Drem Pty Limited v LRL (AUST) Pty Ltd [2024] NSWSC 1422

Drem Pty Limited v LRL (AUST) Pty Ltd [2024] NSWSC 1422

The royalty obligation under the 1994 Royalty Deed, as assumed by LRL in the 2020 Deed, is to be calculated as a 2% royalty on the Gross Proceeds of Saleable Product attributable to LRL's 100% interest in the Kathleen Valley tenements. The language of the earlier deed was sufficiently broad to encompass all interests in the relevant tenements (not limited to prior joint venture interests), and the 2020 Deed did not evidence any intention to restrict LRL's liability to less than its entire interest.

Parties
Plaintiff: Drem Pty Limited; Defendant: LRL (AUST) Pty Ltd
Jurisdiction
Australia
Judgment Date
08 November 2024
Procedural Posture
Contractual Dispute – Construction and Interpretation of Royalty Obligations / Judgment After Final Hearing
Outcome
Declarations made in favour of Plaintiff, costs awarded to Plaintiff
Legal Topics
Royalty Agreements, Deeds – Construction and Assignment, Mining Tenement Interests
Contract Law Mining Law Royalty Agreements Deeds – Construction and Assignment Mining Tenement Interests

Case Brief

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Parties

Drem Pty Limited

Plaintiff

LRL (AUST) Pty Ltd

Defendant

Procedural Posture

Contractual Dispute – Construction and Interpretation of Royalty Obligations / Judgment After Final Hearing

Legal Issues

  1. 1 How is the royalty obligation in the 1994 Royalty Deed to be calculated for the Kathleen Valley tenements now owned 100% by LRL?
  2. 2 Does the obligation apply only to the proportion held by XNAO (87.15%) at joint venture cessation, or to the entirety now held by LRL (100%)?
  3. 3 What is the effect of the 2020 Deed of Acknowledgement between Drem and LRL on the scope of royalty liability?

Ratio Decidendi

The royalty obligation under the 1994 Royalty Deed, as assumed by LRL in the 2020 Deed, is to be calculated as a 2% royalty on the Gross Proceeds of Saleable Product attributable to LRL's 100% interest in the Kathleen Valley tenements. The language of the earlier deed was sufficiently broad to encompass all interests in the relevant tenements (not limited to prior joint venture interests), and the 2020 Deed did not evidence any intention to restrict LRL's liability to less than its entire interest.

Court Disposition

Declarations made in favour of Plaintiff, costs awarded to Plaintiff

Orders

  • Declare Defendant is the 100% holder of the relevant mining tenements.
  • Declare Defendant is obliged to pay a non-bullion royalty under the 1994 Deed and 2020 Deed to Plaintiff, calculated as 2% of Gross Proceeds of Saleable Product from the Defendant's 100% interest.