Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 17) [2018] QLC 45

LAND COURT OF QUEENSLAND CITATION: Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 17) [2018] QLC 45 PARTIES: Cherwell Creek Coal Pty Ltd (ACN 063 763 002) (applicant) v BHP Queensland Coal Investments Pty Ltd (ACN 063 763 002) QCT Resources Pty Ltd (ACN 010 808 705) BHP Coal Pty Ltd (ACN 010 595 721) Mitsubishi Development Pty Ltd (ACN 009 779 873) QCT Investments Pty Ltd (ACN 010 487 831) Umal Consolidated Pty Ltd (ACN 000 767 386) QCT Mining Pty Ltd (ACN 010 487 840) (respondents) FILE NO: MRA1332-08 DIVISION: General division PROCEEDING: Request from experts for further information in Court Managed Expert Evidence (CMEE) process DELIVERED ON: 3 December 2018 DELIVERED AT: Brisbane HEARD ON: Heard on the papers; written submissions closed 27 November 2018. HEARD AT: Brisbane PRESIDENT: FY Kingham ORDERS: 1. By 4pm on Monday 7 January 2019, the respondents must provide the geology and mine planning experts who made the request for -- 1 of 9 -- 2 information with categories 3, 4, 5, 7 & 8 of the Additional Mining Information (as described in the request for information in the email attached to the CMEE Convenor Report dated 19 November 2018). 2. The costs of and incidental to the expert witnesses’ request for information are costs in the cause. CATCHWORDS: CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PROCEDURE – whether a request for information made by expert witnesses during a meeting of experts in a Court Managed Expert Evidence (CMEE) process is an “inappropriate procedure” – where experts have a primary duty to assist the court – where the court expects the experts to consider whether they require further information to prepare their joint report – where the experts must state in their report that they have made all appropriate enquiries – where the request was made and maintained by the experts engaged by both parties in two disciplines – where the court directed the party in possession of the information to provide it to the experts EVIDENCE – EXPERT EVIDENCE – where the experts engaged by both parties in two disciplines made and maintained a request for information during a meeting of experts – where the information related to key facts relevant to issues in dispute – where the experts all asked for the information, although some placed different weight on information about a particular topic – where the delay was unlikely to be significant or to defer the commencement of the trial – where the court directed the party in possession of the information to provide it to the experts Land Court Rules 2000, r 22, r 24, r 24A, r 24C APPEARANCES: G Gibson QC, with J Chapple and N Loos (instructed by Holding Redlich Lawyers) for the applicant S Doyle QC, with A Stumer and F Lubett (instructed by Allens) for the respondents -- 2 of 9 -- 3 Background [1] This judgment is about a request for information by geologists and mine planning experts engaged by the parties to give evidence at trial.1 The request emerged from a meeting convened by Member Stilgoe, acting in her capacity as the Convenor of the Court Managed Expert Evidence process for this case.2 The information request [2] The expert witnesses identified nine categories of information about BMA’s mining of an area that they described as being “within and adjacent to the MDLA 364 eastern boundary”.3 They say it will (or may): 1. confirm the size and general location of the coal resource; and 2. provide better information on the extent of oxidised coal in the resource. [3] The likely extent and quality of the MDLA364 coal resource are key facts for Cherwell Creek’s claim for loss of the opportunity to commercialise that resource. Those facts are relevant to a number of issues, including the likelihood that Cherwell Creek would have developed and operated the mine and the value of its lost opportunity to do so. [4] The expert witnesses identified nine categories of information, which the parties have been referring to as the Additional Mining Information. BMA has already supplied three categories (1, 2 & 9),4 has advised it does not have category 6, and is unwilling to provide the remaining categories (3, 4, 5, 7 & 8). [5] BMA has not disputed the Court’s power to direct it to provide the Additional Mining Information.5 However, the Convenor can only make directions with the consent of 1 Barry Saunders (CCC) and Kerry Whitby (BMA) – geology; Ken Stapleton (CCC) and Greg Maiden (BMA) – mine planning. 2 Practice Direction 3 of 2018 – Procedure for Court Managed Expert Evidence. 3 The email is an attachment to the Convenor’s report. In accordance with Practice Direction 3 of 2018, the Convenor prepared her report in consultation with the parties and filed it when she provided it to me. 4 It advised the Convenor that it had previously disclosed the information described as categories 1 & 2 to CCC, although it appears that was not conveyed to CCC’s experts. 