BUMA Australia Pty Ltd v Queensland Power Company Pty Ltd [2025] QSC 338

SUPREME COURT OF QUEENSLAND CITATION: BUMA Australia Pty Ltd v Queensland Power Company Pty Ltd [2025] QSC 338 PARTIES: BUMA AUSTRALIA PTY LTD (Applicant) v QUEENSLAND POWER COMPANY PTY LTD (First Respondent) AND QUEENSLAND POWER (AUSTRALIA) PTY LTD (Second Respondent) AND MILLMERRAN INVESTMENT COMPANY I PTY LTD (Third Respondent) AND MILLMERRAN INVESTMENT COMPANY II PTY LTD (Fourth Respondent) AND MILLMERRAN INVESTMENT COMPANY III PTY LTD (Fifth Respondent) AND MILLMERRAN INVESTMENT COMPANY IV PTY LTD (Sixth Respondent) AND MILLMERRAN INVESTMENT COMPANY V, PTE. LTD. (Seventh Respondent) AND MILLMERRAN INVESTMENT COMPANY VI, PTE. LTD. (Eighth Respondent) FILE NO/S: SC No 13604 of 2024 DIVISION: Trial PROCEEDING: Trial ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 10 December 2025 DELIVERED AT: Brisbane HEARING DATES: 10, 11, 12, 13, 17, 18 and 20 November 2025, further written submissions received on 21 November 2025 -- 1 of 57 -- 2 JUDGE: Freeburn J ORDERS: 1. The 26 issues are decided in accordance with these reasons. 2. I will hear the parties on the appropriate orders and on interest and costs. CATCHWORDS: CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – AMOUNT – where the eight respondents own and the operate the Millmerran Power Station – where the respondents own the Commodore Coal Mine – where the applicant was, by a deed of novation, the provider of mining services to the respondents for the Commodore Mine under a Contract Mining Agreement – where the applicant claims from the respondents pursuant to the Contract Mining Agreement the sum of $30,519,791 pursuant to five invoices including end of contract claims, plus interest and costs – where the respondents counterclaims from the applicant the sum of $17,468,538.07 by way of set off against the applicant’s five invoices, and the recovery of the additional sum of $23,466,730.91 – whether the applicant’s claim or the respondent’s counterclaim should succeed, in part or in full CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – VARIATIONS – where the parties entered into a variation that took effect on 25 October 2022, namely the First Hired Fleet Variation – where the applicant brough on an additional fleet of equipment to remove overburden at the mine in the ninth operating year of the contract – where the applicant and respondents argue differing interpretations of the proper construction of the variation – where the applicant contends that the First Hired Fleet Variation should be construed such that it was entitled to be paid $4.26 per bank cubic metre (subject to rise and fall) for each bank cubic metre of waste removed by the Hired Fleet ‘in excess of the total of the Contract Waste Quantity as set out in Table 1’ – where the respondents contend that the First Hired Fleet Variation ought to be interpreted in accordance with its purpose – where the respondents argue a literal interpretation which lacks commercial efficacy should be avoided and the variation ought to be interpreted so as to avoid commercial inconvenience – where the starting point for contract interpretation principles is in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 – where the primacy of the text is the first rule of interpretation for considering a point of interpretation – where contract interpretation involves consideration of the language used in its context – where objective surrounding circumstances are -- 2 of 57 -- 3 available to inform the process of contractual interpretation – whether the court should accept the applicant’s or respondents’ construction of the First Hired Fleet Variation CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – VARIATIONS – where the parties entered into a variation that took effect on 30 October 2023, namely the Second Hired Fleet Variation – where, by the Second Hired Fleet Variation, the Hired Fleet continued to operate in the tenth operating year – where the respondents contend that the applicant overcharged, and the respondents overpaid, the sum of $7,129,006.35 – where the respondents contend that the applicant overcharged an additional sum not paid by the respondents of $2,110,272.20 – where the proper construction of the Second Hired Fleet Variation is contested by the parties – where the respondents argue a literal interpretation which lacks commercial efficacy should be avoided and the variation ought to be interpreted so as to avoid it working commercial inconvenience – whether the court should accept the applicant’s or respondents’ construction of the Second Hired Fleet Variation CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – AMOUNT – where under the contract, the parties were to undertake a reconciliation exercise in respect of overburden in advance at the end of the operating period – where the parties are in dispute regarding the calculation of an end of contract overburden reconciliation – where the overburden reconciliation involves comparing the overburden present at the start of the contract with the overburden present at the end of the contract – where the applicant claims that pursuant to the overburden in advance reconciliation, the respondents owe it $10,178,579.88 – where the respondents claim that the applicant owes it $23,625,412.56 – where parties agree in relation to the opening overburden and the relevant overburden rate – where the dispute concerns the closing overburden in advance – where the parties closing overburden in advance figures are different – where there are four reasons for the difference between the parties’ figures – where the first reason relates to the parties’ dispute in relation to the highwall angles – where the second reason is the parties’ dispute in relation to volumes of overburden that protrude above the highwall profile – where the third reason is in relation to the parties’ dispute in relation to the end wall issue – where the fourth reason relates to the parties’ dispute in relation to the hired fleet reduction issue – whether the court should accept the applicant’s or respondents’ construction of the process of calculating the overburden in advance reconciliation amount -- 3 of 57 -- 4 CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – RECOVERY – where the parties are in dispute concerning the entitlements of the applicant to be paid for deliveries of coal not within required quality specifications – where the coal not within required quality specifications is termed reject coal – where the respondents argue the applicant overcharged, and the respondents overpaid, the sum of $3,234,335.03 – where the respondents argue the applicant overcharged an additional sum not paid by the respondents of $1,324,672.54 – where the respondents now seeks restitution of part of the amounts that it paid contending that the basis for payment of those amounts totally failed – where the applicant says that the respondents knowingly paid the full contract price for the coal until July 2024 – where the applicant disputes its liability for the delivery of alleged reject coal on several grounds – whether the respondents should be successful in their claim for restitution with respect to reject coal Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57, cited BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, applied Coulson Aviation (Australia) Pty Ltd v Techfuel Pty Ltd [2025] NSWCA 211, cited Heavy Plant Leasing Pty Ltd (In Liq) v McConnell Dowell Constructors (Aust) Pty Ltd (No 2) (2022) 163 ACSR 562; [2022] NSWSC 1775, cited Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310, applied Mainteck Services Pty Ltd v Stein Heurtey (2014) 89 NSWLR 633; [2014] NSWCA 184, applied Max Cooper & Sons Pty Ltd v Sydney City Council (1980) 54 ALJR 234, cited McGowan v Commissioner of Stamp Duties [2002] 2 Qd R 499; [2001] QCA 236, cited Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37, applied Paciocco v Australia & New Zealand Banking Group Ltd (2016) 258 CLR 525; [2016] HCA 28, applied Realestate.com.au v Hardingham (2022) 277 CLR 115; [2022] HCA 39, cited Redland City Council v Kozik (2024) 281 CLR 202; [2024] HCA 7, cited COUNSEL: D Clothier KC, with M Doyle and J Hohl, for the applicant P O’Shea KC, with D Turner and T Smith, for the respondents SOLICITORS: Corrs Chambers Westgarth for the applicant -- 4 of 57 -- 5 Herbert Smith Freehills Kramer for the respondents Background [1] The eight respondents (collectively, ‘MPP’) own and the operate the Millmerran Power Station. That power station generates power by the burning of coal extracted from the adjacent Commodore Coal Mine which MPP also owns. In February 2014 MPP entered into a Contract Mining Agreement (‘CMA’) with Downer EDI Mining Pty Ltd. Downer EDI was engaged by MPP to provide mining services at the nearby Commodore Coal Mine. [2] In December 2021, by a deed of novation the applicant, BUMA Australia Pty Ltd (‘BUMA’), took Downer EDI’s place as the provider of mining services to MPP for the Commodore Mine under the CMA. [3] The CMA provided for an Operating Period of five Operating Years (‘OY’1) from 1 September 2014 to 31 August 2019 with an option for the parties to agree to add a further five years. The CMA was extended by the further five-year period, such that the Operating Period (as extended) had a duration of 10 years and ending on 31 August 2024. [4] In this proceeding, BUMA claims from MPP pursuant to the CMA the sum of $30,519,791 (including GST) pursuant to five invoices issued to MPP between August 2024 and October 2024 for July and August 2024 (being the last two months in OY10) including end of contract claims, plus interest and costs.2 [5] BUMA’s five invoices which were issued between August 2024 and October 2024 were as follows: (a) two invoices were issued on 22 August 2024 for work performed under the CMA (including certain variations) in July 2024, totalling $9,717,080.53 (including GST); (b) two invoices issued on 16 September 2024 for work performed under the CMA (including certain variations) in August 2024, totalling $9,606,273.16 (including GST); and (c) an invoice issued on 16 October 2024 which included a claim for a positive balance of a particular inventory at the Mine, known as ‘Overburden in Advance’ or ‘OBIA’, identified through a reconciliation exercise at the end of the Operating Period (OBIA Reconciliation), totalling $11,196,437.87 (including GST).3 [6] On the other hand, MPP counterclaims from BUMA: (a) the sum of $17,468,538.07 (excluding GST) by way of set off against BUMA’s five invoices pursuant to clause 53 of the CMA; 1 Thus, operating year 9 of the CMA, from 1 September 2022 to 31 August 2023 is abbreviated to as OY9 and operating year 10, from 1 September 2023 to 31 August 2024, is abbreviated to OY10. 2 The parties agreed that issues of interest and costs should be deferred until the court’s substantive decision was published. 3 See BUMA’s closing submissions at [2]. -- 5 of 57 -- 6 (b) recovery of the additional sum of $23,466,730.914 (excluding GST), plus interest and costs. [7] There are four broad areas of dispute which MPP explains in the following way. [8] First, the parties are in dispute concerning their rights and obligations pursuant to a variation that took effect on 25 October 2022 (‘First Hired Fleet Variation’), pursuant to which BUMA brought on an additional fleet of equipment (‘Hired Fleet’) to remove overburden at the mine in OY9 (1 September 2022 to 31 August 2023). MPP’s case is that pursuant to this variation, BUMA overcharged, and MPP overpaid, invoices issued by BUMA to MPP in the sum of $3,511,570.30. [9] Secondly, the parties are in dispute concerning their rights and obligations pursuant to a Second Hired Fleet Variation that took effect on 30 October 2023, by which the Hired Fleet continued to operate in OY10 (1 September 2023 to 31 August 2024). MPP’s case is that pursuant to this variation: (a) BUMA overcharged, and MPP overpaid, the sum of $7,129,006.35 (excluding GST); (b) BUMA overcharged an additional sum (not paid by MPP) of $2,110,272.20 (excluding GST). [10] Thirdly, the parties are in dispute concerning the calculation of an end of CMA overburden reconciliation, which involves comparing the overburden present at the start of the CMA with the overburden present at the end (‘OBIA Reconciliation’). BUMA claims that pursuant to the OBIA Reconciliation, MPP owes it $10,178,579.88 (plus GST). MPP claims that BUMA owes it $23,625,412.56. [11] Fourthly, the parties are in dispute concerning the entitlements of BUMA to be paid for deliveries of coal not within required quality specifications (‘Reject Coal’). MPP’s case is that: (a) BUMA overcharged, and MPP overpaid, the sum of $3,234,335.03 (excluding GST); (b) BUMA overcharged an additional sum (not paid by MPP) of $1,324,672.54 (excluding GST).5 [12] The parties agree that there are (only) 26 issues that separate them. Several of the issues involve the application of principles of contract interpretation Claim and Counterclaim (Issues 1-3) [13] Issues 1, 2 and 3 are as follows: “Issue 1. Whether the Respondents (collectively, MPP) are indebted to the Applicant (BUMA) in whole or part in respect of amounts claimed in five invoices issued by BUMA between August 2024 and 4 This sum comprises MPP’s First Hired Fleet Overpayment Claim, the Second Hired Fleet Overpayment Claim, the OBIA Reconciliation Claim, and the Reject Coal Overpayment Claim, less the set-off amount referred to in paragraph (a) above. 5 See MPP’s closing submissions at [9]-[12]. -- 6 of 57 -- 7 October 2024 (inclusive), totalling $30,519,791.56 (inclusive of GST) (the Invoiced Amounts). Issue 2. Whether MPP is required to pay BUMA interest on the Invoiced Amounts, calculated in accordance with the CMA and, if so, in what amounts. Issue 3. Whether MPP is entitled to be paid by BUMA (and to set off against, or deduct from, the Invoiced Amounts) amounts claimed by it in relation to the Hired Fleet Issue, OBIA Reconciliation Issue and Reject Coal Issue below, with interest.” [14] The only components of the invoices referred to in issue 1 above that are in dispute are the two performance bonuses claimed by BUMA.6 This is addressed below in the discussion of issue 26. MPP otherwise accepts that the invoiced amounts are payable, subject to MPP’s counterclaims against BUMA.7 That means that the resolution of issues 1 and 3 depend on the findings made in relation to MPP’s various counterclaims. [15] The parties agree that interest (issue 2) and costs ought to be deferred until after the publication of these reasons. First Hired Fleet Variation (Issue 4) [16] Issue 4 is as follows: Whether, on the proper construction of a variation contained in a letter from MPP to BUMA dated 21 October 2022 (the First Hired Fleet Variation): (a) BUMA was entitled to be paid $4.26 (subject to Rise and Fall) for each bank cubic metre (bcm) of waste removed by the Hired Fleet that was in excess of the quantity of the Contract Waste Quantity in Table 1 (subject to adjustment for all changes in Monthly Contract Tonnage and Annual Contract Tonnage); or (b) instead, BUMA was entitled to be paid $4.26 (subject to Rise and Fall) for each bcm of waste removed by the Hired Fleet that was in excess of the sum of the following in Table 1: (i) the quantity of the Contract Waste Quantity; (ii) the quantity of Topsoil Quantity; (iii) 10% of the sum of the Contract Waste Quantity and Topsoil Quantity; and (iv) the quantity of the Base Fleet Production. [17] BUMA argues that subparagraph (a) is the correct interpretation. MPP argues for the interpretation in subparagraph (b). 6 Ibid at [27]. 7 Ibid. -- 7 of 57 -- 8 The Basic Regime of the CMA [18] The basic exchange at the heart of the CMA was that, in exchange for its performance of the whole of the mining works, including mining coal and removing overburden,8 BUMA was to be paid a contract price consisting of the price per tonne of coal described in Item 1(a) of Schedule 1 to the CMA, adjusted in accordance with the CMA, and any applicable performance bonus.9 Under the CMA, BUMA was not to be paid extra sums for removing overburden. The contractor’s costs of removing the overburden were included in the contract price,10 which was essentially an amount per tonne of coal mined. [19] As MPP points out, clause 24 of the CMA obliges BUMA to supply, at its own cost, all personnel and everything else necessary to perform the works.11 Clause 23 of the CMA obliges BUMA to maintain and replace as necessary the contractor’s plant which includes all equipment and machinery such as excavators, dozers and trucks. [20] The risk that more overburden may need to be mined than anticipated was a risk allocated in this way. Clause 30.5 provided for BUMA to receive extra payments in the event that the strip ratio for an OY was at least 10% higher than the tendered strip ratio. The strip ratio comprised the volume of work to be done by BUMA to uncover coal to be mined. The strip ratio was, in respect of coal planned to be mined in an OY as shown in the relevant Annual Mine Plan for that OY, the bank cubic metre (‘bcm’) of overburden mined or planned to be mined to recover such coal, divided by the tonnage of such coal. [21] BUMA’s obligations under the CMA included the preparation of Annual Mine Plans which planned the areas, the sequence, and the timing of BUMA’s mining operations. The Annual Mine Plans were prepared by BUMA and targeted a particular quantity and quality of coal over the time period12 — which, according to various assumptions made in the scheduling software, entailed a planned volume of overburden removal and thereby produced a strip ratio.13 Each Annual Mine Plan would be provided to MPP in draft form, and then approved by MPP. [22] That is the basic regime of the CMA. First Hired Fleet Variation [23] The first hired fleet variation to the CMA is in the form of a letter from MPP to BUMA dated 21 October 2022.14 The letter’s introduction explains the context: “Over recent months the Owner and the Contractor have discussed the Owner’s requirements for the Contractor to target mine areas that are 8 Overburden comprises the waste material that overlies the uppermost coal seam that is to be mined in accordance with the CMA, including the Annual Mine Plan: see the CMA, clause 1 at pahe 22 for the definition. 9 MPP’s closing submissions at [15]. 10 Ibid. 11 Ibid at [16]. 