Santos Limited v Fluor Australia Pty Ltd - [2023] QSC 77

SUPREME COURT OF QUEENSLAND

CITATION:

Santos Limited v Fluor Australia Pty Ltd & Anor [2023] QSC 77

PARTIES:

SANTOS LIMITED
ABN 80 007 550 923

(plaintiff)

v

FLUOR AUSTRALIA PTY LTD
ABN 28 004 511 942

(first defendant)

AND
FLUOR CORPORATION

(second defendant)

FILE NO:

BS 12939 of 2016

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

14 April 2023

DELIVERED AT:

Brisbane

HEARING DATE:

13 April 2023

JUDGE:

Applegarth J

ORDER:

The application to stay the conduct of the reference until further order is dismissed.1.

The defendants pay the plaintiff’s costs of and incidental to the stay application.2.

The parties submit within seven days directions for the expeditious hearing of the defendants’ application to set aside the Referral Order. 3.

CATCHWORDS:

PROCEDURE - STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY - INHERENT AND GENERAL STATUTORY POWERS - TO STAY OR DISMISS ORDERS OR PROCEEDINGS GENERALLY - where the Court has referred questions arising on pleadings to three referees - where the defendants apply to stay the conduct of the reference until further order - where the defendants contend that that the referees failed to comply with the Referral Order, the reference process is affected by apparent bias and lack of procedural fairness, the reference process has become a miscarriage of justice and judgment should be entered for the defendants - where the plaintiff opposes the stay on the basis that the report is close to being finalised, the stay will add to costs and delay, there will be no irreparable harm suffered from continuing, and a stay will cause prejudice to the plaintiff - whether the interests of justice are best served by granting the requested stay

Uniform Civil Procedure Rules 1999, rr 5, 367(2), 501, 502, 505D

Asia Pacific International Pty Ltd v Peel Valley Mushrooms Ltd & Anor [1998] QCA 414, cited
Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, cited
CNY17 v Minister for Immigration and Border Protection (2019) 268 CLR 76, cited
Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453, cited
Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd (2019) 2 QR 271, cited
Santos Limited v Fluor Australia Pty Ltd & Anor (No. 4) [2021] QSC 296, cited

COUNSEL:
Mr P O’Shea KC with Mr J Mitchenson for the plaintiff

Mr S Couper KC with Mr J O’Regan and Mr T Pagliano for the defendants

SOLICITORS:
Corrs Chambers Westgarth for the plaintiff
Jones Day for the defendants

The parties are engaged in litigation on a monumental scale arising from the construction between 2011 and 2014 of the upstream component of a coal-seam gas project.
By an order dated 15 February 2021 and further orders, the Court referred all questions arising on the pleadings in the current proceeding to three referees (“the Referral Order”). Hearings were held before the referees between November 2021 and August 2022. On 7…

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: [2023] QSC 77
Decision Date: 14 April 2023

CaseChat Overview and Summary

In Santos Limited v Fluor Australia Pty Ltd, the defendants sought to stay the reference process conducted by three referees, appointed to resolve disputed issues in the case. The defendants argued that the referees had failed to comply with the Referral Order, that the reference process was affected by apparent bias and lack of procedural fairness, and that the process had become a miscarriage of justice. The plaintiff opposed the stay, stating that the report was close to completion, and that a stay would add to costs and delay, with no irreparable harm to be suffered from continuing. The court had to decide whether the interests of justice were best served by granting the requested stay.

The court considered the progress of the reference process and the consequences of halting it. The court found that the referees were close to finalising their report, and that the final report would not be fundamentally different to the Draft Report. The court also found that the defendants had not demonstrated that allowing the reference to continue to the final report stage would cause them unjustifiable prejudice. The court held that the defendants had not shown that it would be necessary to call their quantum expert, Mr Badala, in order for the overlap to be calculated. The court further held that the defendants' concern that a right to complain about apprehended bias may be lost by their continuing participation in the process was adequately addressed by the plaintiff’s statements that such participation will not be relied upon to support a submission that there has been a waiver or acquiescence, or that the due administration of justice requires the denial of relief because of the defendants’ further participation. The court held that the defendants had not demonstrated that allowing the reference to continue to the final report stage would cause them unjustifiable prejudice.

