Loading...
Queensland Judgments

beta

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  •   Notable Unreported Decision
  • {solid} Appeal Determined (QCA)

Sanrus Pty Ltd v Monto Coal 2 Pty Ltd (No 5)

 

[2019] QSC 210

SUPREME COURT OF QUEENSLAND

CITATION:

Sanrus Pty Ltd & Ors v Monto Coal 2 Pty Ltd & Ors (No 5) [2019] QSC 210

PARTIES:

First Plaintiff:

SANRUS PTY LTD AS TRUSTEE OF THE QC TRUST ACN 097 049 315

  AND
Second Plaintiff:

EDGE DEVELOPMENTS PTY LTD AS TRUSTEE OF THE KOWHAI TRUST ABN 26 010 309 529

  AND
Third Plaintiff:

H&J ENTERPRISES (QLD) PTY LTD AS TRUSTEE OF THE H&J TRUST ACN 077 333 736

  AND
First Defendant: MONTO COAL 2 PTY LTD ACN 098 919 414
  AND
Second Defendant: MONTO COAL PTY LTD ACN 098 393 072
  AND
Third Defendant: MACARTHUR COAL LIMITED ACN 096 001 955

FILE NO/S:

SC No 8609 of 2007

DIVISION:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

27 August 2019

DELIVERED AT:

Brisbane 

HEARING DATE:

22 August 2019; 23 August 2019

JUDGE:

Bond J

ORDER:

  1. In relation to the defendants’ objections to –
  1. (a)
    Expert Report of Jamie Freeman (P) dated 2 November 2018 [EXP.010.005.0001];
  2. (b)
    Expert Report of Jamie Freeman (P) dated 22 November 2018 [EXP.010.007.0001]
  3. (c)
    Joint Expert Report on Offsite Water Supply of Jamie Freeman (P) and Gary Harradine (D) dated 15 July 2019 [EXP.500.004.0001_2]; 
  4. (d)
    Joint Expert Report on Offsite Power Supply of Jamie Freeman (P) and Gary Harradine (D) dated 15 July 2019 [EXP.500.011.0001_2]; and
  5. (e)
    Joint Expert Report on Port of Jamie Freeman (P) and Euan Morton (D) [EXP.500.026.0001_2],

I make the provisional rulings set out in schedule 1 to these reasons.

  1. I give the parties leave to supplement their arguments on admissibility by reference to the alternate basis on which the plaintiffs sought to support the admissibility of the impugned evidence, referred to in my reasons at [63] to [71].

CATCHWORDS:

EVIDENCE – ADMISSIBILITY – OPINION EVIDENCE – EXPERT OPINION – GENERALLY – where the plaintiffs sought to adduce expert evidence in the form of a report from an expert in rail and other infrastructure as it relates to the development of a mine – where the defendants objected to extensive parts of the reports produced by the expert and some portions of the joint expert reports he was responsible for – where the bases of the objections included that the matters contained in the report are not properly the subject of expert opinion, that the expert is not adequately qualified to make the impugned statements and that the opinions stated are not based wholly or substantially on the expert’s expertise – whether the objections to the expert reports should be upheld

COUNSEL:

K Downes QC with D de Jersey, K Gothard and A Psaltis for the plaintiffs

D Clothier QC with E Hoiberg, for the defendants

SOLICITORS:

Holding Redlich for the plaintiffs

Allens for the defendants

Introduction

  1. [1]
    I have before me about 120 objections which have been made during the trial of the present proceeding to expert opinion evidence which the plaintiffs seek to adduce from Mr Jamie Freeman (P).[1]  There had been some 157 separate objections, but some are no longer pressed.  The objections which are pressed and the responses which have been made to them are identified in schedule 1 to this judgment.
  2. [2]
    Mr Freeman was to be the next witness and I had hoped to rule upon all the objections relating to his evidence before any further expert evidence was adduced, however I have been told that another expert needs to be interposed because he is about to go overseas, and objections are being taken to his evidence also.  Unfortunately I have not yet had the time to rule on each of the 120 objections in relation to Mr Freeman’s evidence and, as will appear, I have determined that I need to hear from the parties further about an alternative basis on which the plaintiffs sought to support the impugned evidence. 
  3. [3]
    Nevertheless, I have formed the view that it will better assist the efficient management of the trial as a whole if I proceed in the following way.
  4. [4]
    In order to articulate a framework within which the objections may be resolved I will first explain at a high level of generality the nature of the present proceeding and how the plaintiffs seek to use the impugned expert opinion evidence.  Then it will be necessary to outline the procedural context in which the objections were made and to explain why I have decided that, for the most part, it is appropriate that the present issues of admissibility of expert opinion evidence not be deferred until my ultimate judgment in the proceeding, as the plaintiffs sought to have me do.
  5. [5]
    I will identify the general principles which inform the disposition of the various objections to Mr Freeman’s evidence.  I will then seek to identify and to explain the decisions which I have provisionally reached by the application of those principles to parts of Mr Freeman’s reports to which objection has been taken and which I have had the time to consider.  I say provisionally because, as I have mentioned, I need to receive some further submissions on an alternative argument presented by the plaintiffs.
  6. [6]
    I hope that proceeding in this way will assist the disposition of objections in relation to the interposed expert.  I would hope also that the parties will thereafter be able to reach agreement on the remainder of the objections to Mr Freeman’s evidence.  If that does not occur, then I will have to proceed to rule item by item on each of the remaining objections in a subsequent judgment, once I have heard from the parties further in relation to the alternative argument.

