HAVILAH RESOURCES LTD v RADFORD EARTHMOVERS PTY LTD [2025] SASC 198

Applicant: HAVILAH RESOURCES LTD Counsel: MR B ROBERTS KC WITH MR A BAILLIE - Solicitor: THOMSON GEER Respondent: RADFORD EARTHMOVERS PTY LTD Counsel: MR M HOFFMANN KC WITH MR S URE - Solicitor: FINLAYSONS Hearing Date/s: 17/09/2025 File No/s: CIV-25-003394 B SUPREME COURT OF SOUTH AUSTRALIA (Civil) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. HAVILAH RESOURCES LTD v RADFORD EARTHMOVERS PTY LTD [2025] SASC 198 Judgment of the Honourable Justice Stein 28 November 2025 CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS INTERPRETATION - GENERAL RULES OF CONSTRUCTION OF INSTRUMENTS - COMMERCIAL AND BUSINESS TRANSACTIONS INTERPRETATION - ADMISSIBILITY OF EXTRINSIC EVIDENCE IN RELATION TO INSTRUMENTS - WHEN EVIDENCE ADMISSIBLE - TO PROVE INTENTION OF PARTIES - LATENT AMBIGUITY Havilah Resources Ltd (“applicant”), a mining company, was the sole shareholder of another company, Benagerie Gold and Copper Pty Ltd (“Benagerie”). Benagerie owns a mining lease covering an area in the far north of South Australia near Lake Burnadgera. In 2018, the applicant sold all the shares in Benagerie to Consolidated Mining & Civil Pty Ltd, subsequently known as Radford Earthmovers Pty Ltd (“respondent”). The final payment instalment is yet to be paid under the sale contract and its variations. Whether the contractual conditions for final payment have been met is the subject of this dispute. The applicant seeks a declaration that the respondent is in breach of the sale contract as varied due to its failure to pay the final instalment, activated by the respondent’s sale of its shares in Benagerie to a third party. Upon the granting of such a declaration, the applicant seeks payment of the final instalment with interest. Held (declining to grant the declaration sought): 1. the proper focus of the relevant clause of the sale contract as varied is on the reference to “Mining Lease” not on “CMC/Benagerie” and therefore the requirement to pay the instalment is only activated upon the direct sale of the Mining Lease not by the sale of shares in Benagerie by the respondent. -- 1 of 27 -- Players Pty Ltd v Clone Pty Ltd [2006] SASC 118, discussed. Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310; McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; Zhu v Treasurer (NSW) (2004) 218 CLR 530; Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd [2008] NSWCA 5; Re Golden Key Ltd (in rec) [2009] EWCA Civ 636; Jireh International Pty Ltd v Western Export Services Inc [2011] NSWCA 137; Miwa Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 297; Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; Rocky Castle Finance Pty Ltd v Taylor (2014) 118 SASR 349; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, considered. -- 2 of 27 -- HAVILAH RESOURCES LTD v RADFORD EARTHMOVERS PTY LTD [2025] SASC 198 Civil 1 STEIN J: The question for consideration in this action is whether a final payment for the purchase price of shares has fallen due. The answer to that question depends on the proper construction of a clause which varies the trigger for payment of the final instalment of the purchase price. This issue arises in a context in which the applicant, Havilah Resources Ltd (“Havilah”), previously held 100 percent of the share capital of Benagerie Gold Pty Ltd (“Benagerie”). Benagerie is the holder of 100 percent of the interest in mineral lease 6346 (“Mining Lease”) which entitles Benagerie, among other things, to conduct mining operations for the recovery of gold. In June 2018, Havilah entered into a share sale agreement with the respondent Radford Earthmovers Pty Ltd, previously known as Consolidated Mining & Civil Pty Ltd (“CMC”).1 The share sale agreement provided for the sale of all of the issued shares in Benagerie by Havilah to CMC on terms which included payment of the purchase price in instalments. The share sale agreement was amended in May 2019. The variations, among other things, reduced the total price payable and altered the triggers for the payment of remaining instalments. In 2024, CMC sold its shares in Benagerie to Portia Resources Pty Ltd (“Portia”). The parties are in dispute as to whether the final instalment payment of the purchase price is now payable by CMC to Havilah. 2 Havilah’s case is that the final payment is due and payable because, on the proper construction of the contractual documents, the sale by CMC of the shares in Benagerie to Portia activated the requirement to make the final instalment payment. This argument relies on construing a reference to “CMC/Benagerie” selling “the Mining Lease” as encompassing both a direct sale of the Mining Lease by Benagerie and an indirect sale of the Mining Lease by virtue of the sale of CMC’s shares in Benagerie. Havilah seeks a declaration to the effect that CMC is in breach of the share sale agreement, as varied, due to its failure to make the final payment. 3 In my view, properly construed, the clause applies when Benagerie sells the Mining Lease, not when CMC sells its shares in Benagerie. The text, context and purpose of the contractual suite of documents does not support a conclusion that the reference to “CMC/Benagerie” in the clause broadens the object of the clause (sale of the “Mining Lease”), to the sale of shares in the entity which controls the Mining Lease. The parties in the various contractual documents which together comprised the 2018 arrangements and then the 2019 variations expressly treated the Mining Lease and the shares separately. They specified express, separate conditions in the event of each of the sale of the Mining Lease or the shares in Benagerie. When the variations to the purchase price for the shares were agreed, 1 As the contractual documents relevant to this action refer to CMC, for ease of reference I will refer to the respondent throughout as CMC. -- 3 of 27 -- [2025] SASC 198 Stein J 2 the parties expressly acknowledged that a particular contractual document2 continued to govern the sale of the shares. If the parties had intended to cover the sale of the shares as well as the sale of the Mining Lease, it would have been easy to achieve that outcome by referring expressly to both. The outcome which Havilah seeks to achieve would require the Court writing words into the contract. I have therefore determined to refuse to grant the declaration sought by Havilah. Factual background not in dispute 4 Benagerie was incorporated in 2006. All of its share capital was owned by Havilah. 5 In 2009, Benagerie acquired the Mining Lease for the lease of a mining site in South Australia. 6 In 2017, CMC was granted an exclusive option to develop an area of the Mining Lease comprising the “North Portia” copper and gold deposit, subject to certain conditions. In 2018, CMC carried out mining operations at the site. 7 On 1 June 2018, Havilah, CMC and Benagerie entered into a share sale agreement for the sale of Havilah’s shares in Benagerie to CMC following which all of the issued shares in Benagerie were transferred from Havilah to CMC. In July and August 2018, other documents were executed which, among other things, provide for the payment of royalties and provide security in the form of a mining tenement mortgage. I explain the effect of those documents below. 8 On 24 July 2018, Havilah wrote to the Mining Registrar seeking the registration of the mortgage on the Mining Lease, stating that Benagerie had been sold to CMC and the staged purchase price was secured by the mortgage.3 On 9 August 2018, the Department for Energy and Mining (“DEM”) wrote to Havilah to advise that the mortgage had been registered against the Mining Lease.4 9 On 4 April 2019, Havilah, CMC, Benagerie and another entity, Havilah Royalties Pty Ltd (“Havilah Royalties”), a wholly owned subsidiary of Havilah, executed heads of agreement which attached a commercial term sheet. The heads of agreement contemplated the execution of formal documents to give effect to the terms of the heads of agreement. Formal documents were executed thereafter in May 2019. The terms of these documents are important to the determination of the central issue of construction and I return to address them in detail below. 10 On 15 May 2024, after offering to sell all of the issued share capital in Benagerie to Havilah, CMC, Benagerie and Portia entered into a share sale agreement for the sale and purchase of all of the shares in Benagerie.5 The sale 2 Exhibit A1, tab 10, Exploration Deed, cl 7, acknowledging the Side Deed, tab 4, governed the sale of the shares. 3 Exhibit A1, p 177. 4 Exhibit A1, p 179. 5 Exhibit A1, tab 11. -- 4 of 27 -- [2025] SASC 198 Stein J 3 price was $3.1M.6 The sale was subject to a condition precedent in the form of CMC and Benagerie obtaining a waiver from Havilah with respect to a first right of refusal to acquire the shares or Havilah not validly exercising a first right of refusal. One of the completion deliverables was the execution of a deed of covenant which Portia, Havilah Royalties and Havilah thereafter executed.7 11 On 2 July 2024, all of the issued share capital in Benagerie was transferred from CMC to Portia. 