NQXT vindicated as alleged ‘unconscionable conduct’ case concludes

Today the High Court of Australia dismissed Lake Vermont Resources and QCoal Group’s special leave application and in doing so brought to an end a five-year port access charges dispute in North Queensland Export Terminal’s (NQXT) favour.

NQXT has always maintained its actions in relation to this matter were lawful and in accordance with the parties' contractual arrangements and that NQXT had not engaged in unconscionable conduct, as the Queensland Supreme Court of Appeal unanimously found. 

The decision by the High Court not to grant Lake Vermont Resources and QCoal Group special leave to appeal the Court of Appeal decision is further evidence of this. We are glad the matter has been finalised. 

In August 2021, NQXT was successful in the Queensland Court of Appeal in overturning a 2020 Supreme Court finding regarding a dispute between the company and four of its commercial customers over the quantum and calculation of terminal handling and access charges at North Queensland Export Terminal.

The four port users had to repay $106.8 million in damages, as well as pay 90 per cent of NQXT’s costs incurred in the original trial and a further 95 per cent of NQXT’s costs of the successful appeal. NQXT was successful before the Court of Appeal on the matter of unconscionability and the reasonableness of its port handling charges. 

Two of those users, Lake Vermont Resources and QCoal Group, subsequently applied for leave to take the case to a higher jurisdiction, the High Court of Australia.

The High Court’s decision today not to grant special leave to appeal means the parties have no further recourse and the matter is concluded in NQXT’s favour as per the Queensland Court of Appeal outcome.

ENDS

Editors’ notes

About North Queensland Export Terminal (NQXT)

North Queensland Export Terminal (previously known as Adani Abbot Point Terminal Pty Ltd) is a deep-water export terminal with a nameplate capacity of 50 million tonnes per annum near Bowen, in North Queensland. The terminal has been operating safely for 35 years. Adani acquired the 99-year leasehold of the terminal from the Queensland Government in 2011.

Background to the dispute

There are eight mining companies that have contracts in place to ship their product through the terminal. In August 2017 NQXT commenced proceedings against four of these companies, Lake Vermont Resources, QCoal, Byerwen Coal and Sonoma Mine, in the Queensland Supreme Court. QCoal, Berwyn and Sonoma Mine are all associated with the Queensland businessman and mining industry identity Chris Wallin.

The claim brought by NQXT in the Queensland Supreme Court related to a contractual dispute for the non-payment of terminal handling charges by the users. The users then brought a counter-claim alleging that NQXT had engaged in unconscionable conduct.

Contractual dispute claim

The user companies dispute the 2018, 2019 and 2020 financial year handling charges passed through by NQXT from the port operator on the basis that NQXT has not demonstrated the charges are reasonable having regard to the efficient operation of the Terminal. They have elected to not pay 50% of the user charges billed to them over each of these three years. NQXT lead expert evidence and evidence from former employees of the Operator in support of why these port charges were reasonable.

Unconscionable conduct claim

In 2016 a former user of the port, a subsidiary of Rio Tino, elected to exit from its take or pay contract to ship nine million tonnes per annum of coal through the port until 2028.

The company entered into legal agreement with NQXT to assign its port capacity to a third party, Adani Mining Pty Ltd from July 2022 and to terminate its User Agreement with NQXT.

In an arbitration award handed down in May 2019, former High Court judge Michael McHugh AC QC ruled that these arrangements were lawful and in accordance with the parties’ contractual arrangements. However, the four port user companies claim that while legal, this agreement was unconscionable as it had the effect of increasing their port charges. They argue the payment received by NQXT from the former user should have been used to offset the amounts they are charged to use the port.

For further information contact:

Adani Australia Media
E: [email protected]