Supreme Court of WA|2010-03-05|Before: Mr J, Murray J

WRIGHT PROSPECTING PTY LIMITED -v- HANCOCK PROSPECTING PTY LIMITED [No 9] [2010] WASC 44 (5 March 2010)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : WRIGHT PROSPECTING PTY LIMITED -v- HANCOCK PROSPECTING PTY LIMITED [No 9] [2010] WASC 44

HEARD : 69 MARCH, 1216 MARCH, 1923 MARCH, 2730 MARCH, 3 & 23 APRIL, 711 MAY, 1417 MAY, 2125 MAY, 30 MAY, 7 & 8 JUNE, 1214 JUNE, 21 & 29 JUNE, 13 AUGUST, 610 AUGUST, 1317 AUGUST, 2224 AUGUST, 27 & 28 AUGUST 2007

BETWEEN : WRIGHT PROSPECTING PTY LIMITED (ACN 69 008 676 417)

HANCOCK PROSPECTING PTY LIMITED (ACN 69 008 676 417)

Contract - Partnership agreements - Option to require transfer of assets by one partner to the other - Principles of construction of terms of commercial agreements - Admissibility of evidence of circumstances leading up to and after the date of agreement

Contract - Implication of terms as opposed to inference of terms - The implication of a term requiring the defendant to do all reasonably necessary to secure to the plaintiff the benefit of the option - The option is properly so described - It is not unenforceable because uncertain

Contract - Discharge - Abandonment - General principles - Estoppel as an alternative doctrine - The law as to estoppel by convention

Contract - Enforceability - Legal principle in respect of illegality of contracts discussed - Whether agreement illegal in performance of option because of consents required

Contract - Exercise of option - Effect of rule against perpetuities under Property Law Act 1969 (WA), s 110 - Notice of exercise not stamped until after writ and statement of claim filed - Effect of Stamp Act 1921 (WA), s 27

Contract - Remedies for breach - Equitable remedies - Plaintiff not to be denied relief on ground of unclean hands doctrine - Availability of specific performance and form of orders discussed

Equity - Legal principles in respect of equitable estoppel discussed - On the facts found the defence is not made out

Equity - Unconscionability - Availability when contract unenforceable, or void for illegality - General principles discussed - Necessity to rely on accepted equitable principles to establish unconscionability - Cause of action not maintainable when effect would be to circumvent application of rules of law

Equity - Breach of fiduciary duty as between partners - Relationship to contractual obligations

Trade practices - Breach of Trade Practices Act 1974 (Cth), s 52 - General principles discussed - Action not timebarred

Limitation of action - Plaintiff's equitable claim against defendant as a constructive trustee - Claim for the recovery of 'land' - Claim is not for an interest in possession - Claims by defendant for breach of fiduciary duty and breach of contract - Provisions of Limitation Act 1935 (WA) construed

Damage - Equitable damages - Claim for loss of opportunity to acquire interest in land - Principles governing assessment of expectation damages discussed

Defendant : Mr F M Douglas QC, Mr S J Rushton SC with Mr S K Dharmananda, Mr L P Rayney and Mr J D MacLaurin

Defendant : Cocks Macnish and from 11/6/2007 Salter Power

Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Co Ltd [2008] WASCA 119; (2008) 66 ACSR 594

Anaconda Nickel Ltd v Tarmoola Aust Pty Ltd (2000) 22 WAR 101; [2000] WASCA 27

Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99

BHP Iron Ore Pty Ltd v Westraint Resources Pty Ltd [2002] WASCA 18

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

Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 83 ALJR 903

Canny Gabriel Castle Jackson Advertising Pty Ltd. v Volume Sales (Finance) Pty. Ltd [1974] HCA 22; (1974) 131 CLR 321

Chemeq Ltd v Shepherd Investments International Ltd [2007] WASCA 117

Cigna Insurance Asia Pacific Ltd v Packer [2000] WASCA 415; (2000) 23 WAR 159

Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64

Con-Stan Industries Pty Ltd v Norwich Winterthur Insurance (Aust) Ltd (1986) 160 CLR 226; [1986] HCA 14

Do Carmo v Ford Excavations Pty Ltd [1984] HCA 17; (1984) 154 CLR 234

DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423

Dye v Griffin Coal Mining Co Pty Ltd (1998) 19 WAR 431

Enzed Technology Pty Ltd v Benge (1989) 1 WAR 164

Finesky Holdings Pty Ltd v Minister for Transport (WA) (2002) 26 WAR 368; [2002] WASCA 206

Fitzgerald v F J Leonhardt Pty Ltd [1997] HCA 17; (1997) 189 CLR 215

Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420

Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101; [199] HCA 10

Home Building Society Ltd v Pourzand [2005] WASCA 242

Hospital Products Ltd v United States Surgical Corp [1984] HCA 64; (1984) 156 CLR 41

IATA v Ansett Aust Holdings Ltd (2008) 234 CLR 151; [2008] HCA 3

Kamleh v The Queen (2005) 79 ALJR 541 [2005] HCA 2

Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419

Laybutt v Amoco Australia Pty Ltd [1974] HCA 49; (1974) 132 CLR 57

Lill v Merchant Capital (WA) Ltd (1996) 15 WAR 536

Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 39 ACSR 444; [2006] FCAFC 144

Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449

Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638

Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] UKHL 19; [1997] AC 749

McCann v Switzerland Insurance Aust Ltd (2000) 203 CLR 579; [2000] HCA 65

McKenna v Perecich [1973] WAR 56

Metcalf v Permanent Building Society (1992) 10 WAR 145

Minister for Resources; Ex p Cazaly Iron Pty Ltd [2007] WASCA 175

Morgan v Banning (1999) 20 WAR 474

Morrison v Town of Victoria Park [2007] WASCA 164

Noranda Australia Ltd v Lachlan Resources NL (1988) 14 NSWLR 1

O'Neill v O'Connell [1946] HCA 59; (1946) 72 CLR 101

Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal [1983] 1 AC 854

Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35

Paragon Finance Plc v Thakerar & Co [1998] EWCA Civ 1249; [1999] 1 All ER 400

Pateman v Daw Koh [2007] WASCA 85

Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221

Renowden v McMullin [1970] HCA 24; (1970) 123 CLR 584

Riches v Hogben [1985] 2 Qd R 292

Rosebride Nominees Pty ltd v Commonwealth Bank of Australia [2008] WASCA 107; (2008) 36 WAR 561

Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65

Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 597

Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332

Shepherd v Baster [2006] WASC 176

Shepherd v Felt & Textiles of Australia Ltd [1931] HCA 21; (1931) 45 CLR 359

Sorna Pty Ltd v Flint (2002) 21 WAR 563; [2000] WASCA 22

Stone James v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233

Summers v The Commonwealth [1918] HCA 33; (1918) 25 CLR 144

Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315

Terrex Resources NL v Magnet Petroleum Pty Ltd (1988) 1 WAR 144

Thompson v Palmer [1933] HCA 61; (1933) 49 CLR 507

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52

Townsend v Roussety & Co (WA) Pty Ltd [2007] WASCA 40; (2007) 33 WAR 321

WA v Wardley Australia Ltd [1991] FCA 314; (1991) 30 FCR 245

Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387

Wardley Australia Ltd v WA [1992] HCA 55; (1992) 175 CLR 514

Weldon v Neal (1887) 19 QBD 394

Western Australia v Watson [1990] WAR 248

Willoughby v Barrett-Lennard [1979] WAR 167

Wilson International Pty Ltd v International House Pty Ltd [No 1] [1983] WAR 243

Wilson International Pty Ltd v International House Pty Ltd [No 2] [1983] WAR 257

Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 1] [2007] WASC 78

Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 3] [2007] WASC 118

Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 6] [2007] WASC 191

Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 7] [2007] WASC 229

Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 8] [2008] WASC 20

Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd [1978] HCA 42; (1978) 139 CLR 410

1 This litigation has been on foot since the issue of a writ on 2 March 2001. At that time, the indorsement of claim sought declarations as to the valid exercise of an option granted to the plaintiff by cl 4 of an agreement between the parties dated 15 February 1984. A declaration was sought that what was described as the Rhodes Ridge Joint Venture, comprising various mining tenements and temporary reserves, was an interest of the plaintiff under the 1984 agreement, in respect of which the defendant held its interest as a partner on trust for the plaintiff. An order was sought requiring the defendant to take all necessary steps to transfer the benefit of the Rhodes Ridge interest to the plaintiff.

2 As the years passed, the statement of claim originally filed on 4 April 2001, within the general parameters of the indorsement of the writ, was much amended. Substantial amendments were made. A completely new head of claim was added by leave granted on 27 September 2006. The last occasion, I think, when the statement of claim was amended was by leave granted on 12 June 2007, well into the trial: Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 6] [2007] WASC 191.

3 The defence and counterclaim, in its turn, sustained numerous amendments from 2002 and over the years following. Some were made consequentially upon amendments to the statement of claim. Others were substantively generated by the defendant. On 27 March 2007, I refused leave to amend the defence to plead a limitation defence: Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 1] [2007] WASC 78. I think the defence and counterclaim reached its final form, after numerous amendments, when it was amended by leave I granted on 8 March 2007.

4 The pleadings so far mentioned were subjected to various requests for further and better particulars by both parties. The plaintiff's reply and defence to counterclaim also required amendment. I granted an application of that kind in part, again during the course of the trial, on 30 May 2007: Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 3] [2007] WASC 118.

5 It has been the case that amendments to the pleadings over the years on occasions followed changes in legal representation. Fresh minds and further preparation offered a different view of the issues between the parties which required resolution. I do not criticise that process and certainly, when the matter came under my management to trial, I took the view that as the matter had already been considerably delayed, the parties ought to have every opportunity of which they wished to avail themselves to raise issues that they wished to have litigated and which, in my view, satisfied the tests upon which leave to amend might be granted.

6 However, there is no doubt that the process, intruding upon the trial as it did, both delayed the trial process and expanded the time required for the trial. Further, the book of pleadings runs to 188 pages. The pleadings are complex. They raise a multiplicity of issues and they show the signs of contributions by a number of different pleaders. It has not been easy to winkle out of that complex web of documents the issues which the parties actually wish to litigate.

7 At the beginning and during the course of the trial a considerable issue arose in relation to the confidentiality of primary source documents, particularly relating to the evidence of valuers and other expert witnesses. These were documents which were both discovered by the parties and sought on subpoena, principally from Rio Tinto and other companies within the Rio Tinto group (Rio Tinto). I gave a number of interlocutory judgments, delivered ex tempore and otherwise, on this general topic during the course of the proceedings.

8 I need not revisit those matters except to say that I was naturally guided by the desire to preserve the confidentiality of commercially sensitive documents, given that these parties and companies in the Rio Tinto group were currently dealing commercially with each other and were likely, in various ways, to continue to do so in the future. It was clearly desirable that obviously commercially sensitive documents should remain confidential to their owners, except to the extent necessary to serve the interests of justice in the litigation before the Court. That involved, of necessity, exposing documents to counsel, in some cases to instructing solicitors, and to expert witnesses, either because they wished to rely upon or have regard to them in the presentation of their testimony, or to enable their evidence and opinions to be tested in cross-examination.

9 A confidentiality regime was devised, which identified the various documents in question and restricted access to them to the Court, the party or entity whose documents they were, and nominated individuals who otherwise required access, whether it was counsel, solicitors or witnesses, who were prepared to sign confidentiality undertakings. These were strict in their terms and designed to preserve the confidentiality of the documents for the duration of the proceedings and any appellate proceedings flowing therefrom, as well as securing their return to their owners, whether the documents were originals or copies, when ultimately there was no further need for them for the purposes of this litigation.

10 The undertakings so devised need not be set out here. It is sufficient to note that they went well beyond the ordinary undertaking impliedly given to the Court to use the information provided by such documents and derived from them, only for the purposes of the litigation in which they were produced, so that they could not be used for any purpose collateral to that litigation. As might be expected, it became necessary, on occasion, to modify and somewhat relax the undertakings in relation to specific documents, although I was not always persuaded to that course, eg, in the case of an application heard on 22 November 2007, judgment in which was delivered as Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 8] [2008] WASC 20.

11 The trial in this matter commenced on 6 March 2007. I mention generally the course the trial took because it exemplifies the difficulties that can arise in a long trial, which may unfortunately delay the disposition of the litigation and the delivery of judgment, this being litigation which proved to be incapable of settlement. The trial was originally listed for four weeks in November 2006. The programming orders I made on 27 September 2006, having allowed major amendments to the statement of claim, sought to program preparation to a trial to be conducted over a six week period commencing on, or as soon as practicable after, 5 March 2007. The Court was then of the view that that would enable preparation to be completed, particularly preparation of expert evidence, not only that to be adduced by the plaintiff, but also (with much less confidence as to the capacity to comply with the timelines) responsive and other expert evidence to be adduced by the defendant.

