Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 14) [2018] QLC 29

LAND COURT OF QUEENSLAND CITATION: Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 14) [2018] QLC 29 PARTIES: Cherwell Creek Coal Pty Ltd ACN 063 763 002 (applicant) v BHP Queensland Coal Investments Pty Ltd ACN 098 876 825 QCT Resources Pty Ltd ACN 010 808 705 BHP Coal Pty Ltd ACN 010 595 721 QCT Mining Pty Ltd ACN 010 487 840 Mitsubishi Developments Pty Ltd ACN 009 779 873 QCT Investment Pty Ltd ACN 010 487 831 Umal Consolidated Pty Ltd ACN 000 767 386 (respondents) FILE NO: MRA1332-08 DIVISION: General division PROCEEDING: Application for directions DELIVERED ON: 19 April 2018 (reasons delivered orally on this date) DELIVERED AT: Brisbane HEARD ON: 16 April 2018 HEARD AT: Brisbane PRESIDENT: FY Kingham ORDERS: 1. The directions made on Friday 27 February 2018 are vacated. 2. The review listed on Friday 27 April 2018 is vacated. -- 1 of 11 -- 2 3. By the dates specified in the letter from Holding Redlich to Allens dated 17 April 2018, Cherwell Creek Coal Pty Ltd must: a) file in the Land Court Registry and serve on the Respondents reports from the experts named in the letter; b) Provide the documents that were briefed to the experts (including any instructions) in respect of the reports referred to in Order 3(a) to the Respondents; and c) Provide disclosure in accordance with Rules 211 to 218 (inclusive) of the Uniform Civil Procedure Rules 1999 and the “Protocols for Electronic Exchange of Discovered Documents” delivered to the Registry on 10 December 2015 of each document in the Applicant’s possession or control, other than any document that is provided under paragraph 3(b) of this Order or a document that has previously been disclosed in this proceeding, which is directly relevant to the issues the subject of the reports referred to in Order 3(a). 4. The CMEE process, directed by order 6 made on 14 December 2017, is suspended until further order. 5. All current orders and directions made by the CMEE convenor are stayed and no steps pursuant to the process will be undertaken until further order. 6. By 4:00pm on Friday 4 May 2018 Cherwell Creek Coal Pty Ltd must file in the Land Court Registry and serve on the Respondents its response submissions on the balance of the application filed 16 March 2018. 7. By 4:00pm on Friday 18 May 2018 the Respondents must file in the Land Court Registry and serve on Cherwell Creek Coal Pty Ltd its submissions in reply. 8. After the Respondents reply submissions are filed: a. The President will list the application for further hearing if required; b. If the application is listed for further hearing leave is granted for Mr Doyle QC to appear via video link; and -- 2 of 11 -- 3 c. If the application is not listed for further hearing, it will be determined on the papers. 9. The costs of the hearing on Monday 16 April 2018 and Thursday 19 April 2018 are reserved and will be determined by final orders on the application. APPEARANCES: G Gibson QC (instructed by Holding Redlich Lawyers) for the applicant S Doyle QC, with Ms F Lubett of Counsel (instructed by Allens) for the respondents Reasons given orally on 19 April 2018: [1] This is an application to vacate certain orders I made on the 14th of December 2017 and on the 27th of February 2018, and to order the applicant, Cherwell Creek – I will refer to the applicant as Cherwell Creek throughout – to file expert reports and disclose directly relevant documents. There are three broad issues for the application as they have been formulated in BMA’s written submissions: whether the Court should direct delivery of responsive reports by Cherwell Creek prior to meetings of experts and their joint reports, and the second and third issues relate to the power to, and the regularity of, the directions I have referred to. [2] This judgment deals only with the first issue, encompassed by the proposed order 3 in BMA’s draft orders. I have adjourned, although, I am not sure I specifically announced it at the end of the hearing on Monday, but I have adjourned the balance of the application involving the proposed orders 1 and 2 to allow Cherwell Creek further time to prepare a response to BMA’s submissions on that aspect of the application. And I will hear from counsel later about their availability for the resumed hearing. BMA seeks an order which requires Cherwell Creek to provide certain expert reports, the instructions and documents briefed to the experts for those reports, and disclose any directly relevant material not otherwise briefed to the experts or already disclosed. -- 3 of 11 -- 4 [3] Now, there are numerous experts involved. The request for responsive reports arises from Cherwell Creek’s further amended reply filed on the 22nd of September 2017, which uses the following formulation to support its non-admission of various – or numerous aspects of BMAs amended defence – and I quote: [4] “The applicant is seeking, but has not yet obtained, expert evidence in response to the expert evidence relied upon by the respondents.” The relevant paragraphs are listed in BMA’s proposed order 3(a) – and I will not repeat them. [5] In a letter from Cherwell Creek’s solicitors of 31st of January this year, Cherwell Creek notified which experts will address the relevant issues left outstanding in the reply, and they are: on mining, Mr Thatcher and Mr Stapleton; on rail and port issues, Mr Freeman; on coal handling and preparation, Mr Hillard; on landowner compensation, Mr Knight; on coal markets and pricing, Dr Bristow; mine valuation, Dr Rodeno; loss and damage, Mr Hall; product coal yield, Mr Clarkson; environment