WESTRAINT RESOURCES PTY LTD -v- BHP IRON ORE PTY LTD [No 3] [2008] WASC 265 (21 November 2008)

WESTRAINT RESOURCES PTY LTD -v- BHP IRON ORE PTY LTD [No 3] [2008] WASC 265 (21 November 2008) - WASC 2008 case summary — Zoe

[25]

(a) that the defendant did not use its best endeavours to procure the sale to Mimex of 14mt of iron ore or spot cargos at a price which, after deduction of counter trade costs, was competitive with C&F Rotterdam so as to implement and give full effect to the arrangements contemplated by the 6 June 1988 Agreement (paragraph 9.1 of the Proposed Statement of Claim);

(b) that the defendant did not maximise its sale of iron ore under the Romanian Sales Proposal (paragraph 9.2 of the Proposed Statement of Claim);

(c) that the defendant did not use its best endeavours to implement and give full effect to the arrangements contemplated by the 6 June 1988 Agreement (paragraph 9.2 of the Proposed Statement of Claim);

(d) that the defendant did not act in good faith and with due regard to HML's interests pursuant to the 6 June 1988 Agreement (paragraph 9.2 of the Proposed Statement of Claim);

(e) that the defendant breached the implied term to do all things reasonably within its power to give HML the full benefit of the 6 June Agreement and do nothing to interfere with or prevent the full benefit thereof from accruing to HML (paragraph 9.2 of the Proposed Statement of Claim);

(f) that the defendant did not sell and deliver 14mt of iron ore under the Romanian Sales Proposal (paragraph 9.3 of the Proposed Statement of Claim);

(g) that the defendant, having agreed on price, from August 1989 refused to supply iron ore to Mimex (paragraphs 9.4 and 9.5 of the Proposed Statement of Claim);

(h) that the defendant, having agreed on price, from August 1989 refused to supply iron ore in breach of the express term to maximise the defendant's sale of Mt Newman iron ore under the Romanian Sales Proposal (paragraph 9.5 of the Proposed Statement of Claim);

(i) that the defendant, having agreed on price, from August 1989 refused to supply iron ore in breach of the express term that, where there was a disagreement as to the price of iron ore, the defendant would meet with HML to discuss and resolve the fulfilment of HML's obligations under the Romanian Sales Proposal (paragraph 9.5 of the Proposed Statement of Claim);

(j) that the defendant, having agreed on price, from August 1989 refused to supply iron ore in breach of the express term that the defendant would use its best endeavours to implement and give full effect to the arrangements contemplated by the 6 June Agreement (paragraph 9.5 of the Proposed Statement of Claim);

(k) that the defendant, having agreed on price, from August 1989 refused to supply iron ore in breach of the implied term that the defendant would act in good faith and with due regard to HML's interests pursuant to the 6 June 1988 Agreement (paragraph 9.5 of the Proposed Statement of Claim)

(l) that the defendant, having agreed on price, from August 1989 refused to supply iron ore in breach of the implied term that the defendant would do all things reasonably within its power to give HML the full benefit of the 6 June 1988 Agreement and do nothing to interfere with or prevent the full benefit thereof from accruing to HML (paragraph 9.5 of the Proposed Statement of Claim);

(m) that the defendant did not act I good faith and with due regard to HML's interests (paragraph 9.6 of the Proposed Statement of Claim); and

(n) that the defendant did not do all things reasonably within its power to give HML the full benefit of the 6 June 1988 Agreement and the arrangements contemplated thereby, including the Ore Wagon Agreement (paragraph 9.7 of the Proposed Statement of Claim).

[31]

When I interviewed (or assisted in interviewing) BHPIO's witnesses to prepare witness statements (which were exchanged prior to July 2000), I approached these tasks by reference to Westraint's existing amended statement of claim and BHPIO's existing amended defence. The witness statements were prepared to answer the allegations made in Westraint's existing statement of claim. Particularly, I approached these tasks by reference to what Westraint said was the position with respect to countertrade and barter. In para 3C of Westraint's existing amended statement of claim, it is expressly pleaded that countertrade and barter was HML's/Burwill's responsibility and BHPIO would be paid by a letter of credit. In the proposed re-amendments, this position is now disputed by Westraint.
I interviewed (or assisted in interviewing) each of Mr Carroll, Mr Freeman, Mr Rouse, Mr Dean, Dr Greene, Mr McDonald, Mr Maith, Mr O'Shannassy, Mr Robertson, Mr Oldham and Mr Wedlock in order to prepare draft witness statements on their behalf. In making their witness statements, these witnesses relied on documents discovered by Westraint in September 1996 and documents discovered by BHPIO in November 1996 and July 1997. I prepared a file of documents relevant to each witness (extracting relevant discovered documents) for each witness. Each witness referred to these documents when I took a statement from them. As explained below, these witnesses had to have their memories refreshed by these documents and I am concerned that their recollection of the detail of the transactions has diminished over time.
Witness statements signed by Mr Carroll, Mr Freeman, Mr Rouse, Mr Dean, Dr Greene, Mr McDonald, Mr Maith, Mr O'Shannassy, Mr Robertson, Mr Oldham and Mr Wedlock were served on Westraint between about 28 April 2000 and 18 July 2000.
When I interviewed (or assisted in interviewing) them, Mr Freeman, Mr Rouse, Mr McDonald, Mr O'Shannassy, Mr Robertson, Mr Oldham and Mr Wedlock were no longer employed by BHP. Since I interviewed them, Mr Dean, Dr Greene and Mr Maith have either left BHP, or they are in the process of leaving BHP. If the proposed re-amendments were allowed, further witness statements will be required and it will be much more difficult for BHPIO to obtain witness statements from these witnesses.
Because many of BHPIO's witnesses do not live in Perth (Mr Carroll lives in Melbourne, Mr Rouse lives in Sydney, Mr Dean lives in Melbourne, Dr Greene lives in London, Mr McDonald lives in Brisbane, Mr Maith lives in Belo Horizonte, Brazil, Mr Robertson lives in the United Kingdom and Mr Oldham lives in Brisbane), or are often travelling, it was difficult to arrange the interviews with BHPIO's witnesses and in some cases, the witnesses had to cancel interviews that had been arranged, causing further delays. It was particularly time consuming and expensive to take and settle statements with witnesses no longer employed by BHP and overseas witnesses.
If Westraint is given leave to re-amend the statement of claim, I will have to interview Mr Carroll, Mr Freeman Mr Rouse, Mr Dean, Dr Greene, Mr McDonald, Mr Maith, Mr O'Shannassy, Mr Oldham and Mr Wedlock again, and in all likelihood, interview further witnesses, to put questions to them as to the matters described in paragraph 7, all of which relate to a period between 8 and 14 years ago.
I am informed by Brahma Dharmananda, the partner with conduct of this action on behalf of BHPIO, that discovery was also costly and time consuming. In excess of 11,500 documents have been discovered, sourced from BHP and its agents worldwide.
As discovery had been made, a mediation conference held, witness statements exchanged, a proposed trial bundle of documents collated and objections to witness statements and the proposed trial bundle exchanged, I believed that in November 2000, the action was on the point of going to trial. If Westraint is given leave to re-amend the statement of claim, there will be extensive amendments required to BHPIO's defence, further discovery and witness statements will have to be exchanged and a new trial bundle of documents collated before the action can go to trial.
When witness statements were being exchanged in the first half of 2000, I tried to locate representatives of the then Romanian Government who could provide evidence relevant to the matters already raised in this action. I was unable to locate any of the representatives. Particularly, I was informed by Dr Greene and Mr Maith and believe that they no longer have contact details for either Mr Petrescu or Mr Geormaneanu with whom they negotiated on behalf of Mimex. I do not know how to contact other representatives with whom Mr Hancock may have had dealings. Nicolae Ceaucescu, the former president of Romania with whom I understand Mr Hancock had dealings, was shot on Christmas day, 1989.
Lang Hancock and Kevin Dalby, who would have been important witnesses in that they represented HML in negotiations with various Romanian Government bodies, BHPIO, the Pennant group of companies ('Pennant'), iron ore producers (for example, Hamersley Iron, ISCOR and Robe river), have passed away.

[45]

(a) The decision of the Full Court stands in the place of the decision of Scott J. Hence, the position is as if Scott J had refused the amendment application made to [h]is Honour.

(b) An interlocutory application refused by Judge A may, in limited circumstances, be renewed before Judge A, Judge B or indeed any other judge.