5 Outline of Submissions for the Respondents: Mining Information Request filed 20 November 2018, [6]; Land Court Act 2000, s22(3); Cherwell Creek did not address this in its submission. -- 3 of 9 -- 4 all parties.6 After a case management conference about the request,7 and in consultation with the parties, the Convenor provided a report about the experts’ request and the parties’ responses to it.8 I also allowed the parties to make further written submissions to me about how the Court should respond to the experts’ request. The expert evidence process [6] Before turning to the arguments made in those submissions, I will deal with BMA’s suggestion the experts’ request involves an “inappropriate process”.9 It submitted the joint reporting process is not an opportunity for the experts to engage in inquisitorial fact finding in order to supplement the material on which they prepared detailed reports. To deal with that submission, I will identify some relevant features of the Court’s rules and procedures. [7] Firstly, the rules and procedures of the Court reinforce the duty of the expert witnesses to assist the Court. That duty overrides any obligation owed to any party to the proceeding.10 [8] Secondly, the Court recognises an expert may identify further information that would assist them to fulfil their duty. That is important at each stage of preparation of expert evidence. However, it has particular significance for the meeting of experts, who must discuss and attempt to reach agreement about their evidence in relation to an issue in dispute as it relates to their area of expertise.11 [9] In their meeting process, the experts are not constrained by the information provided by the party who engaged them or by the opinions expressed in their initial report, however detailed. After discussions with a peer, an expert may qualify, alter or even abandon an opinion earlier expressed. The experts may identify that they each formed their opinions on different information. Alternatively, they may identify further 6 Practice Direction 3 of 2018 – Procedure for Court Managed Expert Evidence, [19](b)(iii). 7 Mr Thatcher, a mine planner engaged by Cherwell Creek, also attended the Case Management Conference, with the four experts who made the request, but he is not one of the experts requesting the information. 8 As required by Practice Direction 3 of 2018– Procedure for Court Managed Expert Evidence, [22], [23]. 9 Outline of Submissions for the Respondents: Mining Information Request filed 20 November 2018, 8. 10 Land Court Rules 2000, r 24C. 11 Land Court Rules 2000, r 22. -- 4 of 9 -- 5 information, which neither has access to, that would assist them to finalise their report. [10] Although a party engages an expert to give evidence in their case, the role of an expert witness is to assist the Court on matters within their area of expertise, not to advocate for the client. The Court will obtain limited assistance from an expert whose opinion does not address relevant and available information. [11] The information on which the experts base their opinions is, therefore, fundamental to the discussion about their evidence. The following requirements for the meeting and reporting process reinforce the importance of the experts having access to sufficient information: 1. Before a meeting of experts, the parties must give the expert witnesses enough information and opportunity to adequately investigate the facts in relation to the issues in dispute.12 2. During their meeting, the expert witnesses may ask all parties to respond to an inquiry made jointly of all parties.13 The Court expects the experts to consider this in their discussions and to make a request if they think it is necessary to do so.14 A meeting of experts may be adjourned so further information can be obtained.15 3. The experts must confirm in their statements of evidence, which includes a joint report,16 that they have “made all enquiries considered appropriate”.17 [12] The request by the experts is not an “inappropriate process”; rather, it conforms to the Court’s rules and procedures, which require the experts to be properly informed in developing and articulating their opinions. [13] Turning to the merits of the request, the parties have made arguments about the utility of the information to the experts’ reports and the consequential delay in finalising them. BMA submits the Court should not direct it to provide information only 12 Land Court Rules 2000, r 24. 13 Land Court Rules 2000, r 24A(2). 14 Guidelines for Expert Evidence in the Land Court issued 30 April 2018, [9(f)], [43]. 15 Guidelines for Expert Evidence in the Land Court issued 30 April 2018, [43] (a)-(c). 16 Land Court Rules 2000, r 24(2). 17 Land Court Rules 2000, r 24(3)(b). -- 5 of 9 -- 6 marginally relevant. Providing the information will delay reports in an already very lengthy pre-trial process. CCC submitted it would be unusual for a court to refuse a unanimous request for relevant information made by expert witnesses engaged by both parties. Although there will be some delay, that is not a principled reason for declining the request. The utility of the information [14] BMA raised a number of questions about the utility of the information. [15] Firstly, the experts say the information would be “nice” but “not critical”. This relates to categories 1 to 4. BMA has already provided categories 1 & 2. [16] The geology experts doubt the information they have requested will provide unexpected results and expect it will confirm their assumptions and views, at least as to the size and location of the resource. BMA submitted providing the information would, therefore, “have the effect of satisfying the intellectual curiosity of the geologists, but will make no difference to the outcome of the case, unless there is an ‘unexpected result’.”18 [17] The experts will give evidence on key facts derived from modelling based on limited drilling information on and adjacent to the area of former MDLA364. BMA complained that it has already significantly supplemented the information otherwise available to Cherwell Creek because of its inadequate exploration of the area. That may be so, but the Court’s concern is about the evidence on which it must determine the issues in dispute. [18] Information about the results of mining in and adjacent to the area will supplement the information base for the experts’ modelling. That is not merely a matter of intellectual curiosity for the experts. If it confirms their current modelling, the information has value for the Court as it will increase the experts’ certainty in their opinions. If the information produces an unexpected result, its value is in allowing the experts to refine their opinions. In either case, the requested information will provide the experts, and the Court, with increased confidence in their opinions on key facts. 