Orica IC Assets Ltd v Port Kembla Copper Pty Ltd [2008] NSWSC 72

New South Wales Supreme Court

CITATION : Orica IC Assets Ltd v Port Kembla Copper Pty Ltd [2008] NSWSC 72

HEARING DATE(S) : 29 January 2008

JUDGMENT DATE : 12 February 2008

JURISDICTION : Equity - Commercial List

JUDGMENT OF : Bergin J

DECISION : Answers: "No"; "No"; and "Yes".

CATCHWORDS : [COMMERCIAL CONTRACT] - Determination of separate questions - Contract for Sale of contaminated Land subject to EPA declaration - Whether a "Site Audit Statement" issued by Environmental Auditor within meaning of that term in the Contract - Whether plaintiff entitled to Retention Amount of $500,000 - Whether plaintiff required to complete any Remediation Works.

LEGISLATION CITED : Contaminated Land Management Act 1997

CASES CITED : McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579

PARTIES : Orica IC Assets Ltd - Plaintiff Port Kembla Copper Pty Ltd - Defendant

FILE NUMBER(S) : SC 2007/50112

COUNSEL : D Miller/T To - Plaintiff P Brereton - Defendant

SOLICITORS : Allens Arthur Robinson - Plaintiff Blake Dawson Waldron - Defendant

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

BERGIN J

12 FEBRUARY 2008

50112/07 ORICA IC ASSETS LIMITED V PORT KEMBLA COPPER PTY LIMITED JUDGMENT Introduction 1 At all relevant times until October 2004 the plaintiff, Orica IC Assets Limited, was the owner of a parcel of land in Darcy Road, Port Kembla, being Lot 22 in Folio 546139 comprising approximately 2.85 ha (the Property). The defendant, Port Kembla Copper Pty Limited, was and is the owner of the land adjacent to the south and west of the Property that it uses for industrial purposes (the Land). 2 For many years the Property had been used for the production of superphosphate and for the operation of a fertiliser plant. The levels of minerals, particularly lead, within the Property exceeded the levels approved by the New South Wales Environment Protection Authority (EPA). Groundwater from the Land migrated to the Property and was contaminated with elevated levels of metal and sulphate ions. This contaminated groundwater was then migrating towards the harbour. 3 On 1 October 2004 the plaintiff, as vendor, and the defendant, as purchaser, entered into a written contract for the sale of the Property (the Contract), the purchase price of which was $3.15 million of which $500,000 (the "Retention Amount") was paid by the defendant to the plaintiff's solicitor to be retained pending completion of the "Remediation Works". The balance of the purchase price was paid to the plaintiff on the Completion Date, 14 October 2004. The plaintiff claims that it has completed the Remediation Works and that it is entitled to be paid the Retention Amount. It has requested the defendant to direct the payment of the Retention Amount to the plaintiff, but the defendant claims that the plaintiff is not entitled to that amount because it has not yet completed the Remediation Works. 4 The parties requested the Court to determine separate questions to assist with the final resolution of the proceedings. On 5 October 2007 an order was made for the determination of the following three questions: 1. Was the Site Audit Statement issued by the Environmental Auditor on 26 July 2005 a Site Audit Statement within the meaning of the Contract? 2. Did the issue of the Site Audit Statement by the Environmental Auditor on 26 July 2005 trigger an obligation under clause 43.7(e) of the Contract for release of the Retention Amount (by direction from the defendant)? 3. Does the Contract require the plaintiff to carry out any, or any further remediation work despite the issue of the Site Audit Statement by the Environmental Auditor on 26 July 2005?