12 As it happens, although the trial commenced on 6 March, a version of the report of the plaintiff's expert witness, Mr Cole, was provided at the beginning of February 2007 (exhibit O) and his reports upon which the plaintiff ultimately relied, bore later dates and were provided over a period of time. Exhibit LA, Mr Cole's principal report, was dated 30 March 2007. A necessary part provided as confidential Appendix 10 is dated 3 May 2007 (exhibit LB) and his discounted cash flow analysis was even later. It is pointless to attribute blame for the way that developed, and I refer to it to make it clear that I see nothing in the process described which has a bearing upon the credibility of Mr Cole as a witness.

13 However, it is the case that the incapacity to complete the preparation process within the periods allowed by programming orders had the effect of disrupting an orderly trial process. The trial having commenced at the beginning of March 2007, it proceeded smoothly for a time, with non expert evidence adduced by the plaintiff. As to that, there were statements of evidence, in contradistinction to expert witnesses whose evidence-in-chief was ordinarily provided by way of an export report supplemented on occasions, to some degree, by oral evidence. In accordance with the programming orders, I received the witness statements as the evidence-in-chief of the witnesses, with the various documentary annexures becoming exhibits. That was subject to objections taken, but generally speaking the objections were sensibly resolved by the agreement of counsel and there were very few occasions when I was required to give a ruling.

14 In some cases, it was found to be expedient merely to note the objection and undertake to have regard to it in the final decision to be made by the Court in relation to the facts sought to be established by the evidence of the particular witness. On other occasions, it was possible to amend the statement to reflect the objections or for me to note that a particular portion of the statement clearly had limited evidentiary value. There were, for example, a number of cases where the narrative or the fact of a communication was a relevant fact, but I was required because of the hearsay rules to be careful not to give the material communicated evidentiary value to establish those facts: Kamleh v The Queen (2005) 79 ALJR 541 [2005] HCA 2. Generally, however, potential difficulties of that kind were resolved by the fact that documents tendered were produced without objection and were business records: Evidence Act 1906 (WA), s 79C.

15 In the result, the plaintiff's non-expert witnesses concluded their evidence by the end of March, including evidence in relation to confidential documents, given in closed court as part of the process by which I preserved the confidentiality of the material by excluding from the Court all those who were not persons entitled to sign confidentiality undertakings or who had not done so. In view of the state of preparedness of the plaintiff's expert evidence, it proved to be impossible to resume until Mr Cole commenced his evidence on 7 May. Meanwhile, the parties brought on a small number of interlocutory applications which needed to be dealt with.

16 While I am discussing the trial process, I should observe that so far as documentary exhibits are concerned, the great bulk of them and many more documents which were not ultimately tendered in evidence were contained on electronic databases provided to the Court in a form which enabled them to be displayed in court while witnesses gave their evidence so that they could be seen by the witness, counsel, solicitors and spectators. That process proved to be a considerable saving of time. However, I informed the parties that although I wanted ultimately to have the tender of 'hard copy' - original documents or copies which could be received in evidence - I did not propose to take into evidence the whole of the materials on the databases, but only that material tendered by being referred to or relied upon by a witness or put to a witness in cross-examination.

17 During the course of the giving of the evidence, I did not separately record the receipt into evidence of each document used in those ways, although I did indicate how the documents would be identified as exhibits. I required the legal representatives of the parties, liaising with my associate, to identify within the exhibit numbering system I had indicated would be applied, those documents which had been tendered in evidence. They would then be identified as exhibits in the database and they would be provided to the Court in paper form.

18 That process has now been completed and although it created some difficulty from time to time in actually completing the process of tender in the way I have described, in the end it seems to me that it enabled the proceedings to be conducted much more expeditiously than if, each time a witness referred to or was referred to and cross-examined upon a document, I had stopped the proceedings and given the document an exhibit number and a description which could be included in the transcript in the ordinary way.

19 During the course of the trial, I delivered eight interlocutory judgments which were formally published. They run to about 110 pages in all. The evidence given in the trial occupied 4,565 pages of transcript. The trial occupied 61 sitting days between the beginning of March and the end of August, a period of 12 weeks, twice as long as had been estimated when the matter was listed for trial after the four-week period in November was vacated.

20 As I have remarked, there were breaks in the trial process which were unfortunate. They were principally caused by delays in getting up the expert evidence tendered first by the plaintiff and then by the defendant, whose legal advisers were hampered in getting up their expert evidence, to the extent that it was responsive to that tendered by the plaintiff. There were other causes of delay in the parties' presentation of their cases.

21 The plaintiff's non expert evidence was given some time ago at the beginning of the trial process and it was subjected to considerable challenge. Issues were raised as to the credibility of the plaintiff's witnesses, particularly Messrs Michael Wright and Brandli. It would be desirable that my reasons should not be too long delayed after such a process, but in the end I have, I feel, been able to recall the evidence and, where necessary, I have been able to refresh myself, guided by the submissions of the parties, by reference to transcript and relevant documents, together with my own notes.

22 Lest it be thought that I have overlooked the fact, I should say in passing that because the trial process was so long delayed, it went into time occupied by other commitments which I had undertaken, including a period of leave. That was so also in September and the months following. Before I pass from these matters, I also record that in my view, the effort and diligence and, within the limits of their instructions, the preparedness to negotiate and compromise shown by counsel and solicitors for both parties, was exemplary. I am satisfied that whenever they could move to enable progress to be made by resolving a matter of present difficulty, that was done.

23 When the process of leading evidence concluded at the end of August 2007, each party asked for a month to prepare final submissions. That was granted, and I advised that I would consider, when I was able to read those documents, whether and if so when and for how long, the Court would reconvene to hear oral submissions. The plaintiff's written submissions in two parts, one dealing with material which was generally available and the other with confidential material, were substantially available to me by 7 October 2007 and available to me in final amended form by the end of October 2007. Those submissions run to 445 pages. The submissions are supported by a list of well over a hundred authorities and other references.

