Trouble in Paradise - Supreme Court grants interlocutory injunction in showdown over 95 hectares on the Ashburton River

On 22 December 2020, Quarry Park Pty (Quarry Park), the First Defendant entered into a conditional Sale and Purchase Agreement with Cauldron Ltd (Cauldron), the Fourth Defendant, for the sale of mining lease 08/487 (the Agreement).  This conditional Agreement also included the sale of a number of other mining tenements and tenement applications considered prospective for sand mining.

Facts

The Agreement was subject to a number of conditions precedent, some of which were:

• obtaining the consent of the Minister for Mines and Petroleum under s 82(1)(d) of the Mining Act 1978 (WA) (the Act) to the transfer of mining lease 08/487 to Cauldron; and
• Cauldron's shareholders approving an issue of shares (forming part of the consideration for the transaction) to Quarry Park and related parties.

Cauldron subsequently made announcements to the Australian Stock Exchange on 22 December and 29 December 2020.

Cauldron convened a general meeting of its shareholders to be held on 29 January 2021 to approve the issue of shares to Quarry Park.  

However, on 10 January 2021 the Plaintiff - Wyloo Metals Pty Ltd (Wyloo), had personally gone onto the land the subject of mining lease 08/487 and undertook marking out on the land. The next day Wyloo applied for a prospecting licence over the area in question.

On 22 January 2021 Wyloo commenced proceedings in the Supreme Court of Western Australia seeking declarations that:

• the grant of mining lease 08/487 by the Minister (the Third Defendant) to Quarry Park on 12 April 2013, was not authorised by the Act;
• as a consequence, mining lease 08/487 was invalid; and
• the land the subject of mining lease 08/487 was open for mining for the purpose of s 18 of the Act.

By a chamber summons filed on 25 January 2021, Wyloo lodged an application for an interlocutory injunction to restrain Quarry Park and Cauldron from executing or lodging a transfer in respect of mining lease 08/487.
 
The parties appeared before Tottle J on the afternoon of 27 January 2021 for an interim hearing. His Honour reserved his decision but granted interim relief restraining the execution or lodgement of a transfer of the mining lease until his judgment was delivered.

The parties' contentions

Wyloo's case as to the invalidity of mining lease 08/487 was grounded in the allegation that the mining lease was granted notwithstanding that the statutory pre-conditions to a valid grant were not satisfied.  Two reasons were put forward, namely that:

• the application, when it was lodged on 16 November 2011, was not accompanied by a mining operations statement as required by s 74(1a) of the Act; and  
• the application was not accompanied by a mineralisation report prepared by a qualified person as required by s 74(1)(ca) of the Act.

In relation to the injunction, Wyloo contended that if a transfer of mining lease 08/487 was executed or lodged for approval by the Minister, in practical terms Quarry Park and Cauldron’s title to mining lease 08/487 could be indefeasible, and defeat Wyloo’s prospecting licence.  This was because Quarry Park and Cauldron may have claimed that application for the transfer would constitute Cauldron 'dealing with' Quarry Park, entitling Cauldron to the protection afforded by s 116(2) of the Act.

In simple terms, Quarry Park and Cauldron opposed the grant of the injunction on the basis that:

• Wyloo had no standing to apply for the relief sought;
• the six year limitation period had passed;
• Wyloo sought to disrupt the status quo;
• there was a ‘disconnect’ between the primary and interlocutory relief sought;
• Cauldron had the benefit and protection of s 116(2) of the Act; and
• the balance of convenience favoured the refusal of the injunction – there were five sub-reasons for this.  

Principles relevant to the grant of an interlocutory injunction

For the court to exercise its power to grant an interlocutory injunction, it must be able to answer yes to the following two questions:

1. Whether the plaintiff has made out a prima facie case? This does not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed. It is sufficient that the plaintiff show a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the trial; and
2. Whether the balance of convenience favours the grant of the injunction?  Essentially, this asks whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs, or is outweighed by, the injury which the defendant would suffer if an injunction was granted.

Decision

On 12 February 2021, his Honour delivered his decision granting the injunction, but with corresponding orders for an expedited trial and requiring an undertaking from Wyloo that it would proceed to trial expeditiously. This article will not closely analyse his Honour’s minute reasoning.

Ultimately, his Honour found at [11]:

In summary I consider that Wyloo has established a serious question to be tried albeit that the strength of its claim is diminished by the defences Quarry Park and Cauldron have foreshadowed. The factor that tips the balance of convenience in favour of granting an interlocutory injunction is that a refusal of relief has the potential to have the effect of disposing of Wyloo's claim against it on a final basis.

Lavan comment

The decision is an example of how obtaining interlocutory injunctive relief can be a critical tactical tool to protect your position in a dispute pending the resolution of a final outcome of all the issues in dispute. 

The granting of injunctive relief is always at the discretion of the court – it does not arise by right.  Practically speaking, when a party is considering whether to apply for injunctive relief the usual obstacle in proceeding is whether the applicant has sufficient and cogent enough evidence – which can be gathered and filed quickly – to persuade the court to answer affirmatively to the above stated principles.  

To read the decision in full click here - Wyloo Metals Pty Ltd v Quarry Park Pty Ltd [2021] WASC 30.