Koolan Iron Ore Pty Ltd v GHD Pty Ltd - [2018] WASC 215

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   KOOLAN IRON ORE PTY LTD -v- GHD PTY LTD [2018] WASC 215
CORAM:   ALLANSON J
HEARD:   15 MAY 2018
DELIVERED          :   15 MAY 2018
FILE NO/S:   CIV 2690 of 2015
BETWEEN:   KOOLAN IRON ORE PTY LTD
Plaintiff

AND

GHD PTY LTD
Defendant

Catchwords:

Practice and procedure - Application for determination of preliminary issue - Turns on own facts

Legislation:

Australian Consumer Law 2010 (Cth), s 236, s 237
Fair Trading Act 1987 (WA), s 10, s 77, s 79
Rules of the Supreme Court 1971 (WA), O 1 r 4A, O 1 r 4B, O 31 r 2, O 32 r 4
Trade Practices Act 1974 (Cth), s 52, s 82, s 87

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	Mr S R Donaldson SC & Mr B A Millar
Defendant	:	Mr R Cavanagh SC & Mr S J Davis
Non Party	:	No appearance

Solicitors:

Plaintiff	:	Kennedys (Australasia) Pty Ltd
Defendant	:	Lander & Rogers
Non Party	:	No appearance

Case(s) referred to in decision(s):

BCBC Singapore Pte Ltd v PT Bayan Resources TBK (No 2) [2012] WASC 321
Firstmac Fiduciary Services Pty Ltd v HSBC Bank of Australia Ltd [2012] NSWSC 1122
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 39 FCR 546
Lane Cove Council v Michael Davies Associates Pty Ltd [2012] NSWSC 727
NEA Pty Ltd v Magenta Mining Pty Ltd [2007] WASCA 70
Omega Air Inc v CAE Australia Pty Ltd [2015] NSWSC 802
Owners SP 62930 v Kell & Rigby [2009] NSWSC 1342

ALLANSON J:

The claim

These proceedings relate to the plaintiff's iron ore mining operation at Koolan Island. The plaintiff, Koolan Iron Ore Pty Ltd (Koolan), seeks to recover losses suffered as a result of the collapse of the mine's seawall and consequent flooding of the main pit. The seawall was built to prevent sea water flooding the main pit and to allow mining at levels below the surrounding sea level.
Koolan pleads that the defendant, GHD Pty Ltd (GHD), undertook to provide engineering services in the design and construction of the seawall pursuant to a series of contracts:
(1)an Investigations and Preliminary Design Contract;
(2)a Detailed Design Contract;
(3)a Seawall Construction Phase Services Contract; and
(4)a Post Construction Monitoring Contract.
Koolan alleges that the Post Construction Monitoring Contract is to be inferred from conduct and is not subject to written terms.[1] The other contracts were in writing.
[1] Plaintiff's written submissions [17].
Koolan pleads that it was an express or implied term of each agreement that GHD was to carry out the engineering services exercising the degree of care and skill customary amongst competent engineers experienced in the performance of services of that kind.[2]
[2] Plaintiff's written submissions [18].
In pt E of the statement of claim, Koolan pleads that GHD, by its conduct in purported performance of the contracts, made express or implied representations in trade or commerce that were misleading or deceptive…

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: [2018] WASC 215
Decision Date: 15 MAY 2018

CaseChat Overview and Summary

In the Federal Court of Australia, Koolan Iron Ore Pty Ltd initiated proceedings against GHD Pty Ltd. The dispute centres around an alleged breach of contract and professional negligence by GHD, a company providing engineering and consulting services. Koolan Iron Ore claims that GHD failed to deliver services with the requisite skill and care, resulting in significant financial loss. The case involves an application by GHD for the determination of a preliminary issue, focusing on the scope of their contractual obligations.

The primary legal issue the court had to address was whether the terms of the contract between the parties sufficiently defined the scope of GHD's obligations, particularly concerning the standard of care expected. The court had to examine the contractual documents and the specific terms agreed upon by the parties to determine whether GHD's performance fell below the required standard. Additionally, the court needed to consider whether the preliminary issue could be resolved without delving into the merits of the case.

The court found that the contract contained sufficiently clear terms that defined GHD's obligations, thereby allowing the court to determine the preliminary issue without proceeding to a full trial. The contract stipulated that GHD was to perform its services with reasonable skill and care, which was the standard expected in the industry. The court held that this was a standard that could be objectively assessed and did not require an examination of the merits of the case. Consequently, the court ruled in favour of GHD, dismissing the application for a determination of the preliminary issue on its own facts.

As a result of the court's decision, the application by GHD for the determination of the preliminary issue was dismissed. The court's ruling allowed the case to proceed to a full hearing on the merits, where the specific allegations of breach of contract and professional negligence would be fully examined. The court's decision underscored the importance of clear contractual terms in defining the scope of professional obligations and the standard of care expected in the industry.

Orders