KANOWNA MINES PTY LTD -v- GRANGE RESOURCES LTD [2026] WASC 348

[2026] WASC 348 Page 1 JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS CITATION : KANOWNA MINES PTY LTD -v- GRANGE RESOURCES LTD [No 2] [2026] WASC 348 CORAM : HILL J HEARD : 5 AUGUST 2026 DELIVERED : 24 AUGUST 2026 FILE NO/S : CIV 1574 of 2025 BETWEEN : KANOWNA MINES PTY LTD Plaintiff AND GRANGE RESOURCES LTD First Defendant VOX ROYALTY AUSTRALIA PTY LTD Second Defendant GRANGE RESOURCES LTD First Plaintiff by counterclaim BARRACK MINES PTY LTD Second Plaintiff by counterclaim HORSESHOE GOLD MINE PTY LTD Third Plaintiff by counterclaim GRANGE ADMINISTRATIVE SERVICES PTY LTD Fourth Plaintiff by counterclaim AND -- 1 of 11 -- [2026] WASC 348 Page 2 KANOWNA MINES PTY LIMITED First Defendant by counterclaim VOX ROYALTY AUSTRALIA PTY LTD Second Defendant by counterclaim VOX ROYALTY CORP. (BUSINESS NUMBER 769446287 RC0001) Third Defendant by counterclaim VOX ROYALTY AUSTRALIA PTY LTD First Plaintiff by further counterclaim AND GRANGE RESOURCES LIMITED First Defendant by further counterclaim BARRACK MINES PTY LTD Second Defendant by further counterclaim HORSESHOE GOLD MINE PTY LTD Third Defendant by further counterclaim GRANGE ADMINISTRATIVE SERVICES PTY LTD Fourth Defendant by further counterclaim Catchwords: Practice and procedure - Application for specific categories of discovery - Whether documents are relevant to issues in proceedings - Turns on own facts Legislation: Rules of the Supreme Court 1971 (WA), O 26 -- 2 of 11 -- [2026] WASC 348 Page 3 Result: Application allowed in part Category: B Representation: Original Action Counsel: Plaintiff : J Taylor SC & R Joseph First Defendant : P Walker & P Bond Second Defendant : No appearance Solicitors: Plaintiff : Allen Overy Shearman Sterling First Defendant : Allens Second Defendant : No appearance Counterclaim Counsel: First Plaintiff by counterclaim : P Walker & P Bond Second Plaintiff by counterclaim : P Walker & P Bond Third Plaintiff by counterclaim : P Walker & P Bond Fourth Plaintiff by counterclaim : P Walker & P Bond First Defendant by counterclaim : J Taylor SC & R Joseph Second Defendant by counterclaim : No appearance Third Defendant by counterclaim : No appearance First Plaintiff by further counterclaim : No appearance First Defendant by further counterclaim : P Walker & P Bond Second Defendant by further counterclaim : P Walker & P Bond Third Defendant by further counterclaim : P Walker & P Bond Fourth Defendant by further counterclaim : P Walker & P Bond -- 3 of 11 -- [2026] WASC 348 Page 4 Solicitors: First Plaintiff by counterclaim : Allens Second Plaintiff by counterclaim : Allens Third Plaintiff by counterclaim : Allens Fourth Plaintiff by counterclaim : Allens First Defendant by counterclaim : Allen Overy Shearman Sterling Second Defendant by counterclaim : Clayton Utz Third Defendant by counterclaim : Clayton Utz First Plaintiff by further counterclaim : Clayton Utz First Defendant by further counterclaim : Allens Second Defendant by further counterclaim : Allens Third Defendant by further counterclaim : Allens Fourth Defendant by further counterclaim : Allens Case(s) referred to in decision(s): Nil -- 4 of 11 -- [2026] WASC 348 HILL J Page 5 HILL J: 1 On 24 June 2026, I made orders for discovery, which required each of the parties to give discovery of certain categories of documents. By these orders, the plaintiff (Kanowna) was required to give discovery of two categories of documents, namely: (a) all exploration activity reports for mining licence M27/57 between 1 March 2014 to 30 June 2023; and (b) all announcements between 1 July 2021 and 30 September 2023 recording or referring to any exploration, mining, drilling or resource analysis or estimation or interpretation activity in respect of M27/57. 2 Two categories remained in dispute between the first defendant (Grange) and Kanowna, namely: (a) Category One: all documents created between 1 January 2021 and 30 December 2023 summarising or reporting: (i) on exploration or other activities carried out on M27/57; or (ii) interpretation, modelling or analysis as to the existence, quality or quantity of mineralisation within M27/57; and (b) Category Two: to the extent not captured in Category One: (i) all annual mineral exploration reports for M27/57 lodged by Kanowna with the Department of Mines, Petroleum and Exploration (DMPE) for the years 2021 to 2024; and (ii) all documents created between 1 January 2021 and 30 June 2023 that record or evidence the date or point in time at which Kanowna or Northern Star Resources Limited had generated, or had available, the drilling results, assay results and mineral resource estimate for Red Hill or M27/57 reflected in the announcements of 15 November 2022 and 4 May 2023. 3 Before turning to the specific categories sought by Grange, it is important to bear in mind the principles that govern this application. -- 5 of 11 -- [2026] WASC 348 HILL J Page 6 4 The starting point is that there is no right to an order for discovery under O 26 of the Rules of the Supreme Court 1971 (WA). The power to order discovery is discretionary, although it is recognised as an essential part of the administration of justice. In exercising the court's discretion, the court has regard to the timely and cost-effective disposal of litigation. 