LAND COURT OF QUEENSLAND

CITATION: Cherwell Creek Coal Pty Ltd v BHP Queensland Coal

Investments Pty Ltd & Ors (No. 11) [2017] QLC 59

PARTIES: Cherwell Creek Coal Pty Ltd (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 Development 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/s: MRA1332-08

DIVISION: General division

PROCEEDING: Hearing of an application

DELIVERED ON: 4 December 2017

DELIVERED AT: Brisbane

HEARD ON: 1 November 2017

HEARD AT: Brisbane

PRESIDENT: FY Kingham

ORDERS: 1. The respondents must provide the applicant with

particulars of the members of the selection study

team.

2. Otherwise, the applications for further particulars

and disclosure are refused.

3. The matter is listed for review at 10am on Thursday

14 December 2017.

CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND

TERRITORY COURTS – PARTICULARS – where the

applicant requested further and better particulars – whether

the particulars requested were required to expose the

respondents’ case and to avoid the applicant being taken by

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surprise – whether the respondents’ explanations for a

denial required further material facts to be pleaded –

whether references to passages of expert reports provided

sufficient particulars – where the respondents were required

to provide particulars of the members of a selection study

referred to in the pleadings – where the application to order

the respondents to provide all other particulars requested by

the applicant was refused

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND

TERRITORY COURTS – DISCLOSURE – whether the

documents requested were directly relevant to an issue in

the proceedings – whether documents in the possession of a

consultant engaged by one of the respondents were within

the respondents’ control – whether the respondents had

inadvertently disclosed a document subject to legal

professional privilege – whether the respondents’ conduct

was inconsistent with maintaining the confidentiality of a

document so as to amount to a waiver of privilege in that

document – where the application to order the respondents

disclose further documents was refused

Land Court Rules 2000 r 13

Mineral Resources Act 1989 s 334ZJ(5)(a), s 334ZJ(5)(b),

s 334ZJ(5)(c), s 334ZJ(5)(d), s 334ZJ(5)(e), s 334ZJ(5)(f),

s 334ZJ(5)(g), s 334ZJ(5)(h)

Mineral Resources (Peak Downs Mine) Amendment Act

2008

Uniform Civil Procedure Rules 1999 ch 7, r 13, r 211,

r 211(1), r 223

American Flange and Manufacturing Co Inc v Rheem

Australia Pty Limited [1963] NSWR 1121, cited

Banque Commercial SA (In Liquidation) v Akhil Holdings

Limited (1990) 169 CLR 279, applied

Brisbane City Council v Mio Art Pty Ltd [2012] 2 Qd R 1,

cited

Bruce v Odhams Press Ltd [1936] 1 KB 697, cited

Deemah Marble & Granite Pty Ltd v Sutherland [2001]

NSWSC 829, cited

Erskine v McDowall [2011] QDC 192, cited

Expense Reduction Analysts Group Pty Ltd v Armstrong

Strategic Management and Marketing Pty Ltd (2013) 250

CR 303, applied

Goldsmith v Sandilands (2002) 190 ALR 370, applied

Gilbert v Goodwin (No. 3) [2006] 1 Qd R 499, applied

Housing Commission of NSW v Falconer [1981] 1 NSWLR

547, cited

Lonrho Ltd v Shell Petroelum Co Ltd [1980] 1 WLR 627,

cited

MacArthur Central Shopping Centre Pty Ltd (as TTE) v

3

Valuer General [2016] QLC 10, applied

Mercantile Mutual Custodians Pty Ltd v Village/Nine

Network Restaurants & Bars Pty Ltd [2001] 1 Qd R 276,

applied

Osland v Secretary, Department of Justice (2008) 234 CLR

275, applied

Peninsula Shipping Lines Pty Ltd v Adsteam Agency Pty Ltd

[2008] QSC 317, applied

Police & Nurses Credit Society Ltd v Burgess Rawson (WA)

Pty Ltd [2006] FCA 1395, applied

Sims v Wran [1984] 1 NSWLE 317, applied

Taylor v Santos Ltd (1998) 71 SASR 434, cited

The Queensland Local Government Superannuation Board

v Allen [2016] QCA 325, applied

Trade Practices Commissions v Total Australia (1975) 24

FLR 413, applied

Tri-Star Petroleum Company and Ors v Australia Pacific

LNG Pty Limited & Ors [2017] QSC 136, cited

Wilson v Wilson (1952) 69 WN 358, cited

APPEARANCES: G Gibson QC and N Loos of Counsel, instructed by

Holding Redlich Lawyers, for the applicant

S Doyle QC and A Stumer of Counsel, instructed by

Allens, for the respondents

Background

[1] Cherwell Creek asks the Court to require the respondents (BMA) to provide further

particulars of their Amended Defence and to disclose certain documents. This is

another interlocutory application in a long running compensation claim brought by

Cherwell Creek under special provisions in the Mineral Resources Act 1989 which

came into force in May 2008 (the Amending Act).1 A brief summary of key issues

provides context for Cherwell Creek’s applications.

[2] The compensation provisions invoked by Cherwell Creek form part of a special

purpose statutory regime which resolved competing claims by the parties about their

eligibility to obtain a mining lease over an area of land owned by BMA. Before the

Amending Act commenced, Cherwell Creek and BMA held overlapping and

apparently inconsistent resource tenures and Cherwell Creek had applied for a

mineral development licence over the disputed area (MDLA364). The effect of the

Amending Act was that BMA was declared eligible to apply for mining and

associated rights over the area of MDLA364. Cherwell Creek was granted a

1 Amendments to the Mineral Resources Act 1989 were introduced by the Mineral Resources (Peak

Downs Mine) Amendment Act 2008.

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conditional right to claim compensation from BMA for loss of opportunity to

commercialise the MDLA364 coal resource.

[3] To succeed in its claim, Cherwell Creek must establish it would have been able to

commercialise the MDLA364 coal resource, if the Amending Act had not been

passed. A necessary incident of that is that Cherwell Creek would have been granted

the necessary mining and infrastructure tenures. It alleges it would have been

granted MDLA364 by May 2008 and the necessary mining and infrastructure

tenures by July 2010.

