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Queensland Nickel Pty Ltd (in liq) v QNI Metals Ltd[2022] QCA 136

Queensland Nickel Pty Ltd (in liq) v QNI Metals Ltd[2022] QCA 136

SUPREME COURT OF QUEENSLAND

CITATION:

Queensland Nickel Pty Ltd (in liq) v QNI Metals Ltd & Ors [2022] QCA 136

PARTIES:

QUEENSLAND NICKEL PTY LTD (in liquidation)

ACN 009 842 068

(appellant)

v

QNI METALS LTD

ACN 066 656 175

(first respondent)

QNI RESOURCES PTY LTD

ACN 054 117 921

(second respondent)

MINERALOGY PTY LTD

ACN 010 582 680

(third respondent)

FILE NO/S:

Appeal No 7119 of 2020

SC No 6593 of 2017

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal – Further Orders

ORIGINATING COURT:

Supreme Court at Brisbane – [2020] QSC 143 (Mullins J)

DELIVERED ON:

2 August 2022

DELIVERED AT:

Brisbane

HEARING DATE:

Heard on the papers

JUDGES:

Fraser and Morrison JJA and Burns J

ORDERS:

  1. The respondents pay the appellant’s costs of and incidental to the appeal on the standard basis, to be assessed if not agreed.
  2. The question of the costs of the trial and the interest payable by the third respondent to the appellant, having regard to the orders of this Court made on 25 June 2021, be remitted to the primary judge for determination.
  3. Pursuant to r 388 of the Uniform Civil Procedure Rules 1999 (Qld), order 3 of the orders dated 25 June 2021 be amended to delete the figure $102,884,346.26 and substitute the figure $102,844,346.26.

CATCHWORDS:

APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – POWERS OF COURT – COSTS – where the appellant was successful on appeal – where the parties made written submissions in relation to costs – where the parties agreed to the disposition of costs – where the costs of the appeal should follow the event – where the parties are agreed that the question of the costs at first instance should be remitted either to the learned primary judge or to the commercial list judge, for resolution – where there was an error in calculation – where the appellant sought an order to correct the error under r 388 of the Uniform Civil Procedure Rules 1999 (Qld) – whether the error should be corrected – whether the respondents should pay the appellant’s costs of and incidental to the appeal on the standard basis or to be assessed

Civil Proceedings Act 2011 (Qld), s 58

Uniform Civil Procedure Rules 1999 (Qld), s 388

Queensland Nickel Pty Ltd (in liq) v QNI Metal Ltd & Ors [2021] QCA 138, cited

COUNSEL:

A M Pomerenke QC, with N J Derrington, for the appellant

P Dunning QC, with M Karam and K Byrne, for the respondent

SOLICITORS:

HWL Ebsworth Lawyers for the appellant

Alexander Law for the respondent

  1. [1]
    FRASER JA:  I agree with Morrison JA.
  2. [2]
    MORRISON JA:  On 25 June 2021 the Court delivered its reasons in this matter.[1]  Pursuant to paragraphs 4 and 5 of the orders then made, the parties were to file submissions as to the further disposition of the appeal in light of the reasons given.  The parties have done so, addressing the questions of interest, the judgment sum and costs.

Interest

  1. [3]
    The judgment pursuant to paragraph 3 of the orders given on 25 June 2021 was for $102,884,346.26.  Each party has addressed the question of how to calculate interest on that sum.
  2. [4]
    The appellant contends that interest should be awarded on the judgment pursuant to s 58 of the Civil Proceedings Act 2011 (Qld), in the sum of $48,837,584.76.  It submits that the proceeding was one for debt within the meaning of s 58(1) of the Act.  Section 58 relevantly provides:

Interest up to judgment

  1. (1)
    This section applies in relation to a proceeding in a court for the payment of money, including a proceeding for debt, damages or the value of goods.
  2. (2)
    This section does not apply in relation to:
  1. (a)
    ….
  1. (b)
    a proceeding for the payment of money on which interest is payable as of right whether because of an agreement or otherwise.
  1. (3)
    The court may order that there be included in the amount for which judgment is given interest at the rate the court considers appropriate for all or part of the amount and for all or part of the period between the date when the cause of action arose and the date of judgment”.
  1. [5]
    Accordingly, the appellant contends that the whole of the judgment sum constituted a loan to Mineralogy and that it was a debt claim.  Therefore, it is said, the case prima facie comes within s 58(1).
  2. [6]
    Then it is said that the interest should be calculated from the date of each payment made by QNI, because that is the date on which the cause of action arose for the purposes of s 58(3).  Those dates are said to be appropriate bearing in mind that the function of an award of interest is meant to compensate a plaintiff for being kept out of the money, rather than to punish the defendant.
  3. [7]
    The appellant contends that the application of s 58 is not precluded by the provisions in s 58(2)(b).  Points made in respect of this aspect include:
    1. (a)
      QNI’s claim which was ultimately successful was a simple debt claim;
    2. (b)
      the claim was not for an amount alleged to be owing under the 2011 Loan Agreement;  the payments made by QNI to Mineralogy (or for it at the request of Mineralogy) extended well beyond the amounts that could have been drawn down under clause 4 of the 2011 Loan Agreement;[2] the ultimate judgment debt was founded on a much broader range of payments, including payments made at the request of Mr Wolfe and Mr Mensink, and payments made to or for Mineralogy without specific request;
    3. (c)
      therefore, the significance of the 2011 Loan Agreement was not as the instrument under which QNI’s claim was made, but was merely a piece of objective evidence (albeit powerful) showing that the loan was not as between Mineralogy and the JVC’s, but between Mineralogy and QNI; and
    4. (d)
      further, Mineralogy has never pleaded or contended that interest is payable as of right because of any agreement between QNI and Mineralogy; it should have done so.
  4. [8]
    The respondents contend that on the findings made by this Court, the issue of interest is governed by the 2011 Loan Agreement.  Therefore, it is said, s 58(2)(b) applies to exclude the general operation of s 58.  In respect of that contention, the respondents point to the following findings made by this court:
    1. (a)
      invoices issued by QNI to Mineralogy which included interest on the loans;[3]
    2. (b)
      the 2011 Loan Agreement “contains a promise by Mineralogy to pay interest to QNI, and no one else”;[4]
    3. (c)
      there was evidence to support an inference that the 2011 Loan Agreement was an operative document, including evidence which this Court held to amount to a plain recognition that “the loan agreement was on foot, moneys were being advanced under it by QNI, and interest was payable to QNI”;[5]
    4. (d)
      invoices sent periodically revealed “that QNI was charging interest on the loan and demanded that it be paid to QNI”;[6]
    5. (e)
      the “loan agreement was an operative document, governing the loan”;[7] and
    6. (f)
      it was necessary to determine whether the 2011 Loan Agreement was operative,[8] and then to there was a finding that it was an operative document.[9]
  5. [9]
    It may be inferred that the issue of those terms which governed the loan agreement between QNI and Mineralogy were explored as extensively as they could be during the trial.  Decisions were plainly made as to which witnesses to call, and in the end they were confined to Mr Wolfe and Mr Sorensen.  Equally, a decision was made not to call Mr Palmer and Mr Ahyick, the signatories to the 2011 Loan Agreement.
  6. [10]
    That means that it may be assumed that all the relevant evidence concerning the terms governing the loan between QNI and Mineralogy was before this Court when the appeal was heard.  Consequently, this Court’s reasons give a solid foundation to make conclusions about whether the loan was the subject of a provision for interest, and whether such a provision governed loans made prior to 21 June 2011 (the date the 2011 Loan Agreement was executed), and loans that exceeded the $10 million limit in that agreement.
  7. [11]
    As for the loans made prior to 21 June 2011, one can conclude that they were comprehended within the terms of the 2011 Loan Agreement.  That agreement was signed by Mr Palmer who was at the heart of decisions made about the loans between QNI and Mineralogy, and whether there would be a limit placed upon them.[10]
  8. [12]
    The 2011 Loan Agreement reflected the conversation involving Mr Palmer where the initial limit of $10 million dollars was discussed, but Mr Palmer indicated that there should be no limit.[11]
  9. [13]
    Clause 3 of the 2011 Loan Agreement contained this provision as to interest:

“Interest shall accrue on any outstanding balance at the end of each calendar month at a rate equal to the Reserve Bank of Australia Cash Rate”.