approvals, Mr Hansen; and transport logistics, which has since been clarified, I believe, to be Mr Trevillion. The last three experts I have mentioned: Mr Clarkson, Mr Hansen and Mr Trevillion are new to the case in the sense that they have not yet delivered a report, or have a report filed in these proceedings. [6] I will turn now to the question of whether I should revisit my directions made on the 14th of December. Putting aside any question of the Court’s power to make order 6, Cherwell Creek argued I had already exercised my discretion and should not revisit that. I did exercise my discretion not to make any order about responsive reports, but as I indicated during the hearing on Monday, that does not mean that I decided either that responsive reports were not required prior to the meetings of experts, or that the question of whether those reports were delivered was one for the convener of the CMEE process to decide. At the directions hearing, the question simply did not arise. [7] Since BMA sought to amend its defence, Cherwell Creek has maintained a consistent stance in affidavits filed in the case, in submissions made on various occasions, and in its pleadings. Cherwell Creek has maintained throughout that it would need to obtain further reports from its experts. In December, counsel for Cherwell Creek assured me that Cherwell Creek was not trying to avoid delivering responsive reports, and he knew that had to be done. I was persuaded, though, that the management of -- 4 of 11 -- 5 those reports could be left to the CMEE convener. And that was, I should note, the reference to the CMEE process was one that I initiated by providing to counsel, in advance, the then, and still, consultation draft of guidelines that have not yet been finalised. [8] Given the number of experts and range of disciplines involved, I accepted there was good reason to leave the timing of steps with the convener. Having reviewed the transcript, I see I did not clearly articulate that I saw sense in not delaying all meetings of experts until responsive reports were available, and anticipated the convener would be able to manage a staged approach with expert meetings following delivery of response reports. That would have provided some welcome efficiency in this protracted and difficult litigation. Had I had an indication in December that Cherwell Creek might not deliver responsive reports, given BMAs evidenced desire to have them before the expert meetings, I would have heard argument about that, and determined that matter on the day. [9] It was some time after I made the direction that Cherwell Creek suggested such reports were not necessary. That was controversial. There were detailed exchanges between the solicitors about that, and about how BMA should, or whether it could, raise the matter with the Court. It is not necessary for me to go into the detail of that. Although I deferred the questions about my direction and the CMEE process described in the draft guidelines, I must address a misapprehension in BMAs submissions. The way I read them, there are a number of them, but they can be left to the adjourned hearing. The one that I need to address is a submission about reports from the convener to me. And this is an important issue because of the state of the evidence about the approach taken to responsive reports within the CMEE. So I feel I need to address it now. [10] In paragraph 32 of the submissions, BMA suggested the convener was able to make a private and confidential report to the President, that is, a report the parties would not see. That is a misinterpretation of the draft guidelines for expert evidence in the Land Court, and it calls for clarification by the Court, when those guidelines are finalised so that that interpretation does not arise in the future, but at page 5, the draft refers to reporting on progress of the dispute to the President, subject to the obligation -- 5 of 11 -- 6 of confidentiality. That is a reference to the obligation of confidentiality to the parties and to the experts. It does not mean the convener can make a confidential report to the President. To do that, would be in direct conflict with the description of the process as being without prejudice. One of the documents that will be produced, ultimately, is a format for – an approved form for a report by the convener. [11] The only specific information I have about the question of responsive reports comes from the parties, and they have observed the without prejudice nature of the process, and limited, quite properly, what they have said about it. And my decision today is based only on the affidavits read on this application and on counsel’s submissions, but it seems to me there is no contest about these things. Cherwell Creek has not delivered responsive reports. Cherwell Creek considers their experts’ responses can be worked into the expert meeting process without prior reports, at least at this stage. And Cherwell Creek is not under a direction by the convener, at least now, to deliver any responsive reports. And I note that counsel for Cherwell Creek said the convener may well order responsive reports in the future. [12] That may be, however, as I said earlier, if I thought that might be a live issue between the parties, I would have dealt with the matter at the directions hearing because of the nature of the litigation to date – it is protracted. The communications between the parties are extremely adversarial, bordering on hostile. It would not have been appropriate for a convener in a without prejudice process to resolve such a question. In December, it seemed clear to me that both