[4] BMA denies Cherwell Creek would have been granted the necessary tenures to

commercialise the MDLA364 coal resource. By way of explanation for that denial,

BMA raised a number of issues, some of which are relevant to a number of

Cherwell Creek’s requests for particulars and disclosure. They include the

following:

1. The most appropriate and economic use of the area of MDLA364 was to

locate the infrastructure for a mine then proposed by BMA, the Caval Ridge

mine (the prospective use issue);2 and

2. In order to secure a mining lease Cherwell Creek would have had to have

paid compensation to BMA as the landowner. That compensation would

have included BMA’s loss and additional expense arising from BMA

relocating its infrastructure for the Caval Ridge mine from the area of

MDLA 364 to a location within the boundaries of BMA’s mining lease

(ML1775). BMA alleges it would have been compensated for loss of profits

from the coal on ML1775 that BMA would not have been able to mine if the

infrastructure was relocated (the sterilised coal), the additional costs in

mining the coal not sterilised, and a two year delay in production for the

Caval Ridge mine (the special loss issue).3

[5] In determining Cherwell Creek’s claim, the Court must engage in at least two

hypothetical exercises. Firstly, the Court must decide whether the Minister for

Natural Resources and Mines would have granted Cherwell Creek the necessary

tenures (the prospective use issue arises here). Secondly, it must determine what

2 Amended Defence to Third Amended Annexure A, filed 21 July 2017, paras 11(b)(iii), 14(f)(ii)-(v). 3 Amended Defence to Third Amended Annexure A, filed 21 July 2017, paras 11(c), 14(f)(ii)-(iii).

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Cherwell Creek’s compensation liability to BMA would have been (the special loss

issue arises here).

[6] The hypothetical nature of the allegations is significant for some of Cherwell

Creek’s requests for further particulars and disclosure. Proportionality is an

important consideration where Cherwell Creek asks BMA to particularise a

hypothetical proposition. Further, in considering what would (most likely) have

happened if the Amending Act had not been passed, the date for the assessment and

the information that would have then been available will determine whether

information sought by Cherwell Creek should be provided.

Application for particulars

Principles

[7] The object of particulars is to ensure the efficient process of the Court4 by

adequately exposing the opponent to the scope of the case being brought, to ensure

the party is not caught by surprise.5 The particulars should be sufficiently detailed to

put the other party on their guard as to the case they must meet and to enable them

to prepare for trial.6 A distinction is drawn between particulars and evidence,7

although sometimes proper particulars may reveal aspects of the evidence that will

be called to prove the case.8

[8] The degree of particularity depends upon the nature of the case.9 It is essential to

uphold a sense of balance and proportionality.10 The case management of the

proceeding is a relevant consideration.11 A court is less inclined to order particulars

4 Deemah Marble & Granite Pty Ltd v Sutherland [2001] NSWSC 829 at [8]. 5 Sims v Wran [1984] 1 NSWLE 317 at 321; Banque Commercial SA (In Liquidation) v Akhil

Holdings Limited (1990) 169 CLR 279 at 286; Police & Nurses Credit Society Ltd v Burgess Rawson

(WA) Pty Ltd [2006] FCA 1395 at [17]. 6 Bruce v Odhams Press Ltd [1936] 1 KB 697 at 712-713 applied in Goldsmith v Sandilands (2002)

190 ALR 370 at 371. 7 Trade Practices Commissions v Total Australia (1975) 24 FLR 413 at 417. 8 Wilson v Wilson (1952) 69 WN 358 applied in Deemah Marble & Granite Pty Ltd v Sutherland

[2001] NSWSC 829 at [3]. 9 American Flange and Manufacturing Co Inc v Rheem Australia Pty Limited [1963] NSWR 1121 at

1126. 10 Police & Nurses Credit Society Ltd v Burgess Rawson (WA) Pty Ltd [2006] FCA 1395 at [18]. 11 [2006] WASC 281 at [7].

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where evidence is filed by affidavit.12 This Court will also take into account the role

expert reports may play in refining the issues.13

[9] I have applied those principles in considering the requests for further particulars. I

have also considered the role further directions will play in clarifying any ambiguity

arising from the current pleadings. From the outset, the parties identified the critical

role expert reports would play in refining the issues. The expert report process has

not yet concluded. I will make further directions for the pre-trial processes shortly.

They will likely require the parties, at an appropriate stage, to identify if and to what

extent the expert reports have resolved or refined the issues that arise on the current

pleadings. The requests for particulars maintained at the hearing are addressed in the

order of the relevant paragraph of the Amended Defence.

Paragraph 2(b)(ii) – no MDL would have been granted to the applicant

[10] Cherwell Creek pleads it would have been granted MDL364 in or about May 2008,

but for the Amending Act.14 In paragraph 2(b)(ii) BMA alleges “no mineral

development licence could or alternatively would have been granted to the

applicant”.15 Cherwell Creek asked for particulars of each material fact relied on in

support of that allegation. The form of BMA’s response caused some concern to

Cherwell Creek. Mr Gibson QC, for Cherwell Creek, said BMA’s response leaves

open the possibility it may lead evidence of other matters (not particularised). 16 Mr

Gibson fixed on the following statement:17

“…without limiting the evidence that our clients will rely upon at trial to

prove the material fact referred to above, the matters which will be relied

upon are:…” (emphasis

added)

[11] Mr Doyle QC, for BMA, argued it had adequately defined its case. It relies on a

series of factual matters which are set out in the response and the inference that it

says the Court can draw from those matters.

[12] The reservation relates to evidence. BMA is not required to provide further

particulars of paragraph 2(b)(ii).