12 There were mine plans for various periods. 13 See BUMA’s closing submissions at [18]. 14 The letter constitutes a variation directed by MPP pursuant to clause 30.2 of the CMA. -- 8 of 57 -- 9 understood to have lower moisture levels and smectite clay15 in accordance with the draft Annual Mine Plan provided by the Contractor to the Owner.16 The parties are continuing to discuss the draft Annual Mine Plan and intend to agree it based upon the conceptual Annual Mine Plan v5 attached to this letter as Schedule 1 no later than 15 November 2022. The Contractor has advised that mining in accordance with the conceptual Annual Mine Plan v5 will require additional Contractor’s Plant and that the Contractor must commit to procure that equipment as soon as possible to meet the timeframes it is required to comply with the conceptual Annual Mine Plan.” [24] To deal with that requirement for BUMA’s mining operations to target mine areas with lower moisture levels and smectite clay, MPP directed that BUMA: “provide an additional hired fleet of Contractor’s Plant comprising the equivalent of one Hitachi EX3600 or Leibherr 9350 size excavator and sufficient trucking up to four CAT 789D trucks (hired fleet) on the terms and conditions set out in this letter”. [25] BUMA was to supply that (first) hired fleet on the following terms and conditions: “1. the Hired fleet must be mobilised and available as soon as possible on the Contract Area and in operation during the period from 7 December 2022 (or as soon thereafter as the hired fleet can be fully mobilised) to 31 August 2023 (Hired Fleet Term); 2. The Hired Fleet must: a. be used to access coal, predominantly from high strip ratio (>3.8:1) areas; b. be used to facilitate accelerated waste removal (of all waste material types) over and above the existing fleet quantities described as the ‘Contract Waste Quantity’ in Table 1; c. be used for mining in accordance with the Annual Mine Plan (once approved) and until it is approved in accordance with the conceptual Annual Mine Plan v5. d. not be used for coal mining, direct coal roof clean up or parting removal, 3. all of the terms and conditions under the Agreement applying to Contractor’s Plant and Contractor’s Facilities (including, without limitation, clauses 23 and 24) apply to, and must be 15 The context was that in about late 2019 to early 2020, MPP began to experience significant problems with coal handleability – being the degree to which coal can be handled with relative ease through the conveyor, chute and pipe system at the Mine and the Power Station: see Mr Michael Anthony Winter’s affidavit of 29 August 2025 at paragraph 16. 16 A sixth version of this AMP was subsequently agreed. -- 9 of 57 -- 10 complied with by the contractor in respect of, the Hired Fleet; and 4. the Contractor must perform such surveys, measurements, and calculations as are reasonably necessary to determine the volume of waste removed using the Hired Fleet (as well as the ‘Contract Waste Quantity’ and the ‘Base Fleet Production’) each month in accordance with Good Industry Practice and provide such information to the Owner.” [26] Thus, the idea was that the first hired fleet would provide separate capacity and would be devoted to accelerating overburden (waste) removal. [27] The payment terms were that, for each month during the hired fleet term,17 MPP was required to “pay $4.26/BCM for each BCM of 5th Fleet Production”18 subject to rise and fall adjustment in accordance with clause 18.4 of the CMA. The production was to be measured by survey, where the waste removal by the hired fleet during a month was in excess of “the total of the ‘Contract Waste Quantity’ as set out in Table 1”. The parties acknowledged and agreed that: “the amount noted as the Hired Fleet Production in Table 1 is a target for the Contractor to meet using the Hired Fleet but the Contractor will only be paid for actual Hired Fleet Production calculated under this item and not for the target amount set out in Table 1”. [28] Table 1 was as follows: [29] A sixth version of the OY9 Annual Mine Plan was approved on 12 December 2022. The Hired Fleet was mobilised to the Commodore Mine a month late, in January 2023. The Competing Contentions [30] BUMA contends that the First Hired Fleet Variation should be construed such that BUMA was entitled to be paid $4.26/bcm (subject to rise and fall) for each bcm of 17 The expression actually used is the ‘5 th Fleet Term’ but it is plain that the intention was to refer to what is earlier referred to as the ‘Hired Fleet Term’. The expression ‘5 th Fleet’ seems to have been corrected to ‘Hired Fleet’ but the alteration was not completed. 18 Again, the reference is plainly intended to be a reference to ‘Hired Fleet Production’. -- 10 of 57 -- 11 waste removed by the Hired Fleet ‘in excess of the total of the Contract Waste Quantity as set out in Table 1’.19 BUMA contends that this is the only construction permitted by the actual words of the First Hired Fleet Variation. [31] MPP acknowledges the literal view, but argues for a more nuanced interpretation: “69. On one view, read literally, those provisions suggest that any Overburden over and above the Contract Waste Quantity of 12,495,424 bcm may be removed by the Hired Fleet. But the First Hired Fleet Variation ought to be interpreted in accordance with its purpose, a literal interpretation which lacks commercial efficacy should be avoided, and the variation ought to be interpreted so as to avoid it working commercial inconvenience. An interpretation in accordance with those principles supports MPP’s case as articulated above, because that construction protects against the scenario in which BUMA benefits from the underperformance of the Base Fleet (and relative overperformance of the Hired Fleet) by being compensated at the greater Hired Fleet Production rate, for work that ought to have been performed by the Base Fleet. 70. An important aspect of the proper construction of the First Hired Fleet Variation concerns the evident intention of the parties to negotiate a subsequent Strip Ratio Variation, once the Annual Mine Plan had been agreed. That intention is evident from the presence of the Strip Ratio Variation rate of $2.58/bcm for OY9 next to the Base Fleet Production in Table 1, and from the prior dealings between the parties. The compensation to be paid to BUMA for the Base Fleet Production in Table 1 was evidently to be provided by way of the Strip Ratio Variation. If BUMA were to be entitled to use the Hired Fleet to undertake any of the Base Fleet Production in Table 1, at the Hired Fleet rate of $4.26/bcm, it would be using the Hired Fleet for production for which it was already to be paid (or had agreed to accept risk up to the agreed 10% limit) through the Strip Ratio Variation. As noted above, the amount to be paid by way of the Strip Ratio Variation was to be determined in advance, and paid throughout the OY by equal monthly instalments.” [emphasis added] [32] For the reasons that follow, I reject MPP’s interpretation. Contract Interpretation Principles [33] First, the starting point for contract interpretation principles is the High Court’s judgment in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd.20 There French CJ, Nettle and Gordon JJ said: “The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision 19 BUMA’s closing submissions at [31]. 20 (2015) 256 CLR 104 at [46]-[51]. -- 11 of 57 -- 12 referred to in the text of the contract) and purpose.”21 [emphasis added] [34] Second, that passage does not mean that the process of interpretation is an exercise that involves blending the text, context and purpose and extracting a commercially convenient meaning from an amalgamation of the words of the contract, the surrounding circumstances and the perceived objects of the contract. As French CJ, Nettle and Gordon JJ pointed out: “Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning.”22 [35] The same judges described when the exercise of interpretation required recourse to the context: “However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding ‘of the genesis of the transaction, the background, the context [and] the market in which the parties are operating’.23 It may be necessary in determining the proper construction where there is a constructional choice. The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals. Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations. Other principles are relevant in the construction of commercial contracts. Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption ‘that the parties … intended to produce a commercial result’. Put another way, a commercial contract 21 Ibid at [46]. Kiefel and Keane JJ agreed with the orders proposed by French CJ, Nettle and Gordon JJ but explained their own reasons for the interpretation they adopted. Bell and Gageler JJ agreed with the interpretation adopted by Kiefel and Keane JJ but also pointed out that the case before the court was not an occasion for deciding the controversy as to whether ambiguity must be shown before a court interpreting a written contract can have regard to background circumstances. 22 Ibid at [48]. 23 This quote is from Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at [35]. -- 12 of 57 -- 13 should be construed so as to avoid it ‘making commercial nonsense or working commercial inconvenience’.”24 [emphasis added] [36] Third, that reference to the concept of “commercial inconvenience”25 does not mean that the interpretation exercise is a simple weighing of what might or might not be commercially convenient or commercially inconvenient. [37] The expression ‘commercial nonsense or working commercial inconvenience’ is derived from the judgment of Kirby P in Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd.26 There, in considering the ambiguity in a commercial agreement (under the heading ‘Resolution of ambiguity in commercial agreements’) His Honour said this: “Between two such substantial businesses, there are sound reasons of principle and policy for determining their respective rights and duties, if at all possible, by reference to the written terms by which they expressed those rights and duties. No other approach is as likely to command general acceptance in the commercial community. No other approach is as efficient in the containment of litigation. None is so effective in conserving the economic and entrepreneurial decisions which lie behind contract law to business people rather than lawyers. But language, including that used in commercial agreements, is often ambiguous. It may be so even in agreements between substantial parties which are well advised by lawyers. The ambiguities may arise from a deliberate decision to keep the terms of the agreement between the parties vague, because they are difficult to define and, it is hoped there will be no occasion for disagreement. It may be so because the parties, and those advising them, do not foresee the infinite variety of circumstances which later arise calling for resolution by reference to their agreement. Or it may be so for no better reason than that the inherent contradictions that lie in the words of the agreement between the parties were not recognised at the time those words were agreed to. It then falls to the parties in the first instance, and a court ultimately, to give meaning to those words. Whoever may be the parties to the agreement, it is the fundamental rule, that a court should give the words of a written agreement the natural meaning that they bear. Subject to that rule, in giving meaning to the words of an agreement between commercial parties, courts will endeavour to avoid a construction which makes commercial nonsense or is shown to be commercially inconvenient. This is because courts will infer that commercial parties would not themselves normally agree in such a way.”27 [emphasis added] 24 Ibid at [49]-[51]. 25 The expression is derived from Zhu v Treasurer (NSW) (2004) 218 CLR 530 at [82]. The expression was then picked up in Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd (2014) 251 CLR 640 at [35], and then in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [41]. 26 (1990) 20 NSWLR 310 at 313-314. 27 (1990) 20 NSWLR 310 at 313-314. -- 13 of 57 -- 14 [38] Fourth, the reasons of the High Court in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd, and the authorities relied on by that case, are all consistent with the views expressed by Herzfeld and Prince in their text Interpretation: “… the only relevant meaning is that which the text conveys. This follows from the need to ascertain the intention expressed in the document. Although … context and purpose are relevant, ultimately the court must attribute meaning to the words actually used.”28 [39] The primacy of the text, or as Kirby P called it ‘the fundamental rule’,29 is the first rule of interpretation for a judge considering a point of interpretation.30 As has been explained: “The first place where you look for the intention of the parties is in the language which they themselves used. And it is very often the last place too”.31 Thus, the process of interpretation does not allow a court to force upon a provision of a private legal document a meaning that the words of the provision cannot fairly or reasonably bear, and to substitute for the bargain actually made one which the court believes could better have been made.32 [40] Fifth, in Mainteck Services Pty Ltd v Stein Heurtey SA Leeming JA (with Ward and Emmett JJA concurring) made these observations about the process of contract interpretation:33 (a) in principle, every legal text requires legal interpretation, in order to ascertain its legal meaning, although there is no real scope for dispute about the interpretation of many legal texts; (b) very often: (i) language when considered in its context, will have a single, clear meaning; (ii) there is no dispute as to the ordinary grammatical or literal meaning of a sentence, and no dispute that that is the legal meaning; (iii) nothing in the context will come close to displacing the ordinary grammatical meaning of the legal text; but that is not always the case; 28 Herzfeld and Prince, Interpretation (Thomson Reuters, 3rd ed, 2024) [19.60]. This passage, in the previous edition, was quoted with approval by Stevenson J in Heavy Plant Leasing Pty Ltd (In Liq) v McConnell Dowell Constructors (Aust) Pty Ltd (No 2) (2022) 163 ACSR 562 at [19]. 29 Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 at 313-314. 30 Richard Calnan, Principles of Contract Interpretation (Oxford University Press, 2nd ed, 2017) 27, quoting from Johan Steyn, ‘The Intractable Problem of the Interpretation of Legal Texts’ (2003) 25(1) Sydney Law Review 5. 31 Calnan (supra) quoting from Christopher Staughton, ‘How Do the Courts Interpret Commercial Contracts’ (1999) 58(2) Cambridge Law Journal 303, 305. 32 Herzfeld & Prince (supra) at [19.90]; WorkPac Pty Ltd v Rossato (2021) 271 CLR 456, [63]. Of course, in some cases, words and even whole clauses may be rejected if they are inconsistent with the main object of the contract, as ascertained from a reading of it as a whole: see the discussion by Kim Lewison and David Hughes, The Interpretation of Contracts in Australia (Thomson Reuters, 2012), [9.09]. The principles in these paragraphs were discussed in Rusbridge v Lake Fox Ltd [2024] QSC 279 at [21] and following and also in Habchi v Jason H Pty Ltd [2025] QSC 305 at [9] and following. 33 (2014) 89 NSWLR 633. -- 14 of 57 -- 15 (c) on the other hand, the legal meaning may diverge from its literal or grammatical meaning, especially in the (self-selectingly contestable) cases that reach courts; words do not have a “natural” meaning that can be determined in isolation; (d) for those reasons, to say that a legal text is “clear” reflects the outcome of that process of interpretation; it means that there is nothing in the context which detracts from the ordinary literal meaning; it cannot mean that context can be put to one side. [41] Sixth, for those reasons the process of legal interpretation necessarily involves consideration of the language used in its context, and objective surrounding circumstances are available to inform the process of contractual interpretation.34 The process can involve any implications derived from the words used.35 But often the language, when considered in its context, will have a single, clear meaning, and nothing in the context will displace that single clear meaning. Application of the Principles [42] MPP’s proposed interpretation of the First Hired Fleet Variation bears no resemblance to its clear words.36 MPP’s argument is that BUMA’s entitlement to be paid for the work of the First Hired Fleet is limited to each bank cubic metre that exceeds the sum of: (a) the Contract Waste Quantity; and (b) the Topsoil Quantity; and (c) 10% of the sum of the Contract Waste Quantity and Topsoil Quantity; and (d) the quantity of the Base Fleet Production. [43] Only item (a) – the excess over the Contract Waste Quantity – features in the language of the variation itself. And so, the words of the variation do not contain items (b), (c) or (d). Despite that, MPP adopts an interpretation that, in effect, ‘reads in’ those items. Engrafting those items involves an unwarranted addition to the ordinary literal meaning. [44] MPP argues that the ordinary literal interpretation might result in BUMA being paid for the removal of waste for which the Base Fleet was already to be compensated under the CMA. That can be accepted as a possibility. It is a possibility because the CMA prescribes one regime for payment and the variation prescribes another different regime. However, the variation expressly provided that the mining of coal could only be performed by the Base Fleet. And MPP was to approve the AMP and had at least some control over the mining activities. [45] MPP sought to select certain parts of the negotiations as consistent with its interpretation. There is an obvious danger in such an exercise and none of the communications are persuasive. Even MPP itself draws this rather lukewarm conclusion: “The construction for which MPP contends was not positively rejected by the parties”. In any event, in asking what a reasonable businessperson would have 34 Coulson Aviation (Australia) Pty Ltd v Techfuel Pty Ltd [2025] NSWCA 211 at [93]. 35 Realestate.com.au v Hardingham (2022) 277 CLR 115 at [104]. 