PALMER -v- CITIC LTD [No 10] [2023] WASC 417 (2 November 2023)

1. The Amendment Application follows in the wake of the strike-out application I heard on 4 April 2023 and in respect of which I delivered reasons on 22 June 2023: Palmer v CITIC Ltd [No 8].[1] In that decision, I dismissed the plaintiffs' application to amend the statement of claim in the QNI Proceeding, but allowed the plaintiff's amendment application in the Palmer Petroleum Proceedings. The history of the various iterations of the statements of claim in the FCD Proceedings is detailed in Attachment B to the earlier reasons.
2. For the reasons set out below, I propose to grant the plaintiffs leave to amend the statement of claim in the form of the Proposed 6ASOC. I consider the new pleading is not clearly untenable, and sufficiently addresses the concerns I expressed in my earlier reasons as to the degree of clarity and particularity required in relation to the causal connections which are an essential integer of the cause of action. Further, applicable case management considerations do not sufficiently tell against the grant of leave.
3. I should stress that these reasons do not constitute any finding or conclusion as to the substantive merits of the dispute between the parties. These reasons are solely concerned with whether the plaintiffs have prepared an amended pleading in respect of which leave should be granted from an arguability perspective, and having regard to appropriate case management imperatives. These reasons offer no comment on the merits of the allegations, the potential defences of the CITIC Parties, or whether the claims can ultimately be sustained at trial.

1. There have been several interlocutory decisions published by this court in these actions since they were commenced in 2017 and 2018. Those decisions provide context to the present applications.[2] I will incorporate by reference the background matters which are detailed at [4] - [15] of the reasons published as Palmer v CITIC Ltd [No 7], and at [4] - [13] of the reasons published as Palmer v CITIC Ltd [No 8]. I will generally use the definitions and abbreviations employed in those earlier reasons.
2. As to the claim which is the subject of the QNI Proceeding, the following summary will suffice. The primary provision upon which the Mineralogy Parties rely is cl 11.5(c) of the Fortescue Coordination Deed (FCD). The critical provisions of the FCD, being the central instrument which is relevant to the present action, are extracted in Attachment A to the court's earlier reasons. This clause is engaged when there are relevant failures by Sino Iron or Korean Steel to perform their obligations, and where there are relevant failures by CITIC to cause either of those aforementioned companies to perform their obligations. The obligations in focus in these proceedings are the obligations to pay the Royalty Component B (or RCB) to the Mineralogy Parties. Upon these relevant failures being found, and leaving to one side for now issues concerning the identification of relevant parties and the ability of persons to claim for loss which may have been suffered by others, the indemnity extends to 'any loss suffered, paid, or incurred' by Mr Palmer or Mineralogy 'in relation to' the failures just mentioned.

1. The Amendment Application was supported by an outline of submissions from the plaintiffs dated 7 August 2023. The defendants filed an outline of submissions opposing leave to amend dated 21 August 2023. The plaintiffs filed submissions in reply dated 29 August 2023. No affidavit evidence was filed by either the plaintiff or the defendants in respect of the Amendment Application, although as will be seen, an historical affidavit filed in other proceedings is identified in the plaintiffs' pleading and represents an important part of the manner in which the plaintiffs' claim is now presented.
2. The principal amendments which are in dispute on the pleading are those contained in [44] and [44A] of the Proposed 6ASOC, but these objections affect other paragraphs including [4A], [5], [11A], [37] to [44A], [47] and [49].[3] In some respects, the present amendments reintroduce earlier allegations which had been discarded and in other respects introduce fresh allegations. The primary focus of the amendments is to deal with the causation questions which were the subject of my earlier decision in Palmer v CITIC Ltd [No 8]. The central area for contest at the hearing was as to whether or not sufficient particularity had been provided by the plaintiffs as to the nature of the causal link which is said to support the indemnity claim.
3. The contested portions of the Proposed 6ASOC are replicated in Attachment A to these reasons. The latest iteration of the pleading proposes to effect several changes relative to the previous pleading which was the subject of my earlier reasons. I have summarised these amendments below.

1. At [4A], [5] and [49(iii)] of the Proposed 6ASOC, the plaintiffs propose to insert additional factual matters to explain the structure of the Queensland Nickel Group (being the group comprised of Queensland Nickel Pty Limited, QNI Metals Pty Limited, QNI Resources Pty Limited and Queensland Nickel Sales Pty Ltd). The additional matters provide an explanation as to the ownership structure changes which apparently occurred in October 2019 and April 2020, and provide further detail as to Mr Palmer's beneficial ownership of the shares in Mineralogy Pty Ltd and related companies.
2. These matters are later pleaded by the plaintiffs in the Proposed 6ASOC to support the inference as to the hypothetical conduct of the Mineralogy Parties in a scenario in which the RCB had been paid by the CITIC Parties: [44A(c)(a)].

Narrative as to the actual conduct of Mineralogy and QNI

1. At [37] to [44] of the Proposed 6ASOC, the plaintiffs propose to include a more detailed narrative of the events in 2015 which it is alleged led to the demise of the joint venture business in Queensland, including the downturn of the nickel price in the second half of 2015. The pleading includes a series of new allegations under the heading 'What Mineralogy and QNI did in circumstances where Sino, Korean and CITIC failed to pay Royalty Component B to Mineralogy in accordance with their obligations under the MRSLAs and the FCD'. By 'new', I am referring to allegations that were not in the most recent iteration of the pleading. Some of the matters had been included in past versions of the pleading, however.[4]
2. The new matters include the unsuccessful mandatory injunction application which was brought by Mineralogy in November 2015 and was heard before Tottle J on 7 December 2015 (at [40] to [43A]).[5] It is expressly pleaded that a purpose for making the injunction application was so that Mineralogy could provide funds to QNI including to provide the amount of A$28 million to QNI for working capital (at [41]). This assertion appears to be justified from a reading of Tottle J's reasons for decision. The Mineralogy Parties describe the plea as to the making of the injunction application, and its stated purpose to compel payment of the RCB amounts, as 'a demonstration par excellence of what Mineralogy would have done if it had received RCB in the first instance'.[6]

Narrative as to the hypothetical conduct of Mineralogy

1. At [44A] of the Proposed 6ASOC, the plaintiffs propose to include a heading 'What Mineralogy would have done if Sino, Korean and Citic had paid Royalty Component B on time', which details several matters. It appears this plea effectively replaces the matters previously pleaded at [39], which was something of a central plea in the previous iteration of the pleading.
2. In essence, [44A] pleads that, had the RCB been paid in the manner the defendants were obliged to pay, then Mineralogy would have been in receipt of the various known royalty payment amounts which are pleaded at [28] and in receipt of timeous payments on a quarterly basis thereafter, which Mineralogy expects would have increased over time as the mining and production operations ramped up.[7]
3. It is further pleaded at [44A] that Mineralogy would have provided funds to QNI to continue to manage and operate the joint venture business. The particular circumstances in which Mineralogy would have provided these funds is also pleaded, including that QNI would have taken measures to ameliorate its forecast negative cash flow but would nonetheless have had a cashflow deficit over the period from December 2015 to June 2018 of amounts ranging from a manageable A$1.2 million to a quite sizeable A$91.1 million.[8]
4. As to this last allegation, a series of particulars have been subjoined to [44A(c)] of the Proposed 6ASOC which assert matters from which it is said Mineralogy's conduct can be evidenced or inferred. These matters are, in essence:[9]

(a) the corporate structure of the Queensland companies and Mineralogy, together with the beneficial ownership of Mr Palmer (i.e. the relationship and ownership arrangements between the entities and Mr Palmer);

(b) the quantum of the amounts which would have been received as part of the RCB stream;

(c) that the quantum of the RCB payments could reasonably have been expected to increase as mining and production operations ramped up;

(d) the fact that Mineralogy brought the injunction application in 2015; and

(e) that QNI and Mineralogy had historically provided funds to each other, including the amount of A$12.7 million paid by Mineralogy to QNI in June 2011 and the amount of A$2 million paid by Mineralogy to QNI in August 2011.