12 Deemah Marble & Granite Pty Ltd v Sutherland [2001] NSWSC 829 at [6]. 13 MacArthur Central Shopping Centre Pty Ltd (as TTE) v Vauler General [2016] QLC 10 at [17]. 14 Third Amended Annexure A to the Originating Application, filed 6 May 2016, para 4(a). 15 Amended Defence to the Third Amended Annexure A, filed 21 July 2017, para 2. 16 T1-6, lines 10 to 20. 17 Letter Allens to Holding Redlich, page 1, 9 June 2017; Affidavit of Mr Toby Boys, filed 31 July

2017, Ex TMB-4, p 50.

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Paragraph 3(b)(i)(B) – the applicant would not have undertaken development activities

between May and September 2008

[13] Cherwell Creek alleges that, but for the Amending Act, it would have undertaken

certain studies, investigations and designs between May and September 2008 to

prepare to mine the MDLA364 coal resource.18 In paragraph 3(b)(i)(B) BMA denies

it would have done so because, on the information available to BMA as at May

2008, it was not economically viable to extract and sell the MDLA364 coal

resource.

[14] It provided the following particulars:19

“The Respondents rely upon the expert report of Mr. Gregory Maiden dated

21 November 2016, paragraphs 6.10 to 6.11, Section 18 and paragraphs

19.10 to 19.11.”

[15] Although Mr Gibson accepted particulars can be provided by reference to expert

reports, he argued Cherwell Creek could not identify precisely what is relied upon

from those particulars.20

[16] Depending on the form and clarity of an expert report, it may be necessary to extract

and summarise the author’s conclusions and the basis for them. As Mr Gibson

agreed, it is a question of degree.

[17] Mr Maiden is a mining engineer with experience in production and mine planning.

In section 18.18 of his report, he evaluated the viability of Cherwell Creek’s

proposed mine on three scenarios by reference to different dates. The relevant

scenario is as of May 2008, as is clear from paragraph 3(b)(i)(B). In both his tables

and his analysis, Mr Maiden drew sufficiently clear distinctions between the

scenarios and his opinion on the relevant one is easily ascertained.

[18] The only illustration of imprecision given by Mr Gibson was Mr Maiden’s reference

in [19.10] to “geology data” and “coal quality data”.21 There is no genuine

ambiguity about the source data for Mr Maiden’s opinion. He made that explicit in

paragraphs 5.2 and 6.9 of the report. Both reference the MBGS (Whitby) Model as

at 2008, a model well known to both parties.

18 Third Amended Annexure A, filed 6 May 2016, para 4(b). 19 Outline of argument for the respondents: application for particulars, filed 26 October 2017, para 22. 20 T1-9, lines 5 to 20 and T1-9, lines 38 to 40. 21 Expert Report of Mr Gregory Maiden, filed 22 November 2016, para 19.10.

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[19] Mr Maiden will participate in a conference with an expert in the same field engaged

by Cherwell Creek. They will produce a joint report identifying the areas on which

they agree and disagree. Their report may well reduce the scope of the dispute or

sharpen its focus. If there is a lack of clarity about BMA’s case once the joint report

is provided, that can be addressed then.

[20] BMA is not required to provide further particulars of paragraph 3(b)(i)(B).

Paragraph 3(b)(i)(C) – as at May 2008 there were extensive constraints on and the

applicant had not secured rights of access to rail or port facilities to enable it to export

coal

[21] This is another explanation for BMA’s denial that Cherwell Creek would have taken

various steps to develop the mine between May and September 2008. As at May

2008, BMA alleges there were extensive constraints on rail and port facilities and

Cherwell Creek had not secured access to those facilities to enable it to export the

MDLA364 coal. BMA provided the following particulars:22

“The Respondents rely upon the expert report of Mr. Michael Allen dated

14 November 2016, at paragraphs 4.2 to 4.18, 6.1 to 6.31 and 7.1 to 7.9.”

[22] Mr Gibson made the same complaint about these particulars as he did for the

particulars for paragraph 3(b)(i)(B). He argued this was a worse example involving

some 57 paragraphs, but did not argue any specific ambiguity or lack of clarity that

might be remedied by particulars. I am not persuaded there is a genuine ambiguity

about these particulars.

[23] BMA raised another justification for refusing to provide further particulars. Mr

Doyle argued it was not necessary for BMA to provide particulars of an explanation

for a denial.23

[24] Mr Gibson accepted that as a general proposition. However, he relied on the

reasoning of Justice Bond in Tri-Star Petroleum Company & Ors v Australia

Pacific LNG Pty Limited & Ors.24 In that case, Bond J recognised particulars could

be sought where what is pleaded by way of explanation for a denial is also relied on

22 Outline of argument for the respondents: application for particulars, filed 26 October 2017, para 30. 23 Gilbert v Goodwin (No. 3) [2006] 1 Qd R 499 at 499-500. 24 Tri-Star Petroleum Company and Ors v Australia Pacific LNG Pty Limited & Ors [2017] QSC 136

at [25].

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to advance a positive case. It may be necessary to plead facts which, if not stated

specifically, might take another party by surprise.

[25] Access to the necessary transport infrastructure is raised by Cherwell Creek in its

claim. It alleges it would have taken a number of steps between May and September

2008, including to prepare a rail spur design, to identify the optimal location of

infrastructure.25 It also alleges there would have been sufficient capacity available

in the secondary market for rail on the Goonyella rail system to rail coal from the

mine to the port throughout the relevant life of mine period.26 Cherwell Creek has

already obtained an expert report about the matter. BMA has provided its own and

the particulars reference relevant passages. I am not satisfied further particulars are

required to prevent Cherwell Creek being taken by surprise.

[26] BMA is not required to provide further particulars of paragraph 3(b)(i)(C).

Paragraph 3(b)(ii) – it was not practicable for the applicant to complete the steps they

pleaded they would have taken between May and September 2008

[27] Cherwell Creek requested particulars of the facts BMA relied on in support of its

allegation it was not practicable for Cherwell Creek to complete those steps between

May and September 2008.27 Mr Doyle argued this is a request for evidence not

particulars.