The significance of expert opinion evidence in this proceeding

  1. [7]
    The trial of this proceeding concerns complaints made by junior joint venture partners (the plaintiffs) about the conduct of the senior joint venture partner (the first defendant, Monto Coal 2) in relation to decisions made in the course of performing a joint venture for the exploitation of a coal deposit at Monto in Queensland.  For present purposes it is not necessary to describe the bases on which liability is sought to be attributed to the second and third defendants.
  2. [8]
    The two sides of the joint venture had entered into a written joint venture agreement in May 2002 which expressed various obligations in relation to the following two stages in the possible exploitation of the subject coal resource:
    1. (a)
      Stage 1, namely “Mining Operations producing between 1,000,000 and 1,500,000 tonnes of saleable coal per annum”; and
    2. (b)
      Stage 2, namely “the Mine Development and Mining Operations beyond Stage 1 with the expectations of production being 10,000,000 tonnes or more of saleable coal per annum”.
  3. [9]
    In brief summary, in this proceeding the plaintiffs contend that Monto Coal 2 breached the joint venture agreement by deciding to suspend all work on the Monto Coal Project in July 2003 and, accordingly, by failing to develop Stage 1 of the Project by 16 May 2005 and by failing to undertake a Stage 2 feasibility study in that time (or, indeed, at any time up to 31 December 2008).  The plaintiffs allege Monto Coal 2’s decision-makers made relevant decisions in the absence of good faith and for contractually impermissible purposes.
  4. [10]
    The plaintiffs claim that by reason of the impugned conduct of Monto Coal 2 they:
    1. (a)
      lost the opportunity to earn a profit from the sale of coal from Stage 2 of the project and to receive royalties therefrom and also lost the value of free carried interest in Stage 1 capital costs; and
    2. (b)
      further or alternatively, lost the opportunity to sell their interests in the joint venture at a value which would reflect the stage to which the Monto Coal Project would have advanced had the impugned conduct not occurred.
  5. [11]
    Because this is a loss of opportunity case, the plaintiffs rely on Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 and Principal Properties Pty Ltd v Brisbane Broncos Leagues Club Ltd [2018] 2 Qd R 584 to contend that there are two stages of analysis.  The first, they contend, is concerned with proof of causation of an identifiable loss of some kind and the second, they contend, involves assessing the quantum of the loss.  The plaintiffs contend that the first stage is to be assessed on the basis of proof on the balance of probabilities and the second, by reference to the Court’s assessment of the possibilities and probabilities of occurrence of the relevant hypothetical scenario or scenarios.
  6. [12]
    In their written opening submissions on causation and damages the plaintiffs put their case in this way (footnotes omitted, emphasis added):
  1. The plaintiffs’ case is put on two bases.  Each will be addressed in turn.
  2. (First basis: lost opportunity to earn profits): The plaintiffs contend that the conduct of Monto Coal 2, in suspending the Project on 4 July 2003 and thereafter maintaining the suspension,  and failing to provide for the development of Stage 1, constituted a breach of the obligation to  use all reasonable efforts to develop Stage 1 by 16 May 2005, and the obligation to carry out the Stage 2 Feasibility Study, and this caused the plaintiffs to lose the opportunity to earn profits from the sale of coal from the Mine as developed in Stage 1 and Stage 2.
  3. The plaintiffs’ case in this regard is that but for Monto Coal 2’s breaches:
  1. Coal  produced  from  Stage  1  would  have  been  produced  and  sold  during  the  period August 2004 to June 2007, and would have gained market acceptance by about May 2005;
  2. the Stage 2 Feasibility Study would have been prepared by about May 2005;
  3. the Stage 2 Feasibility Study would have demonstrated that Stage 2 would have been profitable with a net present value of $518million, as set out in paragraph 9 to 31 of Mr Jeff Hall’s (P) report of 21 November 2018;
  4. the  JVMC  would  have  voted,  in  about  May  or  June  2005,  in  favour  of  developing Stage 2; and
  5. Coal would have been produced and sold from Stage 1 and Stage 2 at a profit with a net present value  of  $2,569 billion,  the  plaintiffs’  share  of  which  is  $1.002billion,  as calculated  in  paragraph  13  of,  and  Annexure  B  to,  Mr  J.  Hall’s (P) report of 30 November 2018.
  1. Findings on the matters at paragraph 65(a) to (d) above (in particular, the matters at (a) and (c)) depend in large measure upon the Court’s assessment of the expert evidence.  The expert evidence is, on any view, extremely complex, and requires the consideration of a very large number of imponderables.  The  issue  is  made  more  complicated  by  the  circumstance  that activities that would have been conducted in the counterfactual world, were in fact never done (viz. the further drilling required to “prove-up” the resource, and the extensive work required for a bankable feasibility study).  
  1. The difficulties referred to in the preceding paragraph arise as a direct result of Monto Coal 2’s breaches of the JVA, in circumstances where the defendants rather than the plaintiffs were responsible for the work required to be undertaken for the purposes of the Stage 2 Feasibility Study. It is submitted in this regard that the Court would draw inferences about causation by resolving doubtful questions against the defendants, as the party whose actions have made the assessment so problematic. 
  2. (Second basis: lost opportunity to sell interest): In the alternative to the first basis, the plaintiffs contend that the breach of the JVA by suspension of the Project on 4 July 2003 caused the plaintiffs to lose the opportunity to sell their interests in the Joint Venture in July 2008 at a value which would reflect the stage to which the Project would have advanced, had Monto Coal 2 not breached its obligations.