  1. [14]
    The correspondence supported the view that the 2011 Loan Agreement governed the loans between QNI and Mineralogy thereafter.  Thus, the obligation to pay interest was recognised,[12] invoices were issued for the interest on the loan,[13] and that document was discussed as the agreement which governed the loan including the requirement to pay interest.[14]
  2. [15]
    Insofar as the evidence of Mr Wolfe and Mr Sorensen was concerned, that was directed at a different question from the rate of interest applicable under the loans.  It was directed at trying to establish that the JVCs were the relevant party, rather than Mineralogy.
  3. [16]
    In my view, those findings necessitate the conclusion that QNI’s proceedings come within s 58(2)(b) of the Civil Proceedings Act, in that they were proceedings for the payment of money on which interest was payable as of right under an agreement, and therefore interest was not payable pursuant to s 58.
  4. [17]
    In my view, it is also correct to say that Mineralogy did not have to plead positively that if any loan agreement was established then that agreement fell within s 58(2)(b).  The central issue joined in the proceedings below was not whether interest was payable under the loan agreement, but who was the party to the loan agreement.  QNI contended it was Mineralogy, and the opposing contention was that it was the JVCs.  On either approach, interest was payable in a way that attracted s 58(2)(b).
  5. [18]
    That being the case, the parties are agreed that resolution of the issue, that is to say the rate of interest and the amount, could involve factual findings which make it appropriate that the question be remitted to the trial division.[15]

Costs

  1. [19]
    The parties are agreed on the disposition of costs.
  2. [20]
    First, the costs of the appeal should follow the event.  Accordingly, there should be a further order that the respondents pay the appellant’s costs of and incidental to the appeal, to be assessed if not agreed.
  3. [21]
    As to the costs of the trial, whilst there was substantive success on issues prosecuted at first instance there are complicating issues:
    1. (a)
      no further ancillary orders, or orders as to costs, have been made in the trial division, as was complicated by order 11 of the judgment below; and
    2. (b)
      not all of the parties to the proceedings at first instance were parties to the appeal.
  4. [22]
    The parties are agreed that these issues make it appropriate that the question of the costs at first instance should be remitted either to the learned primary judge or to the commercial list judge, for resolution.

Error in calculation

  1. [23]
    The appellants seek an order under r 388 of the Uniform Civil Procedure Rules 1999 (Qld), correcting the amount of the judgment reflected in order number 3 made on 25 June 2021.  That order was in respect of the judgment to be entered for the plaintiffs against the seventh defendant, in the sum of $102,884,346.26.
  2. [24]
    As the respondents point out,[16] there is an arithmetical error in the calculation of that sum.  Paragraph 126 of the Third Further Amended Statement of Claim recorded components of the loans and repayments, culminating in a calculation of the balance at $102,884,346.26.  That appears in the following schedule:

Payments from QNI to Mineralogy (paragraphs 127 to 147 below)

$35,285,474.44

Mineralogy Litigation Payments (paragraphs 148 to 151 below)

$2,458,217.94

Payments made to Mr Palmer or third parties recorded in the books and records of QNI as debts owing by Mineralogy (paragraphs 152 to 170 below)

$79,983,837.52

Sub total

$117,727,529.90

Repayments (paragraph 173 below)

($14,883,183.64)