[28] Paragraph 3(b)(ii) puts Cherwell Creek on notice that the practicability of

completing the pleaded steps in the period from May 2008 to September 2008 is

disputed. It is clear from both parties’ submissions that they both perceive this as an

allegation of impracticability in a temporal sense. That is reinforced by the

following paragraph of the Amended Defence which raises financial capacity. I am

not persuaded BMA’s explanation requires further definition to avoid surprise.

[29] BMA is not required to provide further particulars of paragraph 3(b)(ii).

Paragraph 3(b)(iii) – the applicant did not have the financial ability to carry out and

complete the steps pleaded

25 Third Amended Annexure A to Originating Application, filed 6 May 2016, para 4(b). 26 Third Amended Annexure A to Originating Application, filed 6 May 2016, para 10(l). 27 Affidavit of Toby Michael Boys, filed 31 July 2017, Ex TMB-1, para 3(b)(ii).

10

[30] Another of BMA’s explanations for denying Cherwell Creek would have taken the

steps pleaded relates to financial capacity. BMA alleges that, at all material times,

Cherwell Creek has had a paid up capital of $2.00, has not owned any real property

or shares and did not have the financial ability to carry out and complete those steps.

[31] BMA provided detailed particulars.28 During argument, Mr Gibson said they were

deficient because they do not specify the amount of funding Cherwell Creek would

have required in order to undertake the steps.29

[32] BMA has identified why it says Cherwell Creek had no capacity to either self-fund

or source funds from others. Cherwell Creek’s own pleading is somewhat imprecise

about what steps would be taken. Mr Doyle submitted the costs would not have

been trivial and that Cherwell Creek has not disclosed any documents that would

indicate any capacity to raise the significant sum that would be required. I am not

satisfied it is necessary for BMA to state the amount of funding that would have

been required. Cherwell Creek has sufficient particulars to understand the nature of

the case it must prepare to meet.

[33] BMA is not required to provide further particulars of paragraph 3(b)(iii).

Paragraph 11(c)(vi) – BMA would have been entitled to total compensation that

exceeded $120 million

[34] This pleading raises the special loss issue. BMA alleges it would have been entitled

to more than $120 million in compensation for its losses arising from relocating the

infrastructure for the Caval Ridge mine. That calculation assumes a two year delay

in production for the Caval Ridge mine arising from the (hypothetical) relocation of

its infrastructure. BMA has identified the factors taken into account in arriving at

that estimate.30 Mr Gibson argued BMA had failed to provide particulars of how

those factors would have resulted in a two year delay.

[35] The factors BMA has identified are not susceptible to precise timeframes, involving

variables and combinations of variables in a hypothetical scenario. At the hearing,

BMA will lead evidence to support its estimate and Cherwell Creek can test

28 Affidavit of Toby Michael Boys, filed 31 July 2017, Ex TMB-2, pp 17-18. 29 T1-25, lines 10 to 25 and T1-26, lines 35 to 45. 30 Further and Better Particulars of the Defence, filed 25 August 2017, para 4(e)(iii).

11

whether it is reasonable. BMA has adequately exposed the basis for an estimate of

two year’s delay of production.

[36] BMA is not required to provide further particulars of paragraph 11(c)(vi).

Paragraph 14(f)(ii)(B) – BMA had identified MDLA as the most economic and optimal

placement for the Caval Ridge mine infrastructure.

[37] This pleading relates to the prospective use issue. BMA alleges that, by May 2008,

it had identified the area of MDLA364 as the most economic and optimal placement

of the infrastructure for the Caval Ridge mine. It provided further particulars,

including that this was identified by the selections study team for the Peak Downs

Mine expansion project.31

[38] There are two aspects of the requests for further particulars in issue. The first is the

identity of the members of the selection study team. Mr Doyle argued their identity

was not material, but did not strongly resist the application. BMA pleads a

judgment by members of the team that the area of MDLA 364 was the most

economic and optimal placement for the Caval Ridge mine infrastructure. As their

judgment is imputed to BMA, their identity is a material fact that should be

particularised.

[39] The second aspect of the dispute about particulars is Cherwell Creek’s request that

BMA state the material facts in support of the allegation that this was the most

economic and optimal placement for the infrastructure. Mr Doyle argued this

misconceives the pleading. BMA does not allege it was the most economic and

optimal placement. Rather, it alleges it had decided that it was. Mr Doyle

characterised that as a statement of historical fact and BMA did not allege it was

correct in making that decision.

[40] Mr Gibson argued BMA’s decision only has relevance for BMA’s case if it was

correct in deciding MDLA364 was the most economic and optimal location for the

Caval Ridge Mine infrastructure. I do not accept that submission. It confuses and, to

some extent, conflates two discrete assessments.

31 Further and Better Particulars of the Amended Defence, filed 25 August 2017, para 3.

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[41] The first is BMA’s subjective assessment that this area was the most economic and

optimal location for its infrastructure for the Caval Ridge mine. That is a decision

by BMA about the best way to exploit the Caval Ridge mine coal resource. The

timing of the decision is important as it precedes the second assessment relevant to

the prospective use issue.

[42] That is BMA’s allegation that its proposed use of MDLA364 was the most

appropriate and economic use of that land (paragraph 14(f)(iv)). That is a discrete

issue involving a different decision maker. BMA alleges the decision maker in the

hypothetical scenario of Cherwell Creek applying for a mining lease, would have

considered use of MDLA364 for the Caval Ridge mine infrastructure was the most

appropriate and economic use of that land.

[43] Although BMA alleges it is so, that is not an assessment that would have fallen to

BMA to make. It would have been a matter for the Minister.

[44] Further, BMA does not rely solely on its decision about placement of infrastructure.

It also pleads the consequences if BMA could not give effect to that decision. The

consequences for BMA are pleaded as the special loss issue. However, BMA pleads

another consequence that would have affected this assessment: the loss of royalties

from the coal sterilised on ML1775 if BMA had to relocate its infrastructure.