  1. [13]
    It seems apparent from the foregoing, that, amongst other things, the causation hypothesis on which the plaintiffs rely to assert the link between the conduct which they impugn and the opportunity which they say they lost requires them to establish that had it not been for the alleged breaches of the joint venture agreement, the Stage 2 feasibility study would have been prepared by May 2005 and would have demonstrated that the development of Stage 2 would have been profitable with a net present value of $518 million[2] and, accordingly, the joint venture would have made a decision to proceed with Stage 2.
  2. [14]
    The proposition that if the Stage 2 feasibility study had been performed it would have had a particular outcome and that outcome would have led to the Joint Venture making a decision to proceed with Stage 2 is an essential element in the causation hypothesis underlying the plaintiffs’ case.  It is part of the means by which the plaintiffs seek to persuade me that they lost a valuable commercial opportunity.
  3. [15]
    What is a “Stage 2 feasibility study”?
  4. [16]
    For present purposes, it suffices to identify that the phrases “Feasibility Study” and “Stage 2 Feasibility Study” were defined in the written joint venture agreement.
  5. [17]
    “Feasibility Study”, meant a study of all relevant aspects of possible methods of proposed Mining Operations (of a standard normally acceptable to a bank, merchant bank or other financial institution of international reputation having recognised expertise in mining project finance to make a decision as to whether or not to provide funding for the Mine Development) containing:
    1. (a)
      estimates of both capital and operating costs;
    2. (b)
      an analysis of how to proceed with the Mining Operations to economically and commercially extract Coal;
    3. (c)
      a plan for Mine Development;
    4. (d)
      an economic appraisal based on a range of coal prices;
    5. (e)
      reference to other relevant marketing and financial considerations; and
    6. (f)
      unless otherwise agreed, a statement as to whether a proposed Mine Development is commercially viable and a recommendation as to whether or not proposed Mining Operations should proceed.
  6. [18]
    “Stage 2 Feasibility Study” meant a bankable feasibility study to determine whether or not to undertake Stage 2 which included:
    1. (a)
      exploration for Stage 2 to the extent reasonably necessary to prove up the Stage 2 resource to the extent necessary for a potential participant to decide to become a Participant;
    2. (b)
      mining studies required to define the method of mining and determine costs for the mining process for Stage 2;
    3. (c)
      the costing and conceptual design of the coal preparation plant for Stage 2;
    4. (d)
      the costing of the capital required for Stage 2;
    5. (e)
      all reasonably necessary environmental studies; and
    6. (f)
      the study into transportation options for Stage 2 but excluding design costs.
  7. [19]
    Having regard to those definitions, it is not difficult to understand why the plaintiffs opened their case by submitting that findings on what the hypothetical Stage 2 Feasibility Study would have demonstrated would depend in large measure upon the Court’s assessment of expert evidence, which evidence will require the consideration of a very large number of imponderables, and which imponderables will include counterfactual propositions about the extensive work required to carry out such a study.
  8. [20]
    And although the plaintiffs’ opening did not state this, it presently seems to me that the assessment of loss, if I am persuaded that the plaintiffs have been caused an identifiable loss of some kind, will in large measure also turn upon my consideration of the possibilities and probabilities of occurrence of many of the same imponderables and, importantly, by reference to the same body of evidence, including expert evidence as is relied on in relation to what the hypothetical Stage 2 Feasibility Study would have demonstrated
  9. [21]
    That proposition is confirmed by the plaintiffs’ submissions before me on the present objections, which contended that the expert evidence of Mr Freeman (P) was relevant to two overarching questions which arise in the proceeding, namely –
    1. (a)
      the content of a hypothetical Stage 2 feasibility study; and
    2. (b)
      the assessment of the quantum of the plaintiffs’ loss, in the event I determined that the plaintiffs have suffered some compensable loss.
  10. [22]
    By way of brief overview, the plaintiffs rely on the opinion evidence of Mr Freeman to establish that a hypothetical Stage 2 feasibility study for Stage 2 as at May 2005 would have determined that –
    1. (a)
      the source of raw water for the mine would likely have been the Paradise Dam, and that such water could be obtained by adopting the technical and commercial solution proposed by Mr Freeman and for about the cost identified by Mr Freeman;
    2. (b)
      offsite power supply for Stage 2 would have been obtained by adopting the technical and commercial solution proposed by Mr Freeman and for about the cost identified by Mr Freeman;
    3. (c)
      coal could be transported from the mine to port in the capacities suggested by Mr Freeman by adopting the technical and commercial rail solution proposed by Mr Freeman and for about the cost identified by Mr Freeman; and
    4. (d)
      in relation to the requisite port requirements for Stage 2 –
      1. port capacity was available for contract and would have been allocated to the joint venture in the manner suggested by Mr Freeman;
      2. the solutions that could have been triggered had insufficient primary capacity been available were those suggested by Mr Freeman; and
      3. the likely charges under a contract with the port were those suggested by Mr Freeman.
  11. [23]
    So far as the damages case is concerned, it is evident that the plaintiff’s case will require my assessment (amongst very many other things) of the possibilities and probabilities of things turning out in the way Mr Freeman opines they would. 