36 In this respect, I accept BUMA’s submissions at [34]. -- 15 of 57 -- 16 understood the language used by the parties to mean, it is impossible to ignore the plain words. Nothing in the context displaces the single clear meaning of the words and requires the court to, in effect, read into the variation words that are not there. [46] Thus, I do not accept MPP’s interpretation. On the proper interpretation of a variation contained in a letter from MPP to BUMA dated 21 October 2022 (the First Hired Fleet Variation) BUMA was entitled to be paid $4.26 (subject to rise and fall) for each bank cubic metre (bcm) of waste removed by the Hired Fleet that was in excess of the quantity of the Contract Waste Quantity in Table 1 (subject to adjustment for all changes in Monthly Contract Tonnage and Annual Contract Tonnage). [47] Incidentally, there was some reference by both parties to the conduct of the parties after the date of the variation. The present authority appears to be against the use of post-contract conduct in aid of the construction of a written contract.37 First Hired Fleet – Adjustment and Overpayment Issues (Issue 5) [48] Issue 5 and its associated sub-issues are premised on the basis that MPP’s interpretation in paragraph 4(b) is correct. Because of the interpretation adopted in relation to issue 4 it is unnecessary to resolve issue 5 and its associated sub-issues. Second Hired Fleet Variation (Issue 6) [49] Issue 6 is as follows: Whether, on the proper construction of a variation contained in a letter from MPP to BUMA dated 30 October 2023 (the Second Hired Fleet Variation): (a) BUMA was entitled to be paid $4.26 (subject to Rise and Fall) for each bcm of waste removed by the Hired Fleet that was in excess of the quantity of the Tendered Overburden in Table 1 (subject to adjustment all changes in Monthly Contract Tonnage and Annual Contract Tonnage); or (b) instead, BUMA was entitled to be paid $4.26 (subject to Rise and Fall) for each bcm of waste removed by the Hired Fleet that was in excess of the sum of the following in Table 1: (i) the quantity of the Base Fleet Requirement; and (ii) the quantity of the SR Variation Volume. [50] BUMA contends for interpretation (a) above and MPP contends for interpretation (b) above. [51] As BUMA’s submissions explain, the First Hired Fleet Term expired on 31 August 2023. The Hired Fleet continued to operate by agreement of the parties whilst the AMP for OY10 was negotiated. BUMA submitted a draft AMP on 18 October 2023 which again (at MPP’s request) targeted mine areas having qualities intended to ameliorate ‘handleability’ issues. Those areas again had high strip ratios, 37 See Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570 and the discussion of this topic in Herzfeld & Prince (supra) at [29.160]. -- 16 of 57 -- 17 necessitating the removal of greater volumes of overburden than would otherwise be required.38 [52] On 30 October 2023, and contemporaneously with its approval of the OY10 AMP, MPP directed BUMA to continue to use the Hired Fleet on the terms set out in a written notice under clause 30.2 of the CMA (the Second Hired Fleet Variation). The Hired Fleet therefore operated continuously from January 2023 to the end of the OY10 on 31 August 2024. [53] At its outset, the Second Hired Fleet Variation provided that: “Terms defined in this letter have the same meaning as those defined in the [CMA] or the [First Hired Fleet Variation]”. [54] The work of the Hired Fleet and the Base Fleet was intended to be separate and distinct.39 That is clear because clause 3(a) provides that, firstly, the Hired Fleet must not be used for the movement of any overburden which forms part of the expected volumes set out under the headings “Base Fleet Requirement” and “SR Variation Volume” in Table 1; and, secondly, no waste material mined at any time by the Hired Fleet shall be used in the calculation of any compensation payable under cl 30.5 of the CMA. To similar effect is clause 3(b) which provides that the work of the Hired Fleet must not include coal mining, direct coal roof clean-up or parting removal. [55] Thus, the idea was to separate the work of the Base Fleet and the Hired Fleet. MPP argued that the consequence of clause 3(a) was that: “It follows that the only Overburden that may be removed by the Hired Fleet is the quantity of 4,152,045 bcm (as divided into monthly quantities) – but only to the extent that the Base Fleet meets its monthly requirements”. [56] It is sufficient to say that clause 3(a) does not say that. Clause 3(a) merely addresses what the Hired Fleet may not do – that is, it may not remove overburden that is part of the Base Fleet’s expected work. It does not prescribe a maximum for the Hired Fleet. [57] Clause 6 of the Second Hired Fleet Variation provided that “for each month during the period from the 1 September 2023 to 31 August 2024, the Owner [MPP] must pay $4.26/BCM for each BCM of Hired Fleet Production”. The expression “Hired Fleet Production” was not defined in the Second Hired Fleet Variation. However, that expression is defined in the equivalent clause of the First Hired Fleet Variation. Given the express ‘same meaning’ clause discussed above,40 and the obvious and express connection between the First and Second Hired Fleet Variations, it is clear that the expression means any waste removed as evidenced by a survey. 38 See BUMA’s submissions at [93]. 39 See clause 3(a) which provides that, firstly, the Hired Fleet must not be used for the movement of any overburden which forms part of the expected volumes set out under the headings “Base Fleet Requirement” and “SR Variation Volume” in Table 1; and, secondly, no waste material mined at any time by the Hired Fleet shall be used in the calculation of any compensation payable under cl 30.5 of the CMA. 40 See above [53]. -- 17 of 57 -- 18 [58] The parties’ arguments as to the proper interpretation of the Second Hired Fleet Variation largely repeat their respective arguments concerning the First Hired Fleet Variation. For the reasons stated in relation to issue 4, I am not persuaded that anything in the context displaces the single clear meaning of the words of the Second Hired Fleet Variation or that the variation should be construed so as to avoid a result that is perceived to be uncommercial or commercially inconvenient. [59] I conclude that the proper interpretation of the variation contained in a letter from MPP to BUMA dated 30 October 2023 (the Second Hired Fleet Variation) was in accordance with alternative (a) stated in issue 6. Second Hired Fleet – Adjustment and Overpayment Issues (Issue 7) [60] Because of the conclusions reached in relation to issue 6 it is unnecessary to determine issue 7 or its related sub-issues. That issue and its sub-issues are all premised on the court accepting the MPP interpretation of the Second Hired Fleet Variation – a premise that has not been accepted. OBIA Reconciliation Issues (Issues 8 to 12) [61] Issue 8 is described in this way: The amount of the Closing OBIA for the purposes of the OBIA reconciliation process under clauses 8.2 and 8.3 of the CMA and the amount payable by MPP to BUMA or by BUMA to MPP for the OBIA reconciliation process in view of the issues in paragraphs 9 to 12. [62] Clause 1 of the CMA defines overburden in advance (‘OBIA’) as “the volume of Overburden41 in bcm that has been excavated in advance of the standard highwall in accordance with this agreement, including the diagram in Schedule 16”. Thus, OBIA was overburden removed in advance of the mining of the underlying coal. [63] It is common ground that the purpose of measuring OBIA is to attribute a value to work in progress.42 Each unit of OBIA has value because it represents a unit of work that a mining services contractor will not need to do in future to uncover coal.43 [64] The CMA contains a mechanism in clause 8.3 for the calculation of an “OBIA Reconciliation Amount”, which involves comparing the opening OBIA with the Closing OBIA.44 If the closing OBIA exceeds the opening OBIA, MPP is obliged to pay BUMA the OBIA reconciliation amount. If the reverse applies, BUMA is obliged to pay that amount to MPP.45 The OBIA reconciliation mechanism is used to determine whether, at the end of the term of its contract, the mining services contractor has increased or decreased the inventory that it inherited at the beginning of the term.46 41 The term ‘Overburden’ is also defined as “waste material that overlies the uppermost coal seam that is to be mined in accordance with this agreement, including the Annual Mine Plan”. 42 BUMA submissions at [124]. 43 Ibid. 44 MPP’s closing submissions at [158]. 45 Ibid. 46 BUMA closing submissions at [124]. -- 18 of 57 -- 19 [65] The OBIA reconciliation amount is calculated by means of the following simple formula: [Closing OBIA – Opening OBIA] × Overburden Rate [66] The parties agree that the opening OBIA was 3,593,759 bcm, and that the relevant overburden rate is $4.86/bcm.47 The dispute concerns the closing OBIA.48 [67] On 9 October 2024, BUMA notified MPP that it had determined the closing OBIA to be 5,716,934 bcm. In this proceeding, BUMA has revised that figure to 5,688,117 bcm – representing an OBIA reconciliation amount of $10,178,579.88, to be paid to BUMA by MPP. [68] On 8 November 2024, MPP notified BUMA that it had determined the Closing OBIA to be -293,579 bcm. In this proceeding, MPP has revised that figure to -959,874 bcm – representing an OBIA reconciliation amount of $22,130,656.38, to be paid to MPP by BUMA.49 [69] There are four reasons for the difference between the parties’ figures. These reasons correspond to issues 9 to 12 and are addressed in sequence below. [70] Incidentally, BUMA complains that the evidence established that MPP has looked for ‘possible cost reduction initiatives’ and a ‘cost neutral outcome’ with the exit of BUMA as the mining contractor from September 2024, and that MPP wanted to ‘optimise’ the commercial position for completion. BUMA says that it is against that background that MPP’s evidence and contentions in relation to the OBIA reconciliation must be viewed.50 [71] However, I reject the idea that the court should view the evidence with a jaundiced or sceptical eye because MPP may have had the (hardly surprising) objective of optimising its commercial position. These were sophisticated mining entities dealing with each other on the basis of a detailed commercial contract. The resolution of the case depends on an objective consideration of the facts against the provisions of the parties’ commercial bargain. Highwall Angles Issue (Issue 9) [72] Issue 9 is as follows: Whether, in determining Closing OBIA for the purposes of the OBIA reconciliation process under clauses 8.2 and 8.3 of the CMA, the ‘standard highwall’ referred to in the definition of ‘Overburden in Advance (OBIA)’ in clause 1 of the CMA is: (a) a highwall with an angle of 70 degrees; or 47 Ibid at [159]. 48 Ibid at [160]. 49 The facts stated in paragraphs [65]-[67] are paraphrased versions of BUMA’s closing submissions at [128]-[130]. 50 BUMA closing submissions at [132]-[133]. -- 19 of 57 -- 20 (b) instead, a highwall with an angle which approximates the actual highwall angle, to the extent the actual angle is sustainable and repeatable. [73] BUMA argues for method (a) and MPP argues for method (b). If MPP is right, there will be a reduction from BUMA’s Closing OBIA of 809,261 bcm. [74] The two approaches are explained in BUMA’s submissions: “BUMA has identified the Closing OBIA by comparing: (a) a standard design highwall profile with a highwall angle of 70 degrees; and (b) the actual highwall profile, as surveyed at the end of the Operating Period. MPP has instead (by recent amendment in this proceeding, but not in its own determination of Closing OBIA as at the end of the Operating Period) identified the Closing OBIA by comparing: (a) ‘a highwall with an angle which approximates the actual highwall angle, to the extent the actual angle is sustainable and repeatable’; and (b) the actual highwall profile, as surveyed at the end of the Operating Period.”51 [75] MPP criticises the use of the standard design highwall profile of 70 degrees as a theoretical geotechnical design angle. However, there is a theoretical basis to both the standard design highwall profile of 70 degrees and the concept of an angle which approximates the actual highwall angle, to the extent the actual angle is sustainable and repeatable. [76] As explained previously, the CMA’s definition of Overburden in Advance or OBIA is “the volume of Overburden in bcm that has been excavated in advance of the standard highwall in accordance with this agreement, including the diagram in schedule 16”. [emphasis added] [77] The concept of a “standard highwall” is not defined in the CMA but the evidence of Mr Robert McKerrow, a mining engineer, establishes that in this context the expression means the use of a standard 70 degree highwall angle. Such extrinsic evidence is admissible to define a technical term.52 [78] I accept also the evidence of Dr Leonie Bradfield, a geotechnical engineer, that the ‘standard design highwall profile’ in Schedule 16 was the approved geotechnical design for the highwalls at the Commodore Mine and that the approved geotechnical design highwall angle should be used for OBIA calculations.53 The standard 70 degree angle was the only angle used as a standard design under the CMA. 51 BUMA’s submissions at [139]-[140]. 52 Herzfeld and Prince, Interpretation (Thomson Reuters, 3rd ed, 2024) [20.80]; Max Cooper & Sons Pty Ltd v Sydney City Council (1980) 54 ALJR 234 at 239. 53 See Joint Expert Report of Dr Leonie Bradfield and Edward Boulton (29 October 2025) at [6]. -- 20 of 57 -- 21 [79] MPP challenged that evidence on the basis of Dr Bradfield’s concession that, for a variety of reasons, the standard 70 degree highwall angle was unlikely to be consistently attainable at the Mine. [80] Mr Boulton’s evidence to the contrary was as follows: “The Commodore mine highwalls were being excavated at lower angles than the 70 degree approved geotechnical design at the end of the CMA (Boulton - paragraphs 5.9, 5.19, 5.44). In my industry experience, most coal mines excavate highwalls at the geotechnical design angle, however I am aware of many occasions in QLD coal mines where highwalls were excavated at lower angles than the geotechnical design. When the highwall is excavated at a lower angle than the geotechnical design, the actual excavation angle to be a better representation of the standard design than the geotechnical design.”54 [81] That evidence, and Mr Boulton’s oral evidence, illustrated that what he sought to identify was not a standard highwall angle, or the angle contemplated by the expression ‘standard highwall’ in the CMA, but rather something that approximated the actual angles being achieved. From that point, Mr Boulton progressed to the idea that what should be used is an angle that ‘approximates the actual highwall angle’, to the extent the actual angle is ‘sustainable and repeatable’. [82] Mr Boulton contended that this was a part of or consistent with industry practice. However, I reject that evidence. It may be what Mr Boulton considers should be industry practice,55 but the evidence did not establish any industry practice to that effect. [83] More importantly, I do not accept that when the CMA used the expression “standard highwall” it was referring to a ‘sustainable and repeatable’ angle. The reference was to the standard 70 degree highwall angle. [84] There are four more aspects that support that conclusion. The first is that the evidence is that the standard 70 degree angle was used when the opening OBIA was calculated.56 To use something else other than the standard 70 degree angle would mean that apples were being compared with oranges. Thus, if some other standard were to be used the opening OBIA would need to be reassessed. [85] Second, the parties used the standard 70 degree angle until shortly before the hearing. That suggests that the parties themselves acted on the basis that the expression “standard highwall” in the CMA referred to the standard 70 degree angle. [86] Third, Mr Boulton’s replacement concept of a ‘sustainable and repeatable’ angle is flawed. That is because, as BUMA’s submissions explain: “Straight away, one might ask how it could be right to use the actual highwall angle as the yardstick for the purpose of determining OBIA, when the thing being measured by that yardstick is the actual highwall. 54 Ibid. 55 That was the effect of his evidence. 56 MPP does not dispute that the opening OBIA was likely calculated at a 70 degree angle: MPP’s submissions at [188]. -- 21 of 57 -- 22 MPP’s methodology would seem predisposed to identifying only negligible amounts of OBIA, because it effectively conforms the measuring tool to the thing being measured. It also disregards completely any notion of a ‘standard’ design within the meaning of the CMA, in favour an actual highwall angle at a particular point in time. That cannot conceivably meet the description of a ‘standard highwall’.”57 [87] Mr Boulton’s concept of a ‘sustainable and repeatable’ angle does not involve a clear standard but rather an assessment on which different people might have different views. It seems not to be the actual angles achieved but rather that an angle that approximates the actual highwall angles achieved, to the extent the actual angles achieved on the mine site are sustainable and repeatable. [88] Fourth, Mr Boulton was a lone voice on this issue. Ms Hunter, BUMA’s mining engineer determined the Closing OBIA using the standard 70 degree angle. Dr Bradfield and Mr McKerrow had never encountered the use of the concept of ‘sustainable and repeatable’ highwall angle. Even Mr Phillip Bryant, an experienced mining engineer employed by MPP, agreed that the appropriate way of calculating the Closing OBIA involved the use of the standard 70 degree angle.58 [89] For those reasons I conclude that in determining closing OBIA for the purposes of the OBIA reconciliation process under clauses 8.2 and 8.3 of the CMA, the ‘standard highwall’ referred to in the definition of OBIA in clause 1 of the CMA is a highwall with an angle of 70 degrees. Fill Issue (Issue 10) [90] Issue 10 is as follows: Whether, in determining Closing OBIA for the purposes of the OBIA reconciliation process under clauses 8.2 and 8.3 of the CMA, volumes of Overburden that protrude above the highwall profile (‘fill’) should be: (a) disregarded; or (b) instead, deducted from the volume otherwise calculated to be the Closing OBIA. [91] Again, BUMA contends for proposition (a) and MPP argues for proposition (b). There should be a deduction from BUMA’s closing OBIA of 217,394 bcm if MPP’s argument is successful. [92] MPP explains the deduction in this way: “The Fill Issue concerns whether certain volumes of material described by Mr Boulton as “fill”, which protrude above the highwall profile, ought to be deducted from OBIA. 57 BUMA’s closing submissions at [152]. 