Bula Ltd v Tara Mines Ltd and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Murphy
• Judgment Date: 06 March 1987
• Neutral Citation: 1987 WJSC-HC 154
• Docket Number: No. 10898P/1986
• Court: High Court
• Date: 06 March 1987

BULA LTD v. TARA MINES LTD & ORS

BETWEEN

BULA LIMITED AND OTHERS

PLAINTIFFS

AND

TARA MINES LIMITED AND OTHERS OF THE FIRST 13 PARTS AND THEMINISTER FOR ENERGY OF THE 14TH PART

DEFENDANTS

1987 WJSC-HC 154

No. 10898P/1986

THE HIGH COURT

Synopsis:

INJUNCTION

Interlocutory

Mandatory relief - Contract - Enforcement - Adjoining mines - Surface boundary along line of river - By agreement, dated 12/12/75, plaintiff mine owner contracted with a Minister of State that "the parties hereto shall procure that" the plaintiffs "shall actively proceed to develop and exploit" the plaintiff's mine as expeditiously as possible - On 19/9/75 a State mining lease had been executed by the said Minister and the defendant mine owner - In the lease the defendant convenanted to co-operate with the Minister so as to ensure that the minerals thereby demised "and any privately owned minerals" in the adjoining lands would be exploited in the most efficient and economical manner, and undertook "to act reasonably in all negotiations" to achieve that end; and the Minister agreed to ensure (so far as lay within his power) that the operators of any such privately owned minerals would act reasonably in all such negotiations - The plaintiff had not begun to exploit its mine, but the defendant's mine had been exploited for over 10 years - The plaintiff sought an order directing the defendant to meet with the plaintiff at such times and with such frequency as might be necessary for the purpose of discussing "what arrangements may be made" by the parties "as regards the use" of the defendant's facilities in the exploitation of the plaintiff's mineral assets - Held that, in essence, the plaintiff was seeking an order compelling the defendant to negotiate directly or indirectly with the plaintiff in relation to the exploitation of the plaintiff's ore body - Held that, on the assumption that the plaintiff was entitled to enforce an obligation undertaken by the defendant in its lease, the mandatory injunction sought by the plaintiff must be refused on the grounds (a) that the terms of the order proposed by the plaintiff were too uncertain to impose a definite duty on the defendant and (b) that to grant the order sought would be to prejudge one of the essential issues in the plaintiff's action - (1986/10898 P - Murphy J. - 6/3/87) - [1987] IR 95 [1988] ILRM 157

|Bula Ltd. v. Tara Mines|

Citations:

CLERK & LINDSELL 15ED P747

LUMLEY V GYE 1853 2 E&B 216

QUINN V LEATHAM 1901 AC 495

SORRELL V SMITH 1925 AC 700

COOPER V MILLEA 1938 IR 749

REARDON V BUTLER 1940 IR 347

SHERRIF V MCMULLEN 1952 IR 236

ROOKES V BARNARD 1964 AC 1129

DAILY MIRROR NEWSPAPERS LTD V GARDINER 1968 2 QB 762

TORQUAY HOTEL CO LTD V COUSINS 1969 2 CH 106

LONRHO LTD V SHELL PETROLEUM CO LTD 1982 AC 173

CADBURY IRELAND LTD V KERRY CO-OPERATIVE CREAMERIES LTD 1982 ILRM 77

COURTNEY & FAIRBAIN LTD V TOLAINI BROTHERS LTD 1975 1 WLR 297

SCRAPTRADE 1981 2 LlLR 425

HILLAS V ARCOS LTD 147 LT 503

SHEPHERD HOMES LTD V SANDHAM 1971 1 CH 340, 1970 3 AER 402

CAMPUS OIL LTD V MIN INDUSTRY & ENERGY (NO 2) 1983 IR 88, 1984 ILRM 85

MORRIS V REDLAND BRICKS LTD 1970 AC 652

HIGGS V HILL LTD 153 LT 128

1 Judgment of Mr. Justice Murphydelivered the 6th day of March 1987.

2 This is a claim by the Plaintiffs for an Order directing the first named Defendant, Tara Mines Limited (Tara) to meet with the Plaintiffs "at such times and with such frequency as may be necessary for the purpose of discussing what arrangements may be made between the first named Plaintiff and the first named Defendant as regard the use of the first named Defendant's facilities in the exploitation of the mineral assets of the first named Plaintiffs" and for certain other purposes set out in the Notice of Motion.