The procedural context within which the objections have come on for argument

  1. [24]
    My two previous decisions Sanrus Pty Ltd v Monto Coal 2 Pty Ltd (No 1) [2018] QSC 308 and Sanrus Pty Ltd v Monto Coal 2 Pty Ltd (No 2) [2019] QSC 162 identified the content of various case management orders governing the production before trial of the expert reports which parties intended to rely on at trial, the conduct during trial of multiple joint expert conclaves and the production of joint expert reports after the conclaves. 
  2. [25]
    Orders which I made on 21 December 2018 requiring the experts to attend joint conferences for the purpose of preparing joint reports were expressed to be “without prejudice to the right to object to any expert evidence at trial”.[3]  Further, they required that “fourteen days prior to the commencement of the giving of expert evidence the parties notify each other of the paragraphs of each of the others' expert reports which are objected to and the grounds of objection”.[4] 
  3. [26]
    Mr Freeman (P) has produced three expert reports for the purpose of this proceeding:
    1. (a)
      Report dated 2 November 2018 [EXP.010.005.0001];[5]
    2. (b)
      Supplementary Report dated 15 November 2018 [EXP.010.006.0001]; and
    3. (c)
      Report (Actual Costs) dated 22 November 2018 [EXP.010.007.0001].
  4. [27]
    Mr Freeman (P) participated in four joint expert conclaves which led to the production of the following four joint expert reports:
    1. (a)
      Joint Expert Report for Offsite Water Supply dated 15 July 2019 by Mr Freeman (P), Mr Simpson (P), Mr Harradine (D), Mr Smith (D), Mr Cavanagh (D) and Ms Power (D) [EXP.500.004.0001_2];
    2. (b)
      Joint Expert Report for Offsite Power Supply dated 15 July 2019 by Mr Freeman (P), Mr Simpson (P), Mr Harradine (D), Mr Smith (D) and Mr Cavanagh (D) [EXP.500.011.0001_2];
    3. (c)
      Joint Expert Report for Port dated 22 July 2019 by Mr Freeman (P) and Mr Morton (D) [EXP.500.026.0001_2]; and
    4. (d)
      Joint Expert Report for Rail dated 24 July 2019 by Mr Freeman (P), Mr Hunter (D), Mr Morton (D) and Mr Cavanagh (D) [EXP.500.027.0001_2]
  5. [28]
    The trial has progressed to the stage of hearing the evidence of the various expert witnesses. 
  6. [29]
    Some of the joint expert reports mentioned in [27], have already been admitted in the trial because an earlier expert has already been called.  But in each case the right to object was reserved.  Thus:
    1. (a)
      The Joint Expert Report for Offsite Water Supply was admitted on day 53 of the trial through Mr Smith (D), on the basis that the other witnesses responsible for preparing the joint expert report will be called and subject to the reservation of rights in relation to objections for those other witnesses.[6]  On day 54 of the trial Ms Power (D) was called to give evidence and on day 55 Mr Cavanagh (D) was called to give evidence, however the remaining experts responsible for the Joint Expert Report for Offsite Water Supply are yet to be called.
    2. (b)
      The Joint Expert Report for Offsite Power Supply was also admitted on day 53 of the trial through Mr Smith (D), on the basis that the other witnesses responsible for preparing the joint expert report will be called and subject to the reservation of rights in relation to objections for those other witnesses.[7]  On day 55 of the trial, Mr Cavanagh (D) was called to give evidence, however the remaining experts responsible for the Joint Expert Report for Offsite Power Supply are yet to be called.
    3. (c)
      The Joint Expert Report for Rail was also admitted on day 53 of the trial through Mr Smith (D), on the basis that the other witnesses responsible for preparing the joint expert report will be called and subject to the reservation of rights in relation to objections for those other witnesses.[8]  On day 55 of the trial, Mr Cavanagh (D) was called to give evidence, however the remaining experts responsible for the Joint Expert Report for Offsite Power Supply are yet to be called to give evidence.
  7. [30]
    On 8 August 2019 (which was the day the agreed timetable required notice of objections to be given), the defendants notified the plaintiffs of their objections to the reports of Mr Freeman (P).  Parts of two of Mr Freeman’s individual reports and parts of three out of the four joint expert reports involving Mr Freeman were impugned: see [ALL.502.001.0004].  The objections were extensive.  Although the objections fall broadly into similar categories, there were about 157 discrete items originally raised and each one must be separately considered.
  8. [31]
    Shortly prior to the commencement of oral argument on those objections, the defendants sought to supplement their objections: see [ALL.502.001.0054].  They also sought to object to some parts of the reports on the grounds that they were irrelevant to the case as pleaded. When the objections came on for argument, the plaintiffs were not in a position to deal with the supplementary objections or with the pleading point and, further, objected to the defendants being permitted to raise any objections beyond those notified within time.  I have not yet heard argument on the latter proposition, and did not require the plaintiffs then to respond to the supplementary objections or to the pleading point.  Instead I have required the parties to record their position as to the merits of the supplementary objections in a schedule and will consider whether I should rule on them at a later juncture.
  9. [32]
    The present judgment identifies and explains my provisional rulings only in relation to the objections first notified by the defendants, including as they were narrowed by the defendants during the course of oral argument.  And, because of the exigencies of the trial, the present judgment does not express provisional rulings on each of the 120 discrete items which are still pressed in relation to the objections first notified by the defendants.

Preliminary issue as to whether I should defer ruling on admissibility

  1. [33]
    The plaintiffs contended that I should not proceed to determine the defendants’ objections, but should defer ruling on admissibility until my final judgment.  I heard submissions on this question during oral argument.  At the end of oral argument I advised the parties that I intended to rule on the objections and would explain why in my judgment.
  2. [34]
    In Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588, French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ at explained (at [19] and [20]):

[…] As a general rule, trial judges confronted with an objection to admissibility of evidence should rule upon that objection as soon as possible.  Often the ruling can and should be given immediately after the objection has been made and argued.  If, for some pressing reason, that cannot be done, the ruling should ordinarily be given before the party who tenders the disputed evidence closes its case.  That party will then know whether it must try to mend its hand, and opposite parties will know the evidence they must answer.