parties agreed responsive reports were required, and that was the understanding on which I acted in making the disputed direction. I must observe, though, that, at least initially, BMA appeared content to leave the question of the report to the convener. [13] That said, during the directions hearing in December, I said, as issues were encountered in the CMEE process, if they needed a determination by the Court, they could be brought back to me, which is what BMA has done. And I do not accept that by making any of the orders sought, that I am dealing with today, I would be undermining the CMEE process, or cutting across the convener’s powers or role, as I conceived it to be in December. An issue has arisen. The circumstances have changed. When I directed the case to CMEE, I had fresh information on an important -- 6 of 11 -- 7 matter, and I see no impediment to my revisiting BMA’s request for an order that Cherwell Creek deliver responsive reports. [14] Now, turning to the merits of that request, BMA seeks orders that are contrary to the procedure outlined in the Land Court Rules, and contrary to the course of reports as directed by Member Smith in April of 2016. Looking, firstly, at the Rules, rule 24E provides for a joint report to precede any other statement of evidence. In this case, however, a different course was adopted. As I have only recently come into the case, I do not have the full history of how that occurred, whether it was a course suggested by the Court, or one that was proposed by one or both of the parties. I suspect it was the latter. In any case, the Court did so direct, presumably with the parties’ input, and no complaint has been made about those directions while I have been managing the case, and it is a sensible process. The parties have used their expert reports to inform, and provide particulars for, very complex pleadings. The expert evidence is going to play a critical role, both before and during the hearing, in defining the scope of the issues. [15] Turning to the sequence of reports that Member Smith provided for in his directions in April of 2016, by then, Cherwell Creek had filed reports from nine experts. And the orders picked up from that stage and provided for the following path to a hearing: BMA would file its expert reports, BMA would file its amended defence, Cherwell Creek would file an amended reply, then meetings of experts, and the joint reports would follow, then both Cherwell Creek and BMA could file further expert reports in response, and then it went to hearing. The directions evidence an intention that the experts will commit their opinions to writing before their meeting, and that is relevant to the three experts who have not delivered reports, Mr Clarkson, Mr Hansen, Mr Trevillion. Even though their reports are responsive to BMA’s reports, it would be contrary to the spirit of Member Smith’s directions for experts to meet without some report from their counterpart. As a matter of fairness, it is difficult to see how there could be a change to that process mid-course. [16] I will now turn to the responsive reports from experts who have already delivered their reports. Member Smith’s directions provided for responsive reports after the joint reports, not before them. It is not clear to me what that means or why they were -- 7 of 11 -- 8 to follow the meetings and the joint reports. It is not clear whether they were to be responsive to reports filed before the meetings or to the joint report or both. Whatever the meaning, there was no provision in the timetable and program that he set for responsive reports prior to the expert meetings. BMA has now made a case for responsive reports set out in Mr Hurford’s affidavit of the 22nd of March 2018. He identified various issues that the experts engaged by Cherwell Creek have not yet addressed. I question whether all the matters he identified call for a further report before the experts meet. [17] It is often the case that experts have not addressed all matters raised by their counterpart before they meet. That is one of the purposes of the meeting and joint report under a system where individual reports are provided beforehand. The joint report – the meeting and the joint report is the opportunity for experts to discuss and, if possible, resolve their differences. In the joint report, the experts are expected to engage directly with the information, assumptions, methodology and conclusions of their counterpart. That said, some of the matters identified by Mr Hurford are substantial including alternative geological models which underpin different mine plans. Those mine plans have implications for a number of the factual disputes the court must determine. [18] If the experts, on some issues, are able to assist the Court, they will need to provide an opinion on information available at different dates as well as on different scenarios, and, ultimately, the Court’s decision about those matters will happen after the expert process, not before, and that complicates the exercise for the experts. In a letter, Cherwell Creek’s solicitors proposed the responses could be worked into the meetings of experts, but Cherwell Creek has not explained how, nor has it met Mr Hurford’s analysis of the state of the report at present and, frankly, I have not sought to read all of the expert reports and try to assess whether Mr Hurford’s analysis, particularly on those more substantial issues, is correct. I am acting on the basis that it is, in effect, uncontested. [19] Another issue I have to consider is the impact of responsive reports on the timing for the hearing. I accept that is a