1. As to the funds which it is alleged would have been provided, the plaintiffs allege that the amounts would have been the money necessary to meet the cash flow deficit to which I have referred above.[10] A question arises here as to the source of the funds signified by the pleading, which I will address later in these reasons.

1. Finally, at [48] of the Proposed 6ASOC, the plaintiffs propose to include an alternative method of calculating the diminution of the value of the Yabulu Refinery. This is pleaded to be the difference between the value had the joint venture business remained in operation, and the present value of the Yabulu Refinery.[11] I do not understand the defendants to mount any pleading challenge to this aspect of the Proposed 6ASOC.

1. I will not rehearse in detail the submissions of each of the parties, but rather identify the critical points which were ventilated in the written submissions and at the hearing.
2. The Mineralogy Parties submit that the Proposed 6ASOC addresses the concerns which I identified in my earlier reasons. In particular, it is submitted that the so-called 'would have' allegation is no longer unduly generalised, the basis for the 'would have' allegation is now properly exposed, and it is asserted that the CITIC Parties will not be prejudiced in their preparation of the case. The plaintiffs say that the new pleading contains a narrative that links the CITIC Parties' non-payment of the RCB to the demise of the joint venture business in Queensland and the external administration of QNI. The narrative is said to be framed at the level of specificity required by the pleading rules.
3. The Mineralogy Parties submit that:
   1. At [84] it was held that in respect of the earlier Proposed 6SOC there was 'an absence of the necessary factual narrative to properly explain the causal connection between the pleaded non-payment of the RCB amounts and the ultimate demise of QNI and the Joint Venture business'. The generalised assertion that Mineralogy 'would have' provided the funds to QNI was insufficient to 'bridge the gap'. Similar observations were made at [92], [94]-[95] and [98.5].
   2. Mineralogy's case on causation no longer amounts to a generalised assertion. [44] and [44A] of the Proposed 6SOC provide a sufficient narrative of what occurred in the absence of Mineralogy receiving RCB and, in contrast, what would have occurred if the CITIC Parties had paid RCB on time. As to the latter, [44A] narrates a hypothetical...[12]
4. The submissions continue:
   1. Combined with [37] and [44], [44A] provides the (relational) link between the CITIC Parties' non-payment of RCB (their 'failures' per clause 11.5(c) of the FCD) alleged earlier in the pleading and the demise of QNI and the Joint Venture business (precipitating the diminution in Palmer's shareholding, being the 'loss suffered, paid or incurred' by him per clause 11.5(c)).[13]
5. As to the potential prejudice to the CITIC Parties, which was the subject of comment in my earlier reasons, the Mineralogy Parties submit that any such prejudice has evaporated through the greater specificity in the Proposed 6ASOC. It is submitted that the CITIC Parties will now be apprised of the material integers of the case to be met at trial including:

(a) the material facts precipitating the demise of QNI and the joint venture business that are relied on by the plaintiffs to establish causation between their non-payment of RCB and Mr Palmer's loss;[14]

(b) if RCB had been paid on time, when and how QNI would have responded to the continued downturn in the nickel price;[15]

(c) how much funding QNI required and when it was required by;[16] and

(d) the basis for demonstrating that Mineralogy would have provided the funding required by QNI.[17]

1. The Mineralogy Parties recognise that a pleading with more detail could conceivably be drafted. But that is not to the point, they contend. Most pleadings are framed at a certain level of abstraction, it is submitted. That is a reflex of the requirements that a pleading only contains material facts (and not evidence) and be as brief as the case permits. It is submitted there are also pitfalls in pleading a case in overly specific terms.
2. Ultimately, the critical issue according to the plaintiffs is whether the Proposed 6ASOC achieves the basic functions of identifying the issues, disclosing an arguable cause of action and apprising the opponent of the case to be met. The plaintiffs contend the pleading achieves each of these functions.

1. The principal objection raised by the CITIC Parties is to [44] and [44A] of the Proposed 6ASOC, but those objections also affect a range of other paragraphs of the pleading (namely [37], [37AA], [37A], [38], [40] to [44A], [47] and [49]).[18]
2. As to the necessary task facing the court on this application, the CITIC Parties submit the broad question for the Court is whether, in the exercise of the Court's discretion in the interests of justice, leave ought to be granted to allow the proposed amendments. This requires the Court to determine whether the plaintiffs' proposed amended pleading discloses a reasonable or arguable cause of action (or is embarrassing), and whether case management considerations point against the grant of leave.
3. As to the first of these enquiries, the CITIC Parties assert there are three fundamental deficiencies in the Proposed 6ASOC.
4. The first deficiency is that the Proposed 6ASOC alleges inconsistent or alternative facts about QNI's alleged funding requirements and there is said to be no narrative to explain these inconsistent facts. Accordingly, it is submitted that the pleading does not plead, in a clear and coherent way, the material facts necessary to demonstrate a causal connection for the purposes of the claim for indemnity pursuant to cl 11.5(c) of the FCD. Senior counsel described the principal problem in this regard as representing an 'unhappy marriage' between the plea at [38] and the plea at [44A(b)] of the Proposed 6ASOC. The first plea asserts a working capital requirement on the part of QNI of A$28 million (as at November 2015). The later plea alleges a cashflow deficit of A$91 million from around December 2017.
5. The second deficiency is that the Proposed 6ASOC does not fairly expose the subjective intention or decision making of Mr Palmer as to how the RCB payments would be applied or how QNI would be funded.
6. The third deficiency is that the alleged funding requirements of QNI, assessed retrospectively, have expanded significantly (it is submitted) from A$36 million in the previous pleading to A$91.1 million in the current proposed pleading. The plaintiffs do not proffer any evidence, nor submissions, to explain this significant late change, it is submitted. This is a weighty factor against the grant of leave, including on case management grounds, according to the CITIC Parties.
7. Descending further into the criticisms levelled by the CITIC Parties, the following matters should be noted, which I draw from the written submissions:

(a) A pleading must include every material fact which, if not pleaded, might take an opposing party by surprise.

(b) The pleading must be presented in an intelligible form - it must not be vague or ambiguous or inconsistent. The pleading must tell a 'coherent narrative', and it must be possible for a reader, such as a judge, approaching the pleading without the assistance of background knowledge, to gain a clear understanding of the essential elements of the cause of action alleged.