12 CMC has paid Havilah $7 million in accordance with the share sale agreement as varied but has not paid the final payment of $3.8M. 13 I turn now to address the various contractual documents which were entered into by the parties. The 2018 Share Sale Agreement provided for the sale of shares with the purchase price to be paid in instalments 14 The Share Sale Agreement between CMC, Benagerie and Havilah8 recites that: • CMC is currently carrying out operations at the Portia gold mine; • the parties had entered into a binding memorandum of understanding by which CMC was granted an exclusive option to develop the North Portia site; • CMC had indicated interest in exercising the option; and • in furtherance of those matters, Havilah had offered and CMC had accepted an offer for the sale and purchase of all of the shares in Benagerie. 15 The Share Sale Agreement provided for the sale of the share capital of Benagerie from Havilah to CMC. The purchase price was $13.5 million, payable in accordance with cl 3(b) of the share sale agreement. Clause 3(b) provided for the payment of the purchase price in four instalments, the last of which was for $5.5M. The first instalment was payable on completion. The next three instalments were to be paid on dates which were determined by reference to dates on which Havilah gave CMC notice that it had obtained approvals from DEM for specified matters (the details of which do not matter for present purposes). 6 Exhibit A1, tab 11. 7 Exhibit A1, tab 12. 8 Exhibit A1; tab 2. -- 5 of 27 -- [2025] SASC 198 Stein J 4 16 The Share Sale Agreement specifies a number of completion obligations9 including delivering executed copies of a Side Deed and mortgage. 17 The Share Sale Agreement states that it is an event of default if CMC does not make any of the instalment payments on the due date and within a further two business days after receipt of notice requiring payment from Havilah.10 It provides that CMC undertakes to Havilah to ensure no default event occurs and Benagerie guarantees to Havilah the due and punctual performance by CMC of its obligation to ensure no event of default occurs, including to pay money.11 Benagerie also agrees to grant security in the form of a mortgage to secure the performance of its obligations under the guarantee.12 Benagerie thus guarantees CMC’s obligation to pay the purchase price and provides security to secure its obligations. 18 The Share Sale Agreement defines “ML” as the Mining Lease and “shares” as the issued shares of Benagerie.13 19 A clause of the Share Sale Agreement14 acknowledges that by virtue of the acquisition of Benagerie by CMC, CMC will be acquiring indirect ownership of the processing plant. In this context, the parties expressly recognise the concept of indirect ownership of assets of Benagerie via ownership of the shares in Benagerie. The purpose of this clause was to deem an obligation in the separate memorandum of understanding to be satisfied. 20 A Royalty Deed, a Side Deed and a mortgage were executed in connection with the Share Sale Agreement. I now turn to address their provisions. The Royalty Deed provides for the payment of royalties, registration of rights against the Mining Lease and places conditions on the sale of the Mining Lease 21 The Royalty Deed between Havilah and Benagerie15 provides that Benagerie will pay royalties to Havilah in accordance with the provisions of the document. 22 The Royalty Deed provides for the registration by Havilah of its right to receive royalty payments against the Mining Lease as permitted by the Mining Act 1971 (SA).16 The registration of that right does not impact upon the ability to register later ranking securities, subject to Havilah’s consent.17 The parties acknowledge that there may be difficulties with registration of the interest against the Mining Lease, in which case when all obligations of Benagerie relevant to the 9 Exhibit A1; tab 2; cl 6. 10 Exhibit A1; tab 2; cl 9. 11 Exhibit A1; tab 2; cl 9. 12 Exhibit A1; tab 2; cl 9. 13 The Share Sale Agreement cross refers to another agreement between CMC and Havilah dated 6 January 2015 entitled “Portia Mining and Processing Agreement”. That agreement was not tendered. 14 Exhibit A1; tab 2; cl 7.1. 15 Exhibit A1; tab 2; schedule 2 to the Share Sale Agreement. 16 Exhibit A1; tab 2; schedule 2 to the Share Sale Agreement; cl 5.4. 17 Exhibit A1; tab 2; schedule 2 to the Share Sale Agreement; cl 5. -- 6 of 27 -- [2025] SASC 198 Stein J 5 mortgage have been discharged, the parties agree that Benagerie will not lodge discharge of mortgage documents so that third parties will continue to have notice of Havilah’s interests under the Royalty Deed.18 23 The Royalty Deed prevents Benagerie from selling, assigning or disposing of its rights in the Mining Lease unless it first procures a deed of covenant executed by the third party acquirer with Havilah to Havilah’s reasonable satisfaction whereby the third party assumes the obligation to pay royalties and associated obligations.19 24 The Royalty Deed contains provisions about the manner of calculation of the royalties. Benagerie’s interest in the Mining Lease is mortgaged to secure performance of its obligations to provide security 25 Benagerie entered into a mortgage20 over its interest in the Mining Lease and assets comprising a processing plant in favour of Havilah to secure the performance of Benagerie’s obligations under the Share Sale Agreement to provide security over the Mining Lease. 26 In particular, it provides security for Benagerie’s guarantee to Havilah of the due and punctual performance by CMC of its obligations to ensure no default event occurs under the Share Sale Agreement as well as the due and punctual payment of the Secured Money.21 “Secured Money” is defined to mean all money the payment or repayment of which from time to time forms part of Benagerie’s obligations to Havilah under the Share Sale Agreement. Accordingly, it covers Benagerie’s guarantee of the payment of the purchase price of the shares. By the mortgage, Benagerie undertakes to promptly pay the Secured Money in accordance with the Share Sale Agreement, a priority deed and the mortgage document.22 27 The mortgage restricts dealings with the mortgaged property. In particular, Benagerie may not sell, assign, dispose or otherwise deal with any mortgaged property, including the Mining Lease, or allow any interest in it to arise or be varied.23 28 Havilah is obliged to redeliver the title documents in relation to the mortgaged property and transfer back any transferred property on the satisfaction of the obligation (to guarantee CMC’s performance and to grant the security to 18 Exhibit A1; tab 2; schedule 2 to the Share Sale Agreement; cl 5.4. 19 Exhibit A1; tab 2; schedule 2 to the Share Sale Agreement; cl 5.3. 20 Exhibit A1; tab 7. 21 Exhibit A1; tab 7; cl 2. 22 Exhibit A1; tab 7; cl 4. The priority deed was not tendered. 23 Exhibit A1; tab 7; cl 4. -- 7 of 27 -- [2025] SASC 198 Stein J 6 secure Benagerie’s performance of its obligations) and upon the payment of the Secured Money (ie the purchase price) in full.24 29 The mortgage provides that Havilah is under no obligation to release the mortgaged property (including the Mining Lease) unless at the time of the release the Secured Money (ie the purchase price) has been paid in full, no obligations remain unsatisfied and it is not reasonably foreseeable there could be any Secured Money owing or obligations to be satisfied in the future.25 The Side Deed provides for the giving of guarantees by CMC of Benagerie’s obligations under the Royalty Deed and contains undertakings in relation to dealings in the shares in Benagerie and the Mining Lease 30 The recitals in the Side Deed between Havilah, Benagerie and CMC26 dated 11 July 2018 record that CMC guarantees Benagerie’s performance and that, additionally, CMC has agreed to provide certain undertakings to Havilah regarding any future share transactions in relation to Benagerie. 31 By the Side Deed, CMC guarantees to Havilah the due and punctual performance by Benagerie of all of its obligations to Havilah under the Royalty Deed, including to pay money.27 The Side Deed provides that if Benagerie does not perform its obligations on time and in accordance with the Royalty Deed, then CMC must perform those same obligations on demand.28 32 The Side Deed sets out undertakings by CMC in relation to any third party offers for shares in Benagerie for ten years after the date of the Side Deed.29 33 The Side Deed sets out a process by which CMC undertakes to provide Havilah the opportunity to purchase the shares on the same terms of any binding offer for the sale and purchase of shares in Benagerie that CMC receives from a third party. If Havilah does not accept CMC’s offer, then CMC may proceed to complete the transaction on the terms of the third party offer. CMC must procure the third party’s execution of a deed of covenant with Havilah on terms to the reasonable satisfaction of Havilah by which the third party agrees to assume and discharge any obligations of CMC under cl 2 (that is, the requirement to guarantee Benagerie’s obligations under the Royalty Deed, including to pay money). There are exceptions including a transaction which does not result in a change in control of Benagerie.30 34 The Side Deed also contains an undertaking regarding the Mining Lease. 