Supreme Court New South Wales Medium Neutral Citation: Prospect Resources v Molyneux [2014] NSWSC 1096 Hearing dates: 04/08/2014, 05/08/2014 Decision date: 15 August 2014 Jurisdiction: Equity Division - Commercial List Before: McDougall J Decision: Summons dismissed with costs. Catchwords: CONTRACTS - general contractual principles - conditions precedent - whether conditions precedent had been satisfied or waived - whether conditions were 'precedent' or 'subsequent' - where condition precedent expressly for the benefit of one party - where conditions precedent include a requirement to reasonably satisfy a party that conditions precedent in another agreement, involving different parties, had been satisfied or waived - where parties to other agreement entered into deed to postpone date for compliance with conditions precedent - where parties to other agreement signed letter indicating conditions precedent had been satisfied - whether parties could be 'reasonably satisfied' of conditions precedent which had not, in fact, be satisfied - whether extending time for fulfilment of conditions precedent amounted to a waiver of conditions precedent - whether letter signed by parties to other agreement sufficient to 'reasonably satisfy' of fulfilment of conditions precedent where parties had a financial interest in fulfilment of the agreement EQUITY - equitable remedies - specific performance - damages - whether to grant damages or specific performance of a subscription agreement - whether a company's unissued capital has any value Cases Cited: Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570 Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303 Gange v Sullivan (1966) 116 CLR 418 Hunt v Wilson [1978] 2 NZLR 261 Perri v Coolangatta Investments Pty Limited (1982) 149 CLR 537 Pilmer v Duke Group Limited (in Liquidation) (2001) 207 CLR 165 Category: Principal judgment Parties: Prospect Resources Limited (Plaintiff) Alexander Molyneux (First Defendant) Blumont Group Ltd (Second Defendant) Pacific Advisers Pty Ltd (Third Defendant) Representation: Counsel: JC Giles (Plaintiff) A Willinge (First, Second and Third Defendants) Solicitors: Whittens Lawyers and Consultants (Plaintiff) Allion Legal (First, Second and Third Defendants) File Number(s): 2013/360199 Judgment 1HIS HONOUR: On 5 July 2013, the plaintiff (Prospect Resources) and the defendants (collectively, "the Consortium") entered into a "Subscription Agreement". Under that agreement, and on the terms set out in it, the Consortium agreed to subscribe for 325 million ordinary shares in the capital of Prospect, at an issue price of $0.012 per share. The total amount to be subscribed was $3.9 million. 2Prospect says that the conditions governing the obligation to subscribe were satisfied, and that the Consortium was required to pay up. The Consortium says that the conditions were not satisfied and that accordingly it was entitled to (and did) terminate the subscription agreement. 3The essential question for decision is whether a number of so-called "conditions precedent" set out in the subscription agreement were satisfied or waived. Background 4Prospect is a listed small cap mineral exploration company. The second defendant (Blumont) is a company listed on the Singapore Stock Exchange (SSX). The first and third defendants (Mr Molyneux and Pacific Advisers respectively) were associated in various commercial ways with Blumont. 5In 2013, Prospect was desirous of undertaking exploration activities in the Republic of Zimbabwe. It needed to raise money both to acquire prospecting rights and to fund the exploitation of those rights. 6Prospect negotiated rights to two, what might be called conveniently, tenements: one known as "Bushtick" and the other known as "Penhalonga". The Penhalonga agreements are uncontroversial, and can be put to one side. 7The relevant agreement relating to the Bushtick tenement is known as the "Senior Prospecting and Mining Agreement" (the SPMA). The parties to the SPMA are Hawkmoth Mining and Exploration (Private) Limited (Hawkmoth); Martin Gunning Investments (Private) Limited (Gunning); and Falcon College Trust (the Trust). 8Hawkmoth, which apparently traded under the name Zimbabwe Mining Investments, and Gunning are companies incorporated in and under the laws of Zimbabwe. Hawkmoth is effectively controlled by Prospect. The Trust is founded and registered in accordance with the laws of Zimbabwe and appears, although it is not necessary to express a concluded a view, to have separate legal personality. 9Clause 5 of the SPMA set out a number of what were called "conditions precedent". Three of those conditions were to be performed within (different) prescribed periods after the "Signature Date" of the SPMA. There was no time limited for the satisfaction of a fourth condition. 10Three of the conditions precedent (I shall use the parties' language as a matter of convenience) in the SPMA were picked up in the subscription agreement, which had been made a week or so prior to the SPMA. The subscription agreement required that those conditions precedent be satisfied or waived by 5 pm on 30 October 2013. It stated that the subscription agreement "is subject to and strictly conditional upon the satisfaction of" those conditions. 11It is apparent that Prospect and the other parties to the SPMA were having some difficulty in satisfying three of the conditions precedent stated in the SPMA (being the three that were said to be conditions precedent to the obligations of the Consortium under the subscription agreement). They tried to deal with this in two ways. 12First, on 17 October 2013, the parties to the SPMA made what they called a "Deed of Variation". The relevant effect of that deed was said, by its cl 2, to be that the conditions precedent (acknowledged to be unfulfilled as at 17 October 2013) were converted into "conditions subsequent", to be satisfied by 27 November 2013. The deed stated also, apparently as a consequence, the agreement of the parties to it "that all Conditions Precedent [in the SPMA] have now been fulfilled". 13Secondly, on 28 October 2013, Prospect wrote to Gunning, the Trust and Hawkmoth. The letter stated Prospect's view that the relevant conditions precedent had been satisfied, and asked the addressees to confirm their understanding of that position by signing the letter. The addressees did so. A copy of the signed letter was sent to the Consortium the next day. 14While all this was happening, the Consortium was conducting what the parties called "due diligence". An adviser to the Consortium, Mr Joseph Havlin, travelled to Zimbabwe and inspected the tenements. The parties to the SPMA produced various documents and other information requested by Mr Havlin. 15As a result of a market event which caused the share price of Blumont to drop sharply, the SSX on 4 October 2013 submitted a query to Blumont. The SSX "noted, and drew to [Blumont's] attention, a substantial decrease in the price of [Blumont's] shares today". It sought details of information which might explain the event, and other information. In the result, Blumont was not given much of an opportunity to deal with the questions. About 20 minutes after they were submitted, SSX suspended trading in Blumont's shares "to safeguard the interest of the market". 16Blumont had been seeking to raise capital to enable it to meet its obligations under the subscription agreement. Not surprisingly, those efforts were interrupted by the suspension of trading in its shares. 17The Consortium attempted to persuade Prospect to defer the date for payment of the amount due under the subscription agreement. Prospect did not agree, no doubt because it needed the money itself, to continue with its activities in Zimbabwe. 18There is no doubt that the Consortium studiously avoided discussing its situation in any detail with Prospect. Further, I find, the Consortium's position, from 18 October at least (that being the date when it was notified of the making and terms of the deed of variation), was that it would not, so far as possible, engage in discussions with Prospect. Plainly, the Consortium hoped that, come 5 pm on 30 October 2013, the conditions precedent might not be satisfied, thus providing it with an opportunity to terminate the subscription agreement. 19Other entities were also to be involved in the capital raising. A company (Investec), which is part of the Investec Group, agreed to subscribe $500,000.00. Its subscription was conditional on completion of the subscription by and placement to the Consortium. An entity known as Sirius agreed to subscribe a further $100,000.00. Its subscription was not similarly conditional. Relevant terms of the agreements The subscription agreement 20Clause 1.1 set out the background to the agreement: 1.1 Blumont Group Ltd. (Blumont), Pacific Advisers Pte. Ltd. (Pacific Advisers), and Alexander Molyneux (AAM) (together the Consortium) have agreed to jointly make an investment in Prospect Resources Limited ACN 124 354 329 (the Issuer) through a newly incorporated entity (Newco). Blumont will own not less than 60% of Newco. 