(c) It is not sufficient for the pleader to state conclusions drawn from unstated facts.

A defendant is entitled to have a plaintiff pinned down to a causation hypothesis which is not characterised by imprecision and ambiguity. This standard requires the pleading to 'ensure that there be no need for the opposite party to closely scrutinise the pleading in a process of textual construction to determine whether a particular fact is relied upon, or the purpose for which it is alleged, much less to decide whether a particular cause of action is raised.[19]

1. Given the plaintiffs require leave to amend their statement of claim and seek the exercise of the Court's discretion in their favour, the CITIC Parties maintain that an explanation for the amendment is required.[20]
2. The CITIC parties say they are unable to prepare their defence properly and leave to amend should be refused. It is submitted by the CITIC Parties that:

1. The plaintiffs' attempts to fix their pleading, in light of the [court's earlier reasons], fail. The 6SOC still does not fairly expose to the impartial and uninformed reader at least the following basal half-dozen matters:

(a) the amount of funding that QNI required in November 2015 in order to remain cash flow positive throughout the period of cash flow difficulty;
>
> (b) the basis for the alleged funding requirements of QNI, assessed retrospectively, which now total $91.1 million;
>
> (c) which material facts - whether 2015 or hypothetical facts, or both - are said to establish the causal link required by clause 11.5(c);
>
> (d) the wider narrative, including Mr Palmer's role in it, which leads to the general conclusionary statement that Mineralogy 'did not provide any funds to QNI' to enable QNI to continue managing and operating the Joint Venture business;
>
> (e) how payments of RCB received by Mineralogy would have been available to Mineralogy, in full, to enable Mineralogy to have provided funds to QNI;
>
> (f) whether there was sufficient RCB available to Mineralogy at the relevant times to provide funding to QNI and Palmer Petroleum or whether it was necessary for the plaintiffs to have contributed other funds, i.e., non-RCB payments, at the times necessary.

3. The CITIC Parties raised a further, albeit alternative proposal, for dealing with the Mineralogy Parties' application. On the assumption that the Mineralogy Parties will need to prepare their lay and expert evidence in order to plead their claim for indemnity properly and completely (an assumption which the Mineralogy Parties reject), the CITIC Parties raise the possibility of the court ordering that the plaintiffs file and serve, with the 6ASOC, their evidence in chief comprising:

(a) a list of documents to be adduced in evidence in the course of the trial;

(b) lay witness evidence; and

(c) expert reports.

1. I will return to this alternative proposal in due course.

1. I propose to apply the principles concerning amendments to pleadings which are set out at [17] - [29] of my earlier decision in Palmer v Citic [No 8]. It did not strike me from the written and oral submissions that the parties were in any material disagreement as to the applicable principles, only as to their application to this case.
2. Additionally, I should make reference to Murphy J's decision in Attorney‑General of Botswana v Aussie Diamond Products Pty Ltd [No 2].[21] As explained by Murphy J, the Aon Risk Services Australia Ltd v Australian National University[22] principles require that in cases where an indulgence is sought, particularly in or close to the trial where there is an obvious potential for serious disruption to the litigation, there should be a proper explanation for the application, showing that it is brought in good faith and bringing to the court's attention, in a candid way, the circumstances giving rise to the application.[23]

1. I first propose to restate the salient matters identified in the court's reasons in June 2023 for refusing leave for the amendments which were then proposed by the Mineralogy Parties. The following extract is sufficient for this purpose:[24]

[98] Drawing these threads together, I consider the amendments introduced by the QNI 6ASOC would have the effect that the pleaded claim would transgress the proscription in O 20 r 19(1)(a) RSC and, a fortiori, would also prejudice, embarrass or delay the fair trial of the action in contravention of O 20 r 19(1)(c) RSC. In summary, my reasons for these conclusions are:

1. The court starts from the proposition that a pleading must fulfil its basic function, in the sense of identifying the issues, disclosing an arguable cause of action (or defence), and apprising the parties of the case that has to be met. A pleading will not inform the opposing party of the case it must meet at trial unless it includes every material fact which, if not pleaded, might take an opposing party by surprise. That does not require 'vast swathes of evidence or unnecessary particulars', as is clear from O 20 r 8(1) RSC.
2. Whether the basic function of the pleading has been fulfilled will need to be assessed in the context of the particular causes of action alleged and the relief which is sought. When assessing a statement of claim, the plaintiff is required to plead the essential elements of the relevant claims by reference to the necessary material facts.
3. Relevantly for the purposes of the present applications and the objections raised by the CITIC Parties, the court must assess whether the proposed pleading advanced by the Mineralogy Parties includes the necessary material facts (and not mere particulars) required to demonstrate the causal connection between the relevant alleged failures and the alleged loss which has been suffered or incurred. This causal connection is an integer of the contractual indemnity claim in cl 11.5(c) of the FCD. The indemnity does not operate in a vacuum. There must be a causal connection between these matters in a relevant sense.
4. There are a number of ways in which material facts could be pleaded by the Mineralogy Parties in order to demonstrate the required causal connection, as is apparent from the earlier iterations of the statement of claim in the QNI Proceeding (for example, in QNI 4ASOC and in QNI 5ASOC). I understand from the interchange with Senior Counsel for the Mineralogy Parties during the hearing that it is not contended that the payments to QNI were required to be made by reason of any legal or other obligation on the part of Mineralogy. That is, of course, not the only basis on which the indemnity could be engaged and it is not suggested that the indemnity in cl 11.5(c) is so confined. The requirement is to plead, in a direct and unambiguous manner, those material facts which arguably establish the causal connection required by the phrase 'in relation to' which appears in cl 11.5(c) (or which provides the basis for a reasonable inference to be drawn in this regard).
5. In my view, a pleading which posits a wholly retrospective analysis of QNI's cash flow and funding requirements in order to demonstrate the required causal connection for the purposes of a claim made pursuant to the indemnity in cl 11.5(c) of the FCD Deed does not provide material facts necessary to demonstrate the connection. As a matter of logic, the material facts must be proximate in a chronological sense to the alleged failures upon which the indemnity is sought to be engaged, not an ex post facto assessment. This is not to decide a constructional question by stealth - it is to apply the text of the clause which is pleaded by the Mineralogy Parties, and upon which they rely for their claim, and assess whether a constituent element thereof has been appropriately pleaded.
6. The case for the Mineralogy Parties as presented in the QNI 6ASOC strays too deep into territory in which a causal connection is not apparent from any material facts (and the allegation that Mineralogy 'would have' done something is inadequate), leaving an indemnity claim based solely on a correlation between the alleged failures and the alleged loss. A correlation does not suffice, in my view, even a logical and commercial correlation such as the allegation that Mr Palmer would have directed funds to the ailing refinery business in Queensland of which he was the ultimate beneficial owner.
7. Further, without the necessary material facts, to allege that Mr Palmer 'would have' provided the funds to QNI does not sufficiently alert the CITIC Parties to the claim they will need to meet at trial. The case as pleaded in the QNI 6ASOC is impermissibly general.
8. A real risk which arises from the form of the proposed pleading, and the matters to which I have just alluded, is that the remaining interlocutory steps in the QNI Proceeding, and the trial of the matter, cannot be undertaken in an efficient and effective manner consistent with the goals in O 1 r 4A RSC and the objects in O 1 r 4B RSC, and may be productive of delays. The further interlocutory steps leading to a trial of this action will achieve their intended benefits (as explained in Barclay Mowlem) only against the backdrop of a clearly pleaded case which has appropriate anchor points to ground the claim. (footnotes omitted)
9. Fundamentally, the prior pleading was objectionable because it failed to plead, in a direct and unambiguous manner, those material facts which arguably established the causal connection required by the phrase 'in relation to' which appears in cl 11.5(c), or which provided the basis for a reasonable inference to be drawn in this regard. The prior pleading adopted a wholly retrospective analysis of the cash flow and funding requirements, leaving the CITIC Parties to defend a case based on Mineralogy's assertion that it 'would have' done something. The case was impermissibly general.[25]

