Perdaman Chemicals and Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [No 5]

[2012] WASC 455

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   PERDAMAN CHEMICALS & FERTILISERS PTY LTD -v- THE GRIFFIN COAL MINING COMPANY PTY LTD [No 5] [2012] WASC 455

CORAM:   EDELMAN J

HEARD:   23 NOVEMBER 2012

DELIVERED          :   23 NOVEMBER 2012

FILE NO/S:   CIV 1925 of 2011

CIV 2422 of 2011
CIV 2423 of 2011
CIV 3201 of 2011
Consolidated by orders dated 18 August 2011 & 14 November 2011

BETWEEN:   PERDAMAN CHEMICALS & FERTILISERS PTY LTD

Plaintiff

AND

THE GRIFFIN COAL MINING COMPANY PTY LTD
First Defendant

LANCO INFRATECH LTD
Second Defendant

LANCO RESOURCES AUSTRALIA PTY LTD
Third Defendant

RUSSELL CONLEY
Fourth Defendant

MANOJ AGARWAL
Fifth Defendant

LAGADAPATI MADHUSUDHAN RAO
Sixth Defendant

KANDIMALLA K V NAGA PRASAD
Seventh Defendant

LANCO RESOURCES INTERNATIONAL PTE LTD
Eighth Defendant

S AMARENDRAN
Ninth Defendant

(BY ORIGINAL ACTION)

THE GRIFFIN COAL MINING COMPANY PTY LTD
Plaintiff

AND

PERDAMAN CHEMICALS AND FERTILISERS PTY LTD
First Defendant

VIKAS RAMBAL
Second Defendant

ANDREAS WALEWSKI
Third Defendant

(BY COUNTERCLAIM)
 

Catchwords:

Practice and procedure - Application for springing orders - Turns on own facts

Legislation:

Nil

Result:

Programming orders made

Category:    B

Representation:

Original Action

Counsel:

Plaintiff:     Mr M L Bennett

First Defendant             :     Mr B Luscombe

Second Defendant         :     Mr B Luscombe

Third Defendant           :     Mr B Luscombe

Fourth Defendant          :     Mr B Luscombe

Fifth Defendant            :     Mr B Luscombe

Sixth Defendant            :     Mr B Luscombe

Seventh Defendant        :     Mr B Luscombe

Eighth Defendant          :     No appearance

Ninth Defendant           :     Mr B Luscombe

Solicitors:

Plaintiff:     Bennett & Co

First Defendant             :     Clifford Chance

Second Defendant         :     Clifford Chance

Third Defendant           :     Clifford Chance

Fourth Defendant          :     Clifford Chance

Fifth Defendant            :     Clifford Chance

Sixth Defendant            :     Clifford Chance

Seventh Defendant        :     Clifford Chance

Eighth Defendant          :     Tottle Partners

Ninth Defendant           :     Clifford Chance

Counterclaim

Counsel:

Plaintiff:     Mr B Luscombe

First Defendant             :     Mr M L Bennett

Second Defendant         :     Mr S Penglis

Third Defendant           :     Mr S Penglis

Solicitors:

Plaintiff:     Clifford Chance

First Defendant             :     Bennett & Co

Second Defendant         :     Herbert Smith Freehills

Third Defendant           :     Herbert Smith Freehills

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

Nil

EDELMAN J: 

(These reasons have been edited from the transcript of the oral judgment delivered after the hearing.)

1. This is an application by all of the defendants except the eighth defendant for orders, including springing orders, requiring the plaintiff (Perdaman) to file various statements of evidence in chief.  The minute of proposed orders was filed on 20 November 2012 very shortly before this hearing.  I will refer to the applicants collectively as the defendants. 

2. The orders sought are as follows:

   1.By 7 December 2012, the plaintiff file statements of the evidence‑in‑chief of any employee or officer of Contingency Financiers to be relied on by the plaintiff in support of the plaintiff's claims that:

   (a)by May 2011 it was on the cusp of achieving Financial Close; and

   (b)the plaintiff would have achieved Financial Close by the Condition Precedent Date.

   2.By 7 December 2012, the plaintiff file statements of the evidence in chief of any employee or officer of Société Générale acting in its capacity as advisor to the plaintiff to be relied on by the plaintiff in support of the plaintiff's claims that:

   (a) by May 2011 it was on the cusp of achieving Financial Close; and

   (b)the plaintiff would have achieved Financial Close by the Condition Precedent Date.

   is to be that constituted only by the witness statements that have been filed by the plaintiff on or before 4.00 pm on Friday, 7 December 2012 (subject to the hearing of any objections on admissibility).

   3.By 30 November 2012, the plaintiff file and serve a signed witness statement in the form of the unsigned witness statement of Boris Hristovski filed 26 October 2012, failing which the plaintiff not be permitted to rely on that evidence at the trial of this action.