21Paragraph 2.1 set out what was called the "agreement to subscribe": 2.1 The Issuer agrees to issue, and Consortium agrees to procure Newco to subscribe and pay for, the number of ordinary shares set out in Schedule 1 of this letter agreement (Agreement) in the Issuer (Subscription Shares) for a price of A$0.012 per Subscription Share (the Subscription Price Per Share) on the terms of the Agreement. 2.2 The Subscription Shares will be issued, subject to approval by the shareholders of the Issuer (Including, without limitation, in accordance with Item 7 of Section 611 of the Corporations Act) (Shareholder Approval), as part of a single tranche of up to 375,000,000 Subscription Shares (Main Tranche). 2.3 All monies received by the Issuer in advance of the issue of Subscription Shares will be held on trust by the Issuer for the benefit of the Consortium pending issuance of the Subscription Shares. 2.4 The parties agree that this Agreement is subject to and strictly conditional upon the satisfaction of clause 3. 22The reference to 375 million shares reflects the fact that Investec and Sirius were to participate in the capital raising. 23Clause 3 set out what were called "conditions precedent": 3. CONDITIONS PRECEDENT 3.1 The obligations of the parties under this agreement are subject to and conditional upon the satisfied (or waiver) of the following conditions precedent: (a) Issuer must reasonably satisfy the Consortium that the transaction documents (listed in Schedule 2) to acquire the Bushtick and Penhalonga projects (together the Gold Projects) have been validly executed and the conditions precedent in those transaction documents have all been satisfied or waived; (b) Shareholder Approval being having been obtained; and (c) Investec Asset Management or its nominee having executed an agreement to subscribe for not less than 33 million shares of the Main Tranche, 3.2 The conditions in clauses 3.1(a) and 3.1(c) are inserted into this Agreement for the benefit of the Consortium and may waived by notice in writing from the Consortium to the Company. 3.3 The condition in clause 3.1(b) is inserted into this Agreement for the benefit of all parties and may only be waived by mutual agreement. 3.4 If the conditions set out in clause 3.1 above are not satisfied (or waived in accordance with clauses 3.1 or 3.2) on or before 5.00pm (WST) on 30 October 2013, any party may terminate this Agreement by notice in writing to the other parties, in which case, this Agreement will be at end and the parties will be released from their obligations under this Agreement (other than in respect of any breaches that occurred prior to termination). 24Clause 4 dealt with, among other things, payment. I set out cl 4.1: 4.1 The Consortium will pay to the Issuer the Subscription Price Per Share for all the Subscription Shares within 14 calendar days of the date of satisfaction of all of the conditions precedent as set out in clause 3. 25The apparent tension between cls 1.1 and 4.1 does not seem to have troubled the parties, and was not addressed in submissions. The SPMA 26The debate focused on cl 4 (which dealt with the duration of the agreement) and cl 5 (which dealt with the topic of "conditions precedent"). 27I set out those clauses: 4. DURATION Subject to the Conditions Precedent, this Agreement shall be effective and binding upon the parties as from the Effective Date until the Termination Date. 5. CONDITIONS PRECEDENT Save for clauses 1 to 5 (both inclusive) and clauses 32 to 41 (both inclusive) ("the Immediately Effective Provisions") all of which will become effective immediately, this Agreement is subject to the fulfilment of the following Conditions Precedent: 5.1 that by no later than 10 (ten) Business Days after the Signature Date: 5.1.1 either of the Falcon Group, through their own efforts or with the requested assistance of ZMI, shall have submitted a complete application for the approval of the Mining Special Grant to be granted in favour of MGI by the relevant authority; and 5.1.2 each party shall have delivered to each of the other Parties certified copies of resolutions of its board of directors or trustees (as the case may be), in a form and substance applicable to the requirements and laws to which such company or trust is subject, 5.1.2.1 approving and, where applicable, ratifying the entering into of this Agreement by the relevant entity; 5.1.2.2 authorising a specified person or persons to execute this Agreement on behalf of each of the relevant Parties and, where applicable, ratifying the execution of this Agreement, by such specified person or persons; and 5.2 by no later than the latter of 4 weeks after the Signature date and the date upon which the approval of the application contemplated in Clause 5.1 for the Special Grant has been granted, ZMI shall complete and deliver to MGI an initial environmental base line study relating to the Project Area, acceptable in terms of the laws of Zimbabwe, which shall include sufficient information so as to objectively and fairly reflect the environmental status and Rehabilitation Liabilities of the Project Area as at the date of such studies; provided that each of the Falcon Trust discloses, upon first request, to ZMI, to the best of its knowledge and understanding, the Rehabilitation Liabilities as at the Signature Date including all environmental, rehabilitation and financial exposure that has been resulted or (in its reasonable opinion) may in future result therefrom; 5.3 each of the Parties are to sign off on the environmental base line study referred to in clause 5.2, whose approval shall not be unreasonably withheld. 5.4 by no later than 45 (forty five) Business Days after the Signature Date, both MGI and the Falcon Trust shall have: 5.4.1 disclosed or delivered to ZMI all information relating to the water sources and reservoirs relating to the Project Area, including any and all natural springs, boreholes, aquifers and/or other sources of water to the knowledge or in the possession of either of the parties of the Falcon Group; 5.4.2 provided to ZMI, the result of any data to the water supply or the results of any existing water study or analysis, which includes information, without limitation, referred to in clauses 14.3.1 to 14.3.3; and 5.4.3 delivered to ZMI an independent and objective report acceptable to ZMI confirming the validity of the Project Rights, that it is in good standing and validly held by MGI, and that such company is entitled to transfer the rights contemplated herein to ZMI in accordance with this Agreement. 5.5 The Conditions Precedent set out in clauses 5.1.1 and 5.4 have been inserted for the benefit of ZMI which will be entitled to extend the time periods contemplated therein and/or to waive fulfilment of any or all of the said Conditions Precedent, in whole or in part, on written notice to both MGI and Falcon Trust prior to the expiry of the relevant time period set out in those clauses or such later date or dates as may be agreed by ZMI. 5.6 The Condition Precedent set out in clauses 5.1.2, 5.2 and 5.3 have been inserted for the benefit of all of the Parties, either of which shall be entitled to extend the time periods contemplated therein and/or to waive fulfilment of any or all of the said Conditions Precedent, in whole or in part, with the relevant consent from the other Parties, which shall not be unreasonably withheld, prior to the expiry of the relevant time period set out in those clauses or such later date or dates as may be agreed by the Parties. 28The "Effective Date" was defined to mean the date on which all "Conditions Precedent" were satisfied or waived. One consequence of cl 4, read in conjunction with that definition, is that cls 1 to 5 and 32 to 41 of the SPMA had immediate effect, whereas the other clauses would have effect only on satisfaction of the conditions precedent. The deed of variation 29Recital B stated: The Parties have agreed to convert unfulfilled conditions precedent in clause 5 of the Agreement to conditions subsequent of the Agreement. 30Clause 2 provided: 2. Conversion of unfulfilled Conditions Precedent to conditions subsequent of the Agreement On and with effect from the date of this Deed, the Parties agree that the conditions precedent in clause 5 which are unfulfilled as at the date of this Deed being clauses 5.2, 5.3 and 5.4 of the Agreement are agreed to be conditions subsequent of the Agreement, whereby these conditions subsequent will need to be fulfilled by the relevant party (as obligated in the Agreement) on or before 27 November 2013. The Parties agree that all Conditions Precedent have now been fulfilled. 31The "Agreement" referred to was defined to mean, as one would expect, the SPMA. The letter of 28 October 2013 32As I have said, that letter was addressed by Prospect to Gunning, the Trust and Hawkmoth. It read (omitting formal parts): We are pleased to confirm that clauses 5.2, 5.3 and 5.4 of the Senior Prospecting & Mining Agreement dated 12 July 2013 (SPMA) between Hawkmoth Mining & Exploration (Pvt) Limited, Martin Gunning Investments (Pvt) Limited, Falcon College Trust and Prospect Resources Limited have been satisfied as of the date of this document. This means that all the original condition precedents in clause 5 of the SPMA (before the Deed of Variation executed on 17 October 2013 converted clauses 5.2, 5.3 and 5.4 to conditions subsequent) have been satisfied as of the date of this document. Please confirm your understanding that clauses 5.2, 5.3 and 5.4 of the SPMA (and therefore, all original conditions precedent) have been satisfied as of the date of this document by signing this document, which may be signed by any number of counterparts with the same effect as if the separate signatures were on the same document. 33Each of the addressees signed, by an authorised signatory, on 28 October 2013, presumably to "confirm [its] understanding of the matters stated" in the letter. 34On 29 October 2013, a scanned copy of the letter was sent by email to representatives of the Consortium. The email said (omitting formal parts): Please find attached a letter confirming that all original conditions precedent under the Senior Prospecting & Mining Agreement have been satisfied. Please advise Prospect Resources when The Consortium will be depositing A$3.9m as per the Placing Agreement in satisfaction of your obligations. Finally, can you please advise me of a contact number and person to talk to. I have made repeated attempts to talk to Alex, Jay and Paul and no one is taking my calls. The parties' submissions 35The following summary of the parties' submissions takes account of the extent to which, in final submissions, each side departed in some ways from its case as propounded in the written opening submissions. 36Mr Giles of Counsel, for Prospect, submitted that Prospect had done what was required to "reasonably satisfy" the Consortium that the "conditions precedent" in the "transaction documents... to acquire the Bushtick and Penhalonga projects" had been satisfied or waived. As I have said, there is no issue as to satisfaction of the conditions precedent in the Penhalonga transaction documents. 37Mr Giles submitted that the protective purpose of cl 3.1 was limited to ensuring that the agreements in respect of the underlying transactions became fully effective, and binding upon the parties to them. He submitted that the protective purpose went no further. In particular, the clause was not designed to protect the Consortium in respect of the risks that themselves were the subjects of, or intended to be addressed by, the conditions precedent. He submitted that this limited purpose was dictated, in particular because cl 3.1(a) itself provided, as an alternative to satisfaction of the conditions precedent, that they might be waived: that is, waived by the parties to the SPMA. 38Mr Giles submitted, next, that Prospect's obligation (if that be the correct way to describe it) reasonably to satisfy the Consortium, that the conditions precedent had been satisfied or waived, was in fact performed by either or both of: (1) the making, and provision to the Consortium, of the deed of variation; or (2) the signing, and provision to the Consortium, of the letter of 28 October 2013; in each case considered in the context of all that was happening (and not happening) at the time. 39"Reasonable satisfaction", Mr Giles submitted, imported an objective element. Thus, even if, speaking subjectively, the Consortium had not been satisfied of the satisfaction or waiver of the conditions precedent, Mr Giles submitted that what had been done was enough reasonably to achieve that result. 40Mr Giles opened Prospect's case on the basis that subjective satisfaction, or satisfaction in fact, was sufficient, and that, subjectively, the Consortium had been satisfied. However, he conceded in final submissions that the evidence did not support the latter proposition. It is thus unnecessary to deal with the former. 41As to the deed of variation: Mr Giles submitted that the statement in cl 2, recording the agreement of the parties "that all Conditions Precedent have now been fulfilled", was sufficient proof of the fact stated. 42Alternatively, Mr Giles submitted, the letter of 28 October 2013, either stating or confirming the understanding of all parties to the SPMA that cls 5.2, 5.3 and 5.4 had been satisfied, was sufficient proof of the fact of satisfaction to amount to "reasonable satisfaction" of its existence. In this context, Mr Giles submitted that the parties should be treated as honest business men who would deal with each other on the basis that what the other said could be accepted: something, he submitted, that occurred every day in business dealings. 43Mr Giles submitted, alternatively, that the letter of 28 October 2013 amounted to a waiver by the parties to the SPMA of any right to assert that the conditions precedent set out in cls 5.2, 5.3 and 5.4 had not been satisfied, or to act in the event that any of those conditions was not satisfied by 27 November 2013. 44The letter evidenced a waiver, Mr Giles submitted, because by signing and agreeing (as, he submitted, on a fair reading they did) to the statements within it, the signatories had elected to proceed on the basis that the conditions precedent had been fulfilled, and had therefore abandoned any inconsistent right (for example, to terminate the SPMA if any of the conditions precedent might not be fulfilled). 45Mr Willinge of Counsel, for the Consortium, emphasised the significance that the parties to the subscription agreement had given to cl 3.1. That followed, he submitted, from cl 2.4. Mr Willinge submitted that the agreement stated in cl 2.4 was relevant to a consideration of what might be necessary (or sufficient) to achieve the state of reasonable satisfaction referred to in cl 3.1(a). 46Mr Willinge submitted that the evident purpose of cl 3.1 was to provide some protection for the substantial investment that satisfaction of the conditions stated in it would require the Consortium to make. He noted that the project was risky (this was common ground), and that there were matters, many of which were the subject of the conditions precedent, that could have a very significant impact on the project, including whether it proceeded at all. 47In his opening submissions, Mr Willinge submitted that the concluding word, "waived", of cl 3.1(a) meant "waived by the Consortium". Although he did not formally withdraw that submission, he did not speak to it in final submissions, except to acknowledge the force of the contrary arguments. 48As to the deed of variation: Mr Willinge submitted that nothing in the deed bore on the question of reasonable satisfaction. The deed, he submitted, was something done between the parties to the SPMA. To the extent that it recorded some consensus between them as to satisfaction of the conditions precedent, that could not prove facts that, objectively, did not then exist. Nor could it prevail over the proper construction of the deed. The true relevance of the deed, Mr Willinge submitted, lay in: (1) its acknowledgment that as at 17 October 2013, the conditions precedent had not been satisfied; and (2) its apparent recognition that a further 6 weeks (until 27 November 2013) might be required for them to be satisfied. 49As to the letter of 28 October 2013: Mr Willinge submitted that, viewed in context, it could not convey, nor was it sufficient to ensure reasonable satisfaction as to, satisfaction of the conditions precedent. That was so, he submitted, for a number of reasons: (1) first, on the evidence, the conditions precedent had not in fact been satisfied - the state of affairs agreed to in the letter did not exist - as at 28 October 2013. Mr Willinge submitted that a statement, of the existence of something that did not in fact exist, could not reasonably show the existence of that fact. (2) Particularly having regard to the significant consequences of reasonable satisfaction - namely, that it triggered the obligation of the Consortium to pay over to Prospect $3.9 million - the mere say-so of people who had a significant interest in the payment of that sum should not be accepted as proof of the asserted facts. (3) For a number of reasons, matters of context known or apparent to the Consortium told against the proposition that the letter, alone and unsupported by any relevant documentation, was sufficient reasonably to satisfy the Consortium of the matters asserted in it. (4) The time given to consider the letter was also relevant, as a contextual factor telling against giving the letter the effect for which Prospect contended. 