Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 12] - [2022] WASC 474

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   SINO IRON PTY LTD -v- MINERALOGY PTY LTD [No 12] [2022] WASC 474
CORAM:   KENNETH MARTIN J
HEARD:   5 APRIL 2022
DELIVERED          :   5 APRIL 2022
PUBLISHED           :   7 MARCH 2023
FILE NO/S:   CIV 1915 of 2019
BETWEEN:   SINO IRON PTY LTD
First Plaintiff

KOREAN STEEL PTY LTD
Second Plaintiff

CITIC LIMITED
Third Plaintiff

AND

MINERALOGY PTY LTD
First Defendant

CLIVE FREDERICK PALMER
Second Defendant

STATE OF WESTERN AUSTRALIA
Third Defendant

FILE NO/S: CIV 2326 of 2021
BETWEEN: SINO IRON PTY LTD
First Plaintiff

KOREAN STEEL PTY LTD
Second Plaintiff

CITIC LIMITED
Third Plaintiff

AND

MINERALOGY PTY LTD
First Defendant

CLIVE FREDERICK PALMER
Second Defendant

THE STATE OF WESTERN AUSTRALIA
Third Defendant

Catchwords:

Practice and procedure - Trial - Section 79C Evidence Act objections to documentary evidence by defendants - Business records - Statements in documents admitted

Legislation:

Evidence Act 1995 (Cth)
Evidence Act 1906 (WA)

Result:

Objections to admission of documents into evidence, overruled

Category: B

Representation:

CIV 1915 of 2019

Counsel:

First Plaintiff	:	J Karkar KC, S Parmenter KC, S Free SC, J Kirkwood, T Maxwell & K Dovey
Second Plaintiff	:	J Karkar KC, S Parmenter KC, S Free SC, J Kirkwood, T Maxwell & K Dovey
Third Plaintiff	:	J Karkar KC, S Parmenter KC, S Free SC, J Kirkwood, T Maxwell & K Dovey
First Defendant	:	P Dunning KC, M Karam, K Byrne, H Cooper & D Fawcett
Second Defendant	:	In person (by video link)
Third Defendant	:	A Sefton SC

Solicitors:

First Plaintiff	:	Herbert Smith Freehills
Second Plaintiff	:	Herbert Smith Freehills
Third Plaintiff	:	Herbert Smith Freehills
First Defendant	:	Robinson Nielsen Legal
Second Defendant	:	In person
Third Defendant	:	State Solicitor's Office

CIV 2326 of 2021

Counsel:

First Plaintiff	:	J Karkar KC, S Parmenter KC, S Free SC, J Kirkwood, T Maxwell & K Dovey
Second Plaintiff	:	J Karkar KC, S Parmenter KC, S Free SC, J Kirkwood, T Maxwell & K Dovey
Third Plaintiff	:	J Karkar KC, S Parmenter KC, S Free SC, J Kirkwood, T Maxwell & K Dovey
First Defendant	:	P Dunning KC, M Karam, K Byrne, H Cooper & D Fawcett
Second Defendant	:	In person (by video link)
Third Defendant	:	A Sefton SC

Solicitors:

First Plaintiff	:	Herbert Smith Freehills
Second Plaintiff	:	Herbert Smith Freehills
Third Plaintiff	:	Herbert Smith Freehills
First Defendant	:	Robinson Nielsen Legal
Second Defendant	:	In person
Third Defendant	:	State Solicitor's Office

Cases referred to in decision:

Agricultural Land Management Ltd v Jackson [2013] WASC 464
McKay v Commissioner of Main Roads [No 2] [2010] WASC 153
Winnebago Industries Inc v Knott Investments Pty Ltd [2011] FCA 625

KENNETH MARTIN J:

(This judgment was delivered extemporaneously on 5 April 2022 and has been edited from the transcript.)