   4.By 7 December 2012, the plaintiff file statements of the evidence‑in‑chief of any employee or officer of proposed equity investors in the plaintiff or related bodies corporate to be relied on by the plaintiff in support of the plaintiff's claims that:

   (a)by May 2011 it was on the cusp of achieving Financial Close; and

   (b)the plaintiff would have achieved Financial Close by the Condition Precedent Date.

3. The essence of this application concerned orders 1, 2 and 4.  In relation to order 3, counsel for Perdaman informed the court from the bar table that the witness statement of Mr Boris Hristovski had been signed and was to be couriered to Perth.  It is expected that it will arrive before 30 November 2012.  Although there was dispute between the parties concerning the extent to which Perdaman had complied with previous orders, in relation to Mr Hristovski I do not consider that it is necessary or appropriate to make any order other than that, by 30 November 2012, the plaintiff file and serve a signed witness statement in the form of the unsigned witness statement of Boris Hristovski filed 26 October 2012.

The significance of the evidence to which the proposed orders 1, 2 and 4 relate

1. In very broad summary, it appears that significant issues in the trial of this matter will include the following:

   (a)whether in May 2011, Perdaman was on the cusp of achieving Financial Close under the coal supply agreement that would have seen first draw down in June 2011;

   (b)whether but for the conduct alleged against the defendants, Perdaman would have achieved Financial Close under the coal supply agreement by the Condition Precedent Date or alternatively was deprived of the valuable opportunity to achieve Financial Close by the Condition Precedent date; 

   (c)whether Perdaman had a shortfall of debt funding and the amount of that shortfall of debt funding;

   (d)whether any finance sought by Perdaman from parties other than the bankers and export credit agencies (ECAs) referred to in par 15 of the statement of claim might be obtained and the extent of that financing; and

   (e)the amount of equity finance required to complete the transaction and from where that equity finance could have been derived.

The background to the orders sought

1. On 2 July 2012 orders were made including Order 17

   17.By 31 August 2012 the plaintiff file statements of the evidence in chief of any employee or officer of the Financiers to be relied upon by the plaintiff at trial in support of its claims that:

   a.By May 2011 it was on the cusp of achieving Financial Close; and

   b.The plaintiff would have achieved Financial Close by the Condition Precedent Date.

2. On 15 October 2012 further orders were made.  The relevant orders are as follows:.

   The Provision of Lay Evidence Witness Statements

   1.The plaintiff's evidence in chief from the Financiers in support of the plaintiff's claims that:

   a.by May 2011 it was on the cusp of achieving Financial Close; and

   b.the plaintiff would have achieved Financial Close by the Condition Precedent Date, other than issues raised by the Counterclaim

   is to be that constituted only by:

   (i)the witness statements that have been filed by the plaintiff on or before 4.00 pm on Friday, 26 October 2012 (subject to the hearing of any objections on admissibility); and

   (ii)the evidence given by the following witnesses that is within the summaries of the substance of their evidence that have been filed by the plaintiff:

   A.Mr David Sidoti of SMBC;

   B.Mr Aiden Flynn of Mizuho;

   C.Mr Paul Gullery of Unicredit Bank AG;

   D.Mr Tarek El-Rakshy of SMBC;

   E.Mr Brad Calleja of NAB;

   F.Mr Simon Esposito of NAB; and

   G.Mr Thomas Rudd of NAB.

   2.If witness statements of the evidence in chief to be adduced by the plaintiff from officers of Société Générale, acting in their capacity as advisor to plaintiff, with respect to the following issues, namely that:

   a.by May 2011, the plaintiff was on the cusp of financial close; and

   b.the plaintiff would have achieved financial close by the condition precedent date

   are not provided by 26 October 2012, the plaintiff is to provide the draft of the  witness statements, current as at 25 October 2012, to the defendants on the basis that those drafts witness statements are not to be used in the proceedings and are privileged from production as evidence in the proceedings.

   3.The parties are to confer with respect to a timetable for the provision of witness statements from the Contingency Financiers and with respect to the provision of signed witness statements from officers of Société Générale, acting in their capacity as advisor to plaintiff, in the event that signed witness statements from those officers are not provided within the time specified in Order 1.

3. There was dispute between the parties concerning the extent to which Perdaman had failed to comply with the 2 July 2012 orders, and also concerning the basis for the 15 October 2012 orders.  For reasons I will explain below, it is not necessary at this stage to attempt to divine the purpose of the 2 July 2012 or the 15 October 2012 orders, including the extent to which those orders were made to facilitate mediation or the extent to which they are necessary for the defendants to provide expert evidence. 