Whether the propose pleading is arguable or embarrassing?

1. In my view, the Amendment Application represents a significant step forward relative to the previous application, and presents a pleading which offers a greater (and sufficiently adequate) degree of particularity as to the causal links which are needed as an essential integer of the indemnity cause of action. Importantly, the task on this application is not simply to assess whether the pleading has improved since the last version. That would be to ask the wrong question. The pleading must be tested against the basic purposes of a pleading and by reference to the applicable pleading rules. An improved pleading may nonetheless be a deficient one.
2. In my view, the Proposed 6ASOC provides the necessary factual narrative to explain the causal connection between the pleaded non‑payment of the RCB amounts and the ultimate alleged demise of QNI and the joint venture business. The proposed pleading now posits the following case, as I apprehend it, which involves five distinct elements or steps.

1. First, had the RCB payments been made by the defendants as required, Mineralogy would have been in receipt of the various RCB payment amounts and in receipt of timeous payments on a quarterly basis thereafter, which Mineralogy expects would have increased over time.
2. On this basis, Mineralogy alleges it would have received the total sum of approximately US$153,792,786 in royalty payments (on a quarterly basis) between December 2013 and March 2017,[26] with further continuing payments thereafter.[27]
3. So, the first element of the case focuses on the inflow of funds to Mineralogy, on a regular basis over a period of three or so years, on the assumption the RCB payments had been made.

1. Second, the Mineralogy Parties allege that QNI required funding of A$28 million as working capital as at November 2015.[28] This followed a downturn in the nickel price in the second half of 2015 which negatively impacted QNI's forecast cashflow for the period from June 2016 and thereafter.[29] I accept the figure pleaded here, being A$28 million, was merely a forecast as to the company's working capital requirement, which is evident from the particulars to the paragraph which expressly refer to the affidavit affirmed by Mr Daren Wolfe, as further explained by senior counsel for the Mineralogy Parties in oral submissions.[30] I will return to this affidavit below.
2. I should say that I do not consider any apparent tension between the plea at [38] and the plea at [44A(b)], being the 'unhappy marriage' issue, as being a matter of sufficient significance to conclude the plea is unarguable or embarrassing. The plea at [38] represents the forecast level of funding required by QNI as working capital, as November 2015. That figure emerges from Mr Wolfe's affidavit affirmed in November 2015. The plea at [44A(b)] identifies the hypothetical funding requirements of QNI after that point in time, on certain assumptions set out at [44A(b)(i)] and [44A(b)(ii)]. In substance, those assumptions involve QNI tightening its belt over this period given the downturn in economic conditions in the nickel sector. The pleas focus on different points in time, with different assumptions, and represent different concepts.
3. I accept the force of the plaintiffs' submissions on this point.[31] That is, there is no necessary inconsistency between an allegation of a forecast at a certain time as to QNI's future funding requirements, and an allegation as to the funding which would in fact have been required by QNI in continuing to manage and operate the joint venture business.
4. I therefore do not consider, at least ex facie, that these pleas are inconsistent.
5. The second element of the case as pleaded thus identifies the forecast cashflow deficiency of QNI in the period prior to it being placed into voluntary administration (and liquidation) and in the period thereafter, on the assumed basis that the administration and liquidation events did not occur. That is, on the assumption that QNI had continued to manage and operate the joint venture business, but it continued to suffer a working capital deficiency which was required to be met through a funding source.

1. Third, the Mineralogy Parties brought an application in this court in November 2015 seeking an interlocutory mandatory injunction requiring the CITIC Parties to pay the RCB payments.[32] One of the affidavits relied on in support of that injunction application was that of Mr Wolfe, who was the CFO for Queensland Nickel and the Group Financial Controller for the main operating companies in the Palmer group of companies.[33] As I have noted, this affidavit is expressly particularised by the Mineralogy Parties in the Proposed 6ASOC.
2. Mr Wolfe's affidavit deposes to the following matters, among others.
3. Mr Wolfe deposes that Queensland Nickel was experiencing financial difficulties in 2013 due to fluctuations in the nickel price and between September 2013 and December 2013 Mineralogy injected cash funds totalling A$27.6 million to ensure the company and its operations continued (which were repaid by Queensland Nickel) (at [39]).
4. Further, Mr Wolfe deposes that, due to the nickel price being lower than Queensland Nickel's cost of production (as at the time the affidavit was sworn), the company could only sustain itself by external cash injections, and Mineralogy was not then in a financial position to make such financial injections in the future (at [60], and see also [65] and [69]). Mr Wolfe deposes that, in October 2015, he had discussions with Mr Mensink and Mr Palmer who informed him that, if and when Mineralogy recieved payment of the RCB amounts, that a portion of the funds would be available to Queensland Nickel to sustain its operations (at [61]).
5. Mr Wolfe's team had prepared a graph showing the negative cash flow position for Queensland Nickel for the period from December 2016 to June 2016 (at [76]) and on the basis of that analysis, a cash injection of A$28 million would have the effect that the figures would increase to the point that Queensland Nickel would remain cash flow positive (at [80]).
6. Finally, Mr Wolfe deposes that, in the past the practice had been for Mineralogy to loan money to Queensland Nickel for the purposes of having available working capital, including in late 2013 (at [81]).
7. So, the third element of the Mineralogy Parties' pleaded case focuses on the contemporaneous conduct of Mineralogy and QNI as a matter of fact at the critical time in the life cycle of QNI's business. The pleaded case relies upon the Mineralogy Parties establishing the matters relating to the injunction application which was brought in late 2015, and in demonstrating the various matters deposed to in Mr Wolfe's affidavit.
8. I turn next to the fourth element, which is the most contentious aspect of the case pleaded by the plaintiffs.