50Mr Willinge emphasised that, as was known or apparent to the Consortium: (1) when Prospect became aware that it was unlikely (to say the least) that the conditions precedent could be satisfied by 5 pm on 30 October 2013, it informed the Consortium of this and asked the Consortium to waive those conditions; (2) when the Consortium declined to waive those conditions, Prospect procured the execution of, and forwarded to the Consortium, the deed of variation; (3) eleven days later, and "out of the blue", Prospect prepared, and procured the signature of, the letter of 28 October 2013 and, the following day, sent that to the Consortium; (4) the state of affairs represented in the letter was completely different to that represented in the deed; (5) there was no explanation given for the change of position; and (6) the statement in the letter was summary in the extreme, lacking any descent into detail, in circumstances where the conditions precedent themselves dealt with matters of detail which in turn required the forming of scientific and other evaluative judgments. 51I should observe that, although the SPMA (and, for that matter, the Penhalonga agreements) were governed by the laws of Zimbabwe, neither party relied on this. In particular, neither party sought to prove any particular feature of the laws of Zimbabwe that might be relevant to the issues in dispute. Accordingly, and in accordance with orthodox principle, the hearing proceeded on the basis that the relevant principles of the laws of Zimbabwe should be assumed to be the same as the relevant principles of the laws of this country. Decision: reasonable satisfaction Some preliminary observations 52I start by making two points relevant to cl 3.1(a). The first is that, in my view, the concluding word of the paragraph, "waived", means "waived by the parties to the transaction documents to acquire the Bushtick and Penhalonga projects". There are three reasons: (1)first, the obligation (assuming it to be so) or burden that cl 3.1(a) imposes on Prospect is reasonably to satisfy the Consortium of various things. One of those things is that the transaction documents have been validly executed. Another is that the conditions precedent in those transaction documents have all been satisfied. A third, which is an alternative to the second, is that those conditions precedent have been waived. As a matter of context, waiver being plainly an alternative to satisfaction, it must mean "waiver by the parties to the SPMA". (2)Secondly, an obligation reasonably to satisfy the Consortium that the Consortium itself has waived those conditions precedent makes no sense. (3)Thirdly, cl 3.2 gives an express right to the Consortium to waive, among other things, "the conditions in [clause] 3.1(a)". If Mr Willinge's construction of cl 3.1(a) (in particular, its concluding word "waived") were correct, it was not necessary for cl 3.2 expressly to refer to the conditions in cl 3.1(a). 53That leads to the next point. The obligation cast on Prospect by cl 3.1(a), in relation to the conditions precedent, could be discharged by satisfying (reasonably) the Consortium that the conditions precedent had been waived by the parties to the SPMA. It follows, as Mr Giles submitted, that the protective purpose of cl 3.1(a) was limited to ensuring, for the benefit of the Consortium, that the SPMA, having been validly executed (and by the time of final submissions, there was no issue as to valid execution), had come into full effect either by satisfaction or by waiver (by the parties to the SPMA) of the conditions precedent in cls 5.2, 5.3 and 5.4. 54No doubt, the Consortium viewed satisfaction of those conditions precedent as bearing upon, and giving it some reassurance in relation to, risks in inherent in the Bushtick project. However, to attribute to cl 3.1(a) the wider purpose for which Mr Willinge contended would be to ignore completely both the acknowledgment that the parties to the SPMA could waive satisfaction of the conditions precedent in it, and that this waiver in turn (if demonstrated to the reasonable satisfaction of the Consortium) would satisfy the requirements of cl 3.1(a). 55As both Mr Giles and Mr Willinge submitted, a proper characterisation of the (objective) contractual purpose of cl 3.1(a) is relevant to the question of whether what was done was sufficient reasonably to satisfy the Consortium of the satisfaction or waiver of the conditions precedent. That does not mean, however, that the other factors identified by Mr Willinge - in particular, the fact that cl 3.1(a) was the trigger for his clients' obligation to pay a substantial sum of money to Prospect - can be put to one side. Conditions precedent and conditions subsequent 56Before I turn to the question, whether what was done was sufficient to discharge cl 3.1(a), I shall say something about the parties' characterisation, in their various contracts, of the conditions as "precedent" or "subsequent". 57As Gibbs CJ observed in Perri v Coolangatta Investments Pty Limited (1982) 149 CLR 537 at 541, characterising a condition as precedent or subsequent only makes sense if it is connected to some "definite point of reference". His Honour said of those labels that: ... since they express a relationship in time, the question which must be asked is "Precedent to what? Subsequent to what?" 58His Honour distinguished between conditions precedent to the formation of a binding contract, and conditions precedent to the performance of obligations under a binding contract, observing that "provided the effect of a condition is clearly understood, its classification may be merely a matter of words". 59At 543, Gibbs CJ said: Nevertheless, it probably does not matter in the present case whether the condition is described as "precedent" or "subsequent", provided that it is understood that its non-fulfilment did not prevent a binding contract from coming into existence but did have the effect that the respondent was under no obligation to complete the sale unless the condition was fulfilled or waived. 60Mason J, who dissented but not on this point, agreed at 551 as to the distinction between conditions precedent to the formation or existence of a contract and conditions precedent to the obligation to perform. His Honour said at 552 that: Generally speaking the court will tend to favour that construction which leads to the conclusion that a particular stipulation is a condition precedent to performance as against that which leads to the conclusion that the stipulation is a condition precedent to the formation or existence of a contract. 61Wilson J (who, with Gibbs CJ and Stephen and Brennan JJ formed the majority) said at 556, by reference to the decision of Cooke J in Hunt v Wilson [1978] 2 NZLR 261 at 267, "that the ambiguous labels precedent and subsequent, when applied to conditions, are seldom of real help in solving issues in this branch of contract law". Wilson J said further, of the condition under consideration: If it matters at all, the special condition in this case may be described with accuracy as either a condition subsequent to the formation of the contract or as a condition precedent to an obligation in either party to proceed to completion. 62Mr Willinge contended, I think, that cl 3 of the subscription agreement was a condition precedent to the existence of any contract. If he contended that, I do not agree. As cl 3.1 itself makes plain, it is "[t]he obligations of the parties under this agreement" that "are subject to and conditional upon" the satisfaction or waiver of the stipulated conditions. 63Further, read in context (and I have not taken up time and space by setting out the whole of the subscription agreement), it is plain that there are provisions of it - for example, the warranties given by one party to the other - that were intended to have immediate effect. 64In my view, if the labels matter (and I am not sure that they do), cl 3.1(a) may be described as both a condition precedent and as a condition subsequent. It is a condition precedent because satisfaction (or waiver) by the stipulated date is necessary if the Consortium is to become liable to perform its obligation to pay. It is also a condition subsequent, because non-satisfaction (and non-waiver) engenders in the Consortium the right to terminate the agreement. 65The position, in relation to the SPMA, is somewhat different. I have indicated at [28] above the effect of cls 4 and 5, read in conjunction of the definition of "Effective Date". The consequence, in terms of conditions precedent or subsequent, is that the conditions set out in cl 5 were conditions precedent to the operation of the whole of the substantive terms of the agreement: cls 6 to 31. Clause 5 was thus a condition precedent to the operation, or binding effect, of (among others) the substantive provisions of the SPMA giving prospecting rights to Hawkmoth (cl 6) and ensuring, in return, the right of Gunning to receive the consideration payable by Hawkmoth for the enjoyment of those rights (cl 7). 