[45] It is the fact that BMA planned to use MDLA364 for its infrastructure and the

consequences of not being able to put that plan into effect that BMA relies on to

assert use of MDLA364 for that purpose is the most appropriate use of the land.32

[46] As pleaded, BMA’s defence does not depend on the Court accepting the selection

study team was correct in deciding MDLA 364 was the most economic and optimal

location for the Caval Ridge mine infrastructure. BMA has not put that in issue.

[47] BMA must provide Cherwell Creek with particulars of the members of the selection

study team. Otherwise, BMA is not required to provide further particulars of

paragraph 14(f)(ii)(B).

32 T1-35, line 38 to T1-36, line 46.

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Paragraph 14(f)(iii) – if Cherwell Creek was granted the mining lease it would have

been necessary for the Caval Ridge Mine infrastructure to be placed within the

boundaries of ML1775

[48] Attachment 1 to Mr Gibson’s written submissions summarises Cherwell Creek’s

various requests for particulars and BMA’s responses. BMA has identified why, in

the hypothetical scenario, the infrastructure would have to be relocated, where it

says it would have relocated the infrastructure, and how it has calculated the loss

and expense that would have arisen from that hypothetical relocation. It is not clear

what further particulars Cherwell Creek would need to understand BMA’s position

on the special loss issue. As pleaded, I am satisfied the particulars adequately

expose BMA’s case.

[49] It is open to Cherwell Creek to dispute the infrastructure would need to be relocated

at all or to assert it could have been relocated elsewhere, thereby reducing BMA’s

loss and expense.

[50] BMA is not required to provide further particulars of paragraph 14(f)(iii).

Paragraph 14(f)(iii)(B) – BMA’s lost profit from sterilisation of coal due to relocation

of the Caval Ridge Mine infrastructure would have been $132.65 million per annum for

10 years

[51] Mr Doyle argued BMA’s particulars are sufficient for Cherwell Creek to understand

every aspect of the allegation concerning loss of profit. They identify the valuation

model which calculates loss using an index price of $115.93, with a relativity of

95.5%. Both the index price and the relativity figure are derived from a valuation

study from 2009, which has been disclosed by BMA. It seems the relativity %

relates, at least in part, to the quality of the coal. Cherwell Creek has data about the

quality of coal up to 500m within the boundary of ML1775. I am not satisfied

Cherwell Creek needs further particulars to understand how BMA has calculated its

lost profit.

[52] Cherwell Creek also sought particulars of the identity of the seller and potential

purchasers of the coal. At the hearing, Mr Gibson agreed that, in essence Cherwell

Creek was after particulars of the market and the price that could be achieved in that

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market.33 However, he later reiterated his argument that BMA would have had

potential purchasers in mind and should provide particulars of them.34

[53] Mr Doyle argued the seller was, necessarily, BMA as it would not otherwise be

entitled to compensation. He submitted it was not necessary for BMA to identify the

hypothetical potential purchasers.

[54] As already identified, the special loss issue requires the Court to engage in a

hypothetical exercise and determine what compensation would have been

determined prior to the hypothetical grant of the mining lease in July 2010. That is,

the Court must undertake the exercise as if it were doing so prior to July 2010, on

the information then available.

[55] In a real compensation claim, details of actual or proposed contractual arrangements

with a prospective purchaser would be relevant, if any existed. However, in the

hypothetical scenario, evidence of the market and the price that could be achieved

would suffice. It is open to Cherwell Creek to propose a different basis for

calculating BMA’s loss of profit than BMA has asserted. BMA has sufficiently

exposed the basis for its calculation of loss of profits.

[56] BMA is not required to provide further particulars of paragraph 14(f)(iii)(B).

Paragraph 14(f)(iii)(BA) – BMA would have incurred additional expenses of

approximately $120 million in the first three years of the Caval Ridge Mine because it

needed to place the initial box cut for the Horse Pit 500m east of BMA’s preferred

location where the coal seam is deeper and BMA would have needed to engage

additional contractors to remove the additional waste in order to avoid delay to

production

[57] This allegation is part of the special loss issue.

[58] Mr Gibson argued the particulars provided by BMA do not state:

1. Who identified the preferred location of the box cut;

2. Each material fact, matter and circumstances relied upon to support the

allegation the location chosen for the initial box cut was the preferred

location;

33 T1-40, lines 6 to 15. 34 T1-41, line 7.

15

3. The number of additional contractors which the respondents allege they

would have needed to engage; and

4. The number of contractors which the respondents allege would have been

present prior to engaging additional contractors.

[59] The first issue raise the same consideration as the complaint about the particulars of

paragraph 14(f)(ii)(B). For the reasons already given, the identity of the members of

the selection study team should be provided by BMA.

[60] The second issue is the decision about the preferred location for the initial box cut.

BMA has provided particulars of the reason for choosing the location for the initial

box cut: because it was as close as possible to the LOX line and would maximise

the recovery of coal. Mr Gibson has not explained how further particulars are

necessary for Cherwell Creek to prepare its case.

[61] The third and fourth issues misconceive the way in which BMA has calculated the

additional cost of removing the extra waste to reach the deeper coal reserves. It is

not calculated by the number of contractors, but by a rate per bank cubic metres

(bcm): 25.3 million bcm x $4.75 = $120,175,000. That is clear from the particulars

given in August 2017, which also references the valuation document which has

been disclosed to Cherwell Creek.

[62] BMA must provide particulars of the members of the selection study team.

Otherwise, BMA is not required to provide further particulars of paragraph

14(f)(iii)(BA).

Application for disclosure

Principles

[63] Applications for disclosure in proceedings in the Land Court are determined

according to the usual rules that apply in civil proceedings.35 The parties are obliged

to disclose each document in their possession or under their control which is

directly relevant to an allegation in issue in the pleadings.36 A document is directly

relevant if it tends to prove or disprove the allegation.37 The Court can order a party

to disclose a document or class of documents if there is or it appears there is an

35 Land Court Rules 2000 r 13; Uniform Civil Procedure Rules 1999 ch 7. 36 Uniform Civil Procedure Rules 1999 r 211(1). 37 Peninsula Shipping Lines Pty Ltd v Adsteam Agency Pty Ltd [2008] QSC 317 at [43].