In relation to the four documents that were the subject of arguments yesterday in terms of their respective admissibility, and the objections taken against their admission into evidence as exhibits by Mineralogy Pty Ltd (Mineralogy), these are my reasons and rulings in relation to those objections.
This electronic trial (Primary Trial) has involved to date over 2,500 documents on all sides sought to be adduced into evidence as part of an electronic trial book. This can be gleaned across a perusal of exhibits B, C1 and C2, as well as exhibits P1 and P2.
Initially as this Primary Trial began, a large number of initial objections, by reference to a table of categories, had been foreshadowed on the part of Mineralogy. The table, which is part of exhibit B, collates Mineralogy's many objections.
Fortunately, the lawyers for the protagonist parties have continued to confer sensibly about such matters and the end result is that they have greatly reduced what would otherwise be the scale of the required debate about over 800 documents - on my rough calculations - in terms of their disputed admission into evidence.
There only remain now, four disputed documents at issue. They essentially, have been chosen by the parties, effectively, as templates to evaluate in principle residual objections still pressed by Mineralogy - by reference to its objection status categorisations.
First, is proposed exhibit 1870, which is the Golder Design report of 20 August 2020 (Golder Report), prepared in relation to the raising of the height of walls of one of the tailing storage facilities (TSFs), up to a relative level (RL) of 66 metres as part of what is referred as the stage 2 raise number 4. The plaintiffs seek to have the Golder Report admitted, effectively, under the business records provision (s 79C(2a) of the Evidence Act 1906 (WA) (Evidence Act)).
The admission is objected to by Mineralogy on the basis of its notified category 3 objection ‑ which is expressed as, effectively, reports concerning technical matters prepared by various corporations containing statements asserting facts in reports that constitute hearsay which cannot be admitted as the truth of any of the matters therein (see folio 374).
Advancing that objection by Mineralogy at the Primary Trial, significant reliance came to be placed upon a first instance decision of the Federal Court by Foster J, in Winnebago Industries Inc v Knott Investments Pty Ltd [2011] FCA 625, particularly by regard to [12] and [13] of his Honour's observations.
I pause to observe, before I return to that Winnebago decision, that his Honour was dealing there with the Evidence Act 1995 (Cth) (Commonwealth Evidence Act) and so, with quite differently expressed legislation ‑ in relation to an admission of business records, as a part of the exception to the hearsay rule by that Commonwealth legislation.
The Winnebago decision itself displays the remarks at [11], [12] and [13], appearing under what there was ruling number 1 ‑ in terms of a submitted rejection of the particular aspect of that report in question. So that is the category 3 objection raised by Mineralogy. A like objection is similarly taken against the next document, that is against proposed exhibit 1853. This document is a 41‑page report by RPM Global of 6 May 2020 for the three plaintiffs (CITIC plaintiffs) prepared in relation to life of mine and with its scheduled report (RPM Global Report).
This document is extensively referred to in the lay technical trial evidence of Mr Robert Goodwin, an employee witness called by the CITIC plaintiffs at the Primary Trial. I note Mr Goodwin's references to this document at pars 45, 52, 53, 149, 157D, 158B, 174 and 175, in his witness statement, exhibit H1.
The Golder Report, in relation to waste tailings storage capacity and the proposed raising of the tailings wall to a greater height - as a part of a TSF stage 2 raise, is, ultimately, potentially relevant to a tenure related issue in the Primary Trial - concerning the storage capacity for generated mining waste, as a by-product of the Sino Mining Project's mining operations - in terms of the magnetite iron ore which is being mined at the Mining Right and Site Lease Agreement (MRSLA) site lease area mining leases M08/123, M08/124 and M08/125 by the Sino Iron Project's mining and processing operations.
The mining and processing of magnetite ore inherently generates waste by‑products - mainly tailings and rocks - which must then be stored somewhere proximate to the mining operation.
Waste rock is roughly encountered in the proportions of about one-third processable product - for two-thirds waste. The generated waste itself, essentially falls into two major categories. The first category is waste rock, which must be removed in order to secure access to a magnetite bearing ore deposit, which rock is mostly then crushed up and removed, but needs to be stored somewhere as part of the process.
The other category of mining waste is the tailings, which are a by‑product of the processing of the magnetite ore through a concentrator then a slurry process. This is part of processing the mined magnetite ore into a concentrate product that is later dried, transported and shipped overseas to Chinese steel mill operators.
Tailings waste is, effectively, solids in suspended form in a liquid. The liquid is, effectively, later extracted leaving smaller residue of solid waste which needs to be stored. As a subject of a tailings deposit, the amount of deposited tailings will increase in dimension and height over time in a dam deposit as mining and treatment of extracted ore continues. A raising of the levels of the surrounding outer walls of the tailings dam is a subject, essentially, of the Golder Report addressing a stage of the increase in the proposed capacity of the TSF by higher walls, allowing a greater volume of tailings to be stored.