(c) It is too extreme to say there is a rule of practice whereby no second interlocutory application can be entertained unless there is a change of circumstances or unless evidence is relied upon which could not reasonably have been obtained earlier. See Nominal Defendant v Manning [2000] NSWCA 80; (20000 [2000] NSWCA 80; 50 NSWLR 139 at [72] per Foster AJA (with whom Heydon JA agreed) and Clairs Keeley v Treacy [2004] WASCA 277; (2004) 29 WAR 479 at [11] per Steytler, Templeman & McKechnie JJ. The Court can and should entertain a second application where the interests of justice require such an outcome. See Clairs Keeley v Treacy [2004] WASCA 277; (2004) 29 WAR 479 at [7] & [13] per Steytler, Templeman & McKechnie JJ; Commonwealth of Australia v Albany Port Authority [2006] WASCA 185 at [24] per Steytler P & [70] - [73] per Pullin JA. See also Pioneer Concrete (WA) Pty Ltd v Elwood [2005] WASCA 48 at [30] per Pullin JA (with whom Malcolm CJ & McLure JA agreed).

(d) It was never submitted to either Scott J or the Full Court that the 6 June 1988 Document constituted a deed rather than a simple contract.

(e) Even treating the 6 June 1988 Document as a simple contract, it was never submitted to either Scott J or the Full Court that the plaintiff had available to it an 'acknowledgment reply'.

(f) Even treating the 6 June 1988 Document as a simple contract, the current law in Western Australia is that for limitation purposes amendments can be made to a statement of claim if they fall within the ambit of the indorsement on the writ of summons. See Jeffrey v Witherow [2006] WASCA 4; (2006) 31 WAR 236 at [36] per McLure JA (with whom Steytler P agreed). In BHP Iron Ore Pty Ltd v Westraint Resources Pty Ltd [2002] WASCA 18 the Full Court incorrectly (with respect) looked at the statement of claim rather than the indorsement. See [76] & [86].

(g) To the extent that BHP Iron Ore Pty Ltd v Westraint Resources Pty Ltd [2002] WASCA 18 directs attention to the statement of claim rather than the indorsement, the decision should no longer be regarded as good law. In hearing the plaintiff's re-amendment application, Le Miere J will be bound to apply the law as stated in Jeffrey v Witherow [2006] WASCA 4; (2006) 31 WAR 236 at [36].

[67]

'Purport' according to the Macquarie Dictionary means 'to profess or claim ... to convey to the mind as the meaning or thing intended; express, imply, ... tenor, import or meaning, ... purpose or object ...'. In the context of s 9(4) of the Property Law Act 'purporting' is used in contra-distinction to 'expressed'. Thus, in my view, an instrument which is not clearly indicated or distinctly stated to be a deed, but which otherwise conveys to the mind, by implication, through its tenor and the words used therein, that it is intended to be a deed, is an instrument purporting to be a deed.

Where an instrument is clearly indicated or distinctly stated to be a deed, absent any extrinsic evidence to the contrary, it would ordinarily be inferred that the parties intended that it should have effect as a deed. The question whether an instrument purports to be a deed is closely bound up with the question whether it appears from the words used in the instrument that the parties intended it to be a deed. Thus the resolution of the questions whether there has been compliance with s 9(4) of the Property Law Act and whether the parties intended the instrument to be a deed depend, in the circumstances of this case, upon a construction of the instrument itself.

The learned trial judge held that in determining whether an instrument was expressed or purported to be a deed, in terms of s 9(4), regard should be had to the form of the instrument alone, and not its substance. He said that it was unnecessary 'to determine whether the document is in substance a deed. Subsection (4) provides no justification for such an exercise.' With great respect I differ from that view. I have already pointed out that, in my opinion, s 9 of the Property Law Act does not dispense with the requirement of intention, and, 'purporting', in the context of s 9(4), does not mean convey to the mind by form alone, but, rather, convey by the instrument as a whole, including both its form and its tenor or substance (252).

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Judgment (102 paragraphs)

WESTRAINT RESOURCES PTY LTD -v- BHP IRON ORE PTY LTD [No 3] [2008] WASC 265 (21 November 2008)

Legislation Cited (1)

Cases Cited (7)