16

objective likelihood that a party has not complied with its duty to disclose.38 The

power to order disclosure is discretionary. There must be something more than mere

suspicion to justify ordering disclosure on the basis of a complaint of incomplete

disclosure.39

[64] The applications for disclosure are considered by item number and, where relevant,

items raising the same issues are dealt with together. Any requests abandoned

before or during the hearing are not addressed.

Item 3 – XPAC database, geological model, mining reserves model and scheduling

model (in Runge’s possession)

[65] BMA asserts it has disclosed all relevant documents relating to geological and

mining models generated for the Peak Downs Mine PDX Study and the Caval

Ridge Selection Study. In her affidavit, Ms Petty explained BMA no longer holds

its geological models in the form in which they existed prior to July 2010, because

as additional drilling is undertaken the data from that drilling is added to the

geological models so that the earlier versions are replaced.40

[66] She also deposed that BMA has disclosed the current geological model for the

Horse Pit, the current working section geological model for the Horse Pit and the

current long term mine plan for the Horse Pit.41 She detailed the extensive searches

undertaken for earlier versions of the geological models and mine plan and said they

have not been located.42 To the extent that any source data concerning issues of

geology, the mine design, scheduling or landforms in respect of the Horse Pit or

Heyford Pit has been located, Ms Petty said the source data has been disclosed.43

[67] Cherwell Creek is dissatisfied with BMA’s disclosure of what it described as an

XPAC database. It may be better described as the geological and scheduling model

for the Caval Ridge mine using XPAC, a mining software. Cherwell Creek asserts

BMA’s attempts to find relevant documents is inadequate and it should have

38 Uniform Civil Procedure Rules 1999 r 223. 39 Mercantile Mutual Custodians Pty Ltd v Village/Nine Network Restaurants & Bars Pty Ltd [2001]

1 Qd R 276 at 283. 40 Affidavit of Toby Michael Boys, filed 31 July 2017, Ex TMB-7, para 105. 41 Affidavit of Alana Maree Petty, filed 13 October 2017, paras 38(a)-(c) and 51. 42 Affidavit of Alana Maree Petty, filed 13 October 2017, paras 42 and 44. 43 Affidavit of Alana Maree Petty, filed 13 October 2017, para 55.

17

undertaken a search for file types .xpk or .xdb during the date range 1 October 2007

to 8 May 2008.

[68] The request for the further search is based on Mr Krinke’s opinion. He has

experience with the XPAC software and said searching the suffixes .xpk or .xdb

may locate relevant files.44 Mr Gibson accepted these are common file references in

a mining company’s database. Mr Krinke raised only the possibility of further

documents being revealed.

[69] BMA’s document management system comprises four aspects or repositories:

Network drives

Databases called Documentum and Hummingbird;

E-rooms; and

Emails.45

[70] Pricewaterhouse Coopers was engaged to search and extract the materials for

review.46 Ms Petty described how the repositories were searched, using specified

parameters and what data sources were extracted for review. The interrogation of

BMA’s databases was extensive. Cherwell Creek has not suggested BMA’s search

terms were lacking in any way. The search extended beyond the limited date range

proposed by Cherwell Creek.

[71] Proportionality is an important consideration. BMA has already disclosed the

geological models and mine plans used to assess what coal would have been

sterilised if the Caval Ridge Mine infrastructure were relocated on ML1775. Given

the search and review exercise already undertaken by BMA, I am not satisfied there

is an objective likelihood that BMA has not complied with its disclosure obligation.

I decline the request to order BMA to undertake or allow the requested search of its

databases.

Item 3 – XPAC database, geological model, mining reserves model and scheduling

model; item 4 – the Runge report; and item 14 – “Heyford Pit Final Landform Plan”

and other documents

44 Affidavit of Toby Michael Boys, filed 13 October 2017, para 7. 45 Affidavit of Alana Maree Petty, filed 13 October 2017, para 10. 46 Affidavit of Alana Maree Petty, filed 13 October 2017, paras 10-17.

18

[72] It is convenient to deal with these three items together as they raise a common issue

about BMA’s control over documents possibly in the possession of Runge (now

RPM Global), a consultant to one of the respondents, BHP. Before considering that

question, there is one dispute about relevance which relates to item 4: the Runge

Report. I will deal with that first.

[73] The Runge Report is referred to in Chapter 5.2 of the Selection Study. Cherwell

Creek alleges it is directly relevant to the prospective use issue.47 It relies on the

opinion of Mr Stapleton, a Mining Engineer who said the Runge Report would

assist him to consider the accuracy of any mining schedules he may develop to

assess the potential interaction between the mine plan he has prepared for his expert

report and proposed or possible mining of the Caval Ridge Mine.48 The mine plan

he has prepared is for the mine proposed by Cherwell Creek.

[74] However, the pleadings do not raise any issue about the potential interaction

between Cherwell Creek’s proposed mine and the Caval Ridge mine. For that

reason, I would not be minded to require disclosure of item 4.

[75] Turning to the issue of control, a party must disclose each document in its

“possession” or under its “control”.49 Both counsel referred to the judgment of

Robertson DCJ in Erskine v McDowall and his reasoning that the concepts of

“power” and “control” are not synonymous.50 He considered control is a more

stringent requirement. Mr Gibson did not dispute Mr Doyle’s submission this

requires BMA to have a presently enforceable legal right or an actual and immediate

ability to obtain documents in Runge’s possession.51 Mr Doyle argued Cherwell

Creek had not demonstrated BMA had such a right.

[76] Mr Gibson said it is difficult to conceive that a company such as BHP would not

have that right and in the absence of evidence to the contrary I should draw that

inference. BMA has not asked Runge to produce any relevant documents in its

possession52 and there is no evidence it now holds any. However, I am satisfied they

47 Although Mr Gibson’s submissions refer to para 4(f)(ii) of the Amended Defence it is apparent that

should be a reference to para 14(f)(ii). 48 Affidavit of Toby Michael Boys, filed 4 October 2017, Amended Schedule A, Item 4, paras 1(a)-(d). 49 Uniform Civil Procedure Rules 1999 r 211. 50 Erskine v McDowall [2011] QDC 192 at [10]-[11]. 51 Lonrho Ltd v Shell Petroleum Co Ltd [1980] 1 WLR 627 at 635-636.; Taylor v Santos Ltd (1998) 71

SASR 434 at 438. 52 Affidavit of Alana Maree Petty, filed 13 October 2017, para 56.