24 Exhibit A1; tab 7; cl 2 (subject to clauses of the mortgage and Royalty Deed). 25 Exhibit A1; tab 7; cl 10. 26 Exhibit A1; tab 4. 27 Exhibit A1; tab 4; cl 2. 28 Exhibit A1; tab 4; cl 2. 29 Exhibit A1; tab 4; cl 5. 30 Exhibit A1; tab 4; cl 5. -- 8 of 27 -- [2025] SASC 198 Stein J 7 35 For a period of ten years after entry into the Side Deed, Benagerie must not sell, assign or dispose of any part of its interest in the Mining Lease to any third party unless Benagerie first offers the opportunity to Havilah to acquire the interest on the same terms.31 If Havilah does not elect to purchase the interest, or is deemed by the terms of the Side Deed to have made an election, then Benagerie may sell the interest to the third party. However, this is only on the basis, among other things, that the third party first executes a deed of covenant with Havilah on terms to Havilah’s reasonable satisfaction by which that third party agrees to assume and discharge any obligations of Benagerie under the deed to the extent of the interest in the Mining Lease acquired by the third party.32 36 In addition, the Side Deed provided that on completion, Benagerie must deliver to Havilah documents evidencing the discharge of all security interests over the Mining Lease.33 The clause thus requires the discharge of the mortgage in relation to the Mining Lease. Again, there is an exception, which covers transactions to a related body corporate of Benagerie provided the related body corporate executes such a deed of covenant to assume and discharge Benagarie’s obligations.34 Thus, Benagerie could transfer the Mining Lease to CMC as a related entity on the condition CMC executes the required deed of covenant. 37 The Side Deed also provides for exploration rights35 in favour of Havilah over an area known as the Bassanio Target.36 The Bassanio Target is an area which partly overlaps with the Mining Lease. Schedule 3 to the Side Deed contains details about exploration rights. It refers in various places to “CMC” and in other places to “CMC/Benagerie”. I return below to address textual considerations arising from the different references to CMC alone and in connection with Benagerie in the contractual documents. The parties agreed to changes in the purchase price and other matters in executed Heads of Agreement 38 On 4 April 2019, Havilah, CMC, Benagerie and Havilah Royalties entered into Heads of Agreement,37 which contemplated variation of the Share Sale Agreement, the Side Deed and the Royalty Deed and addressed certain exploration arrangements in relation to an Exploration Licence in Havilah’s name on terms set out in an attached Commercial Term Sheet. 39 The Heads of Agreement38 state that the precise commercial terms of the revised arrangements need to be recorded in deeds of variation and arrangements in relation to exploration rights granted by Havilah, in favour of Benagerie, will 31 Exhibit A1; tab 4; cl 5. 32 Exhibit A1; tab 4; cl 6. 33 Exhibit A1; tab 4; cl 6. 34 Exhibit A1; tab 4; cl 6. 35 Exhibit A1; tab 4; cl 3; Schedule 3. 36 Exhibit A1; tab 4; cl 6. 37 Exhibit A1; tab 8. 38 Exhibit A1, tab 8. -- 9 of 27 -- [2025] SASC 198 Stein J 8 be recorded in an Exploration Agreement.39 The recitals note that the parties enter into the Heads of Agreement to record the agreed and binding terms of the revised arrangements and to record their common intentions. The parties are legally bound by the terms of the Heads of Agreement, including the terms and conditions which form part of the Commercial Term Sheet attached to the Heads of Agreement. The parties agree to use their best endeavours to agree and execute the final form of the relevant documents together with any ancillary documents to give effect to the terms of the Commercial Term Sheet.40 The parties agree the Heads of Agreement will terminate with effect from the date the transaction documents are executed.41 40 The Commercial Term Sheet42 is entitled “North Portia and EL5873 – Term Sheet between Havilah Resources (HAV) and Consolidated Mining & Civil Pty Ltd/Benagerie Gold and Copper Pty Ltd (CMC)”. The Commercial Term Sheet states that the Heads of Agreement legally bind the parties and will only be superseded when the parties execute the transaction documents. 41 The Commercial Term Sheet is set out in the form of a column document. One column records transaction details from the June 2018 arrangements and the right hand column sets out revised terms. Some items are included with a notation of “No change – completed” or “Eliminated”. New items are included, in some cases with a reference to “HAV Proposal” or “Proposal”, followed by a stated position, sometimes expressed at a high level and in some cases by reference to further discussions. One such example is “HAV Proposal: Transfer of a certain area of land”.43 Another is “CMC will consult with HAV regarding its Exploration Plans for EL5873 to reach agreement”.44 42 The Commercial Term Sheet provides for changes to the instalment payment regime for the payment of the purchase price. The first payment had been made and was noted as requiring no change. The second payment of $3.5M was replaced with a payment of $2M to be made within 24 hours of signing the Heads of Agreement including the Commercial Term Sheet which was described as a “high level summary of the modifications to” the Share Sale Agreement. The third payment of $3.5M was replaced with $4M on terms set out in the Terms Sheet. 43 The final payment of $5.5M was replaced with a: Balance of $3.8M payable once the first $3.5 million of production revenue from the North Portia project is achieved. Paid by equal monthly instalments after milestone achieved - in three equal payments of ⁓$1.3 million for a total of $3.8 million. To be paid earlier in the event CMC sells the ML or its rights as documented in this Term Sheet following receipt of the required written consents… from HAV. 39 Exhibit A1; tab 8; recitals. 40 Exhibit A1; tab 8; cl 6. 41 Exhibit A1; tab 8; cl 6. 42 Exhibit A1; tab 8; Commercial Term Sheet. 43 Exhibit A1; tab 8; Commercial Term Sheet item Q. 44 Exhibit A1; tab 8; Commercial Term Sheet item R. -- 10 of 27 -- [2025] SASC 198 Stein J 9 This represents a 20% discount in the original sale price to reflect the removal of the permitting obligations of HAV and a larger upfront cash payment. Total sale price is $10.8 million. 44 “ML”, used throughout the contract documents, was a shorthand reference to the Mining Lease. 45 The Commercial Term Sheet contained various references to which I will return below. The Implementation Deed was entered into to give effect to the Heads of Agreement 46 The Implementation Deed45 provides for variations to the Royalty Deed, Side Deed and for the assignment of Havilah’s rights under the Royalty Deed to Havilah Royalties. The parties agreed to vary the Share Sale Agreement, the Royalty Deed and the Side Deed in terms set out as attachments to the Implementation Deed. Amendments to the Side Deed included adding reference to the Exploration Deed and making some amendments to exploration rights set out in Schedule 3. 47 The Implementation Deed provides that except as expressly set out in it, all other terms of the Side Deed, Royalty Deed and Share Sale Agreement are unchanged and continue in full force and effect.46 48 The variations to the Share Sale Agreement record the change in the amount of the final payment to $3.8M and provide for the insertion of a new cl 3A as follows: (a) The Parties agree that the Final Payment will be paid by CMC to Havilah as follows: (i) in three equal monthly instalments commencing on the date that is 30 days after the date on which $3,500,000 of Production Revenue has been generated from the North Portia Project, as evidenced by sales invoices supported by product shipping documents provided by Benagerie to Havilah commencing from the first product shipments from the North Portia Project; or (ii) by way of lump sum on the date that is 30 days after CMC/Benagerie sells the ML to a third party, in the event that that date occurs prior to the date referred to in paragraph 3A(a)(i) above. 49 Production Revenue is defined by reference to revenue generated from sales of minerals derived from processing ore from mining at the North Portia Project. The North Portia Project is the project to be undertaken by Benagerie on a particular part of the Mining Lease. 50 The variations to, and assignment of, the Royalty Deed are addressed in attachment 4 to the Implementation Deed. Havilah assigned to Havilah Royalties 45 Exhibit A1, tab 9. 46 Exhibit A1, tab 9; cl 2. -- 11 of 27 -- [2025] SASC 198 Stein J 10 its rights and obligations under the Royalty Deed with Benagerie’s consent. Havilah as parent company of Havilah Royalties guarantees the due and punctual performance of Havilah Royalties’ obligations in its capacity as Payee under the Royalty Deed as assigned.47 51 The parties agreed variations to the Side Deed including to add a reference to the Exploration Deed between Havilah, Benagerie and Havilah Royalties dated May 2019 in relation to Exploration Licence EL5873 (“EL5873”) held by Havilah.48 EL5873 covers an area including, but extending beyond, the area of the Mining Lease. The Exploration Deed gave Benagerie certain exploration rights 52 By the Exploration Deed49 dated 22 May 2019 between Havilah, Havilah Royalties and Benagerie,50 Havilah grants to Benagerie rights to explore the area covered by EL5873 on agreed terms and Havilah and Benagerie agree to commercial terms on which certain discoveries made on EL5873 will be the subject of joint venture arrangements. The Exploration Deed grants to Havilah exclusive rights to explore an area called the Croziers Prospect and grants to Benagerie exclusive exploration rights to explore areas called the Shylock Prospect and the Lorenzo Prospect.51 Those areas are located outside the boundary of the Mining Lease. Benagerie is entitled to exercise exploration rights over EL5873 in relation to areas with the exception of Croziers Prospect in ways specified in the Exploration Deed.52 Benagerie is obliged to incur certain levels of minimum expenditure on EL5873 on a yearly basis.53 Exploration rights addressed in the Commercial Term Sheet by reference to CMC were thus granted to Benagerie, not CMC. 53 The Exploration Deed contains terms setting out the manner in which Havilah and Benagerie will address participation in discovery and mineral claims. 54 The Exploration Deed addresses the sale of shares in Benagerie and the sale of any interest in the Mining Lease. Clause 7 of the Exploration Deed provides that the provisions of the Side Deed govern the sale or issue of shares in Benagerie and the sale, disposal or transfer of any interest in the Mining Lease.54 If Benagerie is permitted to sell, dispose of or transfer its entire interest in the Mining Lease in accordance with the Side Deed, then it may sell to the permitted purchaser its right, title and interest under the Exploration Deed.55 47 Exhibit A1, tab 9; attachment 4 cl 3. 48 Exhibit A1, tab 9, attachment 6, cl 8.1.1. 49 Exhibit A1, tab 10. 50 CMC is not a party to the Exploration Deed. 51 The Exploration Deed also referred to rights to an area called Birksgate Prospect. 52 Exhibit A1, tab 10; cl 4. 53 Exhibit A1, tab 10, cl 3. 54 Exhibit A1, tab 10; cl 7. 55 Exhibit A1, tab 10; cl 7. -- 12 of 27 -- [2025] SASC 198 Stein J 11 55 If Benagerie intends to sell its rights under the Exploration Deed, a process is set out by which Benagerie must first offer Havilah the right to acquire the interests.56 The Exploration Deed specifies that any sale by Benagerie to a third party must be conditional on that party agreeing to be bound by the terms of the Exploration Deed. Sale of the Mining Lease is thus tethered to rights and obligations in the Exploration Deed. When Portia acquired the shares in Benagerie in 2024 it agreed to assume and discharge any obligations of CMC under cl 2 of the Side Deed 56 The Deed of Covenant57 between Portia, Havilah and Havilah Royalties recites that Portia has agreed to assume and discharge any obligations of CMC under cl 2 of the Side Deed as amended by the Implementation Deed and Portia by the deed agrees to assume and undertake to discharge the obligations under cl 2 of the Side Deed. Portia guarantees to Havilah Royalties the performance by Benagerie of all its obligations under the Royalty Deed and provides that if Benagerie has not performed, then Portia must perform on demand by Havilah Royalties. Relevant principles of contract construction 57 A commercial contract must be given a businesslike interpretation having regard to the commercial context, circumstances and objects of the contract.58 The terms of a commercial contract are determined by what a reasonable businessperson would have understood the terms to mean. This requires consideration of the language used by the parties, the circumstances addressed by the contract and the commercial purpose and objects of the contract.59 The objects of the contract are to be found in its genesis, its background, context and the market in which the parties were operating.60 58 The Court ascertains the objective intention of the parties in construing the contract, determining the parties’ rights and liabilities objectively by reference to the contractual text, its context and purpose.61 59 A court may assume that the parties intended to produce a commercial result when making the contract and therefore any construction resulting in commercial 56 Exhibit A1, tab 10; cl 7. 57 Exhibit A1, tab 12. 58 McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 at [22] (Gleeson CJ) citing Hydarnes Steamship Co v Indemnity Mutual Marine Assurance Co [1895] 1 QB 500 at 504 (Lord Esher MR). 59 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [47] (French CJ, Nettle and Gordon JJ). 60 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [47] (French CJ, Nettle and Gordon JJ). 61 Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989 at 996 (Lord Wilberforce, Lord Kilbrandon agreeing at 1001); Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at [35] (French CJ, Hayne, Crennan and Kiefel JJ); Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [46] and [50] (French CJ, Nettle and Gordon JJ). -- 13 of 27 -- [2025] SASC 198 Stein J 12 nonsense or inconvenience ought to be avoided.62 “The rights and liabilities of [the] parties … are determined objectively, by reference to … (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and [its] purpose”.63 60 Where the contract is formed by multiple agreements between the same parties, it is appropriate to read such documents together as a suite of documents to determine the correct construction.64 61 There is no mandate to rewrite agreements to depart “from the language used by the parties, merely to give a provision an operation which, as it appears to the court, might make more commercial sense”.65 62 Evidence of surrounding circumstances is admissible to aid in construing a contract if the language is susceptible of more than one meaning.66 Where there is no ambiguity in expression, evidence of surrounding circumstances cannot be adduced to contradict the plain meaning of the contract.67 However, it can sometimes be necessary to consider events, circumstances and things which are external to the contract including to identify the commercial purpose or object of the contract. It may be necessary where there is constructional choice.68 63 If a certain construction is unambiguous the court must give effect to it, notwithstanding that the result may appear capricious or unreasonable and that it may be suspected the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding an inconvenient or unjust result. However, where contractual language is equally open to multiple 62 Re Golden Key Ltd (in rec) [2009] EWCA Civ 636 at [28]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [51] (French CJ, Nettle and Gordon JJ); Zhu v Treasurer (NSW) (2004) 218 CLR 530 at [82] (Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ); Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310, 313-314 (Kirby P). 63 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [46] (French CJ, Nettle and Gordon JJ) citing Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at [35] (French CJ, Hayne, Crennan and Kiefel JJ) and Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 350 (Mason J, Stephen J agreeing at 344-345, Wilson J agreeing at 392) citing Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989 at 995-996 (Lord Wilberforce, Lord Kilbrandon agreeing at 1001). 64 Rocky Castle Finance Pty Ltd v Taylor (2014) 118 SASR 349 at [106]-[109] (Blue J, Stanley J agreeing at [175]). See also Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [46] (French CJ, Nettle and Gordon JJ). 65 Miwa Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 297 at [18] (Basten JA, McColl JA agreeing at [1], Campbell JA agreeing at [51]) (emphasis in original); see also Jireh International Pty Ltd v Western Export Services Inc [2011] NSWCA 137 at [55]-[56] (Macfarlan JA, Young JA agreeing at [125] and Tobias AJA agreeing at [126]); Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd [2008] NSWCA 5 at [27]-[31] (Basten JA, Tobias JA agreeing at [9]). 66 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352 (Mason J, Stephen J agreeing at 344-345, Wilson J agreeing at 392). 67 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352 (Mason J, Stephen J agreeing at 344-345, Wilson J agreeing at 392); Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [48] (French CJ, Nettle and Gordon JJ). 