Cromarty Resources Pty Ltd v Thalanga Copper Mines Pty Ltd [2021] NSWCA 284

Cromarty Resources Pty Ltd v Thalanga Copper Mines Pty Ltd [2021] NSWCA 284

Cromarty's obligation to pay royalties arose within 15 business days after the end of the month in which actual sales (when title passed and provisional or advance payment was made) occurred, and 'net sales realisation' meant the amount actually realised from such sale, less treatment and refining charges only. Payment of royalties was not an essential term of the contract; however, Cromarty's conduct conveyed an intention to pay royalties only in a manner substantially inconsistent with its contractual obligations and thus constituted repudiation of the contract, entitling Thalanga validly to terminate and claim unpaid royalties and loss of bargain damages.

Parties
First Appellant: Cromarty Resources Pty Ltd; Second Appellant: Red River Resources Ltd; Respondent: Thalanga Copper Mines Pty Ltd
Jurisdiction
Australia
Judgment Date
19 November 2021
Procedural Posture
Appeal / Judgment of the Court of Appeal
Outcome
Appeal dismissed with costs.
Legal Topics
Royalty Payments, Termination of Contract, Repudiation, Construction of Contracts
Contract Law Royalty Payments Termination of Contract Repudiation Construction of Contracts

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Parties

Cromarty Resources Pty Ltd

First Appellant

Red River Resources Ltd

Second Appellant

Thalanga Copper Mines Pty Ltd

Respondent

Procedural Posture

Appeal / Judgment of the Court of Appeal

Legal Issues

  1. 1 When does Cromarty's obligation to pay a royalty arise and is 'net sales realisation' after deduction of sales realisation expenses?
  2. 2 Was Thalanga entitled to terminate the Asset Sale Agreement on 28 December 2018?
  3. 3 Whether and how the amounts of unpaid royalties and damages had to be adjusted, particularly with respect to deduction of sales realisation expenses.

Ratio Decidendi

Cromarty's obligation to pay royalties arose within 15 business days after the end of the month in which actual sales (when title passed and provisional or advance payment was made) occurred, and 'net sales realisation' meant the amount actually realised from such sale, less treatment and refining charges only. Payment of royalties was not an essential term of the contract; however, Cromarty's conduct conveyed an intention to pay royalties only in a manner substantially inconsistent with its contractual obligations and thus constituted repudiation of the contract, entitling Thalanga validly to terminate and claim unpaid royalties and loss of bargain damages.

Court Disposition

Appeal dismissed with costs.

Orders

  • Dismiss the appeal.
  • Order that the appellants pay the respondent's costs.