24 The submissions lodged on behalf of the defendant, both in relation to open material and confidential material, were over 2,645 pages in length, including submissions with respect to the assessment of damages. These submissions were supported by over 430 authorities and other references. Both parties copied the authorities on which they relied. My chambers were decorated with boxes of photocopied cases and other materials, entirely unsolicited.

25 No sooner had the defendant's submissions arrived, indeed on the day after they did so, than the solicitors for the plaintiff wrote seeking to have the matter listed so that they could present argument in favour of the grant of leave to lodge submissions in reply. I refused that request and had my associate write to the solicitors for both parties to advise them that the parties were welcome to lodge submissions in reply to each others closing submissions. I would read and have regard to whatever arrived, but I proposed to start work. Indeed, I had little time during the balance of 2007 in view of other court commitments.

26 In fact, when the first instalment of the plaintiff's submissions in reply arrived on 14 February 2008 the document advised that there was more to come, hopefully by the end of March 2008, and apologised for the incapacity to prepare earlier those then supplied because of constraints on counsels' availability during December 2007 and January and February 2008. In total, when the last instalment dated 3 June 2008 arrived, the plaintiff's reply ran to 646 pages.

27 In the meantime, the defendant undertook a process of written reply to the plaintiff's contributions and the process of exchange of written submissions only ended, finally, when, by consent, I made an order that it should do so, on 23 July 2008, nearly a year after the oral portion of the trial had ended. By then the submissions of the parties ran to well over 4,000 pages. The process has considerably extended the time taken to produce this judgment because, having permitted the process I have described, I felt honour bound to read what was provided and I found that I could not work on sections of the judgment until I received all of the submissions of both parties..

28 I abandoned all thought of re-listing the matter so that counsel could speak to their submissions generally or on any specific aspect of the case. The documents mentioned above are by no means outlines of submissions. They make no attempt to distil those issues which the parties respectively consider to be worthy of presentation from those which, although they find a presence in the pleadings, are effectively makeweights. The submissions are so constructed and in such detail that they effectively defy the capacity of a single judicial officer to read and absorb them, to analyse their worth in a timely way and to use them to assist the process, within a reasonable time, of providing a judgment which fairly and properly deals with the issues in the case.

29 I mention those matters, not by way of complaint or apology for what follows, but because in the respects discussed above, this trial really tested the capacity of the court to conduct the litigation process in a manner calculated to deal justly with the parties. At least in cases where litigants appear to be unconstrained by considerations of time and cost, perhaps different processes of settling disputes than those traditionally employed by the courts will have to be devised.

30 The question may have to be asked whether any two litigants should be able to consume the scarce resources of the court in a way which must be seen as having an impact upon the interests of others who would wish to use the court in the endeavour to resolve their disputes. I confess to having answered that question by regularly giving priority to other matters which have required my attention. However, that is a debate for another time and place. I merely raise these matters now so that the processes of trial and judgment in this case may be understood.

31 Langley George (Lang) Hancock and Ernest (Peter) Wright were friends and business partners. They had known each other most of their lives. They went to school together. They were of an age. Lang Hancock was born on 10 June 1909. Peter Wright was two years older. Peter Wright died suddenly while on a business trip in Thailand on 13 September 1985. Lang Hancock survived him for a considerable period. He died, after a period of illness, on 27 March 1992. He was then aged 82 years.

32 In 1955, Lang Hancock incorporated the defendant company ("HPPL"). In 1956, Peter Wright incorporated the plaintiff ("WPPL"). During the latter part of the 1950s the two men arranged for WPPL and HPPL to commence to carry on business as partners. Each of the men was the life governing director of the company that he had formed. They carried on partnership under the style and title 'Hancock and Wright'. The partnership subsists today. This, then, is a dispute between partners with respect to their respective interests in property the subject of an ongoing partnership.

33 Mr Wright had three children. His eldest son is Michael Wright. He became a director of WPPL on 22 December 1962. His sister is Angela Bennett. One of her children, Grant Bennett, gave evidence before me. Mrs Bennett was appointed a director of WPPL on 17 August 1976. She and Michael Wright continue as directors and they hold, between them, over 99 per cent of the issued shares in WPPL. Peter Wright's younger son is Julian Wright. He originally had a one-third shareholding in WPPL, but he sold it to his brother and sister on 23 February 1987, and so these proceedings do not involve his participation.

34 Lang Hancock's daughter and only child is Mrs Gina Rinehart. She was involved with her father as a director of HPPL except for a period between 1985 and 1991 when, as I understand it, towards the end of Lang Hancock's life she was reappointed as a director, with effect from 7 November 1991. She is currently the major shareholder in HPPL and is a director and the secretary of the company.

35 This litigation concerns the plaintiff's entitlement to the defendant's interest in partnership property comprised of mining tenements which together may be referred to as Rhodes Ridge. There are a number of contractual agreements to which it is necessary to refer. They were drawn by a Sydney solicitor, Mr Carnegie Fieldhouse, who was known as "Carnie". Mr Fieldhouse was employed by the partnership or the partners at the time when the agreements relevant to this litigation were made. He was retained by the partnership after he left that employment towards the end of 1991.

36 He appears to have proffered advice to both Mr Wright and Mr Hancock, even in circumstances where, in relation to the subject matter in question, their interests may have been potentially in conflict. It is obvious that he was very much relied upon for his legal expertise by both partners, effectively by both Mr Wright and Mr Hancock, whose corporate vehicles in the partnership, WPPL and HPPL were.

37 The partnership gained control of the tenements comprising Rhodes Ridge in 1967. They turned their attention to its development and, as was then the ordinary process, a facilitating Act, the Iron Ore (Rhodes Ridge) Agreement Authorisation Act 1972 (WA) was passed in that year. Shortly thereafter, in October 1972, WPPL and HPPL entered into a Joint Venture Agreement and, with the State and Texas Gulf Inc, entered into the Iron Ore (Rhodes Ridge) Agreement.

38 Some years later, on 2 March 1978, WPPL and HPPL entered into a formal partnership agreement. This appears to be the first written agreement under which the partners were to continue to carry on the business of the partnership under the firm name 'Hancock & Wright'. The document is really of historical interest only, but I note that it contained provisions governing the relationship between the partners upon the death of either of the governing directors of the partners, ie, Peter Wright and Lang Hancock: cl 17. Clause 19 provided expressly for the continuation of the partnership, notwithstanding the deaths of either Peter Wright or Lang Hancock, or both men.