3 As has been said in a series of recent Judgments involving some or all of the above named parties, Bula Limited (Bula) and Tara own adjoining orebodies the surface boundary betweenwhich is marked by the River Blackwater near Navan in the County of Meath. The Bula orebody has not as yet been exploited but mining operations commenced on the Tara orebody upwards of ten years ago and have continued ever since. The existence of these valuable orebodies was established by the early 1970s.

4 It is clear that there has been considerable controversy and dispute as to how or by whom or in what manner the adjoining orebodies should beexploited.

5 By an agreement dated the 12th December 1975 ("the Decemberagreement") made between Bula of the first part and other parties of the second part and the Minister for Industry and Commerce of the third part it was agreed inter alia that:-

"The parties hereto shall procure that the Company (Bula) shall actively proceed to develop and exploit the mine in as expeditious a business manner as is possible (being consistent with the legal social and other obligations of the Company) and in such a manner as shall operate for the benefit of the holders of shares of the Company (considered as a whole) and further that the Company shall not engage in any other trade or business or enter into any transaction or carry out any activity or operation or make any investment sale or purchase of any nature whatsoever (save only as is envisaged pursuant to the provisions of Article 9.07 hereof) other than activities transactions operations sales purchases or investments reasonably necessary for the development of the mine and the disposal of the products of the mine to the best commercial advantage".

6 The Tara orebody is held by Tara under a State mining lease dated the 19th September 1975 made between the Ministerfor Industry and Commerce of the first part, the Minister for Finance of the second part and Tara of the third part (therein referred to as "The Lessee").

7 In a part of that lease entitled "and these presents further witness and it is hereby agreed" and lettered (f) it is provided as follows:-

"The lessee undertakes to co-operate with the lessor so as to ensure that the minerals hereby demised and any privately owend minerals in Nevinstown will be exploited in the most efficient and most economical manner with consequent benefit to all concerned and undertakes to act reasonably in all negotiations to achieve such end. And the lessor agrees so far as it is within his power so to do to ensure that the operators of any such privately owned minerals in Nevinstown will act reasonably in all such negotiations".

8 The State mining lease contains an arbitration clause in the followingterms:-

"And it is hereby declared that if at any time hereafter any dispute difference or question shall arise between the lessor and the lessee or their respective successors in a state or any of them touching the construction meaning or effect of these presents or any clause or thing herein contained or the rights or liabilities of the parties or their successors in a state respectively or any of them under these presents or otherwise howsoever in relation to these presents or as to any action taken by a party hereto in purported execution of or compliance with these presents or as to the true and proper determination of any matter material to these presents (including the ascertainment of the profits of thelessee, the determination of the price for the minerals and products of the First Schedule minerals and the ascertainment and determination of all things material to the effective and true operation and determination of the matters provided for in the Schedules including the ultimate findings within those Schedules) then every such dispute difference or question shall be referred to arbitration under the provisions in that behalf contained in the Arbitration Act 1954PROVIDED ALWAYS that upon receipt of notice of request for arbitration by one party then each party shall do all acts matters and things necessary to secure an early determination of the matter in dispute and these presents shall be deemed to be a submission toarbitration."

9 It may be possible to summarise the lengthy Affidavit of Mr. Michael Wymes on which this application is grounded by saying that it is his belief and contention that it is the strategy of Tara to acquire the Bula orebody at a gross under value and for that purpose they have adopted a variety of tatics including the refusal or failure to negotiate as required by the State mining lease as aforesaid and procuring a breach by the Minister of his obligations to Bula under the December agreement.

10 Whilst Counsel on behalf of the Plaintiffs have recognised that the relief sought is expressed in positive terms it has been contended that it could be expressed and would be more appropriately expressed negatively as follows:-

11 1. An Order restraining the continuing interference by the Defendants (other than the Minister) with the economicrights of the Plaintiffs.

12 2. An Order restraining the continuing procurement by the Defendants (other than the Minister) of the breach of the December agreement.

13 3. An Order restraining the continuing breach of Clause (f) aforesaid of the State mining lease by the Defendants with the Plaintiffs or with the Minister in his capacity as trustee for and on behalf of the Plaintiffs.

14 Whilst it is possible to express the relief sought by the Plaintiffs in that way there is no doubt whatsoever but that what they are seeking is an Order compelling the Defendants to negotiate directly or indirectly with the Plaintiffs in relation to the exploitation of the Bula orebody. Moreover, the Plaintiffs have fairly and properly accepted that the Order which they seek must, however expressed, recognise that the negotiations, if ordered by the Court, would be negotiations for the purposes of Clause (f) aforesaid so that the Plaintiffs would be entitled to invoke the arbitration clause contained in the State mining lease if that course should be appropriate.

15 Whilst it is no part of the function of...