The court held that staying the process would prejudice the plaintiff and add to costs and delay. The court held that having the defendants’ substantive application and an application by the plaintiff to accept the report progress will be an efficient means to resolve the issues raised by the substantive application, many of which will arise on the plaintiff’s application to accept the report, and may allow those common issues to be determined by the same judge. The court held that if the process is not stayed then it will be a matter for the referees to determine whether they are in a position to resolve the overlap issue and how this is to be done. The court further held that it is best if the overlap is calculated, if it can be, by the referees who are familiar with the issues and the evidence. The court held that allowing a flawed process to run to its conclusion is not in the interests of justice.

ORDERS:
The application to stay the conduct of the reference until further order was dismissed. The defendants were ordered to pay the plaintiff’s costs of and incidental to the stay application. The parties were ordered to submit within seven days directions for the expeditious hearing of the defendants’ application to set aside the Referral Order.

Orders

Orders of the court

The application to stay the conduct of the reference until further order is dismissed.1.

The defendants pay the plaintiff’s costs of and incidental to the stay application.2.

The parties submit within seven days directions for the expeditious hearing of the defendants’ application to set aside the Referral Order. 3.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Public confidence is not necessarily enhanced by halting a process that is well-advanced, where, on balance, its continuation will assist the just and expeditious resolution of civil litigation, and where prejudice to a party in allowing the process to continue is outweighed by the prejudice to other parties and the interests of justice in halting the process. In fact, doing so may reduce public confidence in the administration of justice. Summary and Conclusion The referees are close to finalising the report and providing it to the Court. The final report will not be fundamentally different to the Draft Report. The referees have called for submissions on the calculation of an overlap between the claims on which the plaintiff has been found by the referees to have prevailed. The process by which the referees determine the amount of the overlap is a matter for them, including a consideration of whether the plaintiff’s submissions on the calculation are essentially an arithmetic exercise or call for expert evidence. If the referees decide the amount of the overlap, and make an adjustment to avoid double-compensation to the plaintiff to the extent of the overlap, then the report can be completed. If they decide to not calculate the overlap, their final report still will have utility and the Court can determine when and by whom the overlap calculation is to be determined. The defendants have not persuaded me that it will be necessary to call their quantum expert, Mr Badala, in order for the overlap to be calculated. In the circumstances, any need to calculate the overlap has not been shown to disqualify the referees from deciding the overlap issue and finalising their report. The defendants have not demonstrated that allowing the reference to continue to the final report stage will cause them unjustifiable prejudice. The defendants’ concern that a right to complain about apprehended bias may be lost by their continuing participation in the process is adequately addressed by the plaintiff’s statements that such participation will not be relied upon to support a submission that there has been a waiver or acquiescence, or that the due administration of justice requires the denial of relief because of the defendants’ further participation. The defendants’ substantive application and this stay application demonstrate that the defendants have taken the point that the process is flawed, and they may reiterate that position to the referees and to others. No irreparable harm will be suffered by allowing the referees to complete their report since, unlike a judgment or other determination that finally declares the rights of the parties, the report does not determine the parties’ rights; it remains for the court to accept, vary or reject all or part of the report. Staying the process would prejudice the plaintiff and add to costs and delay. Having the defendants’ substantive application and an application by the plaintiff to accept the report progress will be an efficient means to resolve the issues raised by the substantive application, many of which will arise on the plaintiff’s application to accept the report, and may allow those common issues to be determined by the same judge.

