BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd - [2016] QSC 55

SUPREME COURT OF QUEENSLAND

CITATION:

BM Alliance Coal Operations Pty Ltd & Ors v BGC Contracting Pty Ltd [2016] QSC 55

PARTIES:

BM ALLIANCE COAL OPERATIONS PTY LTD
ABN 67 096 412 752

(first plaintiff)
BHP COAL PTY LTD ABN 83 010 595 721
(second plaintiff)
BHP QUEENSLAND COAL INVESTMENTS PTY LTD ABN 56 098 876 825
(third plaintiff)
UMAL CONSOLIDATED PTY LTD ABN 29 000 767 386
(fourth plaintiff)
MITSUBISHI DEVELOPMENT PTY LTD
ABN 17 009 779 873
(fifth plaintiff)
QCT MINING PTY LTD ABN 47 010 487 840
(sixth plaintiff)
QCT INVESTMENT PTY LTD ABN 45 010 487 831
(seventh plaintiff)
QCT RESOURCES PTY LTD ABN 74 010 808 705
(eighth plaintiff)

v
BGC CONTRACTING PTY LTD ABN 88 008 766 407

(defendant)

FILE NO:

BS6603 of 2013

DIVISION:

Trial Division

PROCEEDING:

Interlocutory Application

DELIVERED ON:

17 March 2016

DELIVERED AT:

Brisbane

HEARING DATE:

11 February 2016

JUDGE:

Mullins J

ORDER:

The defendant’s application filed on 18 December 2015 is dismissed.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – STRIKING OUT – DISCLOSING NO REASONABLE CAUSE OF ACTION OR DEFENCE – where the plaintiff owner entered into a contract with the defendant contractor to construct an earthworks dam – where the plaintiff terminated the contract – where the plaintiff’s claim is for damages for breach of contract and repudiation – where the plaintiff alleges it is necessary to rectify the defendant’s breaches of the contract specified in the statement of claim and claims the costs of rectification as loss and damage – where the defendant applies to strike out paragraphs of the plaintiff’s statement of claim on the basis that the paragraphs failed to assert a causal nexus between the alleged breaches and the items of loss or damage – where the plaintiff relies on the application of the “ruling principle” for the assessment of damages for breach of contract – whether sufficient material facts are pleaded by the plaintiff to support the cause of action for damages for breach of contract

Bellgrove v Eldridge (1954) 90 CLR 613, considered
Clark v Macourt (2013) 253 CLR 1; [2013] HCA 56, considered
Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR 113, considered
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8, considered
Willshee v Westcourt Ltd [2009] WASCA 87, considered

COUNSEL:

G Beacham QC with B O’Brien for the plaintiffs

R A Holt QC with L Clark for the defendant

SOLICITORS:

Herbert Smith Freehills for the applicants

McCullough Robertson Lawyers for the defendant

The defendant applies to strike out paragraphs 19 to 23 of the plaintiffs’ statement of claim filed on 23 April 2015 or, in the alternative, for an order that the plaintiffs provide further and better particulars in respect of paragraphs 19(d) and 20 to 22. The application is opposed on behalf of the plaintiffs. There is a dispute between the parties as to what material…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] QSC 55
Decision Date: 17 March 2016

CaseChat Overview and Summary

In the case of BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd, the dispute revolves around a contract for the construction of an earthworks dam and associated works at Goonyella Riverside Mine near Moranbah. The plaintiffs, who own the mine and are the joint venture parties, claim damages for breach of contract and repudiation against the defendant, an earthworks contractor. The plaintiffs allege that the defendant failed to comply with the contract specifications in placing soil in the embankment of the dam and did not deliver the required test results and reports. They seek the costs of rectifying the non-compliant soil and the additional costs of completing the dam.

The legal issues in this case concern the sufficiency of the pleadings in the plaintiffs' statement of claim, specifically whether the plaintiffs have disclosed a reasonable cause of action or defence in paragraphs 19 to 23. The defendant applied to strike out these paragraphs or, alternatively, to order the plaintiffs to provide further and better particulars. The defendant argues that the plaintiffs have failed to assert a causal nexus between the alleged breaches of contract and the items of loss or damage claimed. The plaintiffs opposed the application, relying on the principle that damages for breach of contract should be assessed based on the loss directly flowing from the breach.

The court dismissed the defendant’s application. It found that the plaintiffs had sufficiently pleaded the material facts necessary to support their claim for damages for breach of contract. The court held that the plaintiffs’ statement of claim adequately established the causal link between the breaches of contract and the claimed loss or damage. The plaintiffs' reliance on the ruling principle for the assessment of damages was deemed sufficient to meet the pleading requirements.

The final orders of the court were that the defendant’s application to strike out paragraphs 19 to 23 of the statement of claim was dismissed, and the alternative application for further and better particulars was also dismissed.

Orders

Orders of the court

The defendant’s application filed on 18 December 2015 is dismissed.