68 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [49] (French CJ, Nettle and Gordon JJ), observing that the question whether circumstances external to the contract may be resorted to in order to identify the existence of a constructional choice did not arise for determination. -- 14 of 27 -- [2025] SASC 198 Stein J 13 constructions, the preferred construction is the one that will avoid such unreasonableness, inconvenience or injustice.69 Havilah relies on the reference to “CMC/Benagerie” in cl 3A(a)(ii) as capturing an indirect sale of the Mining Lease by the sale of the shares in Benagerie 64 Havilah’s argument is that use of the phrase “CMC/Benagerie” was intentional and the inclusion of “CMC” was not an error or surplusage but rather a deliberate choice and, properly construed, covers both a direct sale by Benagerie of the Mining Lease and an indirect sale of the Mining Lease by CMC selling its shares in Benagerie. 65 Havilah submits that the terms of cl 3A(a)(ii) give rise to a constructional choice between imprecision in the subjects of the clause (that is, “CMC/Benagerie”) or imprecision in the object of the clause (“sells the ML to a third party”). The reference to “CMC/Benagerie” involves two subjects, that is CMC and Benagerie, when the Mining Lease is only owned by Benagerie. Accordingly, Havilah contends that if the obligation was only triggered by a direct sale of the Mining Lease, the reference to “CMC” would be rendered surplusage. Havilah relies on the inclusion of the “/” to signify an alternative, that is, CMC or Benagerie as the case may be. Havilah’s position is thus that the clause is intended to be triggered by a direct or indirect sale of the Mining Lease which might have been expressed more clearly as “CMC/Benagerie sells the ML (directly or indirectly)”. Havilah contends its construction is open textually from the inclusion of both parties effecting the relevant sale. On its position, taking into account the text, context, and commercial purpose of the clause, cl 3A(a)(ii) extends to a sale by CMC of its shares in Benagerie being an indirect sale of the Mining Lease by CMC. 66 Havilah points out that the parties were aware that Benagerie held the Mining Lease and only Benagerie could sell it, yet the parties referred to a sale of Benagerie’s Mining Lease by either CMC or Benagerie. In June 2018, the parties expressly addressed separately the potential for a sale of shares by CMC in Benagerie and the potential for a sale of the Mining Lease by Benagerie 67 At the time of entry into the Share Sale Agreement and the associated contracts, CMC acquired 100 percent of Havilah’s shares in Benagerie. The purchase price was payable in a number of instalments. The last three instalments were staggered and dependent on Havilah obtaining certain approvals from DEM. The suite of documents obliged Benagerie to pay royalties to Havilah and CMC guaranteed Benagerie’s obligations to do so while Benagerie guaranteed CMC’s obligation to pay the purchase price. A mortgage was registered over the Mining 69 Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109 (Gibbs J). -- 15 of 27 -- [2025] SASC 198 Stein J 14 Lease to secure the obligation to pay the purchase price. The payment of the purchase price in full would enable the discharge of the mortgage. 68 By the Side Deed, the parties expressly contemplated and addressed in separate clauses the consequences of a sale of the shares held in Benagerie by CMC and a sale by Benagerie of the Mining Lease. The clauses distinguished between the shares and the Mining Lease and differentiated CMC’s responsibility vis-à-vis the shares and Benagerie’s responsibility vis-à-vis the Mining Lease. 69 In either case, Havilah had to be offered a first right of refusal to acquire the shares or Mining Lease. The Side Deed contained a process to be followed. If, in either case, Havilah declined to take up the first right of refusal, then CMC was free to sell the shares to the third party and left Benagerie free to sell the Mining Lease to a third party. 70 In each case, there were conditions. Among other things, in the case of a sale of the shares in Benagerie, CMC had to obtain a deed of covenant from the third party acquirer with Havilah on terms to the reasonable satisfaction of Havilah whereby the third party agreed to assume and discharge any obligations of CMC under cl 2 of the Side Deed. That clause contained CMC’s guarantee to Havilah of Benagerie’s obligations to Havilah under the Royalty Deed and CMC’s promise to perform those obligations if Benagerie did not do so. 71 Among other matters, in the case of a sale of the Mining Lease, Benagerie could only sell the Mining Lease if: • the third party acquirer first executed a deed of covenant with Havilah on terms to the reasonable satisfaction of Havilah whereby the third party agreed to assume and discharge any obligations of Benagerie under the Side Deed; and • at completion, Benagerie delivered to Havilah documents evidencing the discharge of all of the security interests over the Mining Lease. 72 This recognised that Havilah was not obliged to remove the mortgage encumbrance from the Mining Lease if part of the purchase price remained unpaid. 73 There was an exception to these requirements in the case of a sale or transfer of the Mining Lease to CMC. 74 It follows that as at June 2018 and prior to the variations, if Benagerie had sold the Mining Lease to a third party, it would have been required to follow the procedure in the Side Deed whereby Havilah would be given the first right of refusal and, if Havilah did not elect, Benagerie would have to obtain the deed of covenant from the third party acquirer. The provisions of the mortgage precluded the sale of Benagerie’s interest in the Mining Lease and the mortgage could not be discharged without fulfilling the requirement to pay the whole purchase price. The contractual provisions therefore, among other things, protected the payment of the -- 16 of 27 -- [2025] SASC 198 Stein J 15 purchase price in the event of the sale of the Mining Lease. The sale of the Mining Lease thus could not have proceeded without payment of the purchase price. 75 At that time, if CMC had sold its shares in Benagerie, it would have had to obtain a deed of covenant by which the acquiring party assumed the obligations by which CMC guaranteed the payment of the royalties by Benagerie to Havilah. The Side Deed did not require the acquiring party to assume the obligation to pay the purchase price nor did it require the discharge of the mortgage or require CMC to pay the balance of the purchase price. Accordingly, if a sale of shares in Benagerie had proceeded prior to the variations, it would not have resulted in a requirement to pay the purchase price. CMC would have continued to bear the obligation to pay the purchase price on satisfaction of the then existing prerequisites to each instalment payment. The variations in 2019 altered the triggers for the final purchase price instalment but did not alter the obligations on the sale of shares or the Mining Lease 76 When the variations were entered into in 2019,70 the purchase price was reduced, and the instalments were altered so they were no longer predicated on Havilah giving notice that DEM had given approvals for certain activities but were instead triggered by one of the two alternatives, that is, the achievement of a certain production revenue target or sale of the Mining Lease. 77 The contractual documents entered into by the parties at the time of the variation expanded the rights and obligations of the parties including to encompass dealing with EL5873 in Havilah’s name in the manner set out above. 78 Significantly, while other amendments were made to the Side Deed, the provisions concerning the rights and obligations upon the parties in the event of a sale of the Mining Lease or a sale of the shares in Benagerie were not altered and were reiterated. In my view, those matters militate strongly against Havilah’s construction of cl 3A(a)(ii) for reasons I expand upon below. 79 I turn first to textual considerations before addressing other arguments raised by the parties. Havilah contends that the clause should be construed in light of the Commercial Term Sheet 80 Havilah submits that the words in cl 3A(a)(ii) of the Share Sale Agreement as amended by the Implementation Deed are ambiguous. Accordingly, Havilah submits that the Court should consider the factual background to construe the contract. CMC objects to that submission on the basis that Havilah did not plead such ambiguity and rather conducted the action on the basis the dispute concerns the proper construction of the documents on their face. I accept that Havilah’s statement of claim does not plead such ambiguity. However, for the reasons I set 70 Via the Implementation Deed, Exhibit A1, tab 9, attachment 2. -- 17 of 27 -- [2025] SASC 198 Stein J 16 out below, I am not persuaded by Havilah’s reliance on the reference to “CMC” in the Commercial Term Sheet, nor on the so asserted departures in the Implementation Deed from the Commercial Term Sheet. In particular, I do not consider that the reference to “CMC” in the Commercial Term Sheet demonstrates the parties’ objective intention to address both a direct sale of the Mining Lease by Benagerie and an indirect sale by CMC through sale of its shares in Benagerie nor an inconsistency between the Implementation Deed and the Commercial Term Sheet. Accordingly, it is not necessary for me to further address the parties’ submissions on the pleading point nor their submissions on authorities concerning whether it is permissible to consider surrounding circumstances to determine whether a constructional choice arises. 