Ratio Decidendi

Legal Principle Established

If the process is not stayed then it will be a matter for the referees to determine whether they are in a position to resolve the overlap issue and how this is to be done. My impression is that any further consideration of the overlap issue by the referees, aided by any further submissions which they request or allow, will not take a substantial time. The costs associated with that exercise are minor in the scheme of things and if the plaintiff is found to be entitled to judgment upon claims that overlap, the calculations will need to be determined by someone, sooner or later. In the circumstances, it is best if the overlap is calculated, if it can be, by the referees who are familiar with the issues and the evidence. Broader issues concerning the administration of justice There is no utility in allowing a flawed process to run to its conclusion. This principle was stated by Nettle and Gordon JJ in CNY17. The practical application of the principle depends on the relevant process being found to be flawed, or at least sufficiently apparent that a party will ask for the process to be halted. If a Court is asked to halt a process that is before another decision-maker, it must either find that the process is flawed or make appropriate orders that serve the interests of justice until it can decide that issue. A temporary restraint on the process is not granted simply because an allegation that the process is flawed is made or even where the allegation appears to have substance. Instead, the prospects that the process will be found to be flawed and final relief will be granted is considered along with a range of considerations that determine whether the interests of justice are best served by halting the process at once or allowing it to continue until the Court can determine the allegation. Practical considerations may include how far the process has gone, how much further it has to go, and the consequences for parties’ rights or liberties if the process continues. If the process is obviously flawed, then allowing it to continue is likely to have no utility and doing so will expose a party to the prejudice of participating in a flawed and possibly unfair process. In some situations, including alleged flaws and apprehended bias in criminal proceedings, supervisory and appellate courts do not necessarily halt the process upon an applicant showing that it has prospects of proving at a later hearing that the process is flawed. Considerations that do not favour halting the process include dislocation and delay to the criminal justice process and prejudice to participants in it. In some cases, an allegedly flawed proceeding is allowed to continue despite the risk of it miscarrying and causing injustice. Similar issues may arise in civil proceedings, when a judge declines to disqualify himself or herself and continues a proceeding that one party alleges is flawed by apprehended bias or on some other ground. The determination of whether a process should be halted or allowed to continue is fact-specific, and includes the consequences to parties and the administration of justice in making such a determination.

CITATION:	Santos Limited v Fluor Australia Pty Ltd & Anor [2023] QSC 77
PARTIES:	SANTOS LIMITED ABN 80 007 550 923 (plaintiff) v FLUOR AUSTRALIA PTY LTD ABN 28 004 511 942 (first defendant) AND FLUOR CORPORATION (second defendant)
FILE NO:	BS 12939 of 2016
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court of Queensland at Brisbane
DELIVERED ON:	14 April 2023
DELIVERED AT:	Brisbane
HEARING DATE:	13 April 2023
JUDGE:	Applegarth J
ORDER:	The application to stay the conduct of the reference until further order is dismissed.1. The defendants pay the plaintiff’s costs of and incidental to the stay application.2. The parties submit within seven days directions for the expeditious hearing of the defendants’ application to set aside the Referral Order. 3.
CATCHWORDS:	PROCEDURE - STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY - INHERENT AND GENERAL STATUTORY POWERS - TO STAY OR DISMISS ORDERS OR PROCEEDINGS GENERALLY - where the Court has referred questions arising on pleadings to three referees - where the defendants apply to stay the conduct of the reference until further order - where the defendants contend that that the referees failed to comply with the Referral Order, the reference process is affected by apparent bias and lack of procedural fairness, the reference process has become a miscarriage of justice and judgment should be entered for the defendants - where the plaintiff opposes the stay on the basis that the report is close to being finalised, the stay will add to costs and delay, there will be no irreparable harm suffered from continuing, and a stay will cause prejudice to the plaintiff - whether the interests of justice are best served by granting the requested stay Uniform Civil Procedure Rules 1999, rr 5, 367(2), 501, 502, 505D Asia Pacific International Pty Ltd v Peel Valley Mushrooms Ltd & Anor [1998] QCA 414, cited Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, cited CNY17 v Minister for Immigration and Border Protection (2019) 268 CLR 76, cited Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453, cited Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd (2019) 2 QR 271, cited Santos Limited v Fluor Australia Pty Ltd & Anor (No. 4) [2021] QSC 296, cited
COUNSEL:	Mr P O’Shea KC with Mr J Mitchenson for the plaintiff Mr S Couper KC with Mr J O’Regan and Mr T Pagliano for the defendants
SOLICITORS:	Corrs Chambers Westgarth for the plaintiff Jones Day for the defendants