5 In determining whether a document is relevant (and therefore discoverable in the proceedings), the court considers the pleadings together with the conduct of the parties and the nature of the action. For matters in the commercial and managed cases list of this court, discovery is usually restricted to documents that are directly relevant to an issue in the proceedings, although orders can be sought for discovery of documents more broadly. The ultimate question for the court is whether the documents sought are necessary to fairly dispose of the proceedings. What are the relevant issues in the proceedings raised on the pleadings? 6 The categories of discovery sought by Grange arise out of paragraphs [68] - [75] of its counterclaim against Kanowna. These paragraphs plead that Kanowna breached its obligations to Grange under cl 8.2 of a royalty deed entered into on 29 January 2002 (Royalty Deed). 7 Grange says that the categories of documents it seeks are relevant to the issues of causation (its counterfactual), as well as its claim for loss and damage. 8 In essence, Grange says that pursuant to cl 8.2 of the Royalty Deed, Kanowna was required to provide it with quarterly reports within 15 days after the end of each quarter on exploration, production and any other activities which Kanowna carried out on M27/57. It says these reports were required to be sufficiently detailed so as to enable Grange to enforce and enjoy the benefit of its rights, including to enable Grange to inform itself as to the value of its rights in respect of the royalty payable in respect of M27/25. 9 Grange says that at least between 1 July 2021 and 30 June 2023, Kanowna carried out exploration and other activities on M27/57 but, in breach of cl 8.2 of the Royalty Deed, did not provide Grange with any quarterly reports within 15 days after the end of each quarter or at all. -- 6 of 11 -- [2026] WASC 348 HILL J Page 7 10 In its reply, Grange says that on the proper construction of cl 8.2 of the Royalty Deed, the quarterly reports were required to include the information set out in s 115A of the Mining Act 1978 (WA) and reg 32 of the Mining Regulations 1981 (WA), including geological interpretations and estimates of mineralisation or ore reserves. 11 Grange says that had it been provided with these quarterly reports before entering into the Royalty Sale and Purchase Agreement with Vox on 28 July 2023 (or its variation on 11 September 2023), or sch 3 of the Red Hill Assignment Deed on 26 July 2023, it would have known that: (a) Kanowna had conducted exploration drilling on the Red Hill project between July and December 2021, which outlined broad zones of gold mineralisation to a vertical depth of 400 m; (b) Kanowna had conducted resource drilling on the Red Hill project in August 2021, the results of which supported a maiden mineral resource of 32.4Mt at 1.1g/t for 1.2 Moz; and would not have agreed to sell the royalty portfolio for the price it did, and would not have entered into these agreements. 12 Grange says it suffered loss and damage from Kanowna's breach. Two losses are pleaded: first, the loss of the value of the royalty; and second, the accrual of any liability it has to Kanowna arising from any breach by Grange of the Royalty Deed. 13 Kanowna admits it did not provide quarterly reports to Grange in the relevant period, but says that Grange already has the necessary information about the exploration activity carried out on M27/57 which is contained in two ASX announcements lodged on 15 November 2022 and 4 May 2023. Kanowna says the obligation in cl 8 only required Kanowna to provide its consent to Grange obtaining copies of the information it has lodged with the DMPE, if it wished to surrender M27/57. 14 Kanowna also says that because Grange never asserted its legal right to obtain these reports, it has waived, abandoned or elected not to receive these reports. Should the orders for discovery sought by Grange be made? 15 Grange says the documents sought by them are relevant to both the content of the reports that it should have received under cl 8.2 of the -- 7 of 11 -- [2026] WASC 348 HILL J Page 8 Deed within the timing specified in that clause and how it would have behaved over this period had it received the reports as and when required. It also says these categories are relevant to the quantification of its loss and damage. 16 Kanowna denies the categories sought by Grange are necessary to fairly dispose of the proceedings. In its submission, the pleaded counterfactual does not raise any issue as to the detail of the activities that were undertaken at M27/57 that cannot be obtained from the documents currently available or the categories which Kanowna has already been ordered to give discovery of. 17 I do not accept this submission. The ASX announcements referred to in Grange's counterclaim1 do not descend to a level of detail that would enable Grange to ascertain whether any of the activities referred to in these announcements occurred on M27/57. Instead, as is usual in the industry, the results are reported by reference to the accepted description of the relevant mining operations such as 'Fimiston North', 'Fimiston South Open Pit', and relevantly 'Red Hill'. On this basis, it is not apparent that the information contained in these announcements is the same information that would have been required to be provided to Grange under cl 8.2 of the Royalty Deed. 18 Given this, I consider it is appropriate to order some additional discovery to be given by Kanowna. 