81 Havilah did not tender evidence concerning surrounding circumstances at the time of entry into the arrangements. Rather, Havilah seeks to construe the clause by reference to what a reasonable businessperson would understand the words to mean, viewed in the context of the text, context and purpose of the Implementation Deed, the Share Sale Agreement as a whole and the Heads of Agreement and Commercial Term Sheet given the parties agreed to use their best endeavours to agree documents to give effect to the Commercial Term Sheet. The question thus narrows to whether cl 3A should be construed in the light of the Heads of Agreement and the Commercial Term Sheet and, if so, to what extent that supports Havilah’s argument. 82 I turn to consider Havilah’s argument based on the Commercial Term Sheet. The use of the word “CMC” in the Commercial Term Sheet does not resolve the construction question 83 Havilah contends the effect of the binding Commercial Term Sheet is that the Final Payment is to be paid earlier in the event “CMC” sells the Mining Lease which necessarily involves a direct or indirect sale of the Mining Lease. Accordingly, on Havilah’s position, the inclusion of “CMC/Benagerie” in lieu of “CMC” in the Commercial Term Sheet reinforces the intention to encapsulate either a direct sale of the Mining Lease by Benagerie or an indirect sale by CMC through sale of its shares in Benagerie. 84 Havilah submits that the Commercial Term Sheet must be construed in the commercial context in which Benagerie was a special purpose entity which only owned the Mining Lease and conducted mining operations upon it and CMC acquired the Mining Lease and plant and equipment owned by Benagerie by the purchase of its shares. Havilah also relies on the reference in the Commercial Term Sheet to CMC selling “its rights as documented in this terms sheet”, suggesting the reference to CMC is not unintentional. Havilah contends a relevant backdrop is cl 6 of the Side Deed which constrains CMC’s sale of the shares in Benagerie where that would result in a change in control. Havilah submits that the rights as documented in the Commercial Term Sheet indicate that reference to CMC is not intentional nor mistaken and the sale of CMC’s rights as a further -- 18 of 27 -- [2025] SASC 198 Stein J 17 trigger is consistent with an objective intention that a sale of CMC’s shares in Benagerie would be a relevant trigger event for an earlier payment of the final payment. Otherwise, on Havilah’s case, the Implementation Deed materially departs from the binding terms of the Commercial Term Sheet because the only trigger for payment of the final payment is the direct sale of the Mining Lease by Benagerie. 85 CMC contends that the Implementation Deed should not be construed in light of the terms of the Heads of Agreement and attached Commercial Term Sheet in circumstances in which the Heads of Agreement terminated and were replaced upon execution of the Implementation Deed. 86 Havilah relied on Players Pty Ltd v Clone Pty Ltd (“Players”)71 to support the proposition that the Court would not readily infer that the parties intended (by the Implementation Deed) to depart from the agreed terms (in the Heads of Agreement and Commercial Term Sheet) when implementing those terms. 87 In Players, Doyle CJ, with whom Sulan and Layton JJ agreed, said that it was open to the parties to enter into a lease (the second agreement) that departed from the terms of the agreement to lease (the earlier agreement). However, the Court would not readily conclude the parties had departed from the provisions in the agreement to lease. It was significant that the earlier agreement contained a term which enabled the parties to insist that the later agreement confirm to the earlier terms and constituted agreement to carry forward the terms of the earlier agreement into the later agreement. 88 Havilah’s submission is reliant on establishing that: • the Implementation Deed departed from the Heads of Agreement and the Commercial Term Sheet; and • the parties agreed by the Heads of Agreement and the Commercial Term Sheet to replicate in the Implementation Deed the Commercial Term Sheet provisions. 89 Put differently, the submission proceeded on the basis the Commercial Term Sheet left no room for further agreement and the Implementation Deed failed to carry into effect agreed provisions of the Heads of Agreement and Commercial Term Sheet. 90 In this case, the Heads of Agreement terminated on entry into the Implementation Deed. The Heads of Agreement acknowledged that the precise terms of the revised arrangements needed to be recorded and that the parties agreed to use their best endeavours to agree the final form of the variations. The Heads of Agreement thus expressly recognised that the final form of the variations had not yet been finalised. The express agreement that the Heads of Agreement would 71 [2006] SASC 118. -- 19 of 27 -- [2025] SASC 198 Stein J 18 terminate indicates the parties’ intention that the subsequent variation documents, once negotiated and executed, would supplant the Heads of Agreement. The Heads of Agreement did not contain an equivalent to the term in issue in Players which was to the effect that the later agreement would contain the terms in the earlier agreement with such other terms deemed reasonable, provided that such other terms would not vary the agreed terms. In my view, the best endeavours obligation does not achieve the same outcome as occurred in Players. In this case, the Heads of Agreement referred to matters which were still to be agreed and the Implementation Deed departed in some respects from the Heads of Agreement. Examples include that the Commercial Term Sheet provided for acceleration of the final payment if CMC sold its rights “as documented in this Terms Sheet” (relevantly, exploration rights) but cl 3A(a)(ii) covered only the sale of the Mining Lease. As referred to above, exploration rights addressed in the Commercial Term Sheet by reference to CMC were ultimately granted to Benagerie, not CMC. 91 Further, the definition of CMC in the Heads of Agreement encompassed both CMC and Benagerie. Consequently, it does not necessarily follow that there is an inconsistency between the use of “CMC” in the Commercial Term Sheet and “CMC/Benagerie” in the Implementation Deed. What remains consistent between both is the reference only to the ‘ML” ie the Mining Lease and the lack of any express reference to the shares. 92 Havilah’s submission depends on making good the proposition that at the time of the Commercial Term Sheet, the parties intended that sale by CMC of its shares in Benagerie would trigger the final payment. 93 The variations which were made, in the context of: • the separate treatment of the Mining Lease and the shares in Benagerie throughout the suite of documents; • the express acknowledgement in the Exploration Deed (attached to the Implementation Deed) that the Side Deed governs the sale of shares in Benagerie and the sale of any interest in the Mining Lease; • the express acknowledgment that the parties ratified all other terms the Side Deed, Royalty Deed and Share Sale Agreement; • the fact Benagerie remained liable to pay royalties and CMC’s guarantee of Benagerie’s royalty obligations would have to be assumed by any third party acquirer of the Mining Lease; belie such an intention. I address those matters in further detail below. 94 Havilah took the position that it was necessary to explain the use of the language in circumstances in which neither party took the position that the reference to “CMC” was surplusage. I turn now to address textual references. -- 20 of 27 -- [2025] SASC 198 Stein J 19 Havilah’s reliance upon textual references does not necessarily support its construction 95 Havilah contrasted references to “CMC/Benagerie” with references to “CMC” or “Benagerie” in the Share Sale Agreement and the Implementation Deed to support its position. 96 I have reviewed various references to “CMC”, “Benagerie”, “CMC and Benagerie”, “CMC or Benagerie” and “CMC/Benagerie” in the contractual documents to ascertain whether a consistent pattern of use of the various phrases can be discerned so as to assist in understanding the objective intention of the parties in the use of the different phrases. 97 The parties in some cases referred separately to the entities and in some cases referred to them together. Both parties accepted there was informality in use of the expression “CMC/Benagerie”. 