18 Outline of Submissions for the Respondents: Mining Information Request filed 20 November 2018, [45]. -- 6 of 9 -- 7 [19] Secondly, BMA raised the utility of providing the information in categories 3, 4, 5, 7 & 8, given the experts’ differing views about the importance of knowing the extent of oxidised coal. Further, in the absence of the category 6 information, BMA questioned whether the experts would be able to determine its extent. [20] As I understand it, oxidisation relates to coal quality and, therefore, the value of the MDLA coal resource. The mine planning experts place different weight on this consideration. Cherwell Creek’s expert says it very important. BMA’s expert does not agree it is very important, because the geologists now agree about the ash content of the coal. However, both geologists consider the information would be useful, so there is no dispute between them about that. Even though there is a difference about the weight they place on this information, the experts all joined in the request, including BMA’s mine planning expert who also said he would like to have it. [21] The experts said that, in the absence of category 6 information, they were “less confident” the remaining information would assist them in assessing the extent of the oxidised coal. However, they did not abandon their request. I can only infer from that there is some real utility in allowing the experts to consider the remaining information. [22] Finally, BMA asserted the mining identified by the experts has only taken place on its mining lease adjacent to the eastern boundary of the former MDLA 364, not within it. The geologists appear to be in dispute about the precise boundaries of the MDLA364 area.19 I am not in any position to determine this question, nor to consider its relevance to any issue in the proceedings. [23] Assuming all the information relates to mining outside the MDLA364 area, BMA submitted its only relevance is to provide a basis for drawing inferences about the MDLA364 coal resource. Unless MDLA364 is mined, the experts’ opinion is, necessarily, based on drawing inferences. BMA has already provided, and the experts have already drawn inferences from, the results of drilling in the area adjacent to MDLA364. 19 Supplementary Joint Expert Report of Mr Saunders and Mr Whitby filed 5 March 2014, section 2.3 and figure 2.3. -- 7 of 9 -- 8 [24] The location of the mining is not a reason to refuse the experts’ request. If the precise location of mining is significant to the experts’ opinions, I expect them to explain that in their reports. In any case, the parties can probe the question when the experts give their evidence at trial. [25] While the Court expects expert witnesses to co-operate about requests for information,20 if there is a dispute between them about whether the request is relevant or necessary, they can note that in the request.21 Here, the experts have joined in and maintained a request for information, knowing category 6 information is not available, and some or all of the mining is outside the former MDLA364. In those circumstances, I am satisfied the experts consider there is some real utility in considering the information they have requested. Delay [26] The time taken to respond to the experts’ request has already delayed them from finalising their reports. It will take BMA a month to provide the information. There will be consequential delays for the joint expert reports of the geologists, mine planners and, possibly, the coal quality experts. [27] Any delay in this case is regrettable. However, it is likely to be minimal. Once they have the information, the experts do not expect the delays to be significant, unless the information produces an unexpected result. If there is an unexpected result, a longer delay is justified because the opinions relate to key facts for the claim. [28] Further, the delay in finalising these reports is unlikely to delay the commencement of the trial. The CMEE process has just commenced for the Caval Ridge mine allegations in BMA’s defence. The meeting of the mine planners for those allegations awaits a report from BMA’s expert, due by 30 April 2019. The CMEE process in this case cannot conclude before that joint expert report is filed. [29] Although I have reserved dates in my calendar from late September 2019, if the case is ready for trial earlier, I will do what I can to accommodate an earlier start. However, I am unlikely to make a firm trial listing until I have all the joint expert reports. 20 Guidelines for Expert Evidence in the Land Court issued 30 April 2018, [46]. 21 Guidelines for Expert Evidence in the Land Court issued 30 April 2018, [49]. -- 8 of 9 -- 9 [30] In those circumstances, delay is not a reason to refuse the experts’ request. [31] Before concluding, in a letter from its solicitors to the CMEE Convenor, BMA asserted the commercial sensitivity of the information. If the parties cannot agree beforehand about the need for or form of arrangements to preserve the confidentiality of the information, I will make directions at the next review, tentatively listed for 14 December 2018. Orders [32] I make the following orders: 1. By 4pm on Monday 7 January 2019, the respondents must provide the geology and mine planning experts who made the request for information with categories 3, 4, 5, 7 & 8 of the Additional Mining Information (as described in the request for information in the email attached to the CMEE Convenor Report dated 19 November 2018). 2. The costs of and incidental to the expert witnesses’ request for information are costs in the cause. FY KINGHAM PRESIDENT OF THE LAND COURT -- 9 of 9 --