66I think it is fair to say that, by the time the parties to the SPMA came to make the deed of variation, they were focusing more on form - the labels - rather than on substance, when they reached agreement in terms of the second sentence of cl 2 of that document. The deed of variation 67I turn to consider the effect, in terms of cl 3.1(a), of the deed of variation and of the provision of a copy of it to representatives of the Consortium. In doing so, I acknowledge, as Mr Willinge submitted, that the deed must be considered in context (and to avoid repetition, the same applies to the letter of 28 October 2013). 68The starting point, as Mr Giles and Mr Willinge agreed, is that cl 2 of the deed demonstrated that cls 5.2, 5.3 and 5.4 of the SPMA had not been satisfied as at 17 October 2013. However, the agreement as to the proper construction and effect of the deed went no further. 69An understanding of the operation of the deed of variation (in particular, cl 2) requires close attention, first, to the SPMA. The deed of variation was intended to, and undoubtedly did, vary the SPMA in some ways. 70I have referred already to the interaction of cls 4 and 5 of the SPMA, read in conjunction with the definition of "Effective Date". Clause 5 does not in terms state the effect of non-satisfaction (or non-waiver) of the conditions precedent set out in it. Nor is there any other express term of the deed dealing with those events. However, it seems to me, the answer is provided by cl 5 itself. If the conditions precedent are not satisfied or waived, the substantive provisions of the deed (that is to say, cls 6 to 31) do not commence to operate. That is because the "Effective Date" is defined as I have noted above, and the "Conditions Precedent" are defined to mean "the conditions precedent set out in cl 5". 71Thus, and unlike the subscription agreement, non-satisfaction and non-waiver of the conditions precedent set out in cl 5 would not engender a right in either party to terminate the agreement. Instead, those events (more accurately, "non-events") would have the consequence that the substantive clauses of the agreement, including as I have said those giving Hawkmoth the right to prospect and Gunning the right to be paid the prospecting fee, would not commence to operate. 72On that analysis, cl 5 of the SPMA is conceptually distinct from cl 3 of the subscription agreement. The latter, through cl 3.4, gives contractual effect to the approach to construction of conditions precedent stated in the reasons of the plurality (Taylor, Menzies and Owen JJ) in Gange v Sullivan (1966) 116 CLR 418 at 441. Clause 3.4, if the event (or non-event) enlivening it occurs, gives a right to terminate. Hence, it recognises also that the subscription agreement will continue until termination. 73By contrast, cl 5 of the SPMA is truly a condition precedent, although to the operation of part only of the SPMA. Non-fulfilment of the conditions in cl 5 does not give any right to terminate, nor does it make the SPMA voidable. There is no subsequent defeasance (or defeasibility). The sole consequence of non-fulfilment is that cls 6 to 31 never become operative. 74Against that background, cl 2 of the deed did a number of things: (1) as the parties agreed and I have noted, it recorded that the conditions precedent set out in cls 5.2, 5.3 and 5.4 of the SPMA had not been fulfilled as at 17 October 2013; (2) it converted (or purported to convert) those clauses to "conditions subsequent of the [SPMA]"; (3) it extended the time for fulfilment (or, perhaps, waiver in the alternative) of those conditions to 27 November 2013; and (4) it recorded what the parties regarded as an agreement "that all Conditions Precedent have now been fulfilled". 75It will be noted that in the last sentence of cl 2, the words "Conditions Precedent" have initial capital letters. Thus, by cl 1.1 of the deed, those words have the meaning given to them in the SPMA "unless the contrary intention appears" (and it does not). By reference to the definition of "Conditions Precedent" in the SPMA, those words refer to "the conditions precedent set out in clause 5" of the SPMA. They identify the particular sub-clauses of cl 5 that, in the chapeau to the clause, are agreed to be conditions precedent to the operation, or effect, of cls 6 to 31 of the SPMA. 76There is an inconsistency between the first and second sentences of cl 2 of the deed of variation. The first sentence makes it clear that the conditions precedent have not been satisfied, and extends the date for their satisfaction. The second sentence records an agreement, as to satisfaction, to the contrary effect. The obvious, and I would have thought unavoidable, inference is that the parties, paying more attention to form than substance, have sought to overcome the problems that might follow, in terms of the subscription agreement, from non-satisfaction of the conditions precedent, by declaring them to be conditions subsequent and stating that the "Conditions Precedent" had been satisfied. 77That approach appears to adopt, as a drafting technique, the approach deprecated by Cook J in Hunt and by Wilson J in Perri (see at [61] above). Certainly, it elevates form over substance. 78The consequences of non-satisfaction and non-waiver of the conditions in question depends not on the label attached to them by the parties but, instead, on their proper construction in the context of the whole of the contract of which they formed part. That is apparent from the judgment of Gibbs CJ in Perri at 541 (and see also Mason J at 551 - 553). 79As a matter of construction, it seems to me that the only relevant effect of the first sentence of cl 2 of the deed of variation was to fix, for each of the subclauses of the SPMA to which it referred, 27 November 2013 as the date for satisfaction or waiver, rather than the date determined in accordance with the language of each of those subclauses. 80The agreement that "all Conditions Precedent have now been fulfilled" cannot be correct, as a matter of fact. Those words identify the conditions set out in cls 5.2, 5.3 and 5.4 of the SPMA. It is obvious (as the first sentence of cl 2 of the deed of variation recognises) that those conditions had not been fulfilled as at 17 October 2013. 81Whatever the parties to the SPMA may have agreed among themselves, they could not affect the proper construction and operation of the subscription agreement. Under the subscription agreement, the conditions of the SPMA set out in cl 3.1 were to be performed or waived by 5 pm on 30 October 2013. If they were not performed or waived (by the parties to the SPMA) by that date, either Prospect or the Consortium could terminate. The parties to the SPMA may have agreed among themselves that the date for performance of the conditions stated in cls 5.2, 5.3 and 5.4 of the SPMA should be extended to 27 November 2013. But that agreement could not have the effect of varying cl 3 of the subscription agreement. 82For similar reasons, the statement, as to satisfaction of the Conditions Precedent in the SPMA, recorded in cl 2 of the deed of variation could have no "satisfying" effect for cl 3 of the subscription agreement. Clause 3.1 required Prospect reasonably to satisfy the Consortium that the conditions precedent in the transaction documents had all been satisfied or waived. The phrase "conditions precedent" is used, relevantly for present purposes, to identify the conditions so described in the SPMA. 83It seems to me to be self-evident that a statement of satisfaction, in a deed to which none of the Consortium were parties, that the conditions have been satisfied does not demonstrate satisfaction in fact when the sentence immediately preceding that statement of satisfaction makes it clear that the conditions have yet to be performed or fulfilled. 84Thus, I conclude, the deed of variation was not capable of reasonably satisfying the Consortium that, as at 17 October 2013, the conditions set out in cls 5.2, 5.3 and 5.4 of the SPMA had been satisfied. On the contrary, it makes it plain that those conditions had not been satisfied. 85It is unnecessary to go to the matters of context on which Mr Willinge relied to support his submission that the deed could not have the effect for which Prospect contended. I do however note that, were it necessary to do so, those contextual considerations (none of which, as a fact, is contentious) support the conclusion to which I have come based on the proper construction and effect of cl 2 of the deed. The letter of 28 October 2013 86The letter records a statement by Prospect (which was not a party to the SPMA) that cls 5.2, 5.3 and 5.4 had been satisfied, and the "understanding" of the parties to the SPMA that this was so. The context of, or background to, that letter includes the following matters. 