98 The Share Sale Agreement defines CMC and Benagerie separately. In some places, it refers to both CMC and Benagerie. It does so in contexts which demonstrate that the clause applies to each separately. For example, there is a reference to each of CMC and Benagerie releasing and discharging Havilah upon completion and to CMC and Benagerie meeting obligations and jointly and severally indemnifying Havilah in certain circumstances.72 The Side Deed contains a reference to “CMC and Benagerie” each undertaking to Havilah that up to a specified date, if either CMC or Benagerie comes into possession of gold nuggets from the Portia gold mine, they will offer to sell those nuggets to Havilah when CMC or Benagerie (as the case may be) decides to sell. In this case, the drafter expressly referred to one entity or the other, as the case may be, when addressing the potential for the clause to apply to either entity in the relevant circumstances. 99 There are some references to “CMC/Benagerie” in other documents. For example, cl 7.1.1 of the Side Deed provides that “CMC/Benagerie and Havilah” must meet in a specified time frame to agree upon a person to appoint as an expert. The necessity to appoint an expert may arise either upon a sale of the shares in Benagerie or a sale of the Mining Lease. The formulation of “CMC/Benagerie” in this clause appears to apply to either entity as may be relevant in the circumstances, and accordingly, may be an example where the parties intended “CMC/Benagerie” to be a short-hand reference to “CMC or Benagerie as the case may be”. In this example, the clause could apply to either CMC or Benagerie, depending on whether the expert is retained to address issues arising from an offer for the sale of the shares (in which case it would apply to CMC) or an offer for the sale of the Mining Lease (in which case it would apply to Benagerie). It may also be consistent with implicit acknowledgment of CMC’s control of Benagerie through the parent company/subsidiary company relationship. 72 Exhibit A1, tab 2; cl 7.1(b)(ii). -- 21 of 27 -- [2025] SASC 198 Stein J 20 100 There are a number of references to “CMC/Benagerie” in sch 3 of the Side Deed (entitled “Exploration Rights”) but also some references to CMC only.73 The schedule addresses exploration rights vis-à-vis the Bassanio Target. Havilah retains exploration rights on the Bassanio Target on the specific area within the Mining Lease. Havilah must give prior written notice about exploration work on the Bassanio Target to CMC (only). Havilah explained the references as recognising consent was required from the parent entity, CMC, when mining operations were liable to be conducted by a combination of parent or subsidiary, controlled by the CMC group. There are then references to “CMC/Benagerie” in sch 3. The schedule refers to “CMC/Benagerie” “conducting” operations on the Mining Lease. Other references include that if Havilah wishes to develop any mineral resource, then “CMC/Benagerie” will have a pre-emptive right with respect to such development and Havilah must prepare and submit to “CMC/Benagerie” a proposal and information to enable “CMC/Benagerie” to assess whether “it” will participate in the development and “CMC/Benagerie” will notify Havilah of “its” decision. These references, including in combination with the curious use of “it”, rather than “they” or “their”, may be consistent with the drafter implicitly acknowledging CMC’s control of Benagerie through the parent company/subsidiary company relationship. Havilah accepted that sch 3 did not address two pre-emptive rights, but rather one pre-emptive right which was conferred upon parent or subsidiary and which may, within the corporate group, take up such a right. Similarly, Havilah described the reference to “CMC/Benagerie” notifying Havilah as not contemplating both entities doing so, but rather that the relevant party with the pre-emptive right would provide the notification. The use of the phrase “CMC/Benagerie” in these ways could be consistent with “CMC or Benagerie as the case may be”, or may be the equivalent of “Benagerie directly or CMC indirectly through its control of Benagerie”. The composite expression could have reflected recognition of how mining operations within the CMC/Benagerie group were to be conducted in practice.74 101 The variations to the Side Deed included variations to sch 3 of the Side Deed. These variations also contained references to “CMC/Benagerie” such as “CMC/Benagerie can elect” to carry out drilling on the Bassanio Target subject to Havilah providing certain consents and “CMC/Benagerie” having the obligation to provide access to drilling and other data to Havilah.75 These references could also be intended to refer to CMC or Benagerie as the case may be or may be the equivalent of “Benagerie directly or CMC indirectly through its control of Benagerie”. 102 Havilah contends that cl 3A(a)(ii) can only ever apply to Benagerie because it is the sole owner of the Mining Lease and consequently there must be some point to the addition of “CMC”. CMC in response submits that the provisions which 73 Exhibit A2, tab 4, sch 3, cls 3 – 13. 74 There was no evidence about how mining operations of each of CMC and Benagerie were conducted in practice. 75 Exhibit A1, tab 9, attachment 6, cls 8.1.8-8.19. -- 22 of 27 -- [2025] SASC 198 Stein J 21 recognise the entitlement of Benagerie to transfer the Mining Lease to a related entity (on conditions) give rise to the potential that, at a future point, the Mining Lease could have been owned by CMC. Havilah’s reply is that an inter-group transfer could occur to entities other than CMC, including a sibling company to Benagerie, or a new subsidiary company of Benagerie. However, in that case only one of such reorganisation scenarios, that is, to CMC, would be recognised. Further, Havilah contends that CMC’s argument fails to take into account the fact that the mortgage precluded a transfer of the Mining Lease, even if to a related entity. There was no evidence about the existence of any other related companies. Nevertheless, the potential for an inter-company transfer other than to CMC reduces the prospect that the reference to CMC was included specifically to address a related party transfer of the Mining Lease to CMC. 103 Havilah contrasted the reference to “CMC/Benagerie” in cl 3A(a)(ii) with the express reference to “CMC” paying the final payment and “Benagerie” providing product shipping documents. That differentiation of itself does not resolve the construction question. The obligation to pay the purchase price was CMC’s obligation alone and there is no apparent reason why such an obligation should attach to “CMC/Benagerie”. The production revenue obligation attached to Benagerie because, based on the definitions in the variations, production revenue was associated with the North Portia project to be conducted by Benagerie. 104 Based on my review of the contractual documents I do not consider it can be said that the expression “CMC/Benagerie” necessarily translates to “CMC indirectly or Benagerie directly” in all cases. For example, the expert determination reference I have set out above may be intended to be a reference to either CMC or Benagerie as may be relevant in the particular circumstance. 105 Havilah submits that the slash between CMC and Benagerie is a reference to parent/subsidiary, recognising that the CMC/Benagerie relationship is one in which the wholly owned subsidiary is subject to the control of the parent company. If the phrase “CMC/Benagerie” is used in cl 3A(a)(ii) in the sense of “CMC indirectly” or “Benagerie directly”, it leaves open the possibility that it constitutes a recognition of the parent/subsidiary relationship between the entities by virtue of which CMC relevantly controlled Benagerie. A reference to “CMC indirectly” would not then constitute a reference to “CMC indirectly [sells the Mining Lease] through the sale of its shares in Benagerie” but rather could translate to “CMC indirectly [sells the Mining Lease] by virtue of its control of Benagerie”. In the latter case, the object of the sale transaction remains the Mining Lease. 106 It follows that the textual references do not necessarily nor consistently support Havilah’s construction. Havilah supports its construction by reference to commercial purpose 107 Havilah contends that its construction reconciles most easily with the underlying commercial justification for the early payment of the final payment. Havilah submits that the evident underpinning commercial purpose is to ensure -- 23 of 27 -- [2025] SASC 198 Stein J 22 that CMC will have the funds to pay the balance of the unpaid purchase price to Havilah. On Havilah’s construction, the payment obligation is intended to fall due contemporaneously with CMC receiving the financial benefit derived from the relevant trigger event, which is either production revenue or the sale price of shares in Benagerie or the Mining Lease. Otherwise, Havilah would find itself in a position where, despite CMC having sold its shares in Benagerie, it had no obligation to accelerate the payment of the purchase price. Consequently, the purchase price could be payable years in the future, at which time CMC may not exist nor have the funds to meet the payment. 