58 Transcript T4-29. -- 22 of 57 -- 23 Mr Boulton describes the “fill” volume as where the pit survey surface is above the highwall projection surface. Mr Boulton’s opinion is that this volume of material should be subtracted from the Closing OBIA as a form of negative OBIA. Mr Boulton states that this negative OBIA occurs where material has been dumped on top of the natural surface or where the “prestrip berm” (which is a form of horizontal bench) is less than the usual 10m wide or is at a higher level than the berm in the highwall projection surface such that further material must be excavated to achieve the highwall projection surface. Mr Boulton’s evidence in relation to the Fill Issue was not challenged in cross- examination.”59 [93] BUMA has disregarded rather than deducted these volumes, for a number of reasons given by Ms Hunter, namely: “…the material above the highwall projection surface that Mr Boulton identifies as ‘fill’ or ‘negative OBIA’ in different areas is there for a variety of reasons- including: (a) first, as in-situ pre-strip, in areas where a pre-strip berm / bench was not required, or set higher than expected – usually, because the waste at that point became too hard to freedig; (b) secondly, as ‘bunding’ along the edges above highwalls and in other places, which is required for safety reasons; (c) thirdly, as a stockpile kept on top of the natural surface (that is, at ground level) for a particular purpose; and (d) fourthly, as agreed infrastructure-such as a haul road, crib hut or truck parking area.”60 [94] The problem with MPP’s argument is that the deduction for ‘fill’ is not authorised by the CMA. As BUMA’s submissions explain: “Again, the provisions of the CMA look in only one direction: they count OBIA by identifying work done beyond the yardstick of the ‘standard highwall’. There is no facility to identify, let alone deduct or set off, any concept of ‘fill’ or ‘negative OBIA’ — and MPP does not attempt to explain how, as a matter of law, it arrives at the conclusion that ‘fill’ is to be deducted under the CMA. There is no apparent basis for MPP’s desired outcome to be achieved by a process of contractual interpretation and, for at least the two reasons given above,61 it could not succeed in implying a term to that effect.” [95] There is no prospect that a term can be properly implied to the effect that fill should be deducted. The five conditions required by BP Refinery (Westernport) Pty Ltd v 59 Mr McKerrow largely agreed with the deduction made by Mr Boulton. 60 Third affidavit of Karen Joy Hunter at [86]. 61 The first of those reasons is that it would be inequitable to deduct ‘fill’ volumes from the Closing OBIA because they had not been deducted from the Opening OBIA. The second reason is that there are many different reasons for the fill volume including for temporary infrastructure and topsoil stockpiles – forms of ‘rehandle’ – which would not in practice, and so should not in principle, have any bearing on the determination of OBIA: see BUMA’s closing submissions at [181]. -- 23 of 57 -- 24 Shire of Hastings62 could not be satisfied. There would be significant problems overcoming conditions (2) and (3), namely that the implied term is necessary and that it is obvious. [96] For those reasons, in determining closing OBIA for the purposes of the OBIA reconciliation process under clauses 8.2 and 8.3 of the CMA, volumes of overburden that protrude above the highwall profile (‘fill’) should be disregarded. End Wall Issue/ A Pit and B Pit Issue (Issue 11) [97] Issue 11 is as follows: Whether, in determining Closing OBIA for the purposes of the OBIA reconciliation process under clauses 8.2 and 8.3 of the CMA, OBIA was to be counted in areas of the Commodore Mine where: (a) there was coal present ahead of the walls, and MPP had not directed BUMA that the walls were final walls (or the area was ‘closed’); or (b) OBIA does not include overburden removed from areas of the Commodore Mine at which there was no more coal planned to be mined because the Annual Mine Plan for Operating Year 10 approved by MPP on 30 October 2023 does not evidence an intention to mine coal whether during or after Operating Year 10, or the contractor seeks to place, or does place, spoil which would have to be removed to mine that coal. [98] Again, BUMA contends for proposition (a) and MPP argues for proposition (b). [99] MPP submits that OBIA does not include overburden removed from areas of the Mine if: (a) there was no more coal planned to be mined, such that it cannot be waste material that overlies the uppermost coal seam that is to be mined in accordance with the CMA; (b) for that purpose: (i) the OY10 Annual Mine Plan does not evidence any intention to mine coal in a particular area, whether during or after OY10; or (ii) the contractor seeks to place, or does place, spoil which would have to be removed to mine that coal.63 [100] The volumes MPP submits ought to be deducted from BUMA’s Closing OBIA are: (a) 37,405 bcm in block 14 of the E pit and F pit endwalls; 62 (1977) 180 CLR 266 at 283. The five conditions are (1) [the proposed implied term] must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that “it goes without saying”; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract. 63 MPP’s closing submissions at [197]. -- 24 of 57 -- 25 (b) 1,304,095 bcm in the A and B pit highwalls.64 [101] It is important to bear in mind the definition of ‘Overburden’ in the CMA. Overburden is defined as “waste material that overlies the uppermost coal seam that is to be mined in accordance with this agreement, including the Annual Mine Plan”. The parties are at loggerheads as to how to apply that definition. [102] It is worth examining the approach of both parties. [103] MPP relied on the evidence of Mr Boulton. Mr Boulton’s opinion was that certain volumes of overburden in E and F pits included in the Closing OBIA calculated by BUMA do not constitute OBIA because that the overburden was adjacent to endwalls where there is no evident intention to mine coal.65 [104] As MPP’s submissions explain: “The endwalls are to the east of both pits. Mr Boulton’s opinion is that there were no scheduling blocks east of block 14 in E and F pits; and, as such, the mine planner intended to advance mining only northward in E pit and southward in F pit. Mr Boulton accepted there is coal in the endwalls of E pit and F pit, but says there was no intention to mine this coal as it was not part of the ordinary advance of the highwall. The excavation that in fact occurred on the endwalls was done to facilitate haulage truck access, rather than as part of any intention to uncover coal beneath the endwalls.”66 [emphasis added] [105] Whether MPP had an intention to mine a particular area of the Mine was a matter within MPP’s knowledge. There are three possible categories. First, MPP’s intention to mine an area may have been an express intention. For example, MPP’s intention to mine that area may be clear from the Annual Mine Plan. Second, MPP may have declared walls to be final or it may have otherwise declared certain areas to be closed. Or, third, it may be the case that MPP had not decided, or at least had not expressly decided, whether a particular area may be mined or not. There may be no present intention to mine an area, but the area may become viable in the future for any number of reasons. [106] The difficulty with Mr Boulton’s evidence is that for that third category he was prepared to offer his own opinion that, although there was coal in the endwalls of E pit and F pit there was no intention to mine that coal as it was not part of the ordinary advance of the highwall. That Mr Boulton holds that opinion can be accepted. However, the circumstances as between MPP and BUMA was that MPP had not declared that area closed. MPP may have simply wished to keep its options open. As Mr Boulton accepted that the economics of mining changes over time.67 [107] Mr Boulton’s opinions were premised on the basis that coal ‘planned to be mined’ was, in his opinion, coal that was likely to be mined over a five-year horizon. That 64 Ibid at [198]. 65 Ibid at [199]. 66 Ibid at [200]. 67 See the Joint Expert Report of Robert McKerrow and Edward Boulton (29 October 2025) at [5]. -- 25 of 57 -- 26 excludes coal planned to be mined after, say, six or ten years. But none of that has a foundation in the proper interpretation of the CMA. [108] BUMA’s stance is illustrated by Ms Hunter’s evidence. Ms Hunter contended that the eastern endwall of E and F pits was not a final wall because there was still coal that could potentially be mined in that area and MPP had not instructed BUMA to close the area or to treat the wall as final. She expected that the mining contractor would ‘one day’ come back to mine the area under the haul road. Ms Hunter noted there is a small amount of coal on the eastern boundary of F pit that can only be mined if MPP converts the adjoining MDL 301 into a mining lease. [109] Ms Hunter’s evidence as to pit E, which I accept, was that: “…the spoil was placed in E Pit because, while BUMA’s schedule was designed to keep as much of the end wall open as possible, it was necessary to balance coal haul road access ramps, dumping constraints arising from the PRCP (and from the fact that A Pit and B Pit were remaining open), and challenges arising from high Strip Ratio mining in this area – which generated larger volumes of spoil than had previously been anticipated. In my experience, the presence of the spoil was not an indication that coal in and around the end wall would never be mined.”68 [110] The OBIA reconciliation process was plainly designed to ensure that the mining contractor was compensated for any saving of work achieved by the net removal of more Overburden. The context was that both parties contributed to the Annual Mining Plan and MPP was free to declare any walls as final or any areas or pits as closed.69 The existence of final walls or closed areas was clear to those on the site. As Ms Hunter explained, “Closed areas and final walls were something that I had to take into account in my mine planning work, so I always knew which areas were closed and which walls were final, and which were not”. [111] Consequently, I accept that BUMA was entitled to treat a wall as final, or an area as closed, in determining the Closing OBIA for the purposes of the OBIA reconciliation process under clauses 8.2 and 8.3 of the CMA, if: (a) there was no recoverable coal present; or (b) MPP had expressly confirmed that the area should be closed, or the wall be treated as a final wall.70 [112] That was the procedure adopted on the project. On the other hand, I do not accept MPP’s contention that the formula required the parties to treat a wall as final, or an area as closed, even if coal was present and MPP had said nothing about the finality of the wall or the closure of the area. A significant objective of the process adopted was to reserve to MPP a right to make a positive decision on whether walls were final or areas were closed. The existence of such a process makes it unlikely that the parties 68 Third affidavit of Karen Joy Hunter at [143]. 69 Ms Hunter said that “since the Owner owned the Mine and all the coal in the Mine, Downer could not decide of its own accord to close an area within the Mine, or treat walls above coal as final walls. At most, Downer could propose to close an area or treat walls as final walls. The position was no different after the novation of the CMA to BUMA”: see the third affidavit of Karen Joy Hunter at [127]. 70 BUMA’s closing submissions at [187]. -- 26 of 57 -- 27 contemplated that OBIA was to be measured by a process that, in effect, attempted to glean what MPP, as the mine owner, planned to do in each area of the mine over the next five years. That was the point of MPP’s right to make a positive decision on whether walls were final or areas were closed. [113] There is an air of unreality in MPP’s submission that the court should accept Mr Boulton’s independent expert evidence and exclude these disputed volumes from the OBIA calculation.71 The OBIA was a calculation to be made pursuant to the formula in clause 8.3 of the CMA. The clause did not envisage expert evidence on what was reasonably contemplated but not articulated by MPP over the next five years. Hired Fleet Reduction Issue (Issue 12) [114] Issue 12 is as follows: Whether, on the proper construction of item 3(a) of the Second Hired Fleet Variation, the parties were to deduct from the Closing OBIA for the purposes of the OBIA reconciliation process under clauses 8.2 and 8.3 of the CMA: (a) the volumes of OBIA as at the end of the Operating Period that had been removed by the Hired Fleet; or (b) instead, all volumes of Overburden ever removed by the Hired Fleet. [115] Clause 3(a) of the Second Hired Fleet Variation provides as follows: “… for the avoidance of doubt, no waste material mined at any time by the Hired Fleet shall be used in the calculation of any amounts payable under clause 8.3 of the Agreement …” [116] BUMA contends that this provision required that any OBIA in existence as at the end of the operating period that had been removed by the Hired Fleet was not to be counted towards the closing OBIA. MPP contends that the same provision required that every single bcm of waste ever mined by the Hired Fleet, from January 2023 to August 2024 (whether OBIA or not) – totalling 4,643,021 bcm – be deducted from the closing OBIA.72 [117] BUMA explains its stance in this way: “MPP’s construction is absurd. It would mean that BUMA must now forego, for all 4,643,021 bcm, the Overburden Rate that it would otherwise have been paid under the CMA for that volume of Closing OBIA. The Overburden Rate payable for Closing OBIA was $3.72 per bcm (before Rise and Fall). Under the Hired Fleet Variations, BUMA was paid $4.26 per bcm (before Rise and Fall) for the waste removed by the Hired Fleet. Therefore, on MPP’s construction, for every bcm of waste that BUMA removed with the Hired Fleet it would be paid 71 MPP’s submissions at [214]. 72 BUMA’s closing submissions at [220]. -- 27 of 57 -- 28 $4.26, but it would later have to forego $3.72 – meaning that it would effectively be left with only 54 cents. That construction of cl 3(a) is commercially nonsensical. MPP itself acknowledged internally, and even sought verification from a third- party consultant to confirm, that the $4.26 per bcm rate nominated in the First Hired Fleet Variation was appropriate – reflecting the costs that BUMA incurred for equipment hire, labour, maintenance and fuel to introduce and operate the Hired Fleet. In cross-examination, Mr Winter confirmed that MPP engaged RPM Global to confirm that the price put forward by BUMA for the work of the Hired Fleet was a ‘fair market price’ – a ‘fair reflection of the market rate for that equipment’.389 RPM Global advised MPP that $4.26 per bcm was in line with expectations, and MPP accepted that advice. MPP also sought to negotiate a lower rate with BUMA, but it was met with the response that BUMA was not in a position to discount the rate: it would recover its costs through that rate. The rate was therefore agreed specifically because it was necessary for BUMA to recover its costs of operating the Hired Fleet.”73 [118] MPP’s case is very different. MPP argues that clause 3(a) has a two-pronged effect: “MPP’s case is that on the proper construction of cl 3(a), the entirety of the Overburden properly removed by the Hired Fleet across OY9 and OY10 is: (a) not to be used for the purposes of calculating the OBIA Reconciliation Amount in accordance with cl 8.3 of the CMA; (b) to be deducted from the Closing OBIA for the purposes of calculating the OBIA Reconciliation Amount in accordance with cl 8.3.”74 [119] In my view, step (b) above is a step too far. Clause 3(a) merely requires that no waste material mined at any time by the Hired Fleet is to be used in the calculation of any amounts payable under clause 8.3. The requirement of the clause is merely that those quantities mined by the Hired Fleet not be used in the calculation. Nothing in clause 3(a) required a deduction. It merely required that the Hired Fleet’s mining of waste not be used in the calculation. [120] MPP refers to the provisions of the CMA: “…pursuant to the CMA, BUMA is paid a price per tonne of coal (the Contract Price). It is not paid extra for removing Overburden, except to the extent that payment is to be made for Overburden in excess of that which was anticipated to require removal, by way of a Strip Ratio Variation under cl 30.5. The First Hired Fleet Variation and Second Hired Fleet Variation made provision for the removal of additional Overburden by way of a 73 BUMA’s closing submissions at [221]-[223]. 