1. Fourth, the Mineralogy Parties plead that, had the CITIC Parties paid the RCB amounts from December 2013 onwards, Mineralogy would have provided funds to QNI to continue to manage and operate the joint venture business. This element of the pleaded case draws together the first three elements to which I have just referred. The particular circumstances in which Mineralogy would have provided these funds is pleaded, including that QNI would have taken measures to ameliorate its forecast negative cash flow but would nonetheless have had a cashflow deficit over the period from December 2015 to June 2018.[34]
2. The material facts which are now pleaded to sustain (at least arguably) the causal connection which is essential to the indemnity claim are found in [44A(c)] of the pleading.
3. In essence, the arguable causal connection which the Mineralogy Parties have better exposed in this pleading is said to be established by the corporate relationship between Mineralogy, Mr Palmer and the Queensland entities, the significant influx of RCB payments which Mineralogy would have received in this scenario, the fact that (in 2015) Mineralogy brought an application to compel the RCB payments and asserted in that application that the funds were required at least in part to fund the Queensland joint venture business,[35] and the historical provision of funds by Mineralogy to QNI.
4. The contention which is made by the Mineralogy Parties, as is now evident from the pleading, is that Mineralogy would have advanced 'funds' (but not solely the RCB funds)[36] to QNI to address its working capital issues. The precise manner in which these funds would have been advanced, and precisely when, and from which specific source they would have come, seems to me to be properly a matter for evidence. The pleading is not defective without these matters being affirmatively asserted and pleaded, in my respectful view. The case that is proposed to be mounted, and which the Mineralogy Parties are content to be held to (subject, of course, to any proper amendments which might be sought in the future, on good grounds and with adequate explanation), is that it would have provided such funds to QNI as necessary (including from the greater inflow of amounts received in the form of the RCB payments) to meet the cash flow deficit.
5. I accept the plaintiffs' submission that there would be a degree of artificiality in pleading that payments of RCB in specie would have been used to fund QNI.[37] It is artificial because the RCB payments were to have been paid from January 2014 and another royalty stream (RCA) was to be paid at the same time as the RCB payments. My assessment of this issue during the course of the hearing was as follows:[38]

LUNDBERG J: ... But the way I was reading it was that they represent a subset of the funds. And perhaps coming at it from another angle, coming back to the indemnity, the contractual indemnity itself, which is the sole cause of action, is in its terms - I'm just looking at - it's 11.5, isn't it? It's the indemnity ... against any loss suffered, paid or incurred in relation to the failure of Sino Iron and/or Korean to perform its obligations under the deed, or the failure to perform its - etcetera. So is the pleading perhaps just realistically putting a position that, in hindsight, what's not being contended is that specific funds would have been directly applied to a specific purpose, but that, on this case, the large flow of additional funds in accordance with the obligations put Mineralogy in a position where it's now able to provide funds, including some of those funds that are RCB, to the purposes which are now pleaded, including [to] QNI and [to] Palmer Petroleum in the other case.

1. At this interlocutory pleading stage, the court cannot form any assessment as to the precise correlation between the inflow of funds to Mineralogy and the outflow of funds from Mineralogy, including the payments needed to be made to QNI to avoid its demise. That analysis cannot be undertaken at a desktop level. Thus, while I have found the timeline prepared by the defendants to be helpful to contextualise the events (see Annexure B to their submissions), I am unable to form the view having regard to that timeline that the case as pleaded is logically unsustainable.
2. I recognise the asserted evidentiary speedbumps which lie ahead for the Mineralogy Parties, as identified by the CITIC Parties, both in terms of proving the necessary causal link between the asserted breach and the claimed loss, and in terms of the operation of cl 9.1(e) of the FCD which requires a party claiming the benefit of the indemnity to take all reasonable steps to minimise and where possible avoid any loss or damage suffered by it. However, these are matters for trial in my view, and I am not presently satisfied these asserted speedbumps are insurmountable so as to conclude the pleading is untenable, particularly bearing in mind the size and regularity of the RCB payments,[39] relative to the cashflow shortfall of QNI.[40]
3. These are all matters which will need to be the subject of lay and expert evidence in due course, with particular regard to the timing of the RCB payments, the sources of funding reasonably available to Mineralogy and Mr Palmer, the working capital and cashflow requirements of QNI, the timing and connection between the assumed RCB payment inflows and the requirements of QNI, and the other purposes to which the RCB payments were required to be put by Mineralogy (or would have been put by Mineralogy).

1. Fifth, the Mineralogy Parties plead that QNI was placed into voluntary administration in January 2016 and its creditors resolved to place it into liquidation in April 2016. It is pleaded that this ultimately led to the cessation of the joint venture business.[41]

1. On my assessment, the Proposed 6ASOC fulfils its basic functions. It informs the CITIC Parties of the case it must meet at trial by pleading the necessary material facts. Additional and further elucidation of the plaintiffs' case will come with expert and lay evidence, in the usual way.
2. There is, at least arguably at this stage, a logical connection between the relevant failures to comply with the contractual obligations (on the part of the CITIC Parties) and the asserted loss, in the sense explained by Murphy and Vaughan JJA in English v Vantage Holdings Group Pty Ltd.[42] The pleading no longer adopts a wholly retrospective analysis of cash flows and funding requirements to bridge the causal gap. Rather, the pleading presents a case which I consider the CITIC parties can reasonably understand and plead to.
3. The pleading is not clearly untenable.

1. The CITIC Parties oppose the grant of leave on case management grounds as well. Several issues were raised in this regard, which I will address in turn.
2. One of the matters identified in this regard was the failure by the Mineralogy Parties to explain (at least on affidavit) the shift in the figures pleaded concerning QNI's cash flow deficit. Between iterations in the pleading, this seems to have escalated from an assessed figure of A$36 million to a figure of A$91 million.[43]
3. The explanation proffered from the bar table by senior counsel for the Mineralogy Parties is that the change is unremarkable and simply arises from a closer analysis by the legal team and the usual process of working up a case.[44] That may not adequately explain the entirety of the significant escalation here, but I am prepared to accept senior counsel's indication as a reasonable explanation for the fact the pleaded figure has changed.
4. In any event, it does not seem to me to present as a compelling factor from a case management perspective, given the reality that we are not on the eve of trial and the greater burden which this court would impose on a litigant in that scenario does not presently apply in my view.
5. Additionally, this pleading is not seeking to introduce fresh claims not previously pleaded, such as to widen the ambit of the litigation, which might well have motivated the court to require a more fulsome explanation, including on affidavit.
6. I am cognisant that this Amendment Application represents the latest in a series of pleading disputes in this action, and the plaintiffs' journey over the past six years in working up a pleading has been a difficult process.
7. However, having reached an appropriate level of satisfaction that the pleading is now adequate, at least at the level of arguability, and is not embarrassing, and that leave should otherwise be given to advance the pleading, I do not assess any of the case management considerations identified by the CITIC Parties as being sufficiently persuasive to decline to grant leave. There is one additional case management issue raised by the defendants, which I will briefly mention.

