Downer EDI Mining Pty Ltd v Wambo Coal Pty Ltd

SUPREME COURT OF QUEENSLAND

CITATION:

Downer EDI Mining Pty Ltd v Wambo Coal Pty Ltd [2012] QSC 290

PARTIES:

DOWNER EDI MINING PTY LTD
ABN 49 004 142 223
(respondent/plaintiff)
v
WAMBO COAL PTY LTD ABN 13 000 668 057
(applicant/defendant)

FILE NO/S:

BS6563 of 2012

DIVISION:

Trial Division

PROCEEDING:

Application to stay proceedings

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

26 September 2012

DELIVERED AT:

Brisbane

HEARING DATE:

3 September 2012

JUDGE:

Martin J

ORDER:

The proceeding in this matter be stayed until there has been compliance with the dispute resolution procedures contained in clause 46 of the Operation Agreement exhibited to the affidavit of Joern Schimmelfeder filed in this proceeding on 22 August 2012 or further order.

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – SETTLEMENT OF DISPUTES – where the contract stipulates a dispute resolution procedure (“DRP”) – where plaintiff brought action without full compliance with DRP – where defendant applies for stay of proceedings until there has been compliance – whether DRP is so vague and uncertain that it is unenforceable – whether procedures in DRP are unlikely to resolve the dispute and therefore futile

Dobbs v National Bank of Australasia Ltd (1935) 53 CLR 643, considered
Hooper Bailie Associated Ltd v Natcon Group Pty Ltd (1992) 28 NSWLR 194, considered
Huddart Parker Ltd v The Ship Mill Hill (1950) 81 CLR 502, considered
Straits Exploration (Australia) Pty Ltd v Murchison United NL (2005) 31 WAR 187, applied
Zeke Services Pty Ltd v Traffic Technologies Ltd [2005] 2 Qd R 563, applied

COUNSEL:

DJS Jackson QC with J Otto for the applicant/defendant
W Sofronoff SG QC with D Chesterman for the respondent/plaintiff 

SOLICITORS:

Middletons for the applicant/defendant
Clayton Utz for the respondent/plaintiff 

1. The applicant/defendant (“Wambo”) applies for an order staying the proceeding commenced against it by the respondent/plaintiff (“DEM”) until there has been compliance with the dispute resolution procedure (“DRP”) in clause 46 of a contract between the parties referred to as the “Operation Agreement”.

1. The bases for the application are:

(a)        the plaintiff DEM has not satisfied a condition precedent to its right to commence court proceedings in that it has failed to comply with the DRP;

(b)        alternatively, in the exercise of the court’s inherent jurisdiction, the court should require DEM to comply with the DRP and stay proceedings until that occurs.

1. The application is opposed by DEM on these bases:

(a)        the DRP is so vague and uncertain that it is unenforceable;

(b)        there is no point in staying proceedings whether or not the DRP is enforceable as Wambo has, in discussions to date, been intransigent and unmoveable; and

(c)        it follows that the procedures in the DRP are unlikely to resolve the dispute and it would be futile and wasteful for compliance to be required.

Background

1. In March 2008 DEM and Wambo entered into the Operation Agreement. Pursuant to that agreement DEM is to provide,…