19

would have done so in the past. Although Mr Doyle said it was for Cherwell Creek

to make its case, BMA could have provided evidence of the contractual relationship

between Runge and BHP.

[77] While it is open to the Court to draw the inference urged by Mr Gibson, there are

other considerations as well. The power to order disclosure under r 22353 is

discretionary. In declining to order disclosure in the terms requested, I have taken

into account the following matters.

[78] It is hardly oppressive to require BMA to make a request of Runge. However, the

request would be unproductive if BMA does not have a contractual right to require

Runge to produce documents, assuming they still exist.

[79] There is potential oppression to Runge in meeting either a request or an order, given

the passage of time. It is some 9 to 10 years since it performed the work for BHP.

There may be significant time and expense for Runge in searching for, extracting

and reviewing potentially relevant documents.

[80] There is an alternative means for accessing relevant documents in Runge’s

possession. Cherwell Creek could seek an order for non-party disclosure. This

would allow any oppression of Runge to be properly ventilated.

[81] In those circumstances, I decline Cherwell Creek’s request that BMA request Runge

provide documents in relation to these three items.

Request for disclosure: item 13 – documents relating to revenue received from the Caval

Ridge Mine

[82] Cherwell Creek seeks disclosure of documents about the sale of coal from the Caval

Ridge mine, including the seller and purchasers and the price at which it was sold.

Mr Gibson argued they are relevant to the special loss issue. BMA denies this

because they necessarily postdate July 2010, when Cherwell Creek alleges it would

have been granted a mining lease. Compensation would have to have been

determined before that date. The Caval Ridge Mine did not receive any revenue

until around April 2014.54

53 Uniform Civil Procedure Rules 1999. 54 Affidavit of Alana Maree Petty, filed 13 October 2017, para 91(b).

20

[83] Mr Gibson submitted the Court was entitled to take into account evidence of

subsequent events in assessing compensation. If the Court was now charged with

making an actual determination of compensation payable by Cherwell Creek to

BMA there is some scope for taking into account such evidence, depending on the

nature of the loss being assessed and the use that is made of the evidence. 55

[84] However, the Court will not make an actual determination of compensation payable

to BMA when it hears and decides Cherwell Creek’s claim. It will be deciding what

would most likely have been Cherwell Creek’s compensation liability to BMA if

Cherwell Creek’s application for a mining lease was successful. That must be

assessed as at July 2010, at the latest, because the mining lease could not have been

granted until compensation had been determined. Prior to July 2010, the Court

would have assessed the loss of profits to BMA for the sterilised coal on forecasts

about the market value of the coal. The documents Cherwell Creek seeks would not

have been available prior to July 2010.

[85] I decline the request to order disclosure of item 13.

Item 18 – creative thinking workshop documents and data; item 8 – Peter Cronin

documents

[86] Item 18 and item 8 are linked because Cherwell Creek’s interest in Peter Cronin’s

documents arises from his involvement in a “Creative Thinking Workshop” referred

to in disclosed documents.56 They reveal a workshop was proposed within BMA to

discuss how to deal with risks imposed by the possible grant of MDLA364. That is

relevant to the special loss issue.

[87] At the hearing, Mr Gibson accepted the workshop did not take place and did not

pursue the request for item 18.57 He also accepted BMA does not hold the hard

drive for Mr Cronin’s computer and did not pursue an earlier request for a search of

Mr Cronin’s documents in that regard.

55 Brisbane City Council v Mio Art Pty Ltd [2012] 2 Qd R 1; Housing Commission of NSW v Falconer

[1981] 1 NSWLR 547. 56 BMA132326 and BMA132328. 57 T1-64, line 40.

21

[88] However, he maintained BMA should be required to search its electronic records for

emails from or to Peter Cronin, presumably for any that relate to the risks imposed

on BMA if MDLA364 was granted.

[89] Mr Doyle submitted it was highly unlikely Mr Cronin, who had a human resource

role when he worked for BMA, would have handled any documents relating to

geology or mine planning which had not already been disclosed.

[90] Ms Petty deposed to the searches undertaken for any documents relating to risks

imposed if MDLA364 was granted. The email which brought Mr Cronin to

Cherwell Creek’s attention was sent to Mr Glen Sedgman who was the leader of the

Caval Ridge Mine Selection Study until September 2008. Ms Petty deposed to the

searches of Mr Sedgman’s emails and the disclosure of any documents found on

that issue.58

[91] The only justification for making a targeted search of Mr Cronin’s emails identified

by Cherwell Creek is his connection to a proposed workshop which did not proceed.

Given Ms Petty’s evidence about the scope of BMA’s searches and disclosure, the

fact the workshop did not proceed and Mr Cronin’s human resources role in BMA, I

decline the request. I am not satisfied there is an objective likelihood that BMA has

not complied with its disclosure obligation.

Item 19 – draft submissions referred to in BMA102489 and attached to BMA103120

and BMA102856

[92] Cherwell Creek seeks disclosure of the draft submissions referred to in the email

chain in BMA102849 and attached to BMA103120 and BMA102856.59 BMA

resists producing the draft submissions on two grounds: relevance and legal

professional privilege. Mr Gibson accepted the basis upon which privilege was

claimed but argued it had been waived.60

[93] BMA argued the draft submission is not relevant. The final submission was the one

provided to the Minister and that has been disclosed. The draft submissions are

referred to in an email exchange about a formulation of its loss that BMA no longer

maintains. At the time it disclosed the emails, BMA’s defence alleged that

58 Affidavit of Alana Maree Petty, filed 13 October 2017, paras 15(c), 15(d) and 78. 59 Applicant’s submissions disclosure, filed 23 October 2017, para 49. 60 T 1-73, lines 6 to 11.