87On 19 September 2013, Mr Warner of Prospect sent an email to, among others, Mr Havlin. That email was sent four days before the date of the Extraordinary General Meeting (EGM) of the members of Prospect, called to consider and if thought fit to approve the placements to the Consortium, Investec and Sirius. That email (omitting formal parts) stated: We will be able to confirm that all CPs are satisfied at the close of Monday's shareholder meeting (subject to shareholder approval) other than three conditions precedent in the Senior Prospecting & Mining Agreement which relates to the Bushtick Project. The three CPs that will not be completed are clauses 5.2, 5.3 and 5.4 which relate to the preparation of the environmental baseline studies which are to be completed within 4 weeks of the Special Grant being issued. We have lodged the application for the Special Grant but it has not been issued yet and the environmental work has not been done because we have not had Prospect shareholder approval to approve the transaction, fund raising and the like. These are all conditions that Prospect can waive to effect completion but I do not believe it is in the interests of Prospect to waive the conditions. I also believe that this is an unintended outcome of the contract and should not hold up completion. We therefore ask that you waive the condition within your subscription letters that all conditions precedent relating to the Senior Prospecting & Mining Agreement be satisfied prior to completing your share subscriptions. Finally, I expect that all three share subscriptions will be allotted contemporaneously which will then satisfy the CP that all funds are raised. 88In response to that email, Mr Havlin advised representatives of the Consortium that in his view, the Consortium should not waive the conditions precedent set out in cl 3.1(a) of the subscription agreement "at least until such time as the Bushtick Special Grant has been awarded by the Zim Government". 89On 23 September 2013, after the EGM had approved the resolutions concerning the placements, Mr Havlin sent an email to Mr Warner which, omitting formal parts, stated: Congratulations on holding the shareholders' meeting today. With a successful vote at today's meeting, conditions precedent 3.1(b) and (c) in the subscription agreement have been satisfied. We share your view that completion of the environmental and water work in clauses 5.2 through 5.4 in the Bushtick agreement ordinarily would be considered for waiver in order to satisfy 3.1(a). However, because Bushtick's Special Grant has not yet been issued, we are not inclined to waive condition precedent 3.1(a) in the subscription agreement at this time. We will revisit granting the waiver when the Special Grant has been received. Know you're busy today, but I am available any time convenient for you by mobile or on skype. 90About 11 days later, the SSX suspended trading in Blumont's shares. 91On 11 October 2013, Mr Havlin advised the Consortium that he remained of the view that the conditions precedent should not be waived at least "until that Special Grant [for Bushtick] is in hand". 92The Bushtick special grant was in fact issued on 11 October 2013. Mr Warner sent a copy of it to the Consortium on the same day, under copy of an email which stated among other things: With the issue of this SG, I request that both subscribers transfer funds to Prospect's account so that we can work towards completion of the placement as soon as possible. 93Two days later, Mr Havlin advised the Consortium that the remaining conditions precedent in cls 5.2, 5.3 and 5.4 of the SPMA had not been satisfied but that, in his view, "those just aren't substantial enough to further delay funding". 94Around this time, Mr Havlin on behalf of the Consortium was negotiating with Mr Warner to extend the time for payment of the $3.9 million. As Mr Havlin recorded in an email of 15 October 2013, Mr Warner "was not very happy as you might expect". 95It is not difficult to infer, against that background, that the parties to the SPMA entered into the deed of variation to overcome the perceived problem arising from non-satisfaction of cls 5.2, 5.3 and 5.4 of the SPMA. That inference draws some support from an email sent by Mr Warner to representatives of the Consortium on 18 October 2013, attaching a copy of the deed of variation. So far as it is relevant, that email stated: As advised by email, last Friday (11 October 2013) the Special Grant over the Bushtick Gold Project has been granted and accordingly we requested all three subscribers to remit funds pursuant to the terms of the respective placing agreements and by no later than Friday 25 October. All conditions precedent set out in clause 3.1 of the placing letters have been satisfied or postponed, and accordingly the placement is unconditional. Conditions precedent as per clauses 5.2 - 5.4 of the Senior Prospecting and Mining Agreement, which relate to the preparation of an environmental base line study and provision of information from the parties to Hawkmoth, have been converted to conditions subsequent of the Agreement by way of a Deed of Variation executed by the parties. The tasks contemplated by clauses 5.2 - 5.4 must now be completed by 27 November 2013. Please find enclosed a copy for your records. 96I interrupt the narrative to note that, as Mr Giles submitted, the Consortium's reaction to this email was to delay communicating with Prospect "until as late as possible", so as to leave it "with the minimum time to cure [its] failure to meet the CPs in the Bushtick and Subscription agreement, before the Subscription agreement expires on the 30 October". 97Consistent with that policy, the Consortium avoided speaking to Mr Warner, in response to his many calls and emails, over the next few days. 98On 28 October 2013, an organisation known as EnviroSmart produced a document which was apparently intended to be the "initial environmental baseline study relating to the Project Area" referred to in cl 5.2 of the SPMA. The EnviroSmart document did not comply with the requirements of cl 5.2 in many respects. Mr Warner frankly conceded this in his evidence (T59.14-.34, T74.4-77.28). It is not necessary to go to the detail. 99Also on 28 October 2013, Prospect received a letter from a delegate of the Mining Commissioner of Zimbabwe, addressed "To Whom It May Concern". That letter said: This serves to confirm that Special Grant No.5849 has been duly registered in terms of section 291 of the Mines and Minerals Act of Zimbabwe (Chapter 21:05) to Martin Gunning Investments. Furthermore Martin Gunning Investments are free to mine this Special Grant. 100That was the only document produced which purported to meet the requirements of cl 5.4.3 of the SPMA. Plainly, it did not. Again, Mr Warner frankly conceded this (T62.10-63.10). Again, it is not necessary to go to the detail. 101The deficiencies in what are now said to be the cl 5.2 "environmental baseline report" and the cl 5.4.3 "independent and objective report" must have been apparent at the time, had Mr Warner (or anyone else) turned his mind to the documents. Those deficiencies were not made known to the Consortium. Neither the documents themselves nor an adequate statement of their content was given to the Consortium. 102It was against the background I have described that Prospect prepared, signed and procured the signature of the SPMA parties to the letter of 28 October 2013. It sent a copy of that letter to the Consortium by email which stated (omitting formal parts): Please find attached a letter confirming that all original conditions precedent under the Senior Prospecting & Mining Agreement have been satisfied. Please advise Prospect Resources when The Consortium will be depositing A$3.9m as per the Placing Agreement in satisfaction of your obligations. Finally, can you please advise me of a contact number and person to talk to. I have made repeated attempts to talk to Alex, Jay and Paul and no one is taking my calls. 103It is self-evident, and thus must have been apparent to the Consortium, that the letter of 28 October 2013: (1) was inconsistent with what the Consortium had been told on 19 September 2013 (see at [87] above); and (2) was equally inconsistent with the deed of variation, a copy of which had been given to the Consortium only 11 days before it was given a copy of the letter of 28 October 2013. 104The Consortium was given less than two days to consider the terms of the letter. It was not given any supporting documentation to enable it to assess the accuracy of the statements made in the letter. Those statements were entirely conclusory. The letter gave neither information nor reasoning to support the conclusion set out in the first paragraph, that cls 5.2, 5.3 and 5.4 of the SPMA "have been satisfied as of the date of this document". 105The Consortium's members and representatives might have thought it strange that conditions that, 11 days earlier, had been thought to require until 27 November 2013 to be satisfied were suddenly able to be satisfied a full month earlier. They were not told how this remarkable expedition had been achieved. 