Sum

$102,884,346.26

  1. [25]
    The first three components were all agreed figures in the Defence.[17]  The same was the case in respect of the component for repayments.[18]  Once the additions are made for the first three components, and then the reduction for the repayments, it becomes clear that an arithmetical error was made, and the correct figure is $102,844,346.26.
  2. [26]
    That error should be corrected under r 388 of the Uniform Civil Procedure Rules.
  3. [27]
    I propose the following orders:
  1. The respondents pay the appellant’s costs of and incidental to the appeal on the standard basis, to be assessed if not agreed.
  2. The question of the costs of the trial and the interest payable by the third respondent to the appellant, having regard to the orders of this Court made on 25 June 2021, be remitted to the primary judge for determination.
  3. Pursuant to r 388 of the Uniform Civil Procedure Rules 1999 (Qld), order 3 of the orders dated 25 June 2021 be amended to delete the figure $102,884,346.26 and substitute the figure $102,844,346.26.
  1. [28]
    BURNS J: I agree with the reasons expressed by Morrison JA and with the orders proposed by his Honour.

Footnotes

[1] Queensland Nickel Pty Ltd (In Liq) v QNI Metal Ltd & Ors [2021] QCA 138.

[2]  The terms of the 2011 Loan Agreement were set out in this Court’s reasons at [121].

[3]  Reasons [125](c).

[4]  Reasons [127(d)]

[5]  Reasons [128].

[6]  Reasons [129].

[7]  Reasons [131].

[8]  Reasons [135].

[9]  Reasons [157] and [159].

[10]  Reasons at [115]-[120].

[11]  Reasons at [118]-[120].

[12]  Reasons at [124](b).

[13]  Reasons at [125].

[14]  Reasons at [128].

[15]  Appellant’s submissions, paragraph 19; Respondents’ submissions, paragraph 7.

[16]  Submissions, paragraphs 10-12.

[17]  Paragraphs 133(a), 134(a) and 156(a); AB 377, 378 and 385.

[18]  Paragraph 159(a), AB 389.

Close

Editorial Notes

  • Published Case Name:

    Queensland Nickel Pty Ltd (in liq) v QNI Metals Ltd & Ors

  • Shortened Case Name:

    Queensland Nickel Pty Ltd (in liq) v QNI Metals Ltd

  • MNC:

    [2022] QCA 136

  • Court:

    QCA

  • Judge(s):

    Fraser JA, Morrison JA, Burns J

  • Date:

    02 Aug 2022

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2017] QSC 23117 Oct 2017Application by defendant Mr Palmer for Bond J to recuse himself; application for an adjournment of the plaintiffs' application for a freezing order; both applications dismissed: Bond J.
Primary Judgment[2018] QSC 10725 May 2018Upon undertakings made by the Commonwealth, and the special purpose liquidators, freezing orders made with respect to the first, second, fourth, seventh, eighth, ninth, tenth, eleventh, twelfth, fourteenth and fifteenth defendants: Bond J.
Primary Judgment[2018] QSC 12525 May 2018Application to stay orders made in [2018] QSC 107 for 21 days dismissed, save for orders 16 and 17 which are stayed until further order: Bond J.
Primary Judgment[2018] QSC 14111 Jun 2018Stay of operation of orders 16 and 17 ordered 25 May 2018 discharged; order 16 set aside and in lieu thereof order that each defendant must swear an affidavit setting out their assets and details about those assets: Bond J.
Primary Judgment[2018] QSC 17627 Jul 2018Defendants' agitation that nothing should be determined until a proposed recusal application heard and determined rejected: Bond J.
Primary Judgment[2018] QSC 17727 Jul 2018Plaintiffs' application for disclosure adjourned to 3 August 2018: Bond J.
Primary Judgment[2018] QSC 17803 Aug 2018Defendants' application for a stay of orders dismissed: Bond J.
Primary Judgment[2018] QSC 18003 Aug 2018Plaintiffs' application for disclosure granted: Bond J.
Primary Judgment[2018] QSC 21317 Sep 2018Application that Bond J recuse himself granted; proceedings transferred to Jackson J and other ancillary orders: Bond J.
Primary Judgment[2018] QSC 24022 Oct 2018Defendants' application (except the fourth, twentieth and twenty-first defendants) for leave to proceed with the counterclaim dismissed (except counterclaim not struck through); plaintiffs' application for defence and counterclaim to be struck out granted with leave; defendants' application for strike-out of the consolidated statement of claim allowed in part; hearing adjourned to a date to be fixed; costs reserved: Jackson J.
Primary Judgment[2018] QSC 24526 Oct 2018Defendants' applications for recusal of Jackson J filed 19 October 2018 commence instanter; applications for recusal of Jackson J be adjourned to 1 November 2018 and ancillary directions: Jackson J.
Primary Judgment[2018] QSC 24905 Nov 2018Application that Jackson J recuse himself from hearing the trial of the proceeding granted on the ground of apprehended bias (dismissed on the ground of actual bias); application that Jackson J recuse himself from taking any further part in the proceeding, including any interlocutory applications, dismissed: Jackson J.
Primary Judgment[2018] QSC 27621 Nov 2018Defendants' applications to vacate orders made in [2018] QSC 176 and [2018] QSC 180 dismissed in substance; extended times for directions for discovery and evidence made: Jackson J.
Primary Judgment[2019] QSC 4811 Mar 2019Defendants' application to increases the scope of disclosure and for extensions of time for the delivery of lay and expert evidence dismissed: Jackson J.
Primary Judgment[2019] QSC 20723 Aug 2019First, second, seventh, fifteenth, sixteenth and twenty-second defendants' application for either a permanent stay of this proceeding as an abuse of the process of the court or a stay pending the final determination of proceeding BS13947/18: application dismissed: Mullins J.
Primary Judgment[2020] QSC 14303 Jun 2020Plaintiffs' claims against the seventh defendant, Mineralogy Pty Ltd, to recover alleged funds loaned from Queensland Nickel Pty Ltd to Mineralogy Pty Ltd dismissed; declared that various transactions entered into by Queensland Nickel Pty Ltd are voidable under s 558FE of the Corporations Act 2001 (Cth) (as uncommercial transactions) together with declaratory relief that the transactions are void ab initio: Mullins J.
QCA Interlocutory Judgment[2018] QCA 13926 Jun 2018Fourth defendant's application to stay orders made in [2018] QSC 107 allowed in part and otherwise dismissed: Gotterson JA.
QCA Interlocutory Judgment[2018] QCA 28723 Oct 2018Application for a stay of the orders made by Bond J in [2018] QSC 180 dismissed: Philippides JA.
Notice of Appeal FiledFile Number: Appeal 11834/1710 Nov 2017Appeal from [2017] QSC 231
Notice of Appeal FiledFile Number: Appeal 7119/2030 Jun 2020Appeal from [2020] QSC 143.
Appeal Discontinued (QCA)File Number: Appeal 11834/1722 Feb 2018Appeal from [2017] QSC 231 dismissed by consent.
Appeal Determined (QCA)[2018] QCA 26812 Oct 2018Costs judgment from fourth defendant's application to stay certain orders ([2018] QSC 176; [2018] QSC 178) that was earlier dismissed (after having been abandoned one day prior): Morrison JA.
Appeal Determined (QCA)[2018] QCA 30205 Nov 2018Appeals from [2018] QSC 178 and [2018] QSC 213 dismissed with costs: Fraser and Gotterson JJA and Boddice J.
Appeal Determined (QCA)[2018] QCA 32420 Nov 2018Costs judgment from defendants' application to stay certain orders [2018] QSC 125 that was earlier dismissed by consent: Gotterson JA.
Appeal Determined (QCA)[2019] QCA 2722 Feb 2019Appeals from [2018] QSC 107 (freezing orders) dismissed: Fraser and Gotterson and McMurdo JJA.
Appeal Determined (QCA)[2021] QCA 13825 Jun 2021-
Appeal Determined (QCA)[2022] QCA 13602 Aug 2022-
Special Leave Refused (HCA)[2022] HCATrans 3317 Mar 2022-

Appeal Status

Appeal Determined - Special Leave Refused (HCA)

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