The RPM Global Report, in terms of life of the mine, addresses the issue of a pursuit of magnetite ore within the Sino Iron Project mining leases - by reference to an operation in those pits, initially in an eastern pit and subsequently, via a western pit - as a part of the mining process ‑ in terms of the ultimate pursuit and exploitation of the allowed two billion tonnes of magnetite ore ‑ which Sino Iron Pty Ltd (Sino Iron) and Korean Steel Pty Ltd (Korean Steel) together hold contractual rights to pursue under their respective contractual MRSLAs perfected with Mineralogy some time ago.
Advice by external parties to the CITIC plaintiffs about life of the mine - in terms of an exploitation by extraction of all that ore resource, and the building of higher tailings storage facility walls in terms of its incremental TSF wall raises from time-to-time to contain the ongoing generated tailings waste - relevantly address aspects of the Sino Iron Project's mining operations.
Next disputedly is proposed exhibit 1754. This is an internal CITIC Pacific Mining document concerning the Sino Iron Project, being an interim resource update as at September 2019 prepared by two officers, Mr Julian Cosson and Mr John de Kruijff. Against the admission into evidence of this document, there is another category 3 objection taken by Mineralogy. Again, this document is referred to in Mr Goodwin's evidence at his primary witness statement of 20 October 2021 in pars 51, 82 and 162(a).
The CITIC plaintiffs press for the document to be admissible once again, as a relevant business record - on the basis it was prepared and used in the ordinary course of the CITIC plaintiffs' business for the purpose of recording a matter relating to the interim resources.
The last document over which objection was taken by Mineralogy is against proposed exhibit 1944. This falls into a somewhat different category of objection. The document is an internal memorandum prepared within CITIC by one of its employees, a Mr Dhaniel Tambunan, who provided this memorandum to Mr Goodwin, and also to Mr Xianglin Cheng, CITIC's general manager of mining. This is a document of 14 January 2022.
Proposed exhibit 1944 is a waste dump reconciliation and swell factor review document that Mr Tambunan, essentially, provides to Mr Goodwin for the purpose of Mr Goodwin's reliance in terms of determining the relevant swell factor. That swell factor number is the number that is applied in a calculation made for the purposes of Mr Goodwin's trial evidence - concerning the assessed volume by cubic metreage that is likely to be required in the future for storage of the waste rock generated as part of the excavations towards accessing the underlying magnetite ore deposits at the mine pit.
Mr Tambunan's memorandum of 14 January 2022 calculates a revised number ‑ in terms of a density swell factor then used within Mr Goodwin's assessment of the amount of area, or more correctly, cubic metreage capacity required for likely future storage.
All this goes, as, indeed, do the calculations of Mr Goodwin, as to the predictions and opinions he gives in his evidence on a lay technical basis about the estimated volume of required future TSF storage capacity for ongoing operations of the Sino Iron Project ‑ along with the waste projection for how much more area is required for the storage of waste rock in a waste rock dump (WRD) proximate to the existing mining operations.
By Mr Goodwin's supplementary witness statement of 28 January 2022 tendered at the Primary Trial (exhibit H2), he makes extensive reference to Mr Tambunan's calculations and to his memorandum of 14 January 2022 addressing the swell factor.
So indeed does the CITIC plaintiffs' trial witness expert Professor David Williams, by his supplementary expert report (exhibit M2) at pars 284 to 287, at footnotes 48 to 50.
The basis for the objection of Mineralogy to exhibit 1944, is not another category 3 objection. Rather, it is this time, a category 7 objection, taken on a basis that the 14 January 2022 document is created after June 2012 ‑ manifestly some 10 years after litigation between these parties was reasonably apprehended.
Consequently, it is said by Mineralogy that the document ought to be excluded because, as a category 7 document, its probative value is outweighed by a potential to create prejudice.
That objection looks to be an attempted invocation of s 79C(6) of the Evidence Act ‑ which allows the Court, even if it can otherwise proceed to admit a business record (or, more correctly, admit the statement found within the business record) to nevertheless exclude the document on a basis that, essentially, it has potential to create more prejudice than its probative value, in the trial.
Proposed exhibit 1944, albeit a CITIC internal document, is a business record being used under its proposed deployment ‑ as explained by Mr Goodwin's explicit reference to it in his supplementary statement ‑ in the context of the greater volume of WRD areas said to be required by the CITIC plaintiffs. This goes to the suggested need for greater storage capacity for waste rock beyond what was earlier estimated by reason of the change in the swell factor number used. The change effectively increases the level of the prediction of how much WRD area is required. This all goes ultimately overall to the question of the extra tenure area that is sought in relation to the extra WRD areas asked for from Mineralogy and a part of the underlying subject matter of the requests made to Mineralogy for that extra tenure. This feeds into the assessment of required tenure areas for waste rock, whose assumed utilisation and availability underlies aspects of the Sino Iron and Korean Steel Mine Continuation Proposals (MCPs) of 2016 and 2017 - as to extra WRD areas and, indeed, to the extra TSFs mentioned in those 2017 MCPs put to Mineralogy.