4. The dispute about these issues only became apparent in the application minutes before the hearing when the remainder of the submissions were filed.  It may be relevant to the future timetabling of the provision of evidence but, as I explain below, conferral on this point must take place and if Perdaman seeks orders for provision of witness statements based upon the premise that the evidence sought in the defendants' proposed orders 1, 2 and 4 is not necessary for the defendants to obtain their expert evidence.  This conferral should include Perdaman's submission that previous orders made by the Chief Justice relating to the evidence in proposed orders 1 and 2 were not premised upon the assumption that the evidence was necessary for the defendants to obtain expert evidence.

5. At this stage Perdaman should proceed on the provisional assumption that the provision by it of those witness statements may be ordered at a date to be listed after conferral and that their preparation should continue apace. 

6. Directly relevant to this application is Order 3 of the orders made on 15 October 2012.  

7. There is dispute about why the conferral ordered on 15 October 2012 has not occurred.  The defendants say that Perdaman has failed to confer with the defendants, despite their request.  Perdaman says that an appointment for face‑to‑face conferral was booked between Perdaman and the defendants last week and this appointment was cancelled by the defendants.  For whatever reason, it is, in any event, very unfortunate that there has been a failure to comply with that programming order. 

Whether the orders should be made

1. The defendants have understandable and real concern about the delay in these proceedings.  The proceedings were commenced 556 days ago.  The defendants also say that the Lanco Group has suffered and continues to suffer losses of approximately $10 million a month arising from inability to obtain finance while the allegations made by Perdaman against the defendants are pending:  see the affidavit of Mr Ben Luscombe sworn 5 April 2012.

2. Nevertheless, the orders currently sought by the defendants should not be made at this stage.  This is for three reasons.

3. First, although it is almost a year and a half since Perdaman alleged that it was on the cusp of obtaining Financial Close, Perdaman's actual pleading of the prospect of seeking finance from parties other than those identified in par 15 of the statement of claim was only introduced in August 2012. 

4. Secondly, Perdaman should be given a reasonable opportunity to advance the case raised by the amendments from August 2012 onwards.  Perdaman must confer with the defendants about this timetable for the filing of this evidence.  As I have explained, although the reasons for the lack of conferral are disputed, that conferral nevertheless has not yet occurred.  It should occur before 30 November 2012.   

5. Thirdly, on the basis of the materials which I have considered so far in this application, I consider that the urgency alleged by the defendants based upon their supposition of a trial in March 2013 is misplaced.

6. A significant assumption upon which the defendants' submissions in support of these orders was based was the proximity of trial in this matter.  The defendants referred to 'the foreshadowed trial in as early as March 2013' (par 3), 'the anticipated trial being a few months away' (par 40) and the 'anticipated March trial' (par 41).  At this stage it seems to me that none of these statements is accurate.

7. The second and third defendants by counterclaim (Messrs Rambal and Walewski) submitted that the action is in fact a long way from being ready for trial.  Although I cannot reach anything more than a provisional view on this at the moment, and although it is desirable that this matter should be heard at the first available opportunity, there are significant reasons for serious doubt that a trial in the vicinity of March 2013 is likely. 

8. One of the most significant of these reasons is that the first defendant (the Griffin Coal Mining Company Pty Ltd) has recently substituted twelve pages of particulars to par 190 of its counterclaim concerning the existence of a sham in relation to payments made for works.  Those substituted particulars were served on 24 October 2012.  They are extensive. 

9. Messrs Rambal and Walewski submit that the new allegations may require the defendants by counterclaim to provide supplementary discovery which is 'far reaching and the number of documents likely to be discovered will be significant' (par 11).  They say that the period necessary to give such discovery will be measured in months and that the defendants by counterclaim will likely have to issue further subpoenas as a consequence of the new allegations.  They also say that the defendants by counterclaim will be required to prepare lay and expert evidence in response to these issues.  They refer to a number of paragraphs of a document from a recent expert witness conference which relate to the new particulars.  It also appears that the expert evidence which will be required could be substantial.  Finally, Messrs Rambal and Walewski submit that to the extent that the proposed orders might limit the evidence which would otherwise be adduced by Perdaman, then they would seek to adduce that evidence. 

10. Although these matters raised by submission are necessarily general, at the moment in light of the extent of the substituted par 190, they do not appear to be misguided. 

11. Leave to file the substituted particulars was granted by the Chief Justice on 22 October 2012 with the express reservation of the ability of the defendants by counterclaim to strike out any of those particulars.  I have listed an application for 30 November 2012 which seeks to strike out some of those particulars.  The appropriate course is as follows.  Issues concerning programming of the witness statements referred to in the defendants' application, other than that of Mr Boris Hristovski, be listed for directions on a date to be set after 30 November 2012 with Perdaman and the defendants to confer, face to face, upon a timetable for this evidence prior to 30 November 2012.