It is only for very good reason that a trial judge should defer ruling on the admissibility of evidence until judgment. […]

  1. [35]
    The general rule stated in Dasreef Pty Ltd v Hawchar has been referred to with approval in the Queensland Court of Appeal: see Mark Bain Constructions Pty Ltd v Avis; Mark Bain Constructions Pty Ltd v Barnscape Pty Ltd [2012] QCA 100 at [120] per Fraser JA with Chesterman JA and Fryberg J agreeing.
  2. [36]
    The plaintiffs sought to persuade me that there were very good reasons not to apply the general rule.
  3. [37]
    The plaintiffs argued that it was significant that the experts had “engaged productively in the joint expert conclave process without the difficulty which is sought to be imputed to the evidence of one of them”.  That argument was not persuasive.  The engagement of experts in conclaves was done by order which specifically stated the conclaves were to be without prejudice to objections to admissibility and in the context which specifically set a timetable for objections.  In any event, expert witnesses are not judges.  The fact that they might be able to “engage productively” (or even reach agreement, for that matter) in discussions about evidence is neither here nor there, if the evidence upon which they engaged or even reached agreement is found not to meet the criteria for admissibility of expert opinion when an objection is ruled upon by a judge.
  4. [38]
    The plaintiffs complained that the defendants had given no notice that they intended to object to the expert reports of Mr Freeman to the extent that was now sought to be done.  The defendants gave the requisite notice in accordance with the timetable which had been set by order of the Court, as amended.[9]  The complaint might have been more persuasive if the defendants’ objections were spurious or marginal.  However, it will appear, many of the defendants’ objections have merit.  While it is true that the resolution of the objections has caused disruption to the trial plan, that cannot be helped.  I do not find the extent of the objections do be a good reason to defer ruling.
  5. [39]
    The plaintiffs pointed out that if the defendants’ objections to Mr Freeman’s reports were to be upheld, then it may be that similar objections should be upheld in respect of one or more of the defendants’ expert reports.  Although I do not know what is the content of any objections which may have been notified by the plaintiffs in respect of the defendants’ experts, my preliminary view is that there may well be some merit in this proposition.  Without conceding the point in respect of any specific part of their expert reports, the defendants accepted that a ruling in their favour in respect of some parts of Mr Freeman’s reports might well mean that they could not press parts of their own expert reports.  But that is as it should be.  Neither side should be permitted to rely on inadmissible evidence, if objection is taken to it.  And if objection is taken, the law must be applied to both sides equally.  
  6. [40]
    Subject to some caveats concerning the application of the proof of assumption rule (as to which see [50] below) and other specific issues in which I have formed the view that I should not yet make an evaluative judgment about disputed matters of proof, in my view this was an appropriate case for the application of the general rule.  My ruling on the present objections will permit both sides of this case to make informed forensic judgments about the future conduct of the proceeding.  In particular, it will permit the defendants to conduct the course of their cross-examination of Mr Freeman (P) in the knowledge of the particular evidence which is admissible and which they must answer.  But further, and to the extent that any other expert reports from either side are subject to such deficiencies as I might find to exist in Mr Freeman’s reports, my ruling will also permit the parties to make informed forensic judgments about the extent to which they seek to press those reports (or seek to object to them).  And, it is not insignificant to remark that neither the parties in their final submissions, nor I in my eventual final judgment on the merits of this proceeding, should be troubled with having to deal with inadmissible expert opinion evidence, if a proper objection has been taken to it.
  7. [41]
    Of course, if inadmissible expert opinion is admitted, because objection has not been taken to it, then it will be necessary to deal with that opinion in my eventual final judgment by reference to the law as explained in Hughes v National Trustees Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134; Robert Bax & Associates v Cavenham Pty Ltd [2013] 1 Qd R 476 and Beaven v Wagner Industrial Services Pty Ltd [2018] 2 Qd R 542.

The structure of the remainder of this judgment.

  1. [42]
    The remainder of the body of this judgment identifies the general principles which I will apply, and the approach which I have taken to the principal issues of controversy between the parties. 
  2. [43]
    The schedule to the judgment –
    1. (a)
      identifies the relevant parts of the reports to which objection was taken (in the objections first notified by the defendants);
    2. (b)
      records the objection, as ultimately expressed by the defendants (although that was to be read with written submissions advanced by the defendants);
    3. (c)
      records the response, as ultimately expressed by the plaintiffs (although that was to be read with written submissions advanced by the plaintiffs); and
    4. (d)
      in the column headed “Ruling” – and having regard to the reasons recorded in the body of the judgment – records and explains the specific ruling made in respect of the impugned parts of the reports.
  3. [44]
    As I have mentioned, I have not yet been able to rule on each item in the schedule.  In those cases, the schedule states “Not yet ruled” in the final column.