1. Senior counsel for the CITIC Parties proposed an alternative way forward, in the event the court was minded to grant leave, to which I have given some earnest consideration. The proposal was to require the Mineralogy Parties to serve, at the same time as the Proposed 6ASOC is served, their lay evidence and the expert evidence, as well as a list of documents to be adduced in evidence at trial. This proposal was the subject of some discussion with both senior counsel during the hearing.[45] In general terms, the proposal has merit as a pragmatic device to ensure that a defendant has a proper opportunity to file a defence to a case which is difficult to comprehend, however I do not consider I should implement it in the present circumstances. In my view, it is not necessary for these reasons:

(a) First, to require the Mineralogy Parties to file expert evidence before the issues in the proceeding have been joined, and before the parties have had the usual opportunity to confer as to the expert disciplines which are appropriate for the case and to identify the lead questions for the experts,[46] is likely to create inefficiencies and produce expert reports on the plaintiffs' side which may need to be re-done or discarded, depending on the approach adopted and pleaded by the defendants. Senior counsel for the CITIC Parties recognised the potential for such inefficiencies to emerge.[47]

(b) Second, although the foregoing issues may be less significant in the context of the plaintiffs' lay evidence, there is nonetheless the real risk that the lay evidence will need to address a wider range of issues than is truly needed once the CITIC Parties 'nail their colours to the mast' in their responsive amended defence. The witness statements may need to be heavily modified in due course to tailor them to the issues in dispute in the case. Duplication should be avoided in preparatory steps, even in a case of this magnitude.

(c) Third, while it appears the evidence to be adduced by the Mineralogy Parties is unlikely to depend heavily on the discovery to be given by the CITIC Parties, it may require material from third parties to be obtained through subpoena processes, which is a process more efficiently approached once the issues in the case are joined on the pleadings and once the parties have exhausted discovery processes.[48]

1. In the circumstances, having regard to the view I take that the Proposed 6ASOC is not clearly untenable and now addresses, at least at an arguable level, the causal connection deficiencies which stood in the way of a grant of leave to the previous iteration of the pleading, and being of the view that there are no case management considerations which sufficiently tell against the grant of leave, I consider it is in the interests of justice to grant the plaintiffs leave to file and serve the Proposed 6ASOC.
2. I do not propose to supplement this grant of leave with the additional orders proposed by the CITIC Parties, to require evidence to also be filed. However, it seems to me the Mineralogy Parties, if they have not done so, ought to expedite the preparation of their lay evidence and expert evidence to ensure the case can move more rapidly from this juncture to trial. Given the seniority of counsel for the plaintiffs and the evident size of the legal team which has been engaged, and the stated desire of the Mineralogy Parties to secure trial dates, I reasonably expect that such an exhortation from this court is probably unnecessary.

1. Subject to hearing from counsel for the parties, I propose to make following orders:
   1. The plaintiffs have leave to file and serve an amended statement of claim in the form of the minute of the sixth amended statement of claim filed on 23 July 2023.
   2. By a date to be fixed, the plaintiffs are to file and serve the amended statement of claim referred to in paragraph 1 above in the form of a substituted statement of claim.
   3. By a date to be fixed, the defendants are to file and serve their amended defence and any counterclaim.
   4. By a date to be fixed, the plaintiffs are to file and serve any amended reply and any amended defence to any counterclaim.
   5. The defendants pay the plaintiffs' costs of the application to amend dated 7 August 2023 in any event, to be assessed if not agreed.

1. Palmer is the ultimate beneficial owner of all of the shares ('the Palmer Shareholding') in:

(a) Queensland Nickel Pty Limited (in liquidation) ACN 009 842 068 ('QNI');

(b) QNI Metals Pty Limited ABN 56 066 656 175 ('QM');

(c) QNI Resources Pty Limited ABN 14 054 117 921 ('QR'); and

(d) Queensland Nickel Sales Pty Ltd ABN 15 009 872 566 ('QNS').

4A QNI, QM, QR and QNS are collectively referred to herein as the 'Queensland Nickel Group' and are structured as follows:

1. QR and QM own respectively 80% and 20% of the issued shares in each of QNI and QNS;
2. Until about 11 October 2019, Nickel Consolidated Pty Ltd CAN 119 458 338, Nickel Processing Pty Ltd ACN 119 458 383 and Nickel House Pty Ltd ACN 119 458 374 ownsed respectively 49%, 49% and 2% in each of QR and QM;

(A) Palmer Resources Holdings Pty Ltd ACN 636 569 492 has owned 100% of the shares in QR;

(B) Palmer Metals Holdings Pty Ltd ACN 636 569 483 owned 100% of the shares in QM;

(C) Nickel Consolidated Pty Ltd ACN 119 458 338, Nickel Processing Pty Ltd ACN 119 458 383 and Nickel House Pty Ltd ACN 119 458 374 has owned respectively 49%, 49% and 2% in each of Palmer Resources Holdings Pty Ltd ACN 636 569 492 and Palmer Metals Holdings Pty Ltd ACN 636 569 483;

1. Until about 8 April 2020, Clive Frederick Palmer beneficially ownsed 100% of the shares in each of Nickel Consolidated Pty Ltd ACN 119 458 338, Nickel Processing Pty Ltd ACN 119 458 383 and Nickel House Pty Ltd ACN 119 458 374;
2. Thereafter:

(A) Turbid Investments Pte Ltd, a company incorporated in Singapore, has owned 100% of the shares in Nickel Consolidated Pty Ltd ACN 119 458 338;

(B) Clive Frederick Palmer has beneficially owned 100% of the shares in Turbid Investments Pte Ltd;

(C) Clive Frederick Palmer has beneficially owned 100% of the shares in each of Nickel Processing Pty Ltd ACN 119 458 383 and Nickel House Pty Ltd ACN 119 458 374.

4B Mineralogy is and was at all material times a company incorporated under the Corporations Act 2001 (Cth) and able to sue and be sued in its corporate name.

1. Palmer is the ultimate beneficial owner of all the shares in Mineralogy.

(A) until about 27 January 2021, are were held by Closeridge Pty Ltd ACN 010 560 157 and River Crescent Pty Ltd ACN 010 210 778;

(B) thereafter, have been held by Zeph Investments Pte Ltd (reg no. 201902599N), a company incorporated in Singapore;

1. All of the shares in Zeph Investments Pte Ltd are held by Mineralogy International Limited (7185155), a company incorporated in New Zealand;
2. All of the shares in Mineralogy International Limited are held by Closeridge Pty Ltd, River Crescent Pty Ltd and Clive Frederick Palmer;
3. Clive Frederick Palmer beneficially owns 100% of the shares in Closeridge Pty Ltd ACN 010 560 157 and River Crescent Pty Ltd ACN 010 210 778.

...

11A Further, at all material times Mineralogy held Citic's promise to indemnify Palmer in clause 11.5(c) of the FCD on trust for Palmer.

Particulars

(a) Mineralogy is the trustee of the trust;

(b) Palmer is the beneficiary of the trust;

(c) the property of the trust is a chose in action in the form of Citic's promise to Mineralogy in clause 11.5(c) of the FCD to indemnify Palmer;

(d) the trust arises from the circumstance that clause 11.5(c) of the FCD, in particular that part of the clause that provides, 'CITIC indemnifies Clive F Palmer... against any loss suffered, paid or incurred by it in relation to the failure of Sino Iron and/or Korean to perform its obligations under this Deed or the Project Agreements or the failure of CITIC to cause Sino Iron and/or Korean to perform its obligations under this Deed or the Project Agreements.', is a contractual obligation owed by Citic to Mineralogy for the benefit of Palmer.