39 That agreement was substituted by one dated 24 May 1983. By cl 1, the partnership was re-established to continue under the same firm name. By cl 2, the assets of the partnership were dealt with in a conventional way, establishing that the partnership was an equal partnership. Importantly, under that clause it was provided that all forms of mining tenements, other permits and licences, 'whether held by HPPL or WPPL or subsidiary companies under any Mining Act of any State of Australia at the date of this Agreement are held in trust for and comprise assets of the Partnership.' Clause 7 was the usual provision requiring each partner to be just and faithful to the other in all transactions relating to the partnership business and requiring each 'to give a true account of the same when and so often as the same shall be reasonably required without any concealment or suppression'.

40 There were much more detailed provisions later in the agreement securing the continuation of the partnership upon the death of either Lang Hancock or Peter Wright. By cl 12, the partner having the surviving governing director was to become the managing partner of the partnership until the death of the surviving governing director with 'the right solely to conduct, manage, maintain, control and make all decisions in connection with the partnership business'. Clause 13 directed the managing partner, in that event, to direct its efforts towards bringing into production as soon as reasonably possible the then mining prospects of the partnership, always seeking a royalty, but not involving the partnership in new prospecting or mine management unless specifically agreed between the partners.

41 Clause 14 provided for the continuation of the partnership until terminated by written agreement, but the clause also provided for a notice by one partner to the other, effectively requiring the sale or division of the assets of the partnership and its winding up. Otherwise, by cl 15, after 80 years from the date of the agreement, either partner could serve on the other a notice requiring the partnership to be dissolved.

42 The next agreement to be referred to is a partnership variation agreement made on 15 February 1984. Its terms, particularly the terms of cl 4, are central to this litigation. The common seals of WPPL and HPPL were affixed in execution of the agreement by Peter Wright and Lang Hancock respectively. The document records, by way of recital, that:

the Partners have agreed that each Partner shall assume individual control over certain of the assets and interests of the Partnership to the exclusion of the other Partner and shall have the option to require the division of such assets between the Partners.

The recital makes it clear that the intention was to retain the partnership property within the partnership, but to give to the individual partners sole control over the administration and development of identified assets, with each partner having an option, as the recital put it, to require the actual division of the assets between the partners.

43 It is convenient to set out here the material terms of this agreement:

AS FROM 1 JANUARY 1984 and notwithstanding Clause 12 of the Second Partnership Agreement:

(a) HPPL shall assume sole control over and responsibility for the administration, development and disposal of the assets and interests of the Partnership set out in Schedule 1 hereof other than royalties in respect thereof or premiums referred to in Clause 5 hereof (hereinafter called the 'HPPL interests').

(b) WPPL shall assume sole control over and responsibility for the administration, development and disposal of the assets and interests of the Partnership set out in Schedule 2 hereof other than royalties in respect thereof or premiums referred to in Clause 5 hereof (hereinafter called the 'WPPL interests').

(c) Without reference to the other Partner, HPPL in respect of the HPPL interests and WPPL in respect of the WPPL interests shall be entitled to conclude any negotiations and make any agreement having the effect of reducing or disposing completely of any of the said royalties or premiums to which the Partnership may or shall be entitled PROVIDED THAT the making of such agreement shall not be undertaken other than as a last resort to ensure that any relevant mining venture can proceed IT BEING AGREED that during the lifetimes of the present Governing Directors of HPPL and WPPL any decision to make such agreement as a last resort shall be a the sole and unfettered discretion of the relevant Governing Director.

HPPL IN RESPECT OF the HPPL interests and WPPL in respect of the WPPL interests shall determine from time to time whether and to what extent the partnership shall expend partnership funds in respect of such interests and upon such determination the relevant Partner shall contribute to the Partnership an amount equal to the funds to be expended.
NOTWITHSTANDING CLAUSE 2 of the Second Partnership Agreement all income or profits earned and expenses incurred by the Partnership in respect of the HPPL and WPPL interests during any year of income shall be to the account of the relevant Partner whose share in the profits or losses of the Partnership shall be adjusted accordingly PROVIDED THAT any expenses or monies which have already been paid by the Partnership and are later refunded in respect of any existing mining joint venture shall be to the account of the Partnership.
EACH PARTNER SHALL HAVE the option exercisable at any time during the continuation of the Partnership to require the transfer of the HPPL interests to HPPL and the transfer of the WPPL interests to WPPL.

44 The assets and interests identified as being under the sole control of HPPL and WPPL respectively were those set out in Sch 1 and 2 as follows:

SCHEDULE 1

(a) The assets and interests of the Partnership in and to the McCamey and Marrandoo joint ventures, the balance of the Wittenoom Agreement and the Temporary Reserves and other mining or mineral areas more particularly set out in the map attached hereto and described as LGH Mining Tenements Sheet C, which Sheet also contains particulars of certain of the assets hereafter described in this Schedule.

(b) Kevin's Corner and all other coal interests in Queensland.

(c) All manganese tenements and interests in Western Australia.

(d) The Wittenoom Settlement including offices and houses but excluding the Power House and Mill.

SCHEDULE 2

(a) The assets and interests of the Partnership in and to the Rhodes Ridge joint venture and the Temporary Reserves (including Giles) and other mining or mineral areas more particularly set out in the map attached hereto and described as EAW Mining Tenements Sheet B, which Sheet also contains particulars of certain of the assets hereafter described in this Schedule.

(b) All limestone interests in Western Australia (including limestone areas) held in trust for the Partnership.

(c) All interests in Barrett-Lennards.

(d) Chrome and base metal interests in Western Australia.

(e) Wittenoom Hotel and town houses

45 I find that there were maps of the respective interests of the partners as referred to in par (a) of each of Schedule 1 and Schedule 2. It is not clear whether they were originally attached physically to the agreement, but they are readily identifiable and, in my view, properly form part of the agreement. There are actually three of them.

46 The first is a composite map of the Pilbara region identified on the document as Sheet 'A'. It sets out the various mining tenements referred to by the identifying numbers. Those coloured roughly in red are identified as 'LGH Mining Tenements'. Sheet 'C' is the relevant part of Sheet A which shows, again coloured in red and identified by number, the 'LGH Mining Tenements'. These therefore are the tenements, the areas and the interests identified as HPPL interests in par (a) in Sch 1 of the 1984 agreement.