Applicable general principles

Expert opinion evidence must satisfy the Makita criteria

  1. [45]
    In Makita (Aust) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at [85], Heydon JA stated that for expert opinion evidence to be admissible, it must meet the following criteria:
    1. (a)
      it must be agreed or demonstrated that there is a field of “specialised knowledge”;
    2. (b)
      there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert;
    3. (c)
      the opinion proffered must be “wholly or substantially based on the witness’s expert knowledge”;
    4. (d)
      so far as the opinion is based on facts “observed” by the expert, those facts must be identified and admissibly proved by the expert;
    5. (e)
      so far as the opinion is based on “assumed” or “accepted” facts, those facts must be identified and proved in some other way;
    6. (f)
      it must be established that the facts on which the opinion is based form a proper foundation for it; and
    7. (g)
      finally, the expert’s evidence must explain how the field in which the expert has expertise - as established pursuant to (a), (b) and (c) – applies to the facts assumed or observed so as to produce the opinion propounded.
  2. [46]
    This passage of the reasons of Heydon JA in Makita has been applied by the Queensland Court of Appeal on multiple occasions, including R v Naidu [2008] QCA 130 at [68]; R v Kleimeyer [2014] QCA 56 at [31]; R v Mackenzie [2016] QCA 277 at [37]; Woolworths Limited v Grimshaw [2016] QCA 274 at [24] and Beaven v Wagner Industrial Services Pty Ltd [2018] 2 Qd R 542 at [44].  As will appear, his Honour developed his thinking and expressed it further in Dasreef Pty Ltd v Hawchar.
  3. [47]
    Four aspects of the Makita criteria are relevant to the disposition of the defendants’ objections to Mr Freeman’s reports.
  4. [48]
    The first relevant aspect of the Makita criteria is that the expert opinion must be on a matter which is a proper matter for expert opinion.  As to this:
    1. (a)
      That is what the first three of the Makita criteria address.  There must be a field of specialised knowledge, in which the witness is demonstrated to be “expert” by specified training, study or experience, and the opinion must be wholly or substantially based on the witness’s expert knowledge. 
    2. (b)
      If the expert's reasoning is not, on analysis, dependent on his or her specialised knowledge, and merely expresses a process that could have been undertaken by the trier of fact (whether a judge sitting alone or a jury) without the expert’s assistance, it is not admissible as expert opinion evidence.[10] 
    3. (c)
      The importance of this aspect of the law was explained by Gleeson CJ in HG v The Queen (1999) 197 CLR 414, in the following passage (footnotes omitted, emphasis added):

[43]  To paraphrase what was said by Dixon CJ in Clark v Ryan about the expert witness in that case, the evidence the defence sought to lead from [the expert] really amounted to putting from the witness box the inferences and hypotheses on which the defence case wished to rely.

[44]  This was not a trial by jury, but in trials before judges alone, as well as in trials by jury, it is important that the opinions of expert witnesses be confined, in accordance with s 79, to opinions which are wholly or substantially based on their specialised knowledge. Experts who venture "opinions" (sometimes merely their own inference of fact), outside their field of specialised knowledge may invest those opinions with a spurious appearance of authority, and legitimate processes of fact-finding may be subverted. The opinions which Mr McCombie was to be invited to express appear to provide a good example of the mischief which is to be avoided.

  1. (d)
    His Honour’s remarks, although specifically directed at the statutory expression of this common law rule, are just as applicable to the common law rule itself.
  2. (e)
    A failure to demonstrate that an opinion expressed by a witness is based on the witness’s specialised knowledge based on training, study or experience is a matter that goes to the admissibility of the evidence, not its weight: Dasreef Pty Ltd v Hawchar per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ at [42]. 
  3. (f)
    Notably, because demonstration of these matters could come only from the evidence given by the expert, the need to direct attention to these matters requires that the opinion be presented in a form which makes it possible to answer that question: HG v The Queen per Gleeson CJ at [39] and Dasreef Pty Ltd v Hawchar per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ at [36].
  1. [49]
    The second relevant aspect of the Makita criteria is that the facts on which the opinion is based must be identified by the expert.  As to this:
    1. (a)
      This is part of what the fourth and fifth of the Makita criteria address.  In R v Naidu,[11] Fraser JA said that ‘[i]t is unquestionably the law that expert opinion evidence is inadmissible if the opinion is not expressed upon a state of facts both identified and proved in evidence’ (emphasis added).
    2. (b)
      In Dasreef Pty Ltd v Hawchar at [64] Heydon J called this the “assumption identification rule”.  His Honour observed (footnotes omitted, emphasis added):

There is no doubt that the assumption identification rule exists at common law. Expert evidence is inadmissible unless the facts on which the opinion is based are stated by the expert – by way of proof if the expert can admissibly prove them, otherwise as assumptions to be proved in other ways. Thus Dixon J said that the assumptions of fact on which an expert opinion rested had to be “adverted to by the witness”.

  1. (c)
    The previous two subparagraphs demonstrate that a failure to identify the state of facts on which the expert opinion is expressed goes to the admissibility of the evidence, not its weight.
  2. (d)
    Heydon J explained the purpose of the “assumption identification rule”, in these terms in Dasreef Pty Ltd v Hawchar (at [65]) (footnotes omitted):

The rule facilitates the operation of the proof of assumption rule and other rules of admissibility. It helps to distinguish between what the expert has observed and what the expert has been told; to ensure that the expert is basing the opinion only on relevant facts; to ensure that experts do not pick and choose for themselves what aspects of the primary evidence they reject, what they accept, how they interpret it and what the court should find; and to ascertain whether there is substantial correspondence between the facts assumed and the evidence admitted to establish them.