74 MPP’s closing submissions at [218]. -- 28 of 57 -- 29 particular payment mechanism separate from, and unrelated to the payment mechanism in the CMA. That mechanism was a schedule of rates, by which BUMA was paid a new rate ($4.26/bcm) for the single and separate task of removing additional Overburden by using a separate Hired Fleet of equipment. In those circumstances, it would be a strange result if MPP was required to pay $4.26/bcm ($5.78/bcm by the end of the CMA, after rise and fall) as the price for removing Overburden under the Hired Fleet Variations, and then to pay again ($4.86/bcm) for the removal of that same Overburden through the OBIA mechanism in the CMA.”75 [emphasis added] [121] First, it must be accepted that the CMA and the variations impose different mechanisms for the payment of BUMA’s mining work. Second, the imposition of those two different payment regimes does not mean that MPP was required to pay “again” through the OBIA mechanism. In fact, the purpose of clause 3(a) was to ensure that waste material mined by the Hired Fleet was not used in the calculation of the OBIA reconciliation payable under clause 8.3. [122] As explained, the purpose of clauses 8.2 and 8.3 was to ensure that the mining contractor was compensated for any net increase in OBIA in the course of the contract and reimbursed the mine owner for any net decrease in the OBIA over the course of the contract. That hardly qualifies as, in effect, a double payment. [123] The resolution of this dispute depends on a proper interpretation of the Second Hired Fleet Variation. That document merely provides that “no waste material mined at any time by the Hired Fleet shall be used in the calculation of any amounts payable under clause 8.3 of the Agreement”. Those words do not require that the Hired Fleet’s mining not be used in the calculation and that the Hired Fleet’s mining be deducted. The clear words do not say that. [124] And, I do not accept that MPP’s interpretation gives effect to the natural meaning of the terms of the Second Hired Fleet Variation.76 MPP’s interpretation adds words to the clause that do not appear on the paper. [125] MPP says that its interpretation is consonant with the commercial purpose of the Second Hired Fleet Variation.77 It is doubtful that is true. Each party will have its own commercial purpose in entering into the variation. At least from BUMA’s point of view, the commercial purpose of the variation was to ensure that it was appropriately compensated for the additional plant and equipment it was lending to the mining enterprise. [126] In any event, (as explained above) the contract interpretation exercise required by Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd78 does not involve a simple weighing of what might or might not be commercially convenient or what might or might not be consonant with a perception of the commercial purpose. The language of this variation, when considered in its context, has a single, clear meaning. Nothing 75 MPP’s closing submissions at [221], [222]. 76 See MPP’s closing submissions at [228]. 77 Ibid. 78 (2015) 256 CLR 104. -- 29 of 57 -- 30 in the context displaces that single clear meaning or justifies giving clause 3(a) a two- pronged effect. [127] For those reasons I find that clause 3(a) of the Second Hired Fleet Variation required that any OBIA in existence as at the end of the operating period that had been removed by the Hired Fleet was not to be counted in the calculation of the closing OBIA. Clause 3(a) does not justify a deduction from the closing OBIA for the purposes of calculating the OBIA reconciliation amount in accordance with clause 8.3 of the CMA. Reject Coal Issues (Issues 13 and 14) [128] Issues 13 and 14 are as follows: “13. Whether, on the dates in Annexure 6 to the Amended Defence and Counterclaim filed on 13 October 2025 (DAC), BUMA delivered coal to MPP which had one or more of the Characteristics of Reject Coal in view of the issues in paragraphs 15 to 22. 14. Whether MPP was only obliged to pay BUMA the Reject Price for any Reject Coal delivered on the dates alleged in Annexure 6 of the Amended Defence in view of the issues in paragraphs 15 to 23.” [129] The parties are largely agreed on the features of the regime for ensuring the coal delivered met the quality parameters required by the CMA.79 The Coal Quality Regime [130] Clause 14.2 of the CMA required that BUMA deliver coal such that the weighted average monthly quality of coal delivered during any month was the typical specification, and the weighted average quality of coal delivered during any day was within the acceptable range. The CMA also included an additional quality specification described as ‘Reject Coal’.80 [131] The specifications for Total Moisture, Ash, Total Sulphur and Specific Energy were as follows:81 Characteristic Typical Specification Acceptable Range Reject Coal Total Moisture (as received) 8.5% 7% - 10.0% greater than 10.0% 79 Both parties’ submissions include a summary of the relevant provisions. The summaries are in substance the same. I have used BUMA’s summary because it is a little more detailed. 80 BUMA’s closing submissions at [234]. 81 BUMA’s closing submissions at [235]. -- 30 of 57 -- 31 Ash (as received) 35% 33% - 37% - greater than 39% over 5 continuous hours per clause 14.5(a)(1). - greater than 44% over any 1 hour period per clause 14.5(a)(2). Total Sulphur (as received) 0.4% 0.00% - 0.50% greater than 0.50% Specific Energy (MJ/kg) (gross as received) 18.2 17.4 - 18.8 less than 16.0 or greater than 25.0 [132] Where coal delivered during any delivery day had a weighted average specific energy which was neither the typical specification (for which the contract price was payable) nor reject coal (for which the reject price might be payable), the contract price payable per tonne was subject to adjustment on a scale according to its daily average weighted specific energy.82 [133] Where BUMA delivered reject coal, MPP’s remedies included being entitled to stop providing ‘Transfer Capacity’, being entitled to terminate the CMA, or exercising any other right it had for breach of the CMA.83 MPP could “in its absolute discretion take such coal” if reject coal was delivered. If it took delivery of reject coal, MPP was to pay the ‘Reject Price’ for that coal according to a formula in clause 14.6(c) of the CMA. This formula imposed an approximate discount of 80% on the contract price that would otherwise be paid for coal delivered in accordance with the CMA.84 [134] BUMA’s submissions explain the two methods by which the coal characteristics were to be determined: (a) First, pursuant to cl 16.2(a), MPP was obliged to supply and maintain an ‘Ash Analyser’ to test the Characteristics of the coal on the overland conveyor. The Ash Analyser provided results in real time, including the Characteristic measurements upon which MPP could decide to stop providing Transfer Capacity. (b) Second, pursuant to cl 16.1, MPP was obliged each day to take a sample of the coal that BUMA delivered (referred to as the ‘Laboratory Sample’), part of which would be delivered to an ‘Independent Laboratory’ engaged by MPP for testing of the Characteristics of the coal. The Independent Laboratory was a company called ALS. ALS kept half of the Laboratory Sample to serve as an ‘Umpire Sample’, which could be tested if requested by BUMA or MPP. If the Umpire Sample was tested, the results of that testing would prevail over any results from testing of the Laboratory Sample. The Characteristics determined from the Laboratory Sample would be the principal means of determining the Contract Price payable for the coal under the CMA.85 82 Ibid at [236]. 83 Ibid at [237]. 84 Ibid at [238]. 85 Ibid at [240]. -- 31 of 57 -- 32 The Contentions [135] MPP’s case is that: (a) there were 32 instances of the delivery of Reject Coal by BUMA between 9 February 2023 and 18 August 2024; (b) BUMA has overcharged MPP for that coal, in the sum of $4,559,007.57 (excluding GST), by levying charges at the Contract Price rather than the Reject Price; (c) as to the sum in (b) above, an amount of $1,324,672.54 (excluding GST) was levied in BUMA’s invoices for coal delivered in July and August 2024, which is not payable; (d) MPP has overpaid BUMA the balance sum of $3,234,335.03 (excluding GST), which is recoverable in restitution on the ground of a failure of basis, in circumstances where the Reject Price rather than the higher Contract Price was payable for the coal.86 [136] On the other hand, BUMA says that MPP knowingly paid the full contract price for the coal until July 2024 (covering 24 of the 32 disputed Deliveries) despite asserting in correspondence to BUMA during the operating period that the coal the subject of the disputed deliveries was reject coal. MPP now seeks restitution of part of the amounts that it paid – contending that the basis for payment of those amounts totally failed. BUMA disputes its liability for the delivery of alleged reject coal on several grounds, and in any event denies that MPP is entitled to restitution. [137] Issues 13 and 14 are really overarching issues. The resolution of those overarching issues depends on the resolution of issues 15 to 23. [138] BUMA’s submissions include a useful table that explains the different issues and how they correspond with the 32 disputed deliveries:87 Issue(s) Disputed Deliveries concerned Laboratory Samples 15 to 17 1 to 8, 10 to 12, 14, 15, 17 to 19, 24 to 31, and 34 15 and 18 8, 10 to 12, 14, 15, 17 to 19, and 24 to 31 Ash Analyser — alleged agreement 19 16 to 18, 21, 24 to 34 Ash Analyser — alleged breach of CMA 20 and 21 1 to 6, 8, 10 to 12, 14 to 17, 19, 24 to 31, and 34 Conditions for the imposition of the Reject Price not fulfilled 22 All 86 MPP’s closing submissions at [238]. 87 BUMA’s closing submission at [244]. -- 32 of 57 -- 33 Laboratory Samples (Issue 15) [139] Issue 15 is as follows: Whether, between about February 2023 and August 2024, MPP failed to comply with applicable Standards in obtaining samples of coal delivered to it by BUMA for laboratory testing. The Testing Regime [140] It will be recalled that clause 14.2 specifies the range of characteristics for acceptable coal and specifies what qualifies as reject coal. Clause 14.3 then specifies what is to happen if the coal Delivered is not to specification: “14.3 Deliveries not to specification (a) In the event that any coal Delivered is Reject Coal, the remedies of [MPP] are described in clause 14.5 and clause 4088 but without prejudice to any right of [MPP] for any other breach of this agreement by [BUMA]. (b) In the event that coal Delivered during any Delivery Day has a weighted average Specific Energy which is neither Typical Specification nor Reject Coal, the Contract Price shall be adjusted as described in clauses 14.4, 14.5 and 14.6.” [141] Clause 14.4 provides for BUMA to be paid by reference to the quantity and quality of coal delivered on any delivery day. The contract price was to be adjusted according to formulas based on the specific energy value of the coal. [142] Clause 14.5(a) provides that: “[MPP] will be entitled to stop providing Transfer Capacity in any of the following events: (1) if the weighted average quality of coal Delivered over any period of 5 continuous hours has an Ash Characteristic greater than 39% as determined by the Ash Analyser… (2) if the weighted average quality of coal Delivered over any 1 hour period has an Ash Characteristic greater than 44% as determined by the Ash Analyser… (3) if the weighted average quality of coal Delivered over any Delivery Day has any characteristics described in column 3 of clause 14.2 as determined by the sampling undertaken pursuant to clause 16 and [BUMA] has failed to demonstrate to the reasonable satisfaction of the Owner that such quality is not reasonably expected to be Delivered again, and [MPP] will only recommence providing Transfer Capacity if [BUMA] has demonstrated to the reasonable satisfaction of [MPP] the 88 Clause 40 of the CMA provides for rights to terminate the agreement. -- 33 of 57 -- 34 basis upon which [BUMA] may assure [MPP] that further Reject Coal will not be Delivered.” [143] It can be seen that clause 14.5(a) is really directed to ensuring that, if any of those three situations occur, MPP has available to it a remedy of ceasing to provide transfer capacity (that is taking deliveries of coal). [144] Then, clause 14.6 provides that: “(a) Notwithstanding that coal Delivered is Reject Coal, [MPP] may in its absolute discretion take such coal. (b) In the event [MPP] takes Delivery of Reject Coal, [MPP] will pay the Reject Price for such Reject Coal. (c) The Reject Price will be determined as follows…” [145] Under the heading ‘Determination of Coal Quality’ clause 16 of the CMA contains the provisions that provide for sampling and testing of coal quality. The regime for sampling and testing of coal quality had these features: (a) subject to the provisions regarding the Ash Analyser (see below) coal was to be sampled in accordance with applicable Standards89 each delivery day by MPP using the Sampling Equipment;90 (b) Coal Characteristics of coal sampled will be determined in accordance with applicable Standards by an Independent Laboratory selected and engaged by MPP;91 (c) BUMA was entitled to observe the sampling of coal and collection and delivery by MPP of the Laboratory sample to the Independent Laboratory;92 (d) samples were to be prepared as two portions by MPP in accordance with applicable Standards;93 (e) one portion of the sample was to be used for routine daily analysis by MPP (the Owner Sample); the second portion was to be delivered by MPP to the independent laboratory (Laboratory Sample);94 (f) MPP must utilise the Ash Analyser to test the coal characteristics (except sizing) in all coal delivered;95 (g) The Ash Analyser was to be supplied and maintained by MPP;96 89 The expression ‘Standards’ is defined in the CMA as the relevant standards described in Schedule 12 and, where the CMA is silent as to the standard of code to apply, the relevant standards and/or codes published by the Standards Association of Australia. 90 Clause 16.1(a) of the CMA. 91 Clause 16.1(b) of the CMA. 92 Clause 16.1(c) of the CMA. 93 Clause 16.1(d) of the CMA. 94 Clause 16.1(d) of the CMA. 95 Clause 16.2(a) of the CMA. 96 Clause 16.2(a) of the CMA. -- 34 of 57 -- 35 (h) for the purpose of determining its entitlement to stop providing Transfer Capacity pursuant to clause 14.5(a) (see above), the determination by MPP using the Ash Analyser was to be the sole criterion;97 (i) in the event that the Ash Analyser is not working, the Owner Sample (see (e) above) will determine Ash for the purposes of reject coal and for the purposes of the calculation of any applicable performance bonus under section 4 of Schedule 2;98 (j) the Characteristics (except sizing) were to be determined by MPP from the Owner Sample for routine daily analysis in accordance with applicable Standards;99 (k) MPP was to provide that information to BUMA;100 (l) The Independent Laboratory must be instructed by MPP: (i) to carry out the tests required and in accordance with applicable Standards so as to determine the Coal Characteristics represented by the Laboratory Sample; and (ii) to carry out such tests and to report the results of such tests to BUMA and MPP; as quickly as possible.101 (m) the Independent Laboratory must keep half the Laboratory Sample (for three months) to serve as the Umpire Sample;102 (n) in the event that either MPP or BUMA wishes to have the Umpire Sample tested, they must notify the Independent Laboratory and the other party within 7 days after receipt of the report on the tests;103 (o) the Laboratory Sample was to be the primary determinant of Coal Characteristics for the purposes of determining the contract price payable to BUMA;104 (p) in the event that the Laboratory Sample indicates a coal characteristic different from that determined by the Ash Analyser, payment will be made against the Laboratory Sample determination but for all other purposes under the CMA, the quality determined by the Ash Analyser will prevail;105 (q) where a Characteristic has not been determined by the testing of the Laboratory Sample (for whatever reason) for a Delivery Day during a Month, the Characteristic for that day is deemed to be the mean of that Characteristic for that Month, calculated by averaging the Characteristic for all Delivery Days during that Month weighted for tonnage delivered on that Delivery Day.106 97 Clause 16.2(b) of the CMA. 98 Clause 16.2(b) of the CMA. 99 Clause 16.3(a) of the CMA. 100 Clause 16.3(a) of the CMA. 101 Clause 16.3(b) of the CMA. 102 Clause 16.3(c) of the CMA. 103 Clause 16.3(d) of the CMA. 104 Clause 16.4 of the CMA. 105 Clause 16.4 of the CMA. 106 Clause 16.5 of the CMA. -- 35 of 57 -- 36 The Internal Inconsistency [146] There is an odd inconsistency in the testing regime. [147] On the one hand, when one looks at clause 14.5(a) there are three events that might justify MPP exercising its right to refuse transfer capacity, namely if: (a) the coal delivered over any period of 5 continuous hours has an Ash Characteristic greater than 39% as determined by the Ash Analyser; or (b) the coal delivered over any 1 hour period has an Ash Characteristic greater than 44% as determined by the Ash Analyser; or (c) the coal delivered over any Delivery Day has any Characteristics described in column 3 of clause 14.2 as determined by the sampling undertaken pursuant to clause 16 and BUMA fails to demonstrate to the reasonable satisfaction of MPP that such quality is not reasonably expected to be delivered again. [148] Thus, for two of the three events that justify refusal of transfer capacity, the event involves a determination by the Ash Analyser. The third involves a determination by “the sampling process undertaken pursuant to clause 16”. The only sampling process referred to in clause 16 is the sampling process which involves a laboratory analysis of the Laboratory Sample. It is true that clause 16 considers both the laboratory analysis process and the Ash Analyser process. But the only ‘sampling process’ in clause 16 is the laboratory analysis process. [149] On the other hand, clause 16.2(b) provides that, for the purpose of determining MPP’s entitlement to stop providing transfer capacity pursuant to clause 14.5(a), the parties agree that the determination by MPP using the Ash Analyser was to be the sole criterion. Resolving the Inconsistency [150] There is no easy way to reconcile the two inconsistent provisions. As McPherson JA explained in McGowan v Commissioner of Stamp Duties: “When two provisions of the same deed or contract are irreconcilably inconsistent and cannot stand together, it becomes the duty of a court in interpreting the contract to resolve the antinomy if necessary by rejecting the provision that is repugnant to the substance of the whole. It is a course which a court of construction does not lightly undertake, the more so perhaps where the parties have deliberately gone to effort and expense to rectify the contract by inserting the very provision that is the source of the problem.”107 [151] On balance, the provision in clause 14.5(a)(3) looks to be a mistake. I say that for four reasons. [152] Firstly, clause 16.2(b) is in definitive language: 107 [2002] 2 Qd R 