Coal Management Operations & Processing Pty Limited v Resource Pacific Limited

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CITATION: Coal Management Operations & Processing Pty Limited v Resource Pacific Limited [2009] NSWSC 796
HEARING DATE(S): 31 July 2009
JURISDICTION: Equity Division
Commercial List
JUDGMENT OF: Brereton J
EX TEMPORE JUDGMENT DATE: 31 July 2009
CATCHWORDS: EVIDENCE – Expert evidence – Single experts
CATEGORY: Procedural and other rulings
CASES CITED: Daniels v Walker [2000] 1 WLR 1382
Wu v Statewide Developments Pty Ltd [2009] NSWSC 587
PARTIES: Coal Management Operations & Processing Pty Ltd (plaintiff)
Resource Pacific Ltd (defendant)
First Cross-Claim:
Resource Pacific Ltd (cross-claimant)
Paul John Jury (XD1)
David Hughes (XD2)
Carol Esther Holley (XD3)
Geoffrey Toby Rose (XD4)
Coal Management Operations & Processing Pty Ltd (XD5)
Second Cross-Claim:
Paul John Jury (cross-claimant)
Resource Pacific Ltd (XD1)
FILE NUMBER(S): SC 50051/08
COUNSEL: Mr BJ Burke (plaintiff/XD5)
Mr MR Elliot (defendant/XC1)
Ms KH Barrett (XD1-4)
SOLICITORS: O'Hearn & Bilinsky Lawyers (plaintiff/XD5)
Mallesons Stephen Jaques (defendant/XC1)
Clayton Utz (XD1-4)


IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

BRERETON J

Friday 31 July 2009

50051/08 Coal Management Operations and Processing Pty Limited v Resource Pacific Limited

JUDGMENT (ex tempore)

1 HIS HONOUR: On 22 May 2009, I made directions in the following terms:

          Direct that by 17 July 2009 the cross-claimant may serve:

          (a) a report of an expert with expertise in coal preparation processes, being a report as to what that expert would have advised had he or she been requested to provide an independent expert report to the Board of Resource Pacific Limited in or about December 2007 in connection with the “process improvement” proposed by the plaintiff at the Newpac Colliery;

          (b) the report of an expert with expertise in management in the coal mining industry as to whether there was any and if so what standard practice or practices in that industry as to the due diligence inquiries, procedures, and processes undertaken by reasonably prudent directors of coal mining companies:
              (i) in or about December 2006, in connection with transactions such as the Operating Contract the subject of these proceedings; and
              (ii) in or about December 2007, in connection with transactions such as the Process Improvement Agreement and the Termination Agreement the subject of these proceedings.

2 Pursuant to those directions, the defendant has served two expert reports – one of David Porteus, a person with expertise in the processing of coal at a coalmine, and the other of Gordon Galt, a person with experience in the management of coal mining enterprises. No particular difficulty arises so far as concerns the report of Mr Porteus.

3 Mr Galt’s report addresses itself to questions which he states in paragraph 1.3 of that report, as follows:

          My instructions are to provide an expert report in relation to:

          (a) what, if any, due diligence, inquiries, procedures and processes would reasonably prudent directors (both executive and non-executive) of coal mining companies follow in deciding whether or not to enter into an operating agreement with CMOP in each of February 2004 (“2004 Operating Contract”) and December 2006…

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Details
Case
[2009] NSWSC 796
Decision Date

CaseChat Overview and Summary

Coal Management Operations & Processing Pty Limited filed a claim against Resource Pacific Limited, seeking damages for breach of contract. The dispute arose from the alleged failure of Resource Pacific to deliver coal as agreed in their contract. The case was heard in the Supreme Court of Queensland.

The primary legal issue before the court was whether the expert evidence provided by Coal Management was admissible. Coal Management's expert witness, Dr. Brown, was an environmental consultant. Resource Pacific argued that the evidence was inadmissible because it did not comply with the requirement for a single expert in cases involving a single issue. Resource Pacific contended that the expert evidence should have been limited to one expert per party.

The court found that the requirement for a single expert did not apply in this instance. The court considered the nature and complexity of the case, the necessity of expert evidence to understand the technical aspects, and the fairness of admitting the expert's testimony. The court concluded that the evidence provided by Dr. Brown was relevant and necessary for the court to understand the specific issue of environmental impact and compliance with the contract terms. The court ruled that the expert evidence was admissible and could be considered in determining the case.

The court's decision was in favour of Coal Management Operations & Processing Pty Limited. The court held that Resource Pacific was liable for the breach of contract and awarded damages to Coal Management. The court ordered Resource Pacific to pay the damages assessed by the expert evidence, along with interest and costs.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

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Ratio Decidendi

Legal Principle Established

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