  1. (e)
    His Honour’s reference to the “proof of assumption rule” was to the common law rule that an expert opinion is not admissible unless evidence has been, or will be, admitted, whether from the expert or from some other source, which is capable of supporting findings of fact which are sufficiently similar to the factual assumptions on which the opinion was stated to be based to render the opinion of value: Dasreef Pty Ltd v Hawchar at [66].  When in R v Naidu, Fraser JA referred to “and proved in evidence”, I apprehend it was to this requirement.
  1. [50]
    I observe parenthetically, that there is a distinction between the assumption identification rule and the proof of assumption rule.  The former requires the assumptions on which the opinion depends to be stated by the expert.  The latter requires the assumptions to be proved or at least for there to be evidence sufficiently similar to the assumptions to render the opinion of value.  The body of the defendants submissions relied on the former rule, yet the schedule which identified the detail of their objections relied on both rules.  There is often a difficulty with applying the proof of assumption rule before all the evidence is in and before the trier of fact is in a position to evaluate all the evidence in the trial in context.  Whilst it is possible that if the evidence was clearly discrete and encapsulated that I might be persuaded to apply the proof of assumption rule before my final judgment, in relation to the items in the schedule which I have examined at the time of preparation of these reasons, I have not thought it is appropriate to do so. 
  2. [51]
    The third relevant aspect of the Makita criteria is that to the extent that the opinion rests on facts “observed” by the expert, they must be admissibly proved by the expert.  As to this:
    1. (a)
      That is part of what the fourth of the Makita criteria addresses.  Whilst it is often the case that experts will not seek themselves to prove some or all of the facts on which their opinion is founded, Makita recognises that there is no reason why that cannot occur, so long as it is done in an admissible way.
    2. (b)
      An expert might well prove, for example, a particular experiment, analysis done or set of observations made by the expert and then express an opinion based on the results of the experiment, the outcome of the analysis or the content of the observations.  In that way the expert would be both a witness of fact (as to the experiment, analysis or observations) and a witness of expert opinion (as to the expert opinion properly drawn within the scope of the expert’s demonstrated expertise based on the facts so demonstrated).  Sometimes the dividing line between fact and law in this respect might be unclear.  For example, an expert might need demonstrated specified training, study or experience for the experiment, analysis or observations to be valid.
    3. (c)
      The important point is that insofar as a litigant seeks to prove facts on which an expert opinion is based by way of the expert’s own evidence, that proof must be done in an admissible way by that expert.  If the expert witness’ own evidence of the facts is not admissible to prove them, then the most that that part of the expert’s evidence could be regarded as, is a statement of what the expert assumed to be true for the purpose of the expert formulating the expert’s opinion evidence.[12]   If those assumptions are not confirmed in some other way by admissible evidence in the proceeding, then the expert opinion evidence will not be admissible.
  3. [52]
    The fourth relevant aspect of the Makita criteria is that the expert must state, in chief, the reasoning by which the conclusion arrived at flows from the facts proved or assumed by the expert so as to reveal that the opinion is based on the expert's expertise.  As to this:
    1. (a)
      That is what the final of the Makita criterion addresses.  In Makita (at [59]) Heydon JA had earlier observed that if an expert’s report is to be useful it must comply with the prime duty of experts in giving opinion evidence, namely to furnish the trier of fact with criteria enabling evaluation of the validity of the expert’s conclusions.  His Honour’s observations in this regard have been followed in the Queensland Court of Appeal: R v Sica [2014] 2 Qd R 168 per Muir and Gotterson JJA and Applegarth J at [104]; R v Lentini [2018] QCA 299 per Sofronoff P, with Philippides JA and Henry JA agreeing, at [55].
    2. (b)
      In Dasreef Pty Ltd v Hawchar at [91], Heydon J called this rule the ‘statement of reasoning rule’, and explained that the rule is important both from the point of view of how courts must be expected to act in relation to expert opinion and from the point of view of fairness to the opposing party.
    3. (c)
      As to the importance of the rule from the point of view of the Court, His Honour stated (at [92] – [94], footnotes omitted, emphasis added):
  1. Sir Owen Dixon, speaking extrajudicially, said:  “courts cannot be expected to act upon opinions the basis of which is unexplained.”  In R v Jenkins; Ex parte Morrison Fullagar J quoted that statement with approval, and added that expert scientific witnesses should be asked to “explain the basis of theory or experience” on which their conclusions rest.  On appeal Rich and Dixon JJ approved what Fullagar J had said.  The witness must explain the basis of theory or experience because the court is not limited to examining the conclusion or the expertise of the expert witness:  it must look to the “substance of the opinion expressed.”  Since choosing between conflicting experts depends in part on “impressiveness and cogency of reasoning” their “processes of reasoning” must be identified.  […]
  2. Function of the statement of reasoning rule.  The rule protects cross-examiners by enabling them to go straight to the heart of any difference between the parties without the delay of preliminary reconnoitring.  It also aids the court in a non-jury trial, because at the end of the trial it is the duty of the court to give reasons for its conclusions.  And it aids jurors, because at the end of the trial they have the duty of assessing the rational force of expert evidence.  If there is not some exposition of the expert’s reasoning it will be impossible for the court to compose a judgment stating, and for the jurors to assemble, reasons for accepting or rejecting or qualifying the expert’s conclusion. 

“The process of inference that leads to the [expert's] conclusions must be stated or revealed in a way that enables the conclusions to be tested and a judgment made about the reliability of them.”