106In short, Prospect's position, both at the time and at the hearing, was a minimalist reduction of the Bellman's argument: the letter itself was sufficient, and the Consortium should take it at face value. 107The obvious question is: why? If the letter had emerged out of a course of dealings which showed that Prospect was working towards satisfaction of the conditions precedent by 30 October 2013, and confident of achieving it, then perhaps little further evaluation might have been necessary. But the background to the letter suggested quite the opposite. From the Consortium's position, the clear inference, from what had happened over the six weeks or so preceding the delivery of a copy of the letter of 28 October 2013, was that Prospect thought that the parties to the SPMA would not be capable of satisfying cls 5.2, 5.3 and 5.4 by 30 October 2013. 108I do not accept that a reasonable business person in the position of the Consortium, knowing what the Consortium knew, would have taken the letter of 28 October 2013 at face value. I do accept that this hypothetical reasonable business person might have made inquiries, or sought further information. But that is beside the point. 109First it was the obligation of Prospect reasonably to satisfy the Consortium of the satisfaction of the conditions precedent. It was not for the Consortium to undertake its own investigations, or due diligence, and satisfy itself of those matters. 110Secondly and in any event, if the Consortium had sought further information, it would have been given (perhaps) documents including the EnviroSmart document and the delegate's letter to which I have referred. Had that occurred, it would have been obvious to the Consortium and its advisers, as it was to Mr Warner, that those documents did not comply with the requirements of the relevant clauses of the SPMA. 111Those reasons are sufficient of themselves to decide this question in favour of the Consortium. In those circumstances it is unnecessary to consider in detail Mr Willinge's submission, that Prospect could not in any event reasonably satisfy the Consortium of the satisfaction of the conditions precedent because in fact those conditions precedent had not been satisfied. However, the factual basis for that submission is correct. 112As I have said already, it is clear that the EnviroSmart document did not meet the requirements of cl 5.2. It is equally clear that the delegate's letter did not meet the requirements of cl 5.4.3. There was no evidence that the parties to the SPMA had "signed off on" the purported environmental study (cl 5.3). The expression "sign off" in this context must mean "approve, as meeting the requirements of cl 5.2". No reasonable person could have concluded that the EnviroSmart document did that. 113Mr Giles did not, I think, submit that the letter of 28 October 2013 should be regarded as such a "sign-off". In any event, it could not be, if only because it did not refer to the EnviroSmart document, and did not purport to express the signatories' satisfaction with that document. 114Further, and to the extent that it matters, there is no evidence that cls 5.4.1 or 5.4.2 had been satisfied. 115Were it necessary to decide the point, I would conclude, as Mr Willinge submitted, that a party having the obligation reasonably to satisfy another party of the existence of some fact could not comply with that obligation where the fact in question did not exist. 116I conclude that, on the facts as they appear from the evidence and on the proper construction of 3.1(a) of the subscription agreement, Prospect has not reasonably satisfied the Consortium that the conditions precedent in the Bushtick transaction documents have been satisfied. Decision - waiver 117The starting point must be to identify the sense in which, it is said, the parties to the SPMA "waived" satisfaction of cls 5.2, 5.3 and 5.4. As is made clear by the plurality judgment (Gummow, Hayne and Kiefel JJ) in Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570 at [50] (and see also at [100]), the concept of waiver is one "applied in a variety of senses". 118Mr Giles referred to Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303. There, the Court (French CJ, Kiefel, Bell, Gageler and Keane JJ) was considering "waiver of privilege". In that context, the Court said at [30] (omitting citations): [30] According to its strict legal connotation, waiver is an intentional act done with knowledge whereby a person abandons a right (or privilege) by acting in a manner inconsistent with that right (or privilege). It may be express or implied. In most cases concerning waiver, the area of dispute is whether it is to be implied. In some cases waiver will be imputed by the law with the consequence that a privilege is lost, even though that consequence was not intended by the party losing the privilege. The courts will impute an intention where the actions of a party are plainly inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. 119Mr Giles relied on the Court's citation of Isaacs J in Craine v Colonial Mutual Fire Insurance Company Limited (1920) 28 CLR 305 at 326. The citation appears at [31] of the reasons in Expense Reduction Analysts. I set that paragraph (omitting further citations): [31] In Craine, it was explained that "'[w]aiver' is a doctrine of some arbitrariness introduced by the law to prevent a man in certain circumstances from taking up two inconsistent positions ... It is a conclusion of law when the necessary facts are established. It looks, however, chiefly to the conduct and position of the person who is said to have waived, in order to see whether he has 'approbated' so as to prevent him from 'reprobating'". In Mann, it was said that it is considerations of fairness which inform the court's view about an inconsistency which may be seen between the conduct of a party and the maintenance of confidentiality, though "not some overriding principle of fairness operating at large". 120The significance, Mr Giles submitted, was that Craine was a case involving waiver generally, not waiver in the specific context of waiver of legal professional privilege. 121Mr Willinge relied on the plurality judgment in Gardiner. Their Honours identified at least three senses in which the word waiver is used: election, forbearance and abandonment, or renunciation. 122Further, as their Honours pointed out at [51], waiver may also be used as synonymous with estoppel. 123To my mind, the subscription agreement and the SPMA themselves indicate the meaning to be given to "waived" in cl 3.1(a) of the former. Clause 3.2 of the subscription agreement makes the point that two of the conditions in cl 3.1 were for the benefit of the Consortium. It said that those conditions "may be waived by notice in writing from the Consortium to the Company". Clause 3.3 uses "waived" in the same sense. Further, I think, that is the sense to be attributed to the word "waiver" in the chapeau to cl 3.1 and in cl 3.4. 124Likewise, the SPMA touches on the concept of waiver. Clause 5.5 notes that the conditions set out in cls 5.1 and 5.4 were for the benefit of Hawkmoth "which will be entitled... to waive fulfilment of any or all of the said Conditions Precedent...". Clause 5.6 contains similar statements as to cls 5.1.2, 5.2 and 5.3. They are said to be inserted for the benefit of all parties, and (curiously) that "either" of those parties "shall be entitled... to waive fulfilment of any or all of the said Conditions Precedent...". 125To my mind, when cl 3.1(a) says that the conditions precedent in the transaction documents must be shown (reasonably) to have been satisfied or waived, the word "waived" denotes waiver of the kind permitted by the contractual provisions of the SPMA to which I have referred. 126More particularly, when cl 3.1(a) talks of the conditions precedent having been "waived", it means "in accordance with cls 5.5 or 5.6, as the case may be, of the SPMA". 127As the plurality reasons in Gardiner at [84] suggest, waiver of a condition in a contract for the benefit of a party may be by election between inconsistent rights, or may be by estoppel. However, as I understand it, their Honours also, at [88], [89], identified waiver in this sense as encompassing as well the concept of abandonment or renunciation of a contractual right. 128Further, as it seems to me, cl 3.1(a) embodies (as do cls 3.2 and 3.3, and as do cls 5.5 and 5.6 of the SPMA) express contractual acknowledgments of the entitlements stated by Gibbs CJ in Perri at 543: The condition was in my opinion one for the benefit of the appellants, who were therefore entitled to waive it, but since there was no waiver before proceedings were commenced that question need not be further considered. 129The common contractual denotation, in each agreement, is equivalent to renunciation of the right to rely on non-satisfaction of the condition by taking the benefit of the position, or right, engendered by that non-satisfaction. 