22

relocating the Caval Ridge mine infrastructure would have sterilised 52.5 million

tonnes of coking coal on ML1775.61 BMA disclosed the emails because they

identified 52.1 or 52.5 million tonnes of coking coal had been sterilised and how

those figures were reached. Now, the Amended Defence alleges 38 million tonnes

of ROM coal and 26 million tonnes of product coal would have been sterilised.62

That is a different formulation of loss and the emails would not be relevant to the

special loss issue as now particularised. I would not be minded to order disclosure

of this item for lack of relevance.

[94] In any case, BMA claims privilege in the draft submissions. Mr Gibson argues that

privilege has been waived by BMA’s disclosure of the emails.

[95] I have had regard to the useful summary of the principles of privilege and waiver by

Burns J in The Queensland Local Government Superannuation Board v Allen,63 to

which Mr Gibson referred. Mr Gibson also agreed with Mr Doyle that I should have

regard to the test in Osland v Secretary, Department of Justice.64

[96] Mr Gibson argued that if a document discloses the contents of a privileged

document, in whole or in part, then the veil of protection is lifted for the whole of

the document.65 However, the test in Osland requires the Court to assess the

conduct in context and in the circumstances of the case:

“Waiver of the kind presently in question is sometimes described as

implied waiver, and sometimes as waiver ‘imputed by operation of law’. It

reflects a judgment that the conduct of the party entitled to the privilege is

inconsistent with the maintenance of the confidentiality which the privilege

is intended to protect. Such a judgment is to be made in the context and

circumstances of the case, and in light of any considerations of fairness

arising from that context or those circumstances.”66

[97] The emails were headed “Draft Submission – Strictly Confidential”. They were

relevant, when disclosed, because they referred to the amount of coal that would be

sterilised if the Caval Ridge Mine infrastructure had to be relocated and how that

amount was then calculated. The emails disclose the existence but not the substance

61 Defence to Third Amended Annexure, filed 30 November 2016. 62 Amended Defence to the Third Amended Annexure A, filed 21 July 2017, para 14(f)(iii)(A). 63 The Queensland Local Government Superannuation Board v Allen [2016] QCA 325 at [69]. 64 Osland v Secretary, Department of Justice (2008) 234 CLR 275. 65 T 1-78, lines 33 to 38. 66 Ibid at [45].

23

of the draft submissions, except in that respect. In particular, they do not reveal the

substance of in-house counsel’s notes and mark ups of those submissions.

[98] In those circumstances and in the context of the state of the pleadings at the time, I

accept Mr Doyle’s submission that BMA’s conduct in disclosing the emails was not

inconsistent with BMA maintaining the confidentiality of the draft submissions. I

am not satisfied that BMA waived legal professional privilege in the draft

submissions.

Item 25 – legal advice referred to in BMA .067645

[99] BMA067645 is a draft of Chapter 5.5 of the Selection Study. Other chapters of the

Selection Study were redacted to remove reference to external legal advice.67

Chapter 5.5 was not, and the version of the document disclosed included a reference

to legal advice.

[100] Although BMA relies on the Selection Study to advance its case, Mr Gibson did not

argue it would be unfair to Cherwell Creek for BMA to be able to rely on the

redacted version of the Chapter 5.5 of the Selection Study. I have approached the

request on the basis that the only question is whether the disclosure was inadvertent.

[101] Through its solicitors, BMA advised Cherwell Creek that the un-redacted version of

Chapter 5.5 was disclosed in error.68 Ms Petty deposed that disclosure was

inadvertent. Ms McCabe, in-house counsel for BHP, informed her it was BMA’s

intention to maintain privilege. Mr Hurford, a solicitor employed by Allens,

informed Ms Petty that he had redacted references to external legal advice in other

chapters of the Selection Study.

[102] Mr Doyle argued the disclosure of the un-redacted version of Chapter 5.5 falls

squarely within the principle unanimously endorsed by the High Court in Expense

Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and

Marketing Pty Ltd:69

“Although discovery is an inherently intrusive process, it is not intended to

be allowed to affect a person’s entitlement to maintain the confidentiality

of documents where the law allows. It follows that where a privileged

67 Affidavit of Alana Maree Petty, filed 13 October 2017, para 144. 68 Affidavit of Alana Maree Maree Petty, filed 13 October 2017, Ex AMP-6, p 12. 69 Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty

Ltd (2013) 250 CR 303 at [45].

24

document is inadvertently disclosed, the court should ordinarily permit the

correction of that mistake and order the return of the document, if the party

refuses to do so.”

[103] Mr Gibson argued the principle did not apply to inadvertent disclosure of part of a

document, where the document itself had been disclosed deliberately. Mr Doyle

submitted that argument raised a distinction without a difference. BMA

inadvertently disclosed a document: the un-redacted version of the Selection Study.

[104] I am satisfied the disclosure of the un-redacted version of Chapter 5.5 was

inadvertent and BMA has not waived privilege in it by its disclosure.

Other categories of documents – items 1, 2, 6, 7, 11, 14, 15, 17, and 26

[105] Mr Gibson maintained there is some ambiguity in BMA’s response to Cherwell

Creek’s queries about disclosure of documents falling within these items. BMA

asserts it has disclosed anything within those categories of documents that are

relevant. Mr Gibson’s submissions did not identify any particular deficiency in

disclosure.70 I make no order about these items.

[106] The matter is listed for review on 14 December 2017 when further directions will be

made. The parties may make brief oral submissions about costs at the review.

Orders

[107] The Court orders:

1. The respondents must provide the applicant with particulars of the members

of the selection study team.

2. Otherwise, the applications for further particulars and disclosure are refused.

3. The matter is listed for review at 10am on Thursday 14 December 2017.

FY KINGHAM

70 Applicant’s reply submissions, paras [21]-[22].

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PRESIDENT OF THE LAND COURT