MOSAIC OIL NL v ANGARI PTY LTD and ANOR [1990] NSWCA 129

MOSAIC OIL NL v ANGARI PTY LTD and ANOR

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, MEAGHER and HANDLEY JJA 29 November 1990, 18 December 1990

[1990] NSWCA 129

CONTRACTS — construction of terms — whether a defined term included a certain party to the contract

Priestly JA I agree with Meagher JA.

Meagher JA This is an appeal from Young J on the construction of a clause in an Operating Agreement relating to petroleum exploration and mining in Queensland. At the time of the hearing before Young J the participating parties to the agreement were:

Angari Pty Ltd: 55%

Hartogen Energy Ltd: 20%

Bridge Oil Ltd and Bridge Exploration Pty Ltd: 15%

Mosaic Oil NL: 10%

Angari Pty Ltd, the respondent to the present appeal, became the "Operator" of the Joint Undertaking established by the Agreement on | June 1988, and has continued to be such since that date. It is a wholly owned subsidiary of Hartogen Energy Ltd. At the time of the hearing before Young J, Hartogen Energy Ltd was in provisional liquidation, provisional liquidators having been appointed on 29 May 1989. In between that hearing and the appeal, that company went into liquidation. Virtually no other facts were placed before Young J or adduced on appeal.

The clause whose meaning is in dispute is CL123 of the Agreement. It is in the following words:

"12.3 Whenever 12.3.1 a default or defaults result in aggregate Indebtedness of greater than A$10,000 and this Indebtedness continues for more than 60 days after the Operator has given notice to the Defaulter pursuant to SubCL12.2.1, or 12.3.2 a Party ceases or threatens to cease carrying on its business or become insolvent or compound with its creditors or an order is made or a resolution is passed for the winding up of such party voluntarily or otherwise except in the course of re-construction or amalgamation which has been approved by the Representatives or if a Party has a receiver appointed for the whole or any part of its assets: