R v New Queensland Copper Co Ltd [1917] HCA 34; (1917) 23 CLR 495 (31 July 1917)

The King Plaintiff, Appellant; and The New Queensland Copper Company Limited and Another Defendants, Respondents.

There are two questions in this appeal. The first is whether, under an agreement made between the Secretary for Mines on behalf of the Government of Queensland and the respondent Company, certain sums advanced by the Minister to assist in further developing the mines are repayable only out of the profits to be derived from the working of the mines, or whether they constitute a debt recoverable out of the Company's assets generally. (The Company is now in compulsory liquidation.) The second question is whether the Company, in the event of the second of these propositions being held to express the meaning of the agreement as it stands, is entitled to have the agreement rectified so as to express the first of the propositions, which the respondent Company contends to have been established by evidence as the intention of the parties.

We invited counsel for the appellant to address themselves in the first instance to the first question only, and after hearing their arguments I am of opinion that the Company's contention as to the meaning of the agreement is the right one—that is to say, that the advance is expressed to be repayable out of profits only. If this opinion is correct the second question does not arise, as the claim for rectification is not set up by the appellant, but is part of the defendant Company's counterclaim.

The original agreement, dated 23rd March 1912, relates to the sum of £3,000. Later in the same year there was an agreement between the same parties for a further advance of £1,000, by which it was agreed that all the terms of the original agreement relating to the payment of advances to the Company, and for the security and repayment to the Government of the total amount advanced, should apply to the additional sum of £1,000, the subject of the second agreement. Both sums have been advanced to the Company, and the appellant claims payment of the whole £4,000 or alternative relief, including an account of profits.

The treatment of the whole advance of £4,000 thus depends on the construction of the agreement of 23rd March 1912.

Under that agreement the advance (called in the recitals a "loan or subsidy") was to be paid at the rate of one pound for every pound provided by the Company.

The portion of the agreement on which the question of its meaning principally turns is contained in the first seven lines of clause 6, and is as follows: "The amount so advanced as aforesaid shall be repaid to the Government out of the profits which shall hereafter be derived by or accrue to the Company from the working of the said mines and subject to the terms of this agreement there shall not be divided amongst or paid to members or shareholders of the Company any profits or dividends or bonuses or any returns of any kind until the Company has repaid the advance to the Government." There is not, either in this clause or in the rest of the agreement, any provision for the repayment of the moneys otherwise than out of the profits except that by clause 8, under circumstances which are not contended to have arisen, the Minister is empowered to cause or require the Company to let the mines and plant on tribute on terms approved by him up to a certain point, and to receive half of the moneys obtained from the tributors towards repayment of the advance, the other half to be retained by the Company. This, which is clearly intended as an alternative or rather subsidiary source, is the only source or method of repayment save that specified in clause 6 as quoted, and I think it strengthens the contention of the respondents, for it helps to exclude the implication of sources of repayment other than those expressed in the agreement, to one only of which the appellant is now, in my opinion, entitled to have recourse.

Other parts of clause 6 were adduced by Mr. Graham as tending to show that that clause let in the implication of a general and unrestricted liability. I am unable to accept these contentions, for I think that every passage adduced is perfectly consistent with, I might perhaps have said assistant to, the primâ facie meaning of the passage quoted, which seems to me to be unambiguous in itself, and to be absolute in the absence of any expression inconsistent with its primâ facie purport.

In the part of his judgment dealing with the interpretation of the agreement as it stands, Lukin J. cited the case of Mathew v. Blackmore[1], where the observations of Pollock C.B., at p. 772, and the decision founded thereon are very much in point on the question of the exclusion in certain cases of the implication of a general obligation to pay. The implication claimed is not one that necessarily arises, in the sense given to the term in the oft-quoted case of Hamlyn & Co. v. Wood & Co.[2]. It is impossible, I think, as Lukin J. points out, that "the parties must have intended the suggested stipulation of repayment independently of the question of profits." Not any of the cases cited for the appellant appear to support his contention that a general and unrestricted liability exists where a particular source of repayment is specified in terms which plainly suggest, as these terms do, restriction to that source.

Though it is not necessary, it may as well be pointed out that by clause 2 the Minister has apparently sought to secure himself and the Government against an implication which his participation in the risk of loss might otherwise be argued to convey.

I am therefore of opinion that the appeal must be dismissed, and the case must proceed on the lines laid down by the learned Justice at the trial.

The first question is whether the contention set up on behalf of the Crown in par. 9 of the statement of claim is well founded. If it is not, then, subject to a well established principle of law which I shall presently mention, there is an end of the Crown's case.

In par. 9 it is contended that, upon the true construction of the agreements sued on, the Government of Queensland is entitled to payment of the moneys advanced whether the Company has made any profits or not. The written document that was executed as the final and complete expression of the bargain which the parties made is, so long as it stands unaltered, conclusive evidence of their respective obligations. And it must never be forgotten that the proper construction of a contract, as Lord Atkinson recently said in Boyd & Forrest v. Glasgow and South-Western Railway Co.[3] "must in this as in every other case where a written document has to be construed depend upon the intention of the contracting parties as disclosed in the document itself." This, as I took occasion to emphasize in Gordon v. Macgregor[4], where the judgment of Lord Blackburn in the leading case of Inglis v. Buttery[5] was cited, excludes from our consideration in interpreting the contract all the prior negotiations. I shall quote only a few words of Lord Blackburn, in which he points out that, consistently with that, you may look at "surrounding circumstances." He said:—"You see what is the intention expressed in the words, used as they were with regard to the particular circumstances and facts with regard to which they were used. The intention will then be got at by looking at what the words mean in that way, and doing that is perfectly legitimate."

Now, when on behalf of the Government it is said that notwithstanding the expressed provision in clause 6 that the amount advanced should be repaid to the Government out of the profits made by the Company in working the mines, and notwithstanding the absence of any words in the agreement which expressly give the Crown the right of demanding repayment of the sums advanced whether profits are made or not, yet such a right is to be implied, then I look at the circumstances to see whether the agreement, read as a whole by the light of those circumstances, is one where the law does make such an implication.

The authority to lend the money is contained in two annual Appropriation Acts (Act of 1911-1912, No. 4, and Act of 1912-1913, No. 4). In the first a sum of £10,000 was voted to the Department of Mines for "loans in aid of deep sinking in mines"; and in the second a sum of £27,000 was voted to the same Department "in aid of mining." In other words, Parliament sanctioned, as a matter of public policy and for the general welfare of Queensland, the lending of money in aid of mining in order to benefit the community by unearthing the mineral wealth of the State, and to win the gold and other metals which lay yet untouched and reserved and belonging to the Crown, but which private enterprise was by mining laws invited to obtain.

Private persons risk their own money in a very hazardous venture which, if successful, means profit to themselves and benefit to the community, and which, if unsuccessful, means loss to them but not necessarily loss to the rest of the public. It is plain that, when the Minister of Mines proceeds to carry out such a policy, he is not to be regarded as a mere money-lender having no interest whatever in the transaction but that of getting his money back again. There is no reason, therefore, for regarding the contract which was reduced to writing as raising any implication that the Minister was to have the money back, whether the enterprise resulted in loss or gain. I read the contract as in effect saying, apart from tributing, that provided the Company had sufficient confidence in the venture as to risk its own money the Crown as representing the general community would aid the venture with an equal amount up to the limit stated; that if the venture failed, so much the worse for all, if it succeeded the Crown should first have its money back and then the profits were to go as if the Crown had never assisted. The position is so plain on general principles that it does not need the authority of Mathew v. Blackmore[6], cited by Lukin J., a case, however, which is strongly against the Crown's contention.

I therefore reject the contention made, and now refer to the only outstanding consideration which I think relevant.

It appears that the Company has been compulsorily sequestrated and that the official trustee, acting under the sanction and direction of the Court, has let the mine on tribute to other persons.

If the Company itself after receiving the advance had voluntarily let its mine on tribute without the Crown's consent, then I should have been strongly disposed to apply the principle to which I referred, and which is contained in the case of Burchell v. Gowrie and Blockhouse Collieries Ltd.[7]. There Lord Atkinson, speaking for the Privy Council, adverted with approval to the rule of law laid down by Willes J. in Inchbald v. Western Neilgherry Coffee &c. Co.[8], in these words[9]: "I apprehend that wherever money is to be paid by one man to another upon a given event, the party upon whom is cast the obligation to pay is liable to the party who is to receive the money, if he does any act which prevents or makes it less probable that he should receive it."

But as this cannot, in the circumstances, be said of the Company in the present case, the matter is left to the bare consideration of the primary obligation created by the contract, and, as that leaves the Crown right dependent on the existence and extent of the profits made, the judgment of Lukin J. should be affirmed, and this appeal dismissed.

For the reasons which have just been stated, I agree with the other members of the Court in thinking that the moneys advanced by the Crown are repayable only in the circumstances expressed in the agreement. This disposes of the case, for the Crown has failed in its attempt to show that the defendant Company has committed a breach of the agreement and has prevented it from having the benefit of everything to which it was entitled thereunder.

Solicitors for the respondents, Morris & Fletcher for Hamilton & Nielson, Bundaberg.

[1] [1857] EngR 262; 1 H. & N., 762.

[2] (1891) 2 Q.B., 488.

[3] [1915] UKHL 3; (1915) S.C. (H.L.), 20, at p. 27.

[4] [1909] HCA 26; 8 C.L.R., 316, at p. 323.

[5] 3 App. Cas., 552, at p. 577.

[6] [1857] EngR 262; 1 H. & N., 762.

[7] (1910) A.C., 614.

[8] [1864] EngR 726; 17 C.B. (N.S.), 733, at p. 741.

[9] (1910) A.C., at p. 626.

High Court of Australia

R v New Queensland Copper Co Ltd [1917] HCA 34; (1917) 23 CLR 495 (31 July 1917)

HIGH COURT OF AUSTRALIA