108 Havilah submits that as long as CMC remained the indirect owner of the Mining Lease, upon receipt of production revenue, CMC would always have a reasonable prospect of sufficient means to make the final payment. However, if the Mining Lease was sold directly or indirectly, then on Havilah’s position, CMC, despite having not paid the full purchase price to Havilah, would receive the commercial benefit through the subsequent sale of the asset to a third party, justifying the requirement for CMC to pay the purchase price when it on sold the shares. Havilah further contends that even if the trigger event were to be met so the production revenue reached the threshold $3.5M, that production revenue would not be paid to CMC. At that time, CMC may not be in a position to pay the purchase price. Whether or not CMC sold its shares or Benagerie sold the Mining Lease, the risk to Havilah in respect of the recoverability of the final payment based purely on production revenue was the same. 109 I pause to observe that these arguments constitute Havilah’s commercial justification for why payment should be accelerated upon the sale of the shares in Benagerie, but it does not necessarily make good Havilah’s construction of the clause. 110 There are a number of implicit assumptions in Havilah’s argument. These include that: • CMC would receive sufficient funds on a sale of shares in Benagerie to pay the balance of the purchase price; • $3.5M of production revenue would be generated and paid to CMC to enable CMC to pay the outstanding balance; • the acceleration of the final payment was to act as security for Havilah in the event of both sale of the Mining Lease and sale of the shares; • Havilah was able to negotiate the commercial outcome it uses as justification for its construction. 111 CMC submits that a sale of the Mining Lease to a third party, unlike the sale of Benagerie, potentially could materially impact the achievement of the milestone of production revenue to trigger the payment obligation under cl 3A(a)(i) as it was -- 24 of 27 -- [2025] SASC 198 Stein J 23 unlikely a third party holder of the Mining Lease would be as well placed as Benagerie to achieve the milestone. In my view, while this could be the case, it would not necessarily always follow. 112 I return to the wording of cl 3A. As set out above, cl 3A contained two triggers for the payment of the final instalment. The first attaches to a date on which $3.5M of Production Revenue has been generated from the North Portia Project commencing from the first product shipments from the North Portia Project. The clause refers to generation of the Production Revenue. It does not address how Benagerie will treat or pay that revenue. 113 As set out above, the variations to the Share Sale Agreement record that the North Portia Project is to be conducted by Benagerie at a site on the Mining Lease. If Benagerie were to sell the Mining Lease, it would impede its ability to achieve the generation of the Production Revenue target which activates the final payment obligation. This renders explicable the reference to sale of the Mining Lease as constituting the second trigger for making the final payment. That is, sale of the Mining Lease may place in jeopardy the ability to achieve the Production Revenue target thus impacting on the initiation of the obligation to pay the final payment. A sale of the Mining Lease would also have the effects I have set out above, including upon the discharge of the mortgage and security. The requirement to discharge the mortgage over the Mining Lease upon sale of the Mining Lease further explains acceleration in the event of sale of the Mining Lease. 114 The same does not follow in relation to a sale of the shares in Benagerie. If CMC sold its shares in Benagerie: • Benagerie would continue to own the Mining Lease; • the mortgage would remain registered over the Mining Lease; • Benagerie would continue to own information, assets and exploration rights in relation to the Mining Lease and EL5873. • Benagerie would continue to be in a position to take necessary steps with a view to generating Production Revenue; • Benagerie would continue to have obligations to pay royalties; • Benagerie would continue to have obligations under the Exploration Deed; • CMC would be required to obtain a deed of covenant from a third party acquirer to guarantee Benagerie’s royalty payments. -- 25 of 27 -- [2025] SASC 198 Stein J 24 Havilah’s construction is not consistent with the differentiation between the Mining Lease and the shares in Benagerie in the contractual documents 115 The Share Sale Agreement refers separately to the Mining Lease and to the shares in Benagerie. As would be expected, those assets are treated separately and referred to separately. This supports CMC’s position that a reference to “ML” means only the Mining Lease. Havilah’s construction does not adequately address the separate treatment of sale of shares and sale of the Mining Lease in the Side Deed 116 The phrase “CMC/Benagerie” can be contrasted with the separate reference to CMC only and Benagerie only in other parts of cl 3A(a)(ii) as set out above. Nevertheless, Havilah did not adequately explain why its construction should prevail in the face of the Side Deed. The express purposes of the Side Deed included addressing future share transactions in relation to Benagerie. The Side Deed specifically and separately deals with both the potential sale of the shares in Benagerie and the sale of the Mining Lease. The Side Deed was amended in some respects yet its provisions, including those relating to share sales, were expressly confirmed. The separate treatment of the Mining Lease and shares in Benagerie in the Side Deed and confirmation of the Side Deed provisions in the variation documents strongly favours CMC’s construction of cl 3A(a)(ii). Havilah’s construction does not adequately address the need to write in words to achieve the construction it seeks 117 The use of the slash symbol between CMC and Benagerie requires the reader in effect to read in the word “or” in place of the slash symbol and to read in the words “as the case may be” after “CMC/Benagerie” and the words “directly or indirectly through the sale of its shares in Benagerie” after the reference to the sale of the Mining Lease to achieve the construction for which Havilah contends.76 118 If the parties intended to cover both the direct sale of the Mining Lease and the sale of the shares held in Benagerie, that could easily have been addressed by the drafter expressly referring to both sale of the Mining Lease and sale of the shares in Benagerie. 119 Havilah made the point that the parties knew that the Mining Lease was owned by Benagerie, not by CMC, in support of its position that the reference to CMC encompassed an indirect sale of the Mining Lease by CMC through the sale of the shares in Benagerie. However, the fact the parties were aware of those matters makes more inexplicable the reference only to the Mining Lease if the intention was to address both a sale of the Mining Lease and also a sale of the 76 See Miwa Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 297 at [18] (Basten JA, McColl JA agreeing at [1], Campbell JA agreeing at [51]); Jireh International Pty Ltd v Western Export Services Inc [2011] NSWCA 137 at [55]-[56] (Macfarlan JA, Young JA agreeing at [125] and Tobias AJA agreeing at [126]); Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd [2008] NSWCA 5 at [27]-[31] (Basten JA, Tobias JA agreeing at [9]). -- 26 of 27 -- [2025] SASC 198 Stein J 25 shares held in Benagerie. The failure to do so contrasts with the express treatment in the Share Sale Agreement to indirect ownership in one clause as set out above. The protection provided by the mortgage does not answer the construction issue 120 Havilah contends the clause must be construed in the context of the mortgage including Benagerie’s covenant not to sell, assign, dispose of or otherwise deal with the mortgage property including the Mining Lease. As set out above, to do so would require discharge of the mortgage, which in turn would require Benagerie to pay out Havilah to the extent of the Secured Money. The unpaid portion of the purchase price would therefore crystalise and be paid out in connection with the sale of the Mining Lease. Havilah contends that if clause 3A(a)(ii) is confined only to a sale of the Mining Lease by Benagerie it does not provide any protection outside of that addressed by the mortgage. 121 While a sale of the Mining Lease would require the release of the mortgage, which in turn would require the payment in full of the purchase price, that does not justify expanding the reference to sale of the Mining Lease to sale of the shares in Benagerie given the other matters I have addressed above. Conclusion 122 In my view, the proper focus in cl 3A is on the reference to “Mining Lease” not on “CMC/Benagerie”. The phrase “sells the ML” is clear. It addresses only a sale of the Mining Lease. The additional reference to “CMC” does not alter the specification of the Mining Lease as the object of the sale. 123 I therefore decline to grant the declaration sought by Havilah. -- 27 of 27 --