So, the objections against admissibility made by Mineralogy, by reference to its objections to category 3 and category 7, are different in principle.
For category 7, it is clear that the document from Mr Tambunan sent to his superiors within the CITIC organisation at 14 January 2022 is a business record. The only question is whether, as a matter of discretion, it is more likely to create prejudice, than to deliver probative value, and so, ought nevertheless be excluded.
At the end, I am of the view that the Court should not exercise its discretion to exclude that document. In the context of issues about waste rock disposal and the effects of a swell factor upon storage capacity, which is necessarily part of the evaluation underlying the level of the quantitative need for extra area to deposit that waste material ‑ Mr Goodwin's foreshadowed trial evidence has for some time explicitly identified his use of that information as part of the capacity calculation for waste rock that is made.
In an overall context of the contentious issues in the Primary Trial, a need for greater WRD areas is one of the less problematic parts of the request for extra tenure made to Mineralogy on behalf of Sino Iron and Korean Steel.
I contrast that to more problematic aspects in the Primary Trial (as evaluated at day 24) such as the extra TSF area which is a subject of a challenge because essentially, Mineralogy asserts that a proposed northern extension to the TSF area is more than enough to meet the future tailings storage needs of the CITIC plaintiffs. That position is fundamentally challenged by the CITIC plaintiffs ‑ who say that not only do they need a northern TSF extension, they also need the further TSF areas for tailings storage located at the south of their existing tailings located storage area.
TSF alternatives is another flash point issue in the Primary Trial ‑ unlike the need for greater WRD areas, which is less controversial and as effectively exposed by the cross‑examinations of the plaintiffs' lay and expert witnesses ‑ in terms of respective degrees of emphasis that directed towards those different waste subject matters.
In the end, I do not assess any real level of prejudice to the plaintiff in respect of a receipt of that business record, let alone a preponderance of prejudice over its utility to the case of the CITIC plaintiffs. It will be allowed to stand admitted as exhibit 1944 in the Primary Trial.
The other three exhibits are all objected to on category 3 grounds. Objection is taken against them being admitted for the truth of their contents. Here, I am guided by an exposition of Beech J (as his Honour then was) in dealing with s 79C of the Evidence Act in the second of a series of McKay litigation decisions, delivered as McKay v Commissioner of Main Roads [No 2] [2010] WASC 153, on 24 June 2010.
Commencing at [29], his Honour explained the definition of the term 'business record' under s 79B of the Evidence Act. He identified two platforms in that case on which documents were sought to be admitted as business records. In doing that, particularly at [30], [31] and [32], his Honour exposed, essentially, the reform that was introduced by changes to s 79C ‑ by addition of subsection (2a) in terms of business records and what those changes were meant to bring.
Significantly, his Honour identified, by reference to admissions of business records under that provision, prerequisites for a document being either prepared or used and, consequently, evaluated two questions in terms of a document's preparation in the ordinary course of the business, or use in terms of the ordinary course of the business ‑ for the purposes of recording matters relating to the business of the entity concerned.
The reform introduced by s 79C(2a) of the Evidence Act was noteworthy on the basis that, unlike the pre-existing provision under s 79C(1), the need for a qualified person to be the maker of the statement was not replicated in the reform. On that basis, the local legislation went somewhat further than the Commonwealth Evidence Act provision - replicated in uniform Evidence Act jurisdictions, particularly in New South Wales and, to a considerable extent, also in Victoria.
The local s 79C(2a) provision is, therefore, wider in terms of not requiring the attribution of a statement to a particular qualified person, as regards the fact or the opinion.
In resisting admission of the category 3 documents, heavy emphasis is placed by Mineralogy upon Foster J's observations made in the Winnebago decision, but rendered there by reference to the Commonwealth legislation, in particular, towards s 69(5) of the Commonwealth Evidence Act.
In [11] of Foster J's observations under ruling number 1, his Honour said, as regards the admissibility of a provision found in an annual report:
The source of the statement, which was included in the applicant's 1998 annual report has not been identified nor is there any evidence before me that would support the proposition that the person or persons who decided to put that statement into that Annual Report based the statement on information obtained from one or more persons who had the requisite personal knowledge of the asserted facts.

