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so whats the market saying here XST has two chance of getting...

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19,406 Posts.

80

17/01/18

11:52

Post #: 30369353
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Originally posted by agentm ↑

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION : XSTATE RESOURCES LTD -v- QING [2018] WASC 7
CORAM : MASTER SANDERSON
HEARD : 4 DECEMBER 2017
DELIVERED : 4 DECEMBER 2017
PUBLISHED : 15 JANUARY 2018
FILE NO/S : CIV 1951 of 2017
BETWEEN : XSTATE RESOURCES LTD
Plaintiff
AND
CHLOE KWOK YUN QING
First Defendant
HONG HUNG THIAM
Second Defendant
LIM KEVIN GUNAWAN
Third Defendant
TANZIL HIDAYAT
Fourth Defendant

MASTER SANDERSON
Document Name: WASC\CIV\2018WASC0007.doc (DJ)

1 MASTER SANDERSON: This was the plaintiff's application for summary judgment brought against the first, second and fourth defendants. After hearing argument I entered judgment in favour of the plaintiff in an amount of $US33,187,960. I said I would provide reasons for my decision. These are those reasons.

2 The position of the first, second and fourth defendants was somewhat unusual. They entered an appearance to the writ on 2 August 2017. They were then served with the application for summary judgment. Each of the three defendants admitted liability but maintained that an assessment of damages was required and that should constitute a separate hearing from the summary judgment application. That position was put by the three defendants in correspondence. Their solicitors did not appear at the hearing. Counsel for the plaintiff maintained the evidence provided in the summary judgment application allowed damages to be assessed. I was satisfied that was the case and entered judgment accordingly.

3 The relevant facts taken from the statement of claim are as follows.

4 On 16 December 2016 the plaintiff and the first defendant entered into a binding letter of offer pursuant to which the first defendant undertook to accept a share placement made by the plaintiff. This agreement is referred to in the statement of claim as the 'First Defendant's Binding Letter of Offer'. Pursuant to the binding letter of offer the first
defendant was to accept just under 180 million fully paid ordinary shares in the plaintiff for a total price of just under $AUD7 million. The plaintiff pleads the second and fourth defendants also entered into share subscription agreements with the plaintiff and these agreements are referred to as the 'Second Defendant's Binding Letter of Offer' and the 'Fourth Defendant's Binding Letter of Offer'. Each of these offers led to subscription agreements - respectively the 'First Defendant's Subscription Agreement', the 'Second Defendant's Subscription Agreement', and the 'Fourth Defendant's Subscription Agreement'. In breach of those agreements the first, second and fourth defendants did not produce the money to pay for their shares. Eventually after an extension of time the plaintiff terminated the agreements and sued for damages.

5 By pars 24 - 32 of the statement of claim the plaintiff deals with the use it intended to make of the subscription monies. Essentially the plaintiff intended to acquire a parcel of oil and gas fields in California from a company known as Sunny Frog Oil LLC. On 1 November 2016 it entered into an agreement with Sunny Frog Oil to give effect to the
purchase agreement. It also paid to Sunny Frog Oil an amount of $US500,000 as a non-refundable deposit. When the three defendants breached the subscription agreements the plaintiff was unable to complete the purchase. Eventually Sunny Frog Oil terminated the purchase agreement. The plaintiff says had the purchase agreement with Sunny Frog Oil proceeded it (the plaintiff) would have made substantial profits. It is the loss of those profits which constituted the plaintiff's claim against the defendants. The plaintiff also sought an amount of $AUD1.1 million
being the deposit paid to Sunny Frog Oil and other expenses incurred in relation to the purchase agreement. (The plaintiff paid an additional deposit to Sunny Frog Oil to extend the time for settling the purchase.)

6 As the statement of claim was initially framed the amount of damages claimed was just over $US157 million. However, for the purposes of the summary judgment application the claim was reduced to the amount for which I eventually entered judgment.

7 The summary judgment application was supported by two affidavits of Cosimo Damiano; the first sworn 23 August 2017 and the second sworn 30 November 2017. It is unnecessary to go through the evidence in detail. Suffice it to say the plaintiff took expert advice from a firm of expert petroleum consultants Netherland Sewell & Associates Inc. The
consultants prepared a detailed advice which showed substantial proved, probable and possible reserves of oil and gas. A copy of that report appears as attachment CD-4 to Mr Damiano's first affidavit. An update of the initial report was provided by the consultants on 29 November 2017. It appears as attachment CD-40 to Mr Damiano's second affidavit. If anything it shows that the initial estimates were on the low side. The reserves proved to be more extensive than anticipated. Nonetheless the plaintiff took the step of reducing its claim for damages to concentrate just
on the proven reserves. There is no doubt the plaintiff made good its claim.

8 It is worth bearing in mind that this was a summary judgment application. Under O 14 of the Rules of the Supreme Court 1971 (WA) the plaintiff is required to file affidavit material which confirms the contents of the statement of claim and states that in the deponent's belief there is no defence to the action. Once those requirements of O 14 are
satisfied the evidentiary onus shifts to the defendant to establish there is a serious question to be tried. The summary judgment procedure was never intended to deal with disputed questions of fact nor to resolve issues which on its face require a trial. Furthermore, there are occasions when the very nature of the case shows that further inquiry is necessary to establish liability or to quantify the liability. But it must be obvious from the face of the documents that such an inquiry is necessary. The requirement for a defendant to put on evidence extends not only to the question of liability but to issues of quantum. If it had been the case here that there was a gap in the way damages were calculated or if the plaintiff's claim had about it an element of speculation then it may have been appropriate to give judgment for the plaintiff with damages to be assessed.

9 But in this case there was no gap in the reasoning leading to calculation of the loss. All that can be said is that if the matter had gone to trial it seems likely damages would have been assessed in an amount far greater than the amount for which judgment was entered. That being so, the suggestion (and it was really no more than a suggestion) by the
defendants that it was not appropriate to assess damages in the summary judgment application was without merit.

10 Accordingly, judgment was entered for the plaintiff with costs. The costs awarded were on an indemnity basis. Given the clear nature of the breach of contract by the defendants this was a case where a consent judgment ought have been filed. As it was the plaintiff was put to considerable time and expense preparing for the summary judgment
application and they were entitled to be fully recompensed for their efforts.

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so whats the market saying here XST has two chance of getting the cash buckleys and bugger all and Dempsey's worth bugger all and does nothing to prove up the area so we stay at .012---i say knock back the pay out to around 10 mil and go drill for something hot Cobalt etc etc this things dead in the water

XST Price at posting: 1.2¢ Sentiment: Hold Disclosure: Held
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0 Great analysis

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