499 at 510. -- 36 of 57 -- 37 “For the purpose of determining its entitlement to stop providing Transfer Capacity pursuant to clause 14.5(a), the Parties agree that the determination by [MPP] using the Ash Analyser will be the sole criterion.” [153] Secondly, clause 16.2(b) contains a ‘fallback’ provision which is entirely consistent with the idea that, if it is working, the results of the Ash Analyser is to be the sole means of assessing the coal quality. If the Ash Analyser is not working, then the owner’s sample under clause 16.3(a) determines Ash for the purposes of reject coal and any performance bonus under section 4 of Schedule 2. [154] Thirdly, clause 16.4 provides as follows: “The Parties agree that the Laboratory Sample will be the primary determinant of Coal Characteristics for the purposes of determining the Contract Price payable to [BUMA] under this agreement. In the event that the Laboratory Sample indicates a Coal Characteristic different from that determined by the Ash Analyser, payment will be made against the Laboratory Sample determination but for all other purposes under this agreement, the quality determined by the Ash Analyser will prevail.” [emphasis added] [155] Thus, the evident intention of this provision is that the laboratory samples are to be used for assessing the price to be paid but, for all other purposes, the results of the Ash Analyser were to be used. Those other purposes would include MPP’s right to refuse transfer capacity pursuant to clause 14.5(a). [156] Fourthly, that approach is more likely to be correct given that the evidence was that the results of the Ash Analyser are available within the same day – enabling a stop to be made relatively quickly, even the same day. The laboratory results take more time. BUMA’s Argument [157] That contractual context is important because of an argument raised by BUMA. On behalf of BUMA, Mr Clothier KC argued that the only relevant results were the Ash Analyser results. It was argued that was the case, for whether MPP sought to stop providing transfer capacity, or for MPP to exercise its absolute discretion to accept reject coal (and thereby be liable for the lower Reject Price).108 BUMA argued that one needs to look at the provisions of the CMA as a whole and that the right to stop taking delivery and the absolute discretion to take reject coal are part of the same regime. [158] I do not accept that argument. The contractual regime, as explained over the past few pages, certainly has some complexity to it. It has a number of ‘moving parts’. However, the interpretation exercise is not assisted by, in effect, drawing attention to two related aspects and then treating them as if they are part of a self-contained regime or sub-regime. In my view, it is necessary to recognise the inconsistency and to resolve that inconsistency. 108 Transcript 7-35. -- 37 of 57 -- 38 [159] For the reasons explained, the preferable view is that clause 14(a)(3) appears to be a mistake and it is the laboratory samples that were to be used for the purposes of assessing the price to be paid. However, for all other purposes, the results of the Ash Analyser were to be used. The Relevant Standards [160] It is plain that the sampling and testing procedure needed to comply with the ‘applicable Standards’. The expression ‘Standards’ are those set out in Schedule 12 of the CMA. However, the standards set out in Schedule 12 were superseded by the ISO 13909 series of sampling standards.109 [161] Clause 16 provides detailed provisions that explain how coal quality is to be determined. Coal is to be sampled in accordance with applicable Standards for each delivery day. Coal characteristics are to be determined in accordance with the applicable Standards by the Independent Laboratory. Samples are to be prepared in accordance with applicable Standards. Non-Compliance of the Laboratory Samples [162] BUMA contends that between February 2023 and August 2024, MPP failed to comply with applicable Standards in obtaining samples of coal delivered to it by BUMA for laboratory testing. [163] MPP accepts that the washing down of mine infrastructure adjacent to the sample drums on 4 and 5 May 2023 caused water ingress to the samples on those dates. MPP does not claim an entitlement to the benefit of the lower reject price for deliveries on those dates.110 [164] MPP also accepts that the sampling equipment failed to comply with applicable Standards. The parties’ respective experts, Mr Cameron and Mr Mathewson, agree that the sampling equipment did not comply with the requirements of the relevant ISO sampling standards at the time of audits by Bureau Veritas which occurred in August 2020 and March 2025.111 On 2 May 2024, that is before the second of those audits, a representative of MPP emailed others within MPP: “RE: Coal sampler audits and conveyor safety audit report Shane / Wayne, James & I just inspected the Coal Sampling System….. I don’t think there is any point doing a 3rd Party Audit at present, because it will obviously fail for all the same reasons documented in the 2020 Audit Report…” [165] I accept BUMA’s submissions that both experts ultimately agreed that: 109 See report of Darren Mathewson’s (29 August 2025) at [121] and Reply Expert Report of Donald Wayne Cameron (1 October 2025) at [22]. Note that clause 2.1(i) of the CMA means that the definition of ‘Standards’ in the CMA is taken to be a reference to all amendments or supplements to, or replacements of, that document. 110 MPP’s closing submissions at [248]. 111 MPP’s closing submissions at [249]. -- 38 of 57 -- 39 (a) MPP’s sampling failed in significant respects to comply with the applicable Standards. This includes – in addition to those identified by Bureau Veritas – the failure to conduct bias testing, which Mr Mathewson (MPP’s expert) accepted was a “significant” non-compliance;112 and (b) the effect of such non-compliance was that the laboratory samples collected were: (i) as a result of the defects affecting the primary cutter, crusher, secondary cutter, not representative of the coal delivered (Sample Bias); and (ii) as a result of the defect affecting the sample collection carousel, which was not adequately sealed from the environment, susceptible to contamination from external sources (Sealing Defect).113 [166] Thus, I accept that MPP failed to comply with applicable Standards in obtaining samples of coal delivered to it by BUMA for laboratory testing between February 2023 and August 2024. Can the Non-Compliance be Rescued? [167] MPP’s expert, Mr Mathewson expressed the opinion that that the Sample Bias was likely to mean that the moisture, ash and specific energy of the coal delivered is overstated. Mr Mathewson’s evidence was as follows: “243. In my experience, the ‘bow wave’ produced by the primary sampler (Figure 50) leads to a coarse particle bias due to the coarse particles tending to ‘roll’ to each edge of the belt. This is a similar mechanism to that observed by MPP where “the larger or higher energy lumps of coal roll to the bottom of the stockpile” 244. In their audit reports, Bureau Veritas noted that there “is a significant gap between the primary cutter side plates and the conveyor. This gap should be minimised to prevent the loss of fines” and that the “primary cutter brush, at the rear of the cutter in good condition but does not seem to be rigid enough to clear all material from the belt”. These issues both lead to a coarse bias in the primary sampler. 245. Mr Cameron noted that the lack of ‘lips’ on the secondary sampler in paragraph 43e “may also create a coarse bias, with larger particles falling into the increment”. I agree with Mr Cameron. On 2 May 2024 MPP noted that it “appeared likely that the Sampling Equipment had a coarse bias”. 246. It is well known to experienced industry practitioners that coarser particles are lower moisture than finer particles, due to the higher surface area of finer particles allowing more opportunity for water to adhere to the coal particle. In general, the finer the particle, the higher the moisture and vice versa. 112 BUMA submissions at [269]. 113 BUMA submissions at [271]. -- 39 of 57 -- 40 247. Therefore, any failure of MPP to adhere to the applicable Standards (leading to a coarse bias of the Sampling Equipment) would most likely lead to the moisture results reported Independent Laboratory being lower than was actually the case, on the days that Reject Coal was delivered (Table 10). I am unable to accurately estimate the magnitude of the bias, due to the number of contributing factors, but I would expect that it would typically be >0.1% (ar).”114 [emphasis added] [168] In his reply report, Mr Cameron offered the view that additional test work would be required to sustain that opinion.115 In cross-examination Mr Cameron said that a coarse bias was only one possible outcome of the problems with the sampling system.116 [169] The difficulty is that this controversy ignores that fact that there was a contractual regime whereby the parties agreed on how sampling and testing was to occur. It would inflict some violence on that detailed regime for MPP to fail to comply with the contractual regime for sampling and testing, only to later argue that, despite those failings, the quality was reject coal by reason of some further expert evidence. For example, such an approach deprives BUMA of the opportunity to have the Umpire Sample tested under clause 16.3(d) of the CMA. [170] The parties were bound by the contractual regime, a regime that required adherence to applicable Standards. In my view, MPP’s sampling did not comply with the applicable Standards. MPP did not fix the underlying non-compliance issues of the sampling system noted by Bureau Veritas in their 2020 report. In fact, Mr Mathewson is rather lukewarm in his defence of the sampling system by this statement “The Sampling Equipment was largely compliant with the ISO Standards” [emphasis added]. MPP’s obligation was not to ‘largely’ comply. [171] In any event, I accept Mr Cameron’s evidence that the sampling system was non- compliant.117 And, I accept BUMA’s submission that the fact that the sample collection carousel was allowed to remain unsealed in proximity to wash-down activities was a breach of the applicable Standards and called into question the reliability of the total moisture results for the Laboratory Samples.118 Sampling Non-Compliance (issues 16 and 17) [172] Issues 16 and 17 are as follows: “16. Whether, on the proper construction of the CMA, any failure on the part of MPP to comply with applicable Standards in obtaining samples of coal delivered to it by BUMA for laboratory testing meant that there was no qualifying 114 Report of Darren Mathewson (29 August 2025) at [243]-[247] (document identifiers deleted). 115 Reply Expert Report of Donald Wayne Cameron (1 October 2025) at [65]. 116 Transcript T5-45. 117 The contrary views are recorded in Mr Cameron’s reply report at [76]. 118 BUMA’s closing submissions at [276]. -- 40 of 57 -- 41 ‘Laboratory Sample’ or coal ‘Characteristics’ through the results of that testing for the purpose of the CMA. 17. If the answer to paragraph 16 is ‘Yes’, whether the coal delivered by BUMA on the dates in Annexure 6 to the DAC was Reject Coal.” [173] This issue has been considered above. However, it is important to address the arguments concerning the proper interpretation of the CMA. MPP’s Submission [174] MPP makes this submission: “BUMA contends that on the proper construction of the CMA, a failure by MPP to comply with a relevant Proper Sampling Practice has the result that the relevant sample, and the subsequent test of the sample by ALS, has no contractual relevance – irrespective of the effect of the non-compliance. The effect of acceptance of this contention would be to circumvent the need for BUMA to establish that a particular failure to comply with applicable Standards caused a particular sample which was in truth within specification to be Reject Coal.”119 [175] The principal problem with that submission is that the CMA prescribed an integrated regime which required compliance with the applicable Standards. That integrated regime not only specified the quality of the coal to be delivered but it specified how sampling and testing was to be done120 and the financial and contractual consequences if the coal delivered fell into the reject coal category. [176] The effect of MPP’s interpretation is to, in effect: (a) jettison the contractual scheme in favour of an indeterminate alternative scheme; and (b) pick and choose the parts of the contractual scheme to be adopted and those to be discarded. [177] Effect (b) is illustrated by MPP’s reliance on the quality of coal specifications contractually required by clause 14.2 and its rejection of the contractual force of the prescribed mode of sampling and testing. The parties agreed a contractual regime. They are bound to substantial compliance with that regime and are not free to pick and choose the aspects of the regime that suit. 119 MPP’s closing submissions at [254], [255]. 120 The regime even specified what was to be done if the two means of testing, the laboratory and the Ash Analyser produced different results – see clause 16.4 of the CMA discussed above. -- 41 of 57 -- 42 The Contractual Regime [178] Importantly, the contractual regime was comprehensive.121 It provided for the specified characteristics of the coal with protections for both parties. As explained, the sampling and testing was to comply with applicable Standards. Under the contractual regime, the parties had access to the Umpires Sample which could be tested if requested by either BUMA or MPP. [179] The contractual regime makes it plain that clause 16 specified that coal characteristics were to be determined in accordance with applicable Standards and the “process” in clause 16.122 By that process the parties agreed that “the Laboratory Sample will be the primary determinant of Coal Characteristics for the purposes of determining the Contract Price payable to [BUMA] under this agreement”.123 The CMA provided for an averaging process even if there was no Laboratory Sample.124 [180] MPP argues that to give the contractual regime its effect is impractical.125 The evidence does not establish that. The evidence is that MPP did not comply with the 2020 Bureau Veritas report that MPP commissioned. There is no evidence that what was required by that report was impractical. [181] In any event, the contractual regime required that the testing of the Laboratory Samples by the Independent Laboratory would determine the contract price payable by MPP to BUMA. The sampling was within MPP’s control, and it was MPP that instructed the Independent Laboratory. Ensuring that those matters accorded with the contract was MPP’s contractual obligation. [182] The MPP submission quoted above has a flavour to it that suggests that BUMA was burdened by some onus to establish that the coal delivered on the 32 days specified in Annexure 6 of the Amended Defence and Counterclaim (‘DAC’) was within specification – and not reject coal.126 However, as BUMA’s submissions point out, BUMA does not seek damages for breach of the sampling and testing regime. In fact, it is MPP’s case that the coal delivered on those 32 days was reject coal. The effect of the agreement by the parties was that MPP was required to do that by reference to sampling and testing that complied with applicable Standards and in accordance with the test results of Laboratory Samples. ‘Unwarranted’ Results [183] MPP argues that: “…BUMA’s contention leads to results that are unwarranted as the presumed intention of the parties. The case BUMA puts forward is – it seems – that any breach of a Standard means that the sample is non- 121 MPP itself refers to the CMA as a highly detailed agreement between sophisticated parties; its provisions about sampling and testing, and Reject Coal, are themselves detailed and prescriptive: MPP’s closing submissions at [257]. 122 Clause 16.1(b). 123 Clause 16.4. 124 Clause 16.5. 125 See, for example, MPP’s closing submissions at [258]: “It is not realistic to expect the people at the Mine to be able to identify on a day to day basis whether every relevant provision of an applicable Standard has been met”. 126 The Amended Defence and Counterclaim filed on 13 October 2025. -- 42 of 57 -- 43 contractual – irrespective of the effect it has on the integrity of the sample. Consequently, if the sample does not in fact differ from the sample that would have been obtained from full compliance with the Standards, the sample is nonetheless noncontractual and cannot be used. That is an unreasonable intention to impute to the parties.127 [184] First, as explained, the exercise of contract interpretation is not conducted on the basis of what one or other party contends to be warranted as the presumed intention of the parties. As explained above, the principles derived from Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd128 do not require resort to what might be the presumed intention warranted by one or other of the parties, or by what might be commercially convenient. [185] Second, BUMA does not contend that any breach of standard means that the sample is non-contractual. And, if BUMA did contend that, it would be irrelevant. The evidence here establishes a substantive non-compliance with the applicable Standards. [186] Third, there is something quite unrealistic about MPP’s contention that the circumstances may be that “the sample does not in fact differ from the sample that would have been obtained from full compliance with the Standards”. That rather ignores the evident purpose of the contractual regime. That regime was designed to avoid disputes about sampling and testing. And yet, lurking behind this submission is the idea that there is some ‘true’ result for each sample.129 The problem is that if the sampling is not conducted by proper calibrated equipment in accordance with applicable Standards, then the sample will not be representative. And, as the sample collection carousel was allowed to remain unsealed in proximity to wash-down activities, that calls into question the reliability of the moisture results of the Laboratory Samples.130 [187] Those two examples illustrate that it is wrong, in my view, to assume that a failure to comply with applicable Standards will have no or even little effect on the results. When they entered into the CMA, the parties evidently contemplated that sampling and testing may be contested territory. That is why there is an agreed contractual regime. Conclusion on Issues 16 & 17 [188] And so, the answer to question 16 is ‘yes’. On the proper interpretation of the CMA, any substantial131 failure on the part of MPP to comply with applicable Standards in obtaining samples of coal delivered to it by BUMA for laboratory testing meant that there was no qualifying ‘Laboratory Sample’ or coal ‘Characteristics’ through the results of that testing for the purpose of the CMA. It follows that: 127 MPP’s closing submissions at [259]. 