47 Similarly, Sheet 'B' identifies, coloured blue, the various tenements described as 'EAW Mining Tenements'. These therefore are the tenements, assets and interests identified as WPPL interests in par (a) of Schedule 2 of the 1984 agreement. Each of Sheets 'B' and 'C' are signed by Lang Hancock and Peter Wright. They show identifying numbers and letters which reveal temporary reserves, exploration licences and prospecting licences. Some of the temporary reserves are indicated as having been converted into exploration licences without changing their area or location. A few of the tenements are actual mineral claims.

48 Of importance, as matters developed, in the implementation of this agreement are what came to be called the buy-back provisions in cls 6 to 9. Clause 6 provided that if, in exercising control of a particular interest identified with it, a partner was able to organise 'full scale major development and commencement of substantial mining activities' then it was to offer to the other partner a half of its share in the mining venture at a price calculated at half the cost incurred by the developing partner less any premium it had received. Such an offer would be open to be accepted within a month. Clauses 7 and 8 made some particular arrangements in respect of joint ventures identified as the McCamey joint venture, the Marandoo joint venture and the Rhodes Ridge joint venture. Clause 9 made it clear that the purpose of these terms was, that on the acceptance of a buy-back offer, although the particular interest had been identified with and managed and developed by a particular partner, the partners would be placed, as nearly as practicable, into the position they would have been in if the interests in question had been managed as partnership assets in the ordinary way.

49 I have mentioned that Hancock and Wright were both about the same age. In 1984 the evidence establishes that they would have been in their mid seventies and it is very evident from the correspondence between them that they were concerned, in 1982 and 1983, to settle the partnership arrangements so that the assets and interests of the partnership would benefit them equally with provision for their approximately equal division into two groups of assets of roughly equal value.

50 A memo dated 12 October 1983 (exhibit A20) to Peter Wright from Lang Hancock, with important notations in Hancock's hand and signed by both men, evidences their intent which was ultimately reflected in the 1984 agreement. In the first paragraph of the document, Mr Hancock says:

If I have understood your letter to Carnie [Fieldhouse] of October 2 properly, and Carnie's interpretation of your discussions, I am prepared to accept your carve-up, that is: Rhodes, Giles etc in Group 1 and McCameys etc as Group 2.

51 Attached to the memo is a typed document headed 'E A Wright' with two columns listing various temporary reserves. On the left, as Group 1, are Rhodes Ridge and Giles tenements. On the right, as Group 2, are McCameys and Marandoo tenements. Below that are two other groups. That on the left under Group 1 is marked Group X. Summarised, it collected limestone interests in WA, Barrett-Lennards, a nominated temporary reserve which came to be known as Shovelanna, chrome base metals in WA, and the Wittenoom Hotel and townhouses. The corresponding group of interests in the column under Group 2 was identified as Group Y. Included here were Kevin's Corner and other coal in Queensland, Manganese in WA and the Wittenoom settlement, including offices and houses but excluding the powerhouse and mill. If the reader refers back to the schedules of the 1984 agreement, it can be seen that Groups 2 and Y became Sch 1 and Groups 1 and X became Schedule 2.

52 It is evident that they were grouped in that way by the agreement of the men, each speaking as the guiding mind and will of the corporate vehicle which expressed their partnership interest. The note at the foot of the memo in the hand of Lang Hancock reads:

Agreed in principle subject to documentation with choice of list of assets to be made by E A W before end of week.

E A W now chooses Group 1 & X, L G H to take Group 2 & Y.

14/Oct/83

53 It is evident that the 1984 agreement was the formal documentation to record the agreed terms of the 'carve-up' which, at the same time, was designed to preserve the association of the partners to a limited extent, including the term which became cl 10 of the 1984 agreement that new projects might be pursued and developed by each of the partners individually, but that partner, 'shall offer such interests it may determine in any venture resulting from such activity to the other Partner on a 'Best Friends' basis'.

54 Mr Fieldhouse was instructed to prepare the document which became the 1984 agreement. He took the advice of counsel on the best way to go about it. His brief to counsel, dated 19 December 1983 (exhibit DD6) raises a matter of particular concern in the following manner:

In view of the fact that the partnership is generally in the business of turning to account anything in the mining and exploration fields, it is felt that there may be some possibility of income tax arising on a transfer of partnership assets into the names of the individual partners, or on a partition of the assets.

If Counsel agrees with this view, does he believe that the Partners would be better advised to leave such assets in the partnership with the partnership bearing all maintenance and development costs and with the annual income of each partner from the partnership being varied to take into account the expenses paid in respect of the assets which were proposed to have been allocated to each partner.

Would Counsel please advise upon the best method of structuring the partnership to minimise any possibility of income tax arising from dealing with the assets as desribed.

55 The brief was provided to Mr N Forsyth QC. His opinion is dated 21 December 1983 (exhibit EA68). In par 11 he advises:

In my opinion, the tax risks could be minimised considerably further if there were to be no transfer from the partnership at all. Instead, as suggested by my instructing solicitor, there could be a variation of the interests of the partners in the partnership. What is contemplated is that:

(a) All of the relevant rights and interests that remain in the name of the partnership; the partnership would continue to be the relevant party to all contracts and arrangements; and it would be the partnership with whom the outside world (joint venturers, Governments, employees, contractors and so forth) would deal.

(b) But as between the partners each project would be separately accounted for and the net debit or credit would accrue to the partner in whose 'basket' that project was; and furthermore that partner would have the exclusive right to make all decisions concerning that venture.

(c) Each partner would have the right, at any time, to require the transfer to it of all of the rights, interests, contracts, benefits etc. constituting or ancillary to the venture in question (upon giving an appropriate indemnity in relation to any outstanding or contingent liabilities) and the interest of the other partner therein would thereupon finally be extinguished.

The advantages of this proposal are that continuity is preserved more clearly; that the appearance of continuity is preserved even more clearly; and in particular there is no transfer or disposal or other dealing with the venture in question.

56 I accept that towards the end of Mr Peter Wright's life (it will be recalled that he died on 13 September 1985), although this long partnership continued to be pursued with vigour, some tension developed between the two men and I think it is clear that after Mr Peter Wright's death, the relationship between Mr Lang Hancock and Mr Michael Wright and his sister bore a different quality. It seems to me that it was more an 'arm's length' relationship. There is evidence that during this period Mr Hancock found that his activities and attempts to develop mines, particularly by negotiating joint ventures, were, at least in his eyes, impeded to a degree by the buy-back arrangements made by cls 6 - 9 of the 1984 agreement.