130What, then, is required for waiver in this sense? As the plurality in Gardiner said at [89], what is necessary to renounce a right depends very much on the context in which renunciation is said to have occurred. Further, as their Honours said at [90]: Propositions expressed in terms of abandonment or renunciation of a right, like the proposition that a contractual condition inserted in a contract for the benefit of one party has been waived by that party, are statements of conclusion. They are not statements that reveal the process of reasoning which leads to the assignment of the chosen description. 131In this context, as the plurality suggested at [93], there may be cases where no question of abandonment or renunciation, of the right to insist upon a condition, can arise until the time for performance of that condition arrives. However, for reasons that I hope will become clear, that may not be of direct relevance in the present case. 132The SPMA does not, in my view, create a situation (in relation to conditions precedent) where inconsistent rights may arise. As I have said, on its proper construction, the effect of the relevant clauses (cls 4 and 5, read in conjunction with the relevant definitions) is that if the conditions precedent are neither fulfilled nor waived before the time for their fulfilment arrives, the only relevant consequence is that the substantive provisions of the agreement do not come into effect. 133By contrast, if the conditions precedent set out in cl 3.1 of the subscription agreement are not (reasonably shown to have been) satisfied or waived by 5 pm on 30 September 2013, inconsistent rights do arise. The parties, knowing that the conditions precedent have not been satisfied, or waived, may nonetheless continue to perform the agreement. Or they, or one of them, may terminate the subscription agreement in accordance with cl 3.4. 134Since the relevant question of waiver is whether the parties to the SPMA waived fulfilment of the conditions precedent set out in cls 5.2, 5.3 and 5.4 there is no question of election between inconsistent rights. That follows from what I have said at [72], [73] above. 135In that sense, it seems to me that a party to the SPMA may be said to have waived its rights to fulfilment of the conditions precedent in those clauses if it communicates clearly to the other parties its renunciation of those rights; or its intention not to insist on fulfilment of those conditions precedent. Given the consequences of non-fulfilment and non-waiver, it may be that any such communication should be express; certainly, it would be preferable for it to be both express and in writing. But however the communication is expressed, it must be clear and unequivocal. 136Mr Giles submitted, in the alternative, that the letter of 28 October 2013 signalled clearly that each of the signatories to it had waived its right to insist on fulfilment of the conditions precedent. I do not agree. There are two reasons. 137First, that is simply not what the letter says. On the contrary, the letter says that "the conditions precedent have been satisfied", and indicates that the parties to the SPMA understand that this was so. The letter did not state any intention to renounce, or give up, or not to insist on, fulfilment of those conditions. On the contrary, by stating that those conditions had been satisfied, the letter conveyed, clearly enough, that the conditions remained of importance, as did their fulfilment. 138Secondly, the context or background, to which I have referred, tells against that conclusion. To the extent that it adds anything, so does the email from Mr Warner to representatives of the Consortium dated 29 October 2013, attaching a copy of the letter and stating that the letter confirms "that all conditions precedent under the [SPMA] have been satisfied". 139Up until (and including) 29 October 2013, Prospect's approach was to seek to persuade the Consortium that, one way or another, the conditions precedent had been satisfied. It cannot be that Mr Warner had overlooked the concept of waiver, because at one stage (see at [87] above), he had inquired whether the Consortium would exercise its right of waiver under cl 3.2 of the subscription agreement. 140I have no doubt that satisfaction of the conditions precedent was important to Prospect. After all, the SPMA was only valuable to the extent that the rights created by the special grant were effective and assignable to Hawkmoth (the subject of the condition precedent set out in cl 5.4.3 of the SPMA). Likewise, satisfaction on the environmental aspects of the project, including importantly both the nature and cost of remediation work and the continued availability of freshwater to the Falcon College, must have been of importance to Prospect. They were the subject of the conditions precedent in cls 5.2 (and 5.3), 5.4.1 and 5.4.2. 141In short, I think, Prospect had good reason for preferring that the conditions be satisfied rather than that they be waived. And waiver of two of those conditions (cls 5.4.1 and 5.4.2; cl 5.1.1 may be disregarded) lay in its hands alone, through its effective control of Hawkmoth. 142Whether or not it is correct to say that satisfaction of the conditions precedent was of importance to Prospect, so as to make waiver under the SPMA an unattractive alternative, the clear fact is that the letter of 28 October 2013 made no reference to waiver, and was inconsistent with the proposition that there was any contractual waiver. After all, if (as the letter asserted) the conditions had been satisfied, there cannot have been a waiver. Nor could there remain any subsisting opportunity to waive them. 143I conclude that Prospect has not made good its alternative case, that the parties to SPMA waived satisfaction of the conditions precedent in that agreement. It follows that the documents relied on to demonstrate waiver were not capable of reasonably satisfying the Consortium that there had been such waiver. Relief 144It is unnecessary to deal in detail with the question of relief. However, in case the matter goes further, I will set out the way in which the parties approached that question. 145Mr Giles submitted that his client was entitled to have the subscription agreement specifically performed. He noted (correctly) that Prospect had not terminated the subscription agreement for what it regarded as the Consortium's repudiation, and stated that Prospect remained ready and willing to perform its obligations under the agreement. 146Alternatively, Mr Giles sought damages. He submitted that the damages would be the amount promised to be subscribed, together with the amount of the Investec subscription and the amount of the Sirius subscription. 147As to the Investec subscription: Mr Giles submitted that the Consortium was aware (because it was aware of the terms in which Investec was to subscribe) that this subscription was conditional on the Consortium's subscription. Hence, when the parties made the subscription agreement, they had it in their contemplation that a failure by Blumont to perform its obligations could result in the loss of Investec's subscription. 148There was no such condition in the Sirius subscription agreement. However, Mr Giles submitted that it was inevitable that if the other two subscriptions fell through, Prospect would be required, as a matter of commercial reality, to refund the Sirius subscription. 149Mr Giles submitted that it was not necessary for Prospect to make any allowance for the shares that, under the subscription agreement, it would have been required to issue to the Consortium. He relied, by analogy, on what was said as to the lack of value of a company's unissued capital in Pilmer v Duke Group Limited (In Liquidation) (2001) 207 CLR 165. 150It is not necessary to express a view on those propositions. 151Mr Giles contended, alternatively, for what, by hypothesis, were the wasted costs of the abortive capital raising. 152As to the submissions that Mr Willinge put on the topic of relief, I need do no more than note that the Consortium's position was that if the Court ever got to the question of relief, it would prefer to have relief granted by way of specific performance. As I understand it, Mr Willinge accepted that if Prospect succeeded, the appropriate way to deal with the consequences was to award specific performance of the subscription agreement. 153It may be thought that the subscription agreement is not one of a kind ordinarily ordered to be specifically performed. However, since the parties appeared to accept that, in the result of Prospect's success, that would be the appropriate remedy, it is not necessary to go further. Conclusion and orders 154Prospect's case fails. I make the following orders: (1) order that the summons be dismissed. (2) Order the plaintiff to pay the defendant's costs. (3) Direct that the exhibits be handed out. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 August 2014