128 (2015) 256 CLR 104 at [46]-[51]. See the discussion of contract interpretation principles above. 129 See, for example, the reference to “in truth” in paragraphs [255] and [263] of MPP’s closing submissions. 130 BUMA’s closing submissions at [276]. 131 I have inserted the word ‘substantial’ here because a minor or inconsequential non-compliance would not constitute a failure. However, the failures here were significant. -- 43 of 57 -- 44 (a) the coal delivered by BUMA on the days specified in Annexure 6 to the DAC do not qualify as Reject Coal pursuant to the CMA; and (b) the coal delivered on those 32 days are deemed to be the mean Characteristic for that month in accordance with clause 16.5 of the CMA. Reject Coal (Issue 18) [189] Issue 18 is as follows: Whether any failure by MPP to comply with applicable Standards in obtaining samples of coal delivered to it by BUMA for laboratory testing means that it cannot rely on the results of testing by the ‘Independent Laboratory’ to contend that the coal delivered by BUMA on the dates in rows 1 to 8, 10 to 12, 15, 17 to 19 and 24 to 31 and 34 of Annexure 6 to the DAC had one or more of the Characteristics of Reject Coal. [190] For the reason stated above, the answer here is ‘yes’. [191] MPP submits that: “It is important to understand as to issue 18 that BUMA is required to establish that a particular failure to comply with applicable Standards caused a particular sample which was in truth within specification to be Reject Coal. That is BUMA’s pleaded case. BUMA has the constant persuasive burden of proof as to this case. MPP submits that BUMA has failed to prove it. The basis upon which BUMA submits to the contrary (if it does) is presently unclear to MPP. MPP will address the matter further in oral submissions following receipt of BUMA’s written closing submissions.” [emphasis added] [192] I do not accept that submission. The contractual regime specifies when coal qualifies as reject coal. It is not a case of setting aside the contractual regime and requiring BUMA to positively prove that it delivered coal that was within specification. Ash Analyser — Alleged Agreement (Issue 19) [193] Issue 19 is as follows: Whether, between 18 September and 30 October 2023, BUMA and MPP agreed, by way of variation of the CMA, that, in respect of coal delivered on a day during Operating Year 10, if the laboratory testing results determined that the coal had any Characteristic that would render it Reject Coal and the Ash Analyser result determined that the coal did not have those Characteristics, then they would use the Ash Analyser results to determine whether the coal was Reject Coal. [194] At the core of this issue is a factual dispute: did the parties agree to a modification to the CMA for OY10? [195] The negotiations for the final (and tenth) AMP were conducted by Mr Scott Millane, BUMA’s Project Manager and Site Senior Executive for the Commodore Mine, and -- 44 of 57 -- 45 Phillip Bryant, MPP’s Principal Mining Engineer at the Commodore Coal Mine. It is clear from the negotiations that MPP was anxious to ensure that the OY10 AMP plan had a strip ratio below 6.0 bcm/t. It is also clear that BUMA’s stance was that such a strip ratio could only be achieved if MPP also agreed that the parties would defer to the results of the Ash Analyser for payment purposes in circumstances where the Independent Laboratory results indicated that the coal was reject coal. [196] Both Mr Bryant and Mr Millane gave evidence-in-chief by affidavit and were cross- examined. Neither were shown to be inaccurate. Mr Millane slightly changed his evidence close to trial. Mr Bryant had a slightly less detailed recollection of the conversations. Mr Bryant conceded that he ‘might’ have said something to the effect that BUMA would get a letter but that the AMP they had been discussing had been approved on the basis they had been discussing. [197] Mr Bryant’s evidence can be summarised by the following passage from the cross- examination: “During these discussions, based upon what we’ve seen and what you’ve frankly said in your evidence, you would have appreciated that the linking of those two things – the mine plan for – with a strip ratio of under 6 and BUMA’s proposal to use the ash analyser – were significant things for BUMA?‑‑‑Yes, yes, I see that. It wasn’t proposing one without the other; correct?‑‑‑I see that, yes. It never got to the point of proposing one without the other. They were a job lot?‑‑‑Mmm-hmm, yes. Correct?‑‑‑Yes And before you, I think, sent a letter formally approving the O10 annual mine plan, as it ultimately became, do you recall the – you know, giving Mr Millane the heads-up, effectively, that it was approved and he’d get a letter about that?‑‑‑Ah – I do recall – um – telling Mr Millane that, from a mine planning perspective – um – there’s a go-ahead there for that proposed mine plan. All right. Do you recall that – telling him something to the effect that the mine plan had been approved “as we had discussed”?‑‑‑Ah – I recall telling Scott that the mine plan they presented, as in the mine plan – ah – that was approved in relation to the strip ratio. Okay. And do you have a clear recollection of the words that were said during that conversation?‑‑‑No, I don’t, sorry. Might you have said that he’d get a – something to the effect that he’d get a letter but the mine plan had been approved on the basis you’d been discussing?‑‑‑Something to that effect, yes.”132 132 Transcript T4-40 and T4-41. -- 45 of 57 -- 46 [198] This evidence is tantalisingly close to an agreement, but perhaps not quite there. Mr Bryant agreed that the parties were each wedded to their stance. They were ‘job lots’ in the sense that one was not going to be agreed without the other. [199] However, the next piece of evidence is important. Mr Bryant says this at page 53 of his affidavit: “On 18 October 2023, I emailed Phillip Bryant (Owner), attaching the final draft of the OY10 AMP. On the covering page of the draft OY10 AMP, I wrote: As part of the request to reduce the strip ratio, it was agreed with MOC [the Owner] to default to the ash analyser results if the ALS results determined for a given period that period to be a reject day. The AMP is submitted based on the agreement regarding the ash analyser.” [200] On 30 October 2023, Mr Bryant responded communicating MPP’s approval of the AMP. Having understood that MPP and BUMA were maintaining two stances that were a ‘job lot’, and, having received the covering email of 18 October 2023 explicitly proffering the AMP on that express basis, it is plain that there was an agreement to the effect stated in the email. MPP did not contend that the covering email was not received, or not read, or even not accepted by MPP. [201] Those facts are sufficient to establish the agreement recorded in the covering email. [202] MPP argues that the agreement stated in the covering email simply did not happen. I conclude that the agreement was struck. The fact that the agreement is stated in black and white in the covering email supports that finding, as does the absence of any communication from MPP to the effect that MPP did not agree to that modification. I find that after the final draft of the AMP had been submitted, but before its formal acceptance on 30 October 2023, Mr Bryant said words to the effect that he had gotten the AMP across the line on the conditions that had been agreed. Mr Bryant did not dispute that those words were said – he did not have a clear recollection that those words were said. [203] MPP puts two further arguments. The first is that the agreement was not in writing and was not signed by both parties, which is necessary for a variation of the CMA pursuant to clause 57.5 of the CMA. I do not accept that argument. The agreement is recorded in writing. [204] The second further argument is that the alleged variation is not supported by fresh consideration, which is necessary for a variation at common law. Again, I do not accept that argument. The very point of these negotiations and the agreement was to secure for MPP an AMP that featured a lower strip ratio of less than 6 and to secure for BUMA a flexible means of achieving that goal by being able to use Ash Analyser results which were available immediately and would enable BUMA to adjust the mix of coal and avoid the low price of reject coal. It was a bargain that stood to benefit both parties. -- 46 of 57 -- 47 [205] It is true that the AMP was subject to MPP’s approval. But as BUMA points out, the right to withhold approval was not unfettered.133 There was a benefit to both parties in proceeding as agreed. [206] It follows that on or about 30 October 2023 BUMA and MPP agreed, by variation of the CMA, that in respect of coal delivered on a day during Operating Year 10, if the laboratory testing results determined that the coal had any characteristic that would render it reject coal and the Ash Analyser result determined that the coal did not have those characteristics, then the parties would use the Ash Analyser results to determine whether the coal was reject coal. Ash Analyser – Alleged Breach of the CMA (Issue 20) [207] Issue 20 is as follows: Whether, between about February 2023 and August 2024, MPP breached clause 16.2(a) of the CMA by failing properly to maintain the Ash Analyser. [208] Between at least September 2022 and August 2024, MPP failed properly to maintain the Ash Analyser. MPP does not dispute this. MPP concedes that it failed properly to maintain the Ash Analyser, in particular, by failing to cause the timely replacement of the radiation source, and by failing to carry out timely dynamic calibrations. MPP agrees also that the whole of the evidence supports such findings. [209] On that basis MPP does not dispute that it breached the maintenance obligation in clause 16.2(a) of the CMA. Ash Analyser – Consequences (Issue 21) [210] Issue 21 is as follows: If the answer to the issue in paragraph 20 is ‘Yes’, whether MPP’s breach of clause 16.2(a) of the CMA: (a) caused the Ash Analyser to produce inaccurate and unreliable measurements of coal Characteristics; (b) resulted in BUMA being prevented from taking steps to ensure that the weighted average quality of the coal was not Reject Coal; (c) if the answer to paragraph 21(b) is ‘Yes’, means that it cannot rely on the results of testing by the ‘Independent Laboratory’ to contend that the coal delivered by BUMA on the dates in rows 1 to 6, 8, 10 to 12, 14 to 17, 19, 20, 23 to 32 and 34 of Annexure 6 to the DAC had one or more of the Characteristics of Reject Coal. [211] BUMA contends, and MPP accepts, that on the evidence, the Ash Analyser produced inconsistent and unpredictable results. And so, the question remaining is whether BUMA was prevented from taking steps to ensure that the weighted average quality 133 BUMA’s closing submissions at [309]. See clause 7.6 of the CMA. -- 47 of 57 -- 48 of coal delivered during a day was within specification by reason of MPP’s breaches of clause 16.2 of the CMA. [212] Mr Cameron analysed the effects of the inaccurate and unreliable measurements of coal characteristics by means of the Ash Analyser. His conclusions from the plotting of the inaccuracies and unreliable measurements are stated in his reports. For example: “Again, the practical impact of these plots is that BUMA can have no confidence in the quality of coal they are delivering because the real- time results from the Analysis because they are unpredictably variable in comparison the Laboratory.”134 [213] In the circumstances, I accept BUMA’s submission that: “In the circumstances, BUMA could not use the Ash Analyser to manage the quality of coal Deliveries; something which ought to have been possible if the Ash Analyser had been maintained and calibrated as required by MPP, and operating as intended. By reason of MPP’s breaches, BUMA has been prevented from taking steps to ensure that the weighted average quality of coal Delivered during a Day was within specification. MPP cannot rely on those breaches to impose the Reject Price for coal Delivered which (at least) was reported by the Ash Analyser to be within specification.”135 [214] As a matter of practical reality, MPP’s breaches of clause 16.2 of the CMA caused BUMA to be prevented from ensuring that the coal it delivered was within specification and not reject coal. [215] MPP argues that BUMA has not established that the results from the Ash Analyser would have been materially different in the counterfactual scenario.136 However, the evidence was that BUMA did adjust its ‘blend’ of coal. BUMA’s mining practices involved different quality stockpiles. And the point of the variation considered in issue 19 was to enable BUMA to draw from the creek pits which had a lower strip ratio but a higher moisture content. [216] The staff on site were likely to have expertise that enabled appropriate blending. MPP’s submissions criticised Mr Hunter’s evidence to the effect that he was ‘generally’ able to identify specific types of coal and where they had come from. But I accept Mr Hunter’s evidence that generally, that is mostly, BUMA was able to identify where coal had come from and what the parameters of that coal were. Indeed, Mr Hunter said that records were kept in response to questions in cross- examination.137 [217] The likelihood is that BUMA would have been able to adjust its blend – in accordance with the practices it adopted on site. 134 Reply Expert Report of Donald Wayne Cameron (1 October 2025) at [166]. 135 BUMA’s closing submissions at [330]. 136 This point is made in two different ways in MPP’s closing submissions at [311] and [312]. 137 Transcript T3-36. -- 48 of 57 -- 49 [218] MPP submitted that it would be quite unfair and unreasonable to deprive MPP of its contractual right to the reject price based on a prevention defence in the absence of evidence of a counterfactual that rises no higher than speculation.138 However, it was MPP that failed to comply with its contractual obligation to properly to maintain the Ash Analyser between at least September 2022 and August 2024. It would be unfair and unreasonable to require the party directly affected by that breach to, in effect, accept the reject price when it may well have been able to avoid that result. Non-Fulfilment of Reject Price Conditions (Issue 22) [219] Issue 22 is as follows: Whether on the proper construction of the CMA, the Reject Price was only payable where MPP exercised its discretion to ‘take’ coal determined to be Reject Coal by reference to the results of the Ash Analyser in accordance with clauses 14.5(a) and 14.6 of the CMA. [220] BUMA contends that, on the proper interpretation of the CMA, MPP was obliged to pay (and BUMA was entitled to receive) the contract price on each of the occasions where BUMA is alleged to have delivered reject coal. [221] I do not accept that submission. That submission flies in the face of the express provisions of clause 14.6 which provides as follows: “(a) Notwithstanding that coal Delivered is Reject Coal, [MPP] may in its absolute discretion take such coal. (b) In the event [MPP] takes Delivery of Reject Coal, [MPP] will pay the Reject Price for such Reject Coal. (c) The Reject Price will be determined as follows…” [222] The plain object of that clause is to entitle MPP to take delivery of coal that qualifies as reject coal even though, in that event, MPP also has the right to cease transfer capacity – that is, to refuse to take delivery of the reject coal. In the event that MPP does exercise its absolute discretion to take delivery of reject coal, MPP is obliged to pay only the reject price. [223] BUMA argues that: “Given that none of the events listed in cl 14.5(a) are pleaded or demonstrated in the evidence to have occurred, MPP’s discretion in cl 14.6(a) never fell to be exercised and was not in fact exercised. Clause 14.6(b) therefore did not operate to impose the Reject Price.”139 [224] The concept here is that something more is required beyond MPP merely taking delivery of the Reject Coal. BUMA’s argument is that there are two requirements: (a) the occurrence of one of the three events specified in paragraph 14.5(a) entitling MPP to exercise the right to stop providing transfer capacity – that is taking the coal; and 138 MPP’s closing submissions at [316]. 