57 An agreement dated 12 June 1987 was made between the partners. By then, Michael Wright and Mrs Bennett controlled WPPL, their brother Julian's interest having been acquired by the two of them. This was a variation agreement. It recited the first partnership agreement made on 2 March 1978 and the second partnership agreement made on 24 May 1983. When it referred to the 1984 agreement, dated 15 February 1984, it was stated that, among other things, the partners agreed that each would assume individual control over certain of the assets and interests of the partnership to the exclusion of the other.

58 The significant points of the agreement seem to me to be as follows -

(1) The terms of cl 1(c) of the 1984 agreement were effectively reversed. Neither party was henceforth entitled to make an agreement having the effect of reducing or disposing completely of any royalties to which the partnership would otherwise be entitled: cl 1(a).

(2) Hope Downs, an interest arising after, and therefore not dealt with in the 1984 agreement, was mentioned. On certain financial terms, WPPL relinquished its interest in Hope Downs in favour of HPPL: cl 1(b) and (d).

(3) On the other hand, HPPL relinquished its interest in Marandoo, a HPPL interest under par (a) of Sch 1 of the 1984 agreement, in favour of WPPL: cl 1(c).

(4) Royalties arising from the sale of iron ore arising out of the development of the Rhodes Ridge and Hope Downs interests were to be shared equally: cl 1(e). There were other provisions concerning entitlements to royalties.

Each of HPPL and WPPL is hereby released from the obligation to offer to the other one half of its own right to participate in any mining venture undertaken in respect of HPPL interests and WPPL interests respectively or in respect of any areas allocated to each party under this Agreement.

59 The other form of buy-back, the 'Best Friends' provision, made by cl 10 of the 1984 agreement, was effectively removed by cl 5 of the 1987 agreement as follows:

Each partner shall be entitled to prospect for minerals of any type and take up any type of mining or other tenement (whether or not previously owned by the Partnership) without being obliged to offer to the other Partner any opportunity to participate in such activity or tenement and in no circumstances shall one partner be liable to pay any royalty to the other in respect of iron ore or any other mineral produced from such activity or tenement.

60 Finally in this review of pertinent agreements, I refer to an agreement made on 14 September 1989. It is an interesting document, reflecting the attitude to the partnership of Mr Hancock. There were four parties to it; HPPL, WPPL, Mr Lang Hancock and Mr Kevin Dalby. Mr Dalby was an engineer, effectively employed by the partnership, but the evidence reveals that his association with Lang Hancock was very close and in his later years he spent substantial periods of time working directly with Mr Hancock or upon projects which he was endeavouring to advance. Mr Dalby was a director of various companies, most of them Hancock related, but importantly, for present purposes, since the mid 1980s until his death on 25 October 1991, Mr Dalby was a director of both WPPL and HPPL. Mr Dalby's death, at the age of 65, was unexpected. He suffered a heart attack.

61 The 1989 agreement is concerned with the management of the interests of the partners, both currently and into the future. By cl 1, Mr Hancock, during his lifetime, and on his death, Mr Dalby, was to manage the interests of the partners at Wittenoom (Marandoo) and Rhodes Ridge, including the exploration licences 47/57, 47/58, 47/59 and 47/60. That exclusive power of management, to be exercised by either Mr Hancock or, upon his death, Mr Dalby (bearing in mind that Mr Hancock was then nearly 80) was limited to a term of 10 years or the death of the last of Hancock and Dalby to die, whichever first occurred.

62 There was a proviso to this agreement. According to the evidence, Mr Hancock was concerned about his health and the proviso was that if he should become so incapacitated as to be unable to discharge his management obligations, then Dalby was to exercise the powers conferred upon Mr Hancock in that regard. Clause 2 provided a limited capacity to extend the term. By cl 3, the management rights were exclusive and complete.

63 As it turned out, according to the evidence, Mr Dalby never exercised management powers under this agreement because he died on 25 October 1991 and Mr Hancock survived him. It will be recalled that, at the age of 82, Mr Hancock died on 27 March 1992.

The plaintiff's claim for breach of contract

64 The plaintiff's original and principal claim may be put relatively simply. As I have said in other judgments, it relies entirely on the terms and enforceability of cl 4 of the 1984 agreement. In a sense, that is so also in respect of the plaintiff's alternative 'unconscionability' claim to which I shall come in due course.

65 Having pleaded in the statement of claim what are regarded as the material terms of the 1983 and 1984 agreements, and having referred to the Rhodes Ridge interest or, 'the assets and interests of the Partnership in and to the Rhodes Ridge joint venture and the Temporary Reserves (including Giles) ... ', par 18 asserts that as at 27 March 1992 (the date of Lang Hancock's death), the Rhodes Ridge interest remained a WPPL interest.

66 By par 19, it is pleaded that the plaintiff gave notice of its exercise of the option provided by cl 4 of the 1984 agreement by notices dated 11 December 1997 and 28 June 2000. Those facts were established. The notices are exhibit A7 and A8 respectively. Both are directed to HPPL and are given on behalf of WPPL, the common seal being affixed under the hand of Mr Michael Wright and Mrs Bennett in the case of the first notice, and Mr Wright and Mr Brandli in the case of the second notice, which is given 'without prejudice' to the validity and effectiveness and any rights that WPPL may have under the first notice of 11 December 1997. The second notice is materially in the same terms as the first, even down to the same typographical error:

WPPL HEREBY GIVES NOTICE pursuant to the clause 4 of exercise by it of the option to require the transfer of the HPPL interests to HPPL and the transfer of the WPPL interests to WPPL.

The notice having previously recited the terms of cl 4 of the 1984 agreement, its purport in each case is clear.

67 The first notice was sent under cover of a letter signed for WPPL by a Ms Turner, who at the time was a director and the secretary of WPPL. The letter is addressed to a Mr Newing, the General Manager, Commercial and Legal, of HPPL. It responds to a letter written by Mr Newing on 2 October 1997. That letter was addressed to Ms Turner and Mr Brandli, who was then and remains a director of WPPL and who has been its secretary since November 1998. Mr Newing's letter raised various matters on behalf of HPPL, to some of which I will need to return in due course, concerning the stamping of partnership agreements, the Rhodes Ridge interest and its future, and indeed the future of the partnership, which Mr Newing recommended should be dissolved. An offer was made to purchase WPPL's 25% interest in Rhodes Ridge. A meeting was sought.

68 By the letter dated 11 December 1997 (exhibit EA 201), Ms Turner said that WPPL was prepared to discuss the future dissolution of the partnership and she added that, 'in the meantime' she enclosed the notice exercising the option pursuant to cl 4 of the 1984 agreement.

69 The response was a letter dated 20 January 1998, under the hand of a Mr Morhall, a director of HPPL. He referred to a conversation he had had with Ms Turner on 15 December 1997, and he asked for confirmation that she had then said that WPPL only gave the notice, 'on the advice of your legal counsel' and that there was no intention of taking any further action at that stage. By letter dated 3 February 1998, Ms Turner replied that WPPL intended the notice to be a formal notice exercising the option and expected that HPPL would 'sign all relevant forms and other documents and take all necessary action required as a result of the exercise of the option', but because of HPPL's wish to discuss other matters, WPPL was prepared to refrain from legal action. It is noteworthy that it is clear that these people knew each other well. The letters are written addressing the recipients by their first names, shortened familiarly. When the business is done they exchange season's greetings.

70 On 24 July 1998, Mr Morhall wrote again to Ms Turner expressing the view, for HPPL, that the purported exercise of the option was ineffective and the defendant's position was that Rhodes Ridge was and would remain a partnership asset shared equally by the partners, who together had a 50% interest in the joint venture with Hamersley Iron Pty Ltd, one of the Rio Tinto group of companies. The letter gives, as a reason for HPPL's view that the exercise of the option was ineffective, the fact that events since then had overtaken the intent of the 1984 agreement. Reference was made to the sale of the McCamey's interest and the sale of Marandoo, together with the execution of the later partnership variations in the 1987 and 1989 agreements.

71 Particular reliance was placed upon the management arrangements effected by the 1989 agreement in relation to Rhodes Ridge, making it clear, so the letter asserted, that Rhodes Ridge was a partnership asset. Finally, it was noted that any transfer of the Rhodes Ridge interest from one partner to the other would require ministerial approval under the relevant State Agreement Act, which had not occurred, so that 'any purported transfer is therefore null and void'. These arguments and the proposition that the notice was ineffective were rejected by WPPL by a letter dated 30 July 1998 under Ms Turner's hand.

72 The second notice of exercise of the option, dated 28 June 2000, was given under cover of a letter addressed to Mrs Rinehart for HPPL and signed by Messrs Wright and Brandli. Mr Brandli notes that he signs the letter for and with the authority of Mrs Bennett.

73 There is no doubt that the exercise of the option on the second occasion was rejected by HPPL. Paragraph 22 of the statement of claim says that it occurred by a letter from HPPL to WPPL dated 31 July 2000 (exhibit MM17). There is also in evidence a letter dated 11 August 2000, from Mrs Rinehart to Mrs Bennett and Mr Wright (exhibit JJ7), which refers to HPPL's letter of 31 July 2000 and repeats the position said to have been stated in that letter, making the point clearly that, 'The purported Exercise of Option by you in December 1997 and recently is of no effect. You had no right to do so then and no right to attempt to do so now.' If it is necessary to decide the point, I think that if the exercise of the option was effective, the relevant notice is that dated 11 December 1997.

74 The essence of this part of the plaintiff's case is expressed in pars 20 and 21 of the statement of claim which assert that, upon the exercise of the option, the partners were required to transfer the HPPL interests to HPPL and the WPPL interests to WPPL, and so the Rhodes Ridge interest is presently held on trust for WPPL (I take that to be the effect of par 21), and is required to be transferred to WPPL.

75 A most important pleading is to be found in par 20(b), which is to the effect that upon the exercise of the option the partners were required to:

do all things necessary including executing documents and joining in the seeking of the consent of any Minister or joint venture party which may be necessary to enable WPPL to have the benefit of the transfer.

Rather enigmatically, par 20 pleads that this obligation arises as a matter of law upon the proper construction of cls 1 and 4 of the 1984 agreement.

76 By par 23 of the statement of claim, it is asserted that the defendant's refusal to comply with the purported exercise of the option on either occasion was in breach of the 1984 agreement. On the other hand, par 24 asserts that WPPL is ready, willing and able to transfer to HPPL any remaining HPPL interests not already transferred to it. As I understand it, WPPL says that, so far as it is concerned, at least by the time of the second notice exercising the option, there were no such HPPL interests which were still required to be provided to WPPL under the terms of the 1984 agreement.

77 It is material at this point to refer to asset and interest nominated in Sch 1 par (b) of the 1984 agreement as a HPPL interest. I refer to the interest identified as Kevin's Corner and all other coal interests in Queensland. Kevin's Corner was a mineral tenement for coal. It was held in equal shares by the partners. There had been an earlier dealing with the interest in 1988, to which I need not make detailed reference. It is sufficient to say that that dealing came to nothing and Kevin's Corner remained a partnership asset. It had originally been held as an exploration permit for coal under the terms of the Mineral Resources Act 1989 (Qld) and as from 1 May 1996 the tenement was converted to a mineral development licence issued under that Act by the Qld Minister for Mines and Energy to the partners equally.

78 Shortly thereafter, by a deed dated 1 June 1998, during the period between the two notices of exercise of the option, WPPL assigned to HPPL all of its interest in Kevin's Corner. The deed made it clear that after the assignment took effect, HPPL would have exclusive rights to develop the licence for its own profit, despite the fact that on the licence itself it might be the case that WPPL would be shown as holding a 50% interest in the licence area.

WRIGHT PROSPECTING PTY LIMITED -v- HANCOCK PROSPECTING PTY LIMITED [No 9] [2010] WASC 44 (5 March 2010)

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (940 paragraphs)

WRIGHT PROSPECTING PTY LIMITED -v- HANCOCK PROSPECTING PTY LIMITED [No 9] [2010] WASC 44 (5 March 2010)

The mining tenements constituting the Rhodes Ridge interest

Dealings between Messrs Peter Wright and Lang Hancock

Capital gains tax questions and tax liability generally

The pleaded facts relied upon to support the estoppel

Breach of s 52 of the Trade Practices Act 1974 (Cth) (TPA)

Legislation Cited (12)

Cases Cited (60)