19 On the express terms of the Royalty Deed, Kanowna is required to pay Grange a royalty on all refined gold and refined silver (as those terms are defined in the Royalty Deed) recovered from M27/57. The Royalty Deed sets out the basis on which the royalty will be calculated and when it will be paid, and obliges Kanowna to provide Royalty Statements, which can be the subject of disagreement. 20 Clause 8 is entitled 'Tenement maintenance' and sets out Kanowna's obligations in the event it wished to surrender M27/57, as well as the requirement for Kanowna to provide quarterly reports to Grange. 1 These announcements are annexed to the affidavit of Richard Gordon Lilly filed 22 July 2026 as 'RGL-7' and 'RGL-8'. -- 8 of 11 -- [2026] WASC 348 HILL J Page 9 21 Clause 8.2 of the Royalty Deed is in the following terms: [Kanowna] shall provide [Grange] with quarterly reports within 15 days after the end of each quarter, on exploration, production, and any other activities which it carries out on [M27/57]. 22 The context of this clause includes the provisions of cl 8.1 which required Kanowna, where it wished to surrender M27/57, to give notice to Grange and, in the event that Grange wished to take a transfer of M27/57, required Kanowna to transfer M27/57 to Grange and to provide its consent to the DMPE for the release to Grange of any information lodged in relation to M27/57. It was also required in this event to provide Grange with copies of technical reports, drilling data and access to core relating to M27/57. 23 In seeking to prove its claim set out in [68] - [75] of the Grange's counterclaim against Kanowna, I accept it will be necessary for Grange to establish what information it should have received from Kanowna, but did not. Under the terms of the Royalty Deed, Kanowna's obligation was to provide Grange with quarterly reports on exploration, production and 'any other activities which it carries out on' M27/57. At this stage, there has been no production from M27/57, so these reports could only have addressed exploration and 'other activities'. This is the category of documents sought by Grange in Category One (a). On this basis, I consider orders should be made requiring Kanowna to discover these documents, subject to the matters set out below in [25]. 24 I also accept that there is an issue on the pleadings as to whether these reports were required to comply with s 115A of the Mining Act 1978 and reg 32 of the Mining Regulations 1981. This is a question as to the proper construction of the Royalty Deed which cannot be determined ahead of trial. It is sufficient for the purposes of this application to note that there is an issue on the pleadings as to whether the information Kanowna was required to provide to Grange extended to office studies (including data review, geological interpretation, assessment, and target generation), as well as resource estimations.2 On this basis, I accept that Kanowna should also be ordered to provide discovery of Category One (b), subject to the following qualification. 25 On the pleadings, the quarterly reports that should have been provided by Kanowna to Grange (which Kanowna accepts it did not provide) were the quarterly reports for the period between 1 July 2021 2 Affidavit of Richard Gordon Lilly filed 22 July 2026, 'RGL-5', page 40. -- 9 of 11 -- [2026] WASC 348 HILL J Page 10 (which should have been delivered within 15 days of 30 September 2021 or 15 October 2021) and 30 June 2023 (which should have been provided on 15 July 2023). It is only documents addressing events occurring with this date range that are discoverable. While I accept that documents addressing these events may have been created after this date, I do not consider this period should be extended by six months. In my view, the date range of the documents sought by Grange extends beyond the issues in dispute. On this basis, I consider that the documents to be discovered by KML under Category One should be limited to documents created between 1 July 2021 and 31 July 2023. 26 Turning to Category Two, for the following reasons, I do not consider that an order should be made in the terms sought. 27 First, on the express terms of the Royalty Deed, Kanowna was not required to provide Grange with copies of the annual mineral exploration reports, unless it proposed to surrender M27/57. This is not the counterfactual pleaded by Grange. 28 Second, the Royalty Deed did not require Kanowna to provide Grange with the date or point in time at which it obtained any results on M27/57. Its sole obligation was to provide quarterly reports. 29 Third, as is acknowledged in the chapeau to this category, it is likely that much of the information contained in these categories is already the subject of Category One. Conclusion and orders 30 For these reasons, I consider that orders should be made for Kanowna to provide discovery of the documents in Category One of its application with an amended date range of 1 July 2021 to 31 July 2023. 31 Given that there has been partial success by both parties in relation to the application, I will hear from the parties as to the appropriate costs order and as to the timing of the provision of discovery. -- 10 of 11 -- [2026] WASC 348 HILL J Page 11 I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia. CR Acting Associate to the Honourable Justice Hill 24 AUGUST 2026 -- 11 of 11 --