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The mining industry has long favoured the use of joint venture structures. Joint ventures can improve the feasibility of a mining project by enabling the parties to share risk, pool capital and access their respective resources and capabilities, with each participant 'usually (but not necessarily) contributing money, property or skill'.1
With these benefits come exposure to substantial technical, logistical, economic, legal and political risks. For companies participating in such ventures, obtaining clarity around their legal rights and obligations is essential. Yet despite the popularity and prevalence of the joint venture model, no single body of law regulates these relationships and the legal principles that determine the rights and obligations of the joint venture parties remain unsettled.
One key risk area of particular importance to joint venturers is the control of “common” property and the rights of the various entities associated with the joint venture to access the records of the joint venture.
The unsettled nature of any such ‘rights’ was highlighted in the Full Federal Court of Australia’s decision in Alliance Craton Explorer v Quasar Resources Pty Ltd and Heathgate Resources Pty Ltd.2 The case, in which Alliance’s leave to appeal to the High Court was ultimately refused, concerned the alleged right of Alliance, as the junior joint venturer in the unincorporated joint venture, to access documents and records relating to the joint venture.
The judgment reinforces that in these types of ventures, often referred to as contractual joint ventures, the terms of the agreement struck by the parties as recorded in the joint venture agreement(s) will be critical to determining the respective rights and obligations of the joint venturers. The relationship between a manager of a joint venture and the joint venturers will always be subject to the terms of any relevant contract between them.3
Without a clear articulation in the agreement of the nature and extent of the relevant joint venture entities’ rights (if any) of access to joint venture records, there is no legal guarantee of any access rights to documents.
Alliance, a subsidiary of ASX-listed Alliance Resources Limited, had entered into an unincorporated joint venture agreement with Heathgate Resources to explore and develop a mining tenement in South Australia. The joint venture agreement appointed Heathgate as manager of the joint venture. Heathgate later assigned all its interest in the joint venture to a related company, Quasar, but continued to provide services to the manager as an independent contractor.
Alliance, who held a minority 25% interest in the joint venture, filed an application in the Federal Court seeking a declaration regarding its interest in “joint venture records” held by Quasar and Heathgate. The primary judge dismissed Alliance’s application and Alliance appealed to the Full Court of the Federal Court of Australia.
Two key legal issues were:
The Court rejected Alliance’s agency argument and confirmed that the mere existence of a joint venture does not, without more, lead to the conclusion that the manager of the joint venture is the agent of the venturers. An agency relationship can only be established by the consent of all the parties. In circumstances where there joint venture agreement expressly disclaimed agency (and there was no suggestion that clause was a sham), the court should give appropriate weight to the parties’ intentions. The mere fact one party undertook work at the joint venture’s request and for its benefit is also insufficient, without more, to establish an agency.
Alliance’s second argument, that a term providing it with access to the documents should be implied into the joint venture agreement to give it business efficacy, was also dismissed. The Court upheld the primary judge’s decision that such a term was not necessary because Alliance was able to comply with its obligations under the joint venture agreement without access to the joint venture records.
The terms of the joint venture agreements will be the principal influence in determining whether a party is entitled to access particular joint venture records. For joint venture parties who want unambiguous rights to access documents, they should ensure this is provided for through the drafting of express provisions into the agreements between them. Those provisions should be drafted by reference to the joint venture’s operations, the manager’s accounting and management practices as well as the reporting requirements owed by any of the joint venturers.
Particularly where joint venture parties are sophisticated and well-advised, and have, following negotiations, entered into an agreement that is comprehensive in its terms, joint venturers should not expect the courts to presume the parties intended for something other than what is recorded in their written arrangements.
The contents of this publication are for reference purposes only and may not be current as at the date of accessing this publication. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2025
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