relevant factor. On Monday, I expressed my frustration that Cherwell Creek was not in a position to advise how long it would take to prepare -- 8 of 11 -- 9 the reports. I am pleased that, so quickly, that was put right, and I now have a very clear idea of when reports might be provided. As a matter of course, this Court expects parties to be prepared to address the issues that naturally arise on applications that are before it. The experts, even the newly appointed experts, are not starting afresh. They have had BMA’s reports for some time. The Court has been advised, as have BMA’s representatives, that the experts are working on their responses. The work required for an expert to participate in a meeting of experts is the same work required to prepare a report. [20] I accept there is additional work in formulating and documenting an individual opinion, but it is a – what I would think, that that is a marginal addition. It is possible that the hearing will not be able to commence on the first day of the period that I have reserved, but I stress that period was fixed on by me when it seemed to everyone that responsive reports would be provided, and it was also fixed at a time when junior counsel for BMA could not confirm the availability of senior counsel. I do not see those dates as fixed in stone. It was always a tentative reservation. Until the joint reports are filed, there can be no certainty about the hearing dates. I will leave the listing as it is, though, and I can assure the parties that when the matter is ready to proceed, it will start, and there will be no difficulty in the Court’s calendar in achieving that. This is a priority case for the Court and it is time the matter was brought to hearing and determined. [21] Turning to the timetable that has been set out in the letter from Holding Redlich of 17th of April, it provides for seven reports being provided by the 18th of May or more by the 1st of June, and one report which is an additional report by one of the experts, Mr Stapleton, which is his report responding to the Caval Ridge Mine allegations, and that is to be provided by the 29th of May. By that time, BMA will have filed its summaries of the evidence of their lay witnesses. That timetable would allow some expert meetings to commence by late May which is still some three months before the date is reserved. [22] If that needs to be deferred, that is, the hearing, as I said, currently, there is no difficulty in the Court listing the matter for hearing as soon as it is ready. So taking into account the apparent position of Cherwell Creek in relation to responsive reports -- 9 of 11 -- 10 in December last year and now, taking into account the prior directions – the prior approach taken by the Court to the expert reports in this case, how critical the expert evidence is to defining the issues and the scope of the issues on which Cherwell Creek relies on expert opinion that has not yet been documented and the potential impact on hearing dates, I will order Cherwell Creek to file reports from the experts and by the dates nominated in the letter from Holding Redlich dated the 17th of April. [23] I will turn to the CMEE process briefly. BMA has asked for this to be suspended pending further order, and it is appropriate to do that until the balance of the application is decided. Whether the CMEE process resumes or not, directions for expert meetings and joint reports will have to be made. I note that there is a letter from Holding Redlich dated the 13th of December which identifies the groupings of experts for meetings and joint reports; although, I do not think that encompasses Mr Trevillion, and so it might need to be revised, but when the hearing resumes before me, I expect both parties to have considered what meetings and joint reports are required. So whoever manages the process can make appropriate arrangements. [24] There is one further matter I have to place on the record that relates to an aspect of the application that is adjourned for further hearing, that is, the direction made in my name on the 27th of February 2018. Quite apart from any of the submissions made by BMA about that direction, it was not made in the terms that I authorised. The direction I authorised did not reference rule 19(2)(b) of the Land Court Rules. All the matters that are set out in order 2 which are, as BMA has observed in its submissions, merely a repeat of matters set out in the rules. The direction that I authorised stated the powers of the convener in the terms described at page 5 of the drafted guidelines. It was to be an explicit statement of powers that were implicit in the reference to those guidelines by order 6. I am investigating how the order was issued in my name in terms that I did not authorise. [25] However, having identified the error on the record, it should be corrected and I will vacate that order, but I stress that has no bearing on BMA’s submissions about that direction on other grounds. The parties may still ventilate those arguments at the next hearing. I just cannot allow an error to remain on the record. Turning to costs, BMA sought costs of the application. As I have adjourned the application part-heard, I will -- 10 of 11 -- 11 reserve the question of costs of the hearing on Monday and of today until I have disposed of the application in full. I will take the usual approach. I believe, without fettering my discretion, I can indicate that I would expect that the costs of Monday’s argument and of today would follow the event. However, I am happy to hear from Cherwell Creek’s counsel about that when we resume. (Orders made) -- 11 of 11 --