His Honour was referring to s 69(5) of the Commonwealth Evidence Act. He said further:
There was no evidence as to the basis upon which this statement had been included in the Annual Report.
His Honour then added:
Obviously, I am in a position to infer certain matters concerning the source of that statement but, in my view, the applicant has failed to demonstrate that the statement was made upon the basis of information supplied by a person who had or who might reasonably to be supposed to have had personal knowledge of any of the asserted facts as required by section 69(2)(b) of the Evidence Act.
It is apparent from those observations Foster J in context was applying, as one would only expect, a provision of the Commonwealth Evidence Act - in terms of a maker of a statement sought to be admitted as evidence. That approach was in harmony with s 79C(1) and (2) as they had read and were applied in Western Australia for some time.
But it is manifest that s 79C(2a) is now expressed in wider terms, and does not, unlike subsections (1) and (2), as was explained by Beech J in his reasons in McKay [No 2], tie itself to a requirement for a qualified person necessarily being identified as the maker of the statement sought to be admitted. The local provision became wider than the Commonwealth provision, as a result of those reforming amendments.
Foster J's observations in Winnebago are therefore, distinguishable. In my view, they are not the driving consideration. Foster J went on further to observe at [12] that he would also have excluded the same material in an exercise of his discretion under s 135(a) of the Commonwealth Evidence Act, given he assessed it as unfairly prejudicial to the respondents to have to deal with that statement ‑ made in such general terms without an identical source and in a way which could not be tested.
That secondary approach seems to me to be broadly akin to the discretion this Court holds under s 79C(6) of the Evidence Act to reject, on balance, a document notwithstanding it otherwise does meet the admissibility criteria of s 79C ‑ if it is assessed as unduly prejudicial, compared to its probative value.
Here, I must apply that local law applicable under the local statute. That was also the approach by Edelman J in this Court, who elaborated upon Beech J's observations from McKay [No 2] in a later decision, Agricultural Land Management Ltd v Jackson [2013] WASC 464, commencing at [53] - [56].
There is nothing, however, in those observations that detracts from the force and clarity of what Beech J said in McKay [No 2], which explains the law to be applied in Western Australia.
Part of the evaluation process for a business record is linked to the intrinsic character of the document itself.
Accordingly, proposed exhibit 1870, being the Golder Report, on its face, presents as a business record used by the CITIC plaintiffs in their business and manifestly so, given the report's subject matter as a design report concerning the raise in the relative level heights for the walls of that existing Sino Iron Project TSF, being stage 2 raise number 4.
Similar observations must apply for the RPM Global Report and, indeed, also as well for exhibit 1754 ‑ in terms of the Sino Iron Project interim resources update of September 2019.
Those three documents, on their faces, display that they are documents used and kept as part of the business records of the CITIC plaintiffs, essentially, as part of their ongoing mining operations under the Sino Iron Project in the Pilbara of Western Australia. The interim resources update of September 2019, effectively, on its face, reveals that document's intrinsic character as an incremental component of the plaintiffs' mining business.
Likewise, RPM Global's 2019 life of mine report (exhibit 1853), indeed, indicates, at that temporal point, the assessment made concerning the amount of viable resource left in the ground, from a mining perspective.
I have already indicated, in terms of the stages for the lifting of the tailings dam wall's height, the intrinsic nature of that document which is relevant to another aspect of the Sino Iron Project dealing with generated waste as part of the CITIC plaintiffs' mining operation business.
Consequently, I conclude all three category 3 objection documents are indeed documents used in the ordinary course of the CITIC plaintiffs' business and for the purposes of recording matters relating to that business.
I also conclude, by reference to identified places in Mr Goodwin's trial evidence and in Professor William's supplementary expert report, that it is clear how the particular statement made within each aspect of those three documents is being deployed by the CITIC plaintiffs from a relevance perspective in their case. There is no undue prejudice, in my view, in terms of this use having ever been hidden from or not being likely to be appreciated by the first and second defendants. That proposed use had been fully exposed.
I add that the admission of these four documents into evidence, of course, says nothing about their respective weight as evidence in the Primary Trial. That is a matter, ultimately, for submission at the end, in the context of the overall trial evidence.
The only question(s) I am deciding now is to the admissibility of the four documents or, more correctly, the admission by s 79C of statements made within each of those documents for the purposes of the business records admissibility pathway under s 79C(2a) of the Evidence Act.
Consequently, all four documents will be admitted into evidence as tendered by the CITIC plaintiffs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
VC
Associate to the Honourable Justice K Martin
7 MARCH 2023