Background

Background to the litigation

The defendant applies to strike out paragraphs 19 to 23 of the plaintiffs’ statement of claim filed on 23 April 2015 or, in the alternative, for an order that the plaintiffs provide further and better particulars in respect of paragraphs 19(d) and 20 to 22. The application is opposed on behalf of the plaintiffs. There is a dispute between the parties as to what material facts must be pleaded in respect of the plaintiffs’ claim for damages for breach of contract arising from works performed by the defendant (an earthworks contractor) in constructing an earthworks dam and associated works at Goonyella Riverside Mine near Moranbah. Background to plaintiffs’ claim The plaintiffs are joint venture parties which own the mine and the first plaintiff is the management company which operates the mine for them. The relevant contract was entered into between the first plaintiff and the defendant in December 2010. In December 2011 the first plaintiff terminated the contract. At the time the termination took effect in January 2012, the construction of the dam was incomplete. This proceeding was commenced by the plaintiffs in July 2013 claiming damages for breach of contract and repudiation. The breaches alleged in paragraphs 14 to 18 of the statement of claim are the placement of “lots” of soil in the embankment of the dam which do not comply with the specifications in the contract, along with the late delivery or non-delivery of the test results and reports required under the contract which were required to demonstrate the compliance of the lots with the specifications. The plaintiffs seek the costs of rectifying the non-compliant lots and the additional costs of completing the dam. Progress of the pleadings Paragraph 19 of the statement of claim (omitting the particulars) alleges:“19. By reason of the breaches of the Contract set out above:(a)The soil placed in the Embankment in the areas described in paragraph 14 above does not comply with the requirements of the Contract;(b)The first plaintiff cannot determine whether the soil placed in the Embankment in the areas described in paragraph 15 above complies with the Contract;(c)The first plaintiff did not become aware of the matters set out in (a) and (b) above, until further soil had been placed in the Embankment on top of the areas which suffer from the deficiencies described in (a) and (b) above;(d)The work performed under the Contract does not comply with the Contract.” Paragraph 20 then pleads that by reason of the defendant’s breaches of contract referred to in paragraphs 14 to 18, the first plaintiff has suffered loss and damage, the measure of which is the cost of rectifying the breaches referred to in paragraphs 14 and 15, or alternatively 14 and 16. Paragraph 21 contains an alternative pleading on the basis that it is the joint venture parties which have suffered the loss and damage and the first plaintiff is entitled to sue for and recover that loss for the benefit of the joint venture parties.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	BM Alliance Coal Operations Pty Ltd & Ors v BGC Contracting Pty Ltd [2016] QSC 55
PARTIES:	BM ALLIANCE COAL OPERATIONS PTY LTD ABN 67 096 412 752 (first plaintiff) BHP COAL PTY LTD ABN 83 010 595 721 (second plaintiff) BHP QUEENSLAND COAL INVESTMENTS PTY LTD ABN 56 098 876 825 (third plaintiff) UMAL CONSOLIDATED PTY LTD ABN 29 000 767 386 (fourth plaintiff) MITSUBISHI DEVELOPMENT PTY LTD ABN 17 009 779 873 (fifth plaintiff) QCT MINING PTY LTD ABN 47 010 487 840 (sixth plaintiff) QCT INVESTMENT PTY LTD ABN 45 010 487 831 (seventh plaintiff) QCT RESOURCES PTY LTD ABN 74 010 808 705 (eighth plaintiff) v BGC CONTRACTING PTY LTD ABN 88 008 766 407 (defendant)
FILE NO:	BS6603 of 2013
DIVISION:	Trial Division
PROCEEDING:	Interlocutory Application
DELIVERED ON:	17 March 2016
DELIVERED AT:	Brisbane
HEARING DATE:	11 February 2016
JUDGE:	Mullins J
ORDER:	The defendant’s application filed on 18 December 2015 is dismissed.
CATCHWORDS:	PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – STRIKING OUT – DISCLOSING NO REASONABLE CAUSE OF ACTION OR DEFENCE – where the plaintiff owner entered into a contract with the defendant contractor to construct an earthworks dam – where the plaintiff terminated the contract – where the plaintiff’s claim is for damages for breach of contract and repudiation – where the plaintiff alleges it is necessary to rectify the defendant’s breaches of the contract specified in the statement of claim and claims the costs of rectification as loss and damage – where the defendant applies to strike out paragraphs of the plaintiff’s statement of claim on the basis that the paragraphs failed to assert a causal nexus between the alleged breaches and the items of loss or damage – where the plaintiff relies on the application of the “ruling principle” for the assessment of damages for breach of contract – whether sufficient material facts are pleaded by the plaintiff to support the cause of action for damages for breach of contract Bellgrove v Eldridge (1954) 90 CLR 613, considered Clark v Macourt (2013) 253 CLR 1; [2013] HCA 56, considered Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR 113, considered Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8, considered Willshee v Westcourt Ltd [2009] WASCA 87, considered
COUNSEL:	G Beacham QC with B O’Brien for the plaintiffs R A Holt QC with L Clark for the defendant
SOLICITORS:	Herbert Smith Freehills for the applicants McCullough Robertson Lawyers for the defendant