139 BUMA’s closing submissions at [336]. -- 49 of 57 -- 50 (b) the exercise of the discretion to nevertheless accept Reject Coal. [225] It can be accepted that one of the three events in clause 14.5(a) is a necessary condition. And so, taking the third event as an example, the condition is satisfied if: (a) the weighted average quality of coal delivered over any delivery day has any characteristics described in column 3 of clause 14.2, as determined by the sampling undertaken pursuant to clause 16; and (b) BUMA has failed to demonstrate to the reasonable satisfaction of MPP that such quality is not reasonably expected to be delivered again. [226] Aspect (a) requires MPP to positively demonstrate that the coal had the column 3 (Reject Coal) characteristics. But aspect (b) is a negative stipulation. It merely requires a failure of BUMA to demonstrate, to the reasonable satisfaction of MPP, that such reject quality is not reasonably expected to be delivered again. [227] Importantly, BUMA’s argument assumes that what is required is for MPP to positively demonstrate that it exercised the discretion to nevertheless accept reject Coal. However, the words used are that MPP has an “absolute discretion”. In my view that absolute discretion can be exercised by MPP simply taking or accepting coal that qualifies as reject coal. It is hard to read ‘absolute discretion’ as requiring some positive notice or manifest election by MPP to BUMA. It is sufficient if MPP merely accepts the reject coal rather than electing to exercise its remedy to cease providing transfer capacity (that is, taking the coal). [228] Therefore, I accept that, on the proper interpretation of the CMA, the reject price was only payable where MPP exercised its discretion to ‘take’ coal determined to be reject coal as determined by the sampling undertaken pursuant to clause 16. I do not accept that the CMA required any positive notice or manifest election by MPP to BUMA. The scheme of the provisions is that, in the event that BUMA delivered reject coal, MPP could exercise a remedy of (in effect) refusing to take the coal, or it could take the coal and pay the reject price. A Penalty? (Issue 23) [229] Issue 23 is as follows: Whether clauses 14.6(b) and (c) of the CMA are an unenforceable penalty. [230] It will be recalled that clause 14.6 is as follows: “(a) Notwithstanding that coal Delivered is Reject Coal, [MPP] may in its absolute discretion take such coal. (b) In the event [MPP] takes Delivery of Reject Coal, [MPP] will pay the Reject Price for such Reject Coal. (c) The Reject Price will be determined as follows…” [231] It is true that the clause operates to reduce the contract price for coal by 80% in the event that the coal delivered qualifies as reject coal. However, it is hard to imagine a less appealing case for an unenforceable penalty. -- 50 of 57 -- 51 [232] The test is not in dispute. As BUMA explains a penalty is a collateral stipulation – the purpose, or a predominant purpose, of which is to punish a party for failure of a primary stipulation, and thus to compel performance.140 Various tests or presumptions have been suggested such as: (a) whether the sum stipulated for is extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach; (b) a single lump sum is made payable by way of compensation, on the occurrence of one or more or all of several events, some of which may occasion serious and others but trifling damage.141 [233] It is not in dispute that BUMA bears the evidentiary and persuasive onus as the party alleging that clauses 14.6(b) and (c) of the CMA are an unenforceable penalty.142 [234] BUMA argues that the 80% reduction operates whether the breach occasions ‘serious’ or ‘trifling’ damage to MPP. However, it is overly simplistic to refer to breaches as trifling damage in this context. The CMA is a complex agreement between two sophisticated corporations. The agreement was designed to ensure that the coal supplied to the power station fell between certain parameters. The evident purpose of the reduced payment for reject coal was to provide BUMA with an incentive to deliver coal within those parameters. [235] The parties respective coal industry experts, Mr Williams and Mr Lowry, prepared a joint expert report. MPP’s submissions include a useful summary of the points on which both experts agree. That summary is as follows: (a) the Power Station was purpose built to operate exclusively on coal from the mine; (b) it is sensible for the Power Station operator to want to operate the boiler within the design coal range and not in the reject zones – to minimise the risk that equipment may not function correctly, or exhibit excessive wear or corrosion, not make generation output, or in the worst case, result in a forced outage of the power station; (c) Reject Coal, due to high moisture, can have many effects on the Power Station including forced outages, higher risk of tube failure, excess power consumption. The experts also agreed that if the coal cannot be adequately dried in the primary air/mill system, unstable combustion may occur requiring a reduction in boiler output; (d) Reject Coal, due to high sulphur, results in an increase in production of sulphur dioxide and sulphur trioxide emissions, which pose environmental and health 140 For this proposition BUMA cites Arab Bank Australia Ltd v Sayde Developments Pty Ltd (2016) 93 NSWLR 231 at [74] and Paciocco v Australia & New Zealand Banking Group Ltd (2016) 258 CLR 525 at [29], [127], [159], [166], [254], [259] and [273]. MPP relies on a similar proposition and a similar selection of cases at [320] of its closing submissions. 141 Keane J, for example, discussed these principles/presumptions (derived from Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd [1915] AC 79) in Paciocco v Australia & New Zealand Banking Group Ltd (2016) 258 CLR 525 at [260]. 142 Paciocco v Australia & New Zealand Banking Group Ltd (2016) 258 CLR 525 at [167]. -- 51 of 57 -- 52 risks – and increased sulphur trioxide increases the risk of sulphuric acid dewpoint and corrosion of the air heater and stack liner; (e) in the longer term, the use of Reject Coal can lead to increased maintenance and the need to replace equipment early. Examples are increased wear, erosion, corrosion, and tube failure by long term overheating. In addition to the cost of equipment repair or replacement, the downtime results in a loss of generation; (f) in the short term, the use of Reject Coal can lead to unplanned reduction in the power station output or cause forced outages or a need to reduce output to stay within equipment capabilities – i.e. unplanned “derating” events. Examples of this include coal build-ups and blockages in the coal handling, storage, feeding, and milling systems, burner trips, and exceeding the mill capacity or overload; (g) Mr Lowry and Mr Williams agreed upon a range of issues logged at the power station as unplanned derating events. They include multiple coal hang ups and wet coal and that the unplanned derating events referred to in the above issues have resulted in thousands of lost megawatt hours; (h) when electricity prices are high, the owner – MPP – would want to run the power plant at full output – and the derating events are most likely to occur when full load is required. The obvious consequence of derating events and reduced capacity is therefore financial loss to MPP; (i) it would be extremely difficult to accurately estimate the true cost of the Reject Coal used to date because of factors such as variability in electricity prices, the actual coal quality going to the boiler, actual derating events, equipment damage and wear etc. Mr Lowry and Mr Williams agreed that it would be impossible to accurately predict the future cost.143 [236] That rather illustrates the complexity of the process and the point of the CMA provisions which provides BUMA with an incentive for the coal delivered to be within the parameters. That complexity is some distance from those cases where there are breaches of separate obligations for which one indiscriminate sum is payable. Rather than being characterised as a ‘penalty’ payable in the event of a ‘breach’, the more accurate description is that the parties agreed a differential in price which reflects the commercial value of coal delivered to the power station that is within specification and the risks of using coal that is outside the specifications. [237] It is true that in the event of reject coal MPP has open to it the remedy of ceasing transfer capacity. That is, MPP can simply stop taking the coal. But that rather ignores the commercial reality that MPP may lose the opportunity to run the power station at an advantageous output. MPP has its own commercial relationships. [238] To fall foul of the penalty principles,144 the alleged penalty must be out of all proportion, or in gross disproportion, to MPP’s legitimate interest in securing coal within the parameters.145 As Keane J observed in Paciocco v Australia & New Zealand Banking Group Ltd, “(o)nly in cases where gross disproportion is such as to 143 MPP’s closing submissions at [327]. 144 I have assumed the penalty principles apply. MPP argued that they did not. I have found it unnecessary to decide that issue because, even on the assumption that the penalty principles do apply, the circumstances do not offend those principles. 145 Paciocco v Australia & New Zealand Banking Group Ltd (2016) 258 CLR 525 at [221]. -- 52 of 57 -- 53 point to a predominant punitive purpose have agreed payments payable on breach of contract been struck down as penalties”.146 [239] BUMA has failed to discharge its evidentiary and persuasive onus. The regime had an obvious commercial objective. Out of specification coal had the potential to impact the operation, maintenance and performance of the power station.147 There was no punitive character to the regime. And, the context is that the parties were sophisticated corporations with no evident inequality of bargaining power. Claim for Restitution (Issue 24) [240] Issue 24 is in these terms: Whether MPP is entitled to restitution for any amounts overpaid to BUMA for deliveries of alleged Reject Coal on the dates in Annexure 6 to the DAC because there was a failure of the basis upon which those amounts were paid. [241] As BUMA explains, MPP paid BUMA the full contract price for 26 of the 34 deliveries of alleged reject coal. MPP now contends that there has been a total failure of basis in respect of those deliveries.148 BUMA contests that there has been a total failure of consideration. [242] The requirement is that: “…the failure of consideration must be total in relation to the payment sought to be recovered. The issue is whether the plaintiff received any of the performance which was stipulated by the contract as the agreed return for the payment which the plaintiff seeks to recover. If the failure was merely partial there is usually no right of recovery. However, the mere fact that the plaintiff has received some benefit from the contract does not prevent a failure of consideration being total, since in order to prevent the failure being a total failure the benefit must have been part of the agreed return for the money.”149 [243] On this issue, I accept BUMA’s submission that the nature of the bargain here was that MPP would pay the contract price for BUMA’s performance of the works. Only part of the works (albeit the most important part) involved the delivery of coal. Within that part, the contract specified that the delivery of coal of a particular quality would attract the contract price and the delivery of coal outside that quality would attract a lesser price under the contract.150 [244] MPP’s case is not that BUMA failed to carry out the works. BUMA carried out the works and delivered coal. MPP’s case is that the coal that was delivered was outside specification and therefore justified the lesser price under the contract. In other words, 146 Ibid. 147 MPP’s closing submissions at [325(c)]. 148 BUMA’s closing submissions at [372]. 149 Halsbury’s Laws of Australia at [110-11665]. 150 BUMA’s closing submissions at [375]-[376]. -- 53 of 57 -- 54 MPP’s case concerns the quality of the work or the quality of the product of the BUMA’s work.151 [245] On any view, MPP has received at least part of the benefit for which it paid the contract price and its claim that there has been a total failure of consideration must fail.152 [246] MPP argues that Redland City Council v Kozik confirms the recoverability of the overpayment in restitution.153 Reliance was placed on the following passage from Kozik: “No questions of good consideration or valuation of counter- performance will arise in response to a claim for restitution of excess payments made for a service provided under an agreement or other obligation. If the agreement or obligation provides for a particular price for a service and the amount paid exceeds that price then the claim for restitution will itself be limited to the excess of the agreed price. No issue of defences to a claim for restitution will arise because the excess is the only amount as to which the basis for the payment will have failed and it is the only amount which the defendant was not entitled to receive.”154 [247] The factual basis for the recovery sought in Kozik was very different. And the passage referred to addresses a different issue, namely whether a defence of good consideration applied. In the absence of some direct authority, it would not be appropriate to extract this single paragraph in a very different case and apply it to this case, and by that means bypass well-established authority (see the extract from Halsbury above). National Pump & Energy Claim (Issue 25) [248] Issue 25 is as follows: Whether BUMA is entitled to claim $16,167.50 for costs incurred to National Pump & Energy in July 2024 pursuant to a variation directed by MPP under clause 30.2 of the CMA in about October 2022. [249] This is no longer an issue. MPP accepts it is liable on this claim. Performance Bonuses (Issue 26) [250] Issue 26 is as follows: Whether BUMA is entitled to claim $72,983.60 (July 2024) and $97,645.22 (August 2024) as Performance Bonuses under the CMA in circumstances where BUMA failed to give timely notice under clause 18.5(a) of the CMA. 151 BUMA draws an analogy with the English case of Valeo Materiaux De Frictions v VTL Automotive Ltd [2005] EWHC 1855 (TCC). 152 BUMA’s closing submissions at [380]. 153 (2024) 281 CLR 202. 154 Ibid at [236]. MPP relied on this case in their oral submissions: Transcript T7-11 and T7-10. -- 54 of 57 -- 55 [251] Clause 18.5(a) of the CMA provided for performance bonuses: “During the Operational Period, where [BUMA] considers that it has met or exceeded the Key Performance Indicators for a Month so as to entitle it to claim a Performance Bonus as contemplated in Schedule 2, within 7 days of the end of that Month, [BUMA] may submit to [MPP] a claim for payment of the Performance Bonus for the previous Month, for review and consideration by [MPP]” (emphasis added).” [252] MPP’s case is that: (a) on its proper interpretation, the notice requirement in cl 18.5(a) of the CMA is a strict condition precedent to BUMA’s ability to claim a performance bonus; (b) for the months of July and August 2024, BUMA did not submit a timely claim for payment of the performance bonus within the required time required. As BUMA’s Mr Hayes accepts in his evidence: (i) the July 2024 claim was submitted on 9 August 2024 (two days late); and (ii) the August 2024 claim was submitted on 13 September 2024 (six days late).155 [253] Mr Hayes’ evidence was that MPP did not in the past enforce the time limit. MPP submits that is irrelevant to whether MPP is entitled to do so.156 [254] In my view, the notice requirement in clause 18.5 is a condition precedent to BUMA’s entitlement to such a bonus. Viewed as a whole, clause 18.5 provides a regime for BUMA to give notice of such a claim, which must be in a specific form, for the parties’ representatives to consider that claim for a bonus, and then for payment of any such entitlement to the bonus. [255] BUMA argued that this issue did not arise on the pleadings because MPP had admitted an obligation on its part to pay the Performance Bonus in the exact amounts that BUMA claimed. [256] In paragraph 23 of BUMA’s statement of claim, BUMA pleads this: “Further, in respect of July 2024: (a) BUMA is entitled to claim a Performance Bonus in accordance with clause 18.5 and Schedule 2 of the CMA in the amount of $72,983.60; Particulars See Annexure A.2 to the SOC.” [257] There is a peculiarity to paragraph 23 in that it pleads an entitlement to claim a performance bonus, rather than an entitlement to the bonus. Perhaps that is because the clause 18.5 specifies a regime for dealing with the claim. 155 MPP’s closing submissions at [341]. 156 Ibid. -- 55 of 57 -- 56 [258] MPP’s response in paragraph 79 of its defence and counterclaim adds to the confusion: “As to paragraph 23, MPP: (a) admits that it has an obligation to pay the Performance Bonus of $49,749.59 $72,983.60 pleaded in subparagraph (a) but otherwise denies the allegations because BUMA did not claim a Performance Bonus in accordance with clause 8.5 [sic, 18.5] and Schedule 2 of the CMA; … (f) says that it is not liable to pay any of the amounts pleaded therein because of the matters pleaded in paragraph 107 below.” [emphasis added] [259] The emphasised parts of paragraph 79 above illustrate the problem. Paragraph 23 of the statement of claim alleges an entitlement to claim the bonus. In response, paragraph 79 pleads two apparently contradictory things, namely that MPP has an obligation to pay the bonus and that it otherwise denies the allegation because BUMA did not claim the bonus in accordance with clause 18.5. [260] BUMA submits that “MPP cannot resile from the plain effect of its pleading”.157 However, it is doubtful that there is a ‘plain effect’ of MPP’s pleading. Within the same sentence MPP has both admitted an obligation to pay and denied that BUMA properly claimed the bonus. Then MPP says that it has no liability to pay. Such a contradictory pleading hardly constitutes a “plain admission”. [261] Nevertheless, on its face, MPP’s pleading admits an obligation to pay the bonus. The partial denial seems limited to whether the proper process was followed. In any event, MPP would be obliged to withdraw its admission that it had an obligation to pay the bonus. It has not made such an application. MPP should be held to its (admittedly contradictory) pleading which admits an obligation to pay the July 2024 performance bonus. [262] The pleadings for the August 2024 performance bonus are not materially different. The same result follows. MPP should be held to its pleading, as confusing as it is, because that pleading admits an obligation to pay the performance bonus. Conclusions [263] MPP submits that the orders to be made will be money orders that are dependent on the findings made in relation to a substantial number of individual disputes. MPP submits that it was not practical for the parties to set out a cascading sequence of money orders which takes into account all possible permutations. [264] In the circumstances, in order to give the parties an opportunity to be heard on the consequences of the findings above, it is appropriate to allow the parties time to make 157 BUMA also alleges that MPP admitted that it is obliged to pay the amounts that BUMA claimed in July 2024 and August 2024 for the Performance Bonus and that MPP has not sought leave to withdraw that admission and cannot now do so: BUMA’s submissions at [383]. -- 56 of 57 -- 57 submissions on the consequences of the finding made and on the form of the orders. Interest and costs should also be the subject of a further opportunity to be heard. -- 57 of 57 --