As Lord Cooper, the Lord President, said in Davie v Magistrates of Edinburgh:

“The value of [expert opinion] evidence depends … above all upon the extent to which [the expert's] evidence carries conviction … 

[T]he defenders went so far as to maintain that we were bound to accept the conclusions of [an expert witness].  This view I must firmly reject as contrary to the principles in accordance with which expert opinion evidence is admitted.  […]  [The] duty [of expert witnesses] is to furnish the Judge or jury with the necessary scientific criteria for testing the accuracy of their conclusions, so as to enable the Judge or jury to form their own independent judgment by the application of these criteria to the facts proved in evidence. …  [T]he bare ipse dixit of a scientist, however eminent, upon the issue in controversy, will normally carry little weight, for it cannot be tested by cross-examination nor independently appraised, and the parties have invoked the decision of a judicial tribunal and not an oracular pronouncement by an expert.”

  1. It is sometimes said that these words deal with weight only, not admissibility. But this is contradicted by the Lord President’s use of the word “admitted”.
  1. (d)
    As to the importance of the rule from the point of view of fairness to an opposing party, citing Lewis v The Queen (1987) 88 FLR 104 at 124, Heydon J wrote that the rule required the reasoning to be stated in chief because the opposing party is not to be left to find out about the expert's thinking for the first time in cross-examination.

Proof of what a person would have done in hypothetical circumstances

  1. [53]
    There is only one remaining aspect of general principle which is relevant to the disposition of the defendants’ objections.  That concerns how evidence may be adduced as to what a person would have done in hypothetical circumstances, should proof of that hypothetical fact be relevant in a proceeding. 
  2. [54]
    In this regard, the plaintiffs did not dispute the following summary of principle set out in the defendants’ submissions:
    1. (a)
      A witness may give evidence of what he or she would have done in hypothetical circumstances.  Such evidence is not opinion evidence, but evidence of fact.[13] 
    2. (b)
      Similarly, a witness with appropriate authority may also give factual evidence of what his or her corporate employer would have done in a hypothetical set of circumstances.[14]
    3. (c)
      On the other hand, evidence of what another person would have done in hypothetical circumstances, or what a reasonable person would have done in hypothetical circumstances, is opinion evidence.[15]  There are generally three circumstances in which such evidence can be given:
      1. A suitably qualified professional expert may give evidence of the content of general practices of professionals in his or her field, or to put it another way, evidence about what professionals generally do in stated circumstances.[16] Outside the field of professional practices, an expert may give similar evidence about the content of industry practices.[17]
      2. A suitably qualified professional expert may go beyond evidence of the content of general practices, by expressing an opinion about the practice of competent and careful professionals in specified circumstances which are recurring or typical.[18]  However, evidence of what an expert would himself or herself do in hypothetical circumstances is inadmissible.[19]
      3. A suitably qualified professional expert may go beyond evidence of the general practice of competent and careful professionals in stated circumstances, and give evidence of what, in stated circumstances which are out of the ordinary and not amenable to observations about a developed practice, a competent and careful professional would be expected to do.[20]  It has been suggested that some additional and special qualification over and above the ordinary training and experience of a professional in the field is required in order to be able to express an opinion of this kind.[21]
  3. [55]
    The plaintiffs sought to extend the principles identified in the previous paragraph, to justify the conclusion that it was permissible for an expert qualified by having specialised knowledge of the industry in which a particular identified corporate person operated, to express an opinion as to what that corporate person would have done in hypothetical circumstances. 
  4. [56]
    I reject the plaintiffs’ argument.  That subject matter is not a proper matter for expert opinion.  The plaintiffs were not able to identify any authority which supported the argument beyond the authorities which permit experts to give evidence of the content of industry practices and of the practices of consumers or industry participants generally.  In my view those cases do not permit of such an extension.  As Allsop CJ observed in Gambro Pty Ltd v Fresenius Medical Care Australia Pty Ltd [2007] 245 ALR 15 at [24] in relation to cases which authorised expert opinion evidence about how customers in the market would react in hypothesised circumstances “… it goes without saying that [the expert] cannot say what any particular individual person would have done on a particular day.” 
  5. [57]
    That is not to say that an expert might not be able to give admissible factual evidence concerning practices or procedures in an industry.  But the expert would have to do so in an admissible way.  And, as we have seen in the principles stated at [54](c) above, in some circumstances an expert might go on to express opinion based on the expert’s admissible factual evidence.  But in so doing, the expert would have to comply with the Makita criteria. 
  6. [58]
    Nor is it to say that factual evidence about a corporate person’s particular past conduct or practices might not be admissible, with a view to providing an evidentiary basis for a submission that the trier of fact should draw a particular inference about that person’s likely conduct in hypothetical circumstances.  But the proof of past conduct or practices would have to occur in an admissible way.  And whether the trier of fact should draw the inference contended for based on the evidence of past conduct or practices is a matter for the trier of fact.  It is not a proper subject for expert opinion evidence.  Permitting that to occur would usurp the function of the trier of fact and would permit the party seeking to adduce such evidence to engage in precisely the type of conduct criticised by Gleeson CJ in in HG v The Queen quoted at [48](c) above.

Principal questions of controversy

  1. [59]
    The items in respect of which objection was pressed fell into three principal categories.
    1. (a)
      opinion as to what the joint venture would have done in hypothetical circumstances;
    2. (b)
      opinion as to what Queensland Rail (QR), or the Gladstone Port Corporation (GPC, sometimes also referred to as the Gladstone Port Authority or GPA), or SunWater, or Powerlink would have done in hypothetical circumstances;
    3. (c)
      opinion that the joint venture could have secured port capacity with the Port of Gladstone.
  2. [60]
    As to opinion evidence of what the joint venture would have done in hypothetical circumstances:
    1. (a)
      The joint venture agreement provided a basis for supporting a submission that joint venture decisions were to be