer, will not deliver any significant prejudice. Nor for that matter has Yara or Mr or Mrs Oswal sought to demonstrate any financial prejudice to their respective positions arising out of a deferment of a resolution of these costs issues.

8 Accordingly, my view is that the costs of the trial of preliminary issues should be reserved until further order.

9 As there is a pending appeal by Yara and crossappeals by other parties, the matter whilst case managed in my CMC List should now stand in abeyance until the appeal process concludes. There is, of course, liberty to apply for all parties concerning reserved costs of the hearing and determination of the preliminary issues in the action itself and in the counterclaim.