...

Failure of Citic to perform the obligations of Sino and Korean - clause 11.5(c) FCD

1. [Not used]
2. Mineralogy made demand of Citic to cause Sino and Korean to pay Royalty Component B and any interest owing in respect thereof under the MRSLAs.

(a) Full particulars of the demand by Mineralogy are set out in the pleadings in Supreme Court of Western Australia Proceeding CIV1808/2013 and CIV3024/20212017. The demand was further made by the filing and service of the interlocutory mandatory injunction in proceeding CIV1808/2013 in November 2015.

(b) Demand was made by the filing on 20 November 2015 in Supreme Court of Western Australia Proceeding CIV2368 of 2015 and service of a chambers summons seeking an interlocutory mandatory injunction.

(c) Demand was made by the filing on 27 November 2015 in Supreme Court of Western Australia Proceeding CIV1808 of 2013 and service of a chambers summons seeking an interlocutory mandatory injunction.

(d) The plaintiffs refer to Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 16] [2017] WASC 340 at paragraphs [803], [804] and [805] and the demands recorded therein.

(a) failed to cause Sino and Korean to pay Mineralogy the amount of Royalty Component B payable as alleged in paragraph 28;

(b) did not itself pay Mineralogy the amount of Royalty Component B payable as alleged in paragraph 28.

1. By reason of the matters alleged in paragraphs 29 to 32 inclusive hereof, there was a 'failure of Sino Iron and/or Korean to perform its obligations under this Deed or the Project Agreements or the failure of CITIC to cause Sino Iron and/or Korean to perform its obligations under this Deed or the Project Agreements' within the meaning of those words in clause 11.5(c) of the FCD.

1. At all material times, QM and QR were Joint Venturers in a nickel and cobalt refinery business located at Yabulu in North Queensland (Yabulu Refinery) known as the Queensland Nickel Joint Venture (the Joint Venture).
2. The Joint Venture was governed by the Queensland Nickel Joint Venture Agreement dated 17 September 1992 (JVA) and an Administration Agreement dated 17 September 1992 (AA).

Copies of the agreements are in the possession of the Plaintiff's' solicitors and available for inspection on request.

1. Pursuant to the JVA, QNI was appointed as manager of the Queensland Nickel Joint Venture and was given powers of management as set out in the JVA and AA so as to enable it to manage and operate the Joint Venture business.

(a) QNI was appointed General Manager of the Queensland Nickel Joint Venture from 17 September 1992.

(b) QNI ceased to be General Manager of the Queensland Nickel Joint Venture upon QNI being placed into administration on 18 January 2016.

(c) QNI continued to have all responsibilities and duties of the General Manager until a Successor Manager was appointed.

(d) Queensland Nickel Sales Pty Ltd was appointed as General Manager on 3 March 2016.

(e) The powers of management are recorded in:

(i) clauses 3.2, 3.3, 5 and 6 of the JVA;

(ii) clauses 3 and 4 of the AA.

The Royalty Component B payments due by Sino and Korean (and upon their default CITIC Citic) to Mineralogy were not available to provide QNI with working capital

1. In the second half of 2015 there was a continued downturn in the price of nickel.

The Plaintiff refers to the affidavit of Daren Bruce Wolfe affirmed on 17 November 2015 (the Wolfe affidavit) filed in the interlocutory mandatory injunction proceeding referred to below and in particular paragraph 82 and exhibit DBW-13.

37AA In about late September 2015, Wood Mackenzie published a report, of which QNI was aware, that the downturn of nickel prices was forecast to continue until at least sometime in 2016.

37A The decrease in the price of nickel alleged in paragraph 37 and the forecast duration of the price downturn alleged in paragraph 37AA adversely affected QNI's forecast cashflow for the period to 30 June 2016 and beyond.

Particulars

The Plaintiffs refer to paragraphs 66 and 72 to 79 inclusive of the affidavit of Darren Bruce Wolfe affirmed on 17 November 2015 (Wolfe affidavit).

What Mineralogy and QNI did in circumstances where Sino, Korean and CITIC failed to pay Royalty Component B to Mineralogy in accordance with their obligations under the MRSLAs and the FCD

1. In or about November 2015, QNI required funding of $28 million as working capital to enable it to continue managing and operating the Joint Venture business during the period in which its forecast cashflow was adversely impacted.

Report by KPMG 'Cabinet in Confidence' Document dated 8 December 2015 page 7 under the heading 'KPMG Comments'. This document is in the possession of the Plaintiffs' solicitors and is confidential. A copy will be made available to the Defendants upon receipt of the usual undertaking to keep the document confidential. The Plaintiffs also rely upon the Wolfe affidavit.

1. In or about November 2015, if Sino, Korean and CITIC had paid Royalty Component B to Mineralogy in accordance with their obligations under the MRSLAs and the FCD, Mineralogy would have provided those funds to QNI to enable it to continue to manage and operate the Joint Venture business while nickel prices remained low. [Not used]
2. In November 2015, Mineralogy brought an application in CIV 1808/2013 for an interlocutory mandatory injunction requiring inter alia, Sino, Korean and Citic to pay the Royalty Component B claimed to be due and owing to Mineralogy for the period ended 30 September 2015 and ongoing payments of Royalty Component B (Mandatory Injunction Application). [Not used]

The amount claimed to be due and owing was approximately US$48 million.

1. A purpose for making the Mandatory Injunction Application was so that Mineralogy could provide funds to QNI including $28 million to QNI for working capital. [Not used]

The Plaintiffs refer to the Wolfe affidavit and the affidavit of Clive Theodore Mensink affirmed 17 November 2015.

1. In support of the Mandatory Injunction Application, Mineralogy filed and served upon Sino, Korean and Citic affidavits to support the matters set out in paragraphs 37 to 41 herein. [Not used]

The affidavits filed in support of the Mandatory Injunction Application are referred to in the reasons of the Honourable Justice Tottle in Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 8] [2015] WASC 473 published on 8 December 2015.

1. In the Mandatory Injunction Application Sino, Korean and Citic: [Not used]

(a) wrongly asserted that Royalty Component B was not capable of calculation and was not payable to Mineralogy under the MRSLAs.

(b) successfully resisted an order that they or any one of them make payment of Royalty Component B to Mineralogy or any amount in relation thereto.

The assertion was wrong for the reasons given by the Honourable Justice Martin on 24 November 2017 and the reasons given by the Court of Appeal on 21 May 2019.

43A On or about 7 December 2015, the Honourable Justice Tottle heard and dismissed the Mandatory Injunction Application.

1. As Sino, Korean and Citic's did not pay Mineralogy Royalty Component B, including the amount of Royalty Component B due and owing to Mineralogy for the period ended 30 September 2015 and/or 31 December 2015,:

(a) Mineralogy did not provide the any funds to QNI (save as to the amount in subparagraph (a)(v)(D) in the particulars of paragraph 44A(c) below), including the amount set out in paragraph 38 herein, to enable it to continue managing and operating the Joint Venture business.;

(b) the matters in paragraphs 45 to 47 below occurred.

(a) The Mineralogy Royalty under the MRSLAs was Mineralogy's principal source of revenue.

(b) Royalty Component B was a significant part of the consideration anticipated to be flowing to Mineralogy in respect of the mutual rights and obligations of the parties over time under the MRSLAs: see Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 16] [2017] WASC 340 at [344].

What Mineralogy would have done if Sino, Korean and Citic had paid Royalty Component B on time

44A If Sino, Korean and Citic had paid Royalty Component B to Mineralogy in accordance with their obligations under the MRSLAs and the FCD:

(a) Mineralogy would have:

(i) received the funds alleged in paragraph 28 herein and by the dates alleged therein;

(ii) expected to receive timeous payment of Royalty Component B thereafter, the quarterly amounts of which would be expected to increase as Sino and Korean's mining and production operations ramped up;

(b) Mineralogy would have provided funds to QNI to enable it to continue to manage and operate the Joint Venture business in the following circumstances:

(i) by October 2015, QNI would have forecast that its cashflow would become and remain for some period of time negative as a result of a downturn in the nickel price;

Evinced or inferred by the Wolfe affidavit. Further particulars may be provided upon completion of interlocutory processes.

(ii) as a result of the forecast alleged in subparagraph (i) herein, by October 2015, QNI would have taken measures to ameliorate its forecast negative cashflow, including:

(A) limiting capital expenditure to only what was necessary to continue to manage and operate the Joint Venture business;

(B) reducing the workforce of the Joint Venture business by not replacing any vacant roles when such vacancies arose;

(C) reducing its operating costs to only what was necessary to continue to manage and operate the Joint Venture business;

(D) QNI would have extended the date for payment of its trade creditors to such date(s) as were necessary to enable QNI to continue to manage and operate the Joint Venture business;

(iii) if it had taken the measures alleged in subparagraphs (i) and (ii) herein, QNI would have (in the absence of funding) had a cashflow deficit in between about November 2015 and 2017 as particularised herein;

Further particulars may be provided upon the completion of interlocutory processes.

(c) Mineralogy would have provided to QNI the funds required to meet the cashflow deficit alleged in subparagraph (b)(iii) herein at the times necessary to enable QNI to continue to manage and operate the Joint Venture business

(a) How Mineralogy would have acted if Sino, Korean, and Citic had paid Royalty Component B to Mineralogy in accordance with their obligations under the MRSLAs and the FCD is evinced by or to be inferred from:

(i) the matters alleged in paragraphs 4 to 5 herein;

(ii) the quantum of the amounts alleged in paragraph 28 herein;

(iii) the quarterly amounts of Royalty Component B that could reasonably be expected to increase as Sino and Korean's mining and production operations ramped up;

(iv) the making of the Mandatory Injunction Application;

(v) QNI and Mineralogy had historically provided funds to each other. In the case of Mineralogy, it had provided at least the following funds to QNI:

(A) an amount of $12,738,383.64 paid by Mineralogy to QNI on 21 June 2011;

(B) an amount of $2,000,000 paid by Mineralogy to QNI on 24 August 2011;

(C) an amount of $14,800 paid by Mineralogy to QNI on 28 November 2011; and

(D) an amount of $130,000 paid by Mineralogy to QNI on 23 October 2015;

(b) The funds that Mineralogy would have provided to QNI is the amount of money necessary to meet the cashflow deficit alleged in subparagraph (b)(iii) herein.

(c) Further particulars may be provided upon the completion of interlocutory processes.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Palmer v CITIC Ltd [No 8] [2023] WASC 221.

[2] Palmer v CITIC Ltd [2017] WASC 253 (Le Miere J) (Stay application); Palmer v CITIC Ltd [No 2] [2019] WASC 14 (Kenneth Martin J) (Preliminary questions application); Palmer v CITIC Ltd [No 3] [2019] WASC 424 (Kenneth Martin J) (Discovery categories); Sino Iron Pty Ltd v Mineralogy Pty Ltd [2022] WASC 151 (Quinlan CJ) (Costs application); Palmer v CITIC Ltd [No 4] [2022] WASC 292 (Kenneth Martin J) (Strategic conference and timetabling); Palmer v CITIC Ltd [No 5] [2023] WASC 44 (Kenneth Martin J) (Directions and timetabling); Palmer v CITIC Ltd [No 6] [2023] WASC 188 (Lundberg J) (Application to set aside subpoenas); Palmer v CITIC Ltd [No 7] [2023] WASC 202 (Lundberg J) (Strike‑out applications); Palmer v CITIC Ltd [No 8] (Lundberg J) (Amendment applications) and Palmer v CITIC Ltd [No 9] [2023] WASC 238 (Lundberg J) (Discharge of prior orders).

[4] In particular, in the Fourth Amended Statement of Claim dated 17 July 2018.

[5] I refer to Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 8] [2015] WASC 473 (Tottle J).

[6] Plaintiffs' reply submissions [12].

[12] Plaintiff's submissions [7] - [8], referring to the court's earlier reasons.

[15] Proposed 6ASOC [44A(b)(i)] and [44A(b)(ii)].

[19] Defendants' submissions [9(d)], citing Oztech Pty Ltd v Public Trustee of Queensland (2019) 269 FCR 349; [2019] FCAFC 102 [30] (Middleton J, Perram J, Anastassiou J).

[20] The CITIC Parties seek to distinguish the decision of Allanson J in Hampton Transport Services Pty Ltd v Crushing Services International Pty Ltd [2018] WASC 54 [27] in this regard, to which I referred in my earlier reasons.

[21] Attorney‑General of Botswana v Aussie Diamond Products Pty Ltd [No 2] [2009] WASC 301.

[22] Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175.

[23] Attorney‑General of Botswana v Aussie Diamond Products Pty Ltd [70].

[24] Palmer v CITIC Ltd [No 8] [98].

[25] See further the court's reasons at Palmer v CITIC Ltd [No 8] [82] - [92].

[30] ts 873 - 874 and affidavit of Daren Bruce Wolfe affirmed 17 November 2015 filed in CIV 2368 of 2015 [80].

[31] Plaintiffs' reply submissions [7] - [10].

[33] Affidavit of Daren Bruce Wolfe affirmed 17 November 2015 filed in CIV 2368 of 2015 [2].

[35] See also the reasons of Tottle J in Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 8] [80] and [94] - [97].

[36] An issue which was the subject of oral submissions from both senior counsel: ts 864 - 865 and ts 874.

[37] Plaintiffs' reply submissions [23].

[39] Which amounts to more than US$153m over the relevant period.

[40] Which ranges from A$1.2m through to A$91.1m. Converting these amounts to US$, this is a range of approximately US$0.9m to US$68m (assuming an exchange rate of US$0.75).

[42] English v Vantage Holdings Group Pty Ltd [2021] WASCA 47 [104].

[46] Recognising that the parties have had some conferral regarding the expert evidence issues, as was apparent at the strategic conference, ts 853 - 857. Additionally, the court provided the parties with the standard expert evidence regime to facilitate conferral via email on 3 August 2023 but no formal orders have been made.

[48] Although as I indicated in Palmer v CITIC Ltd [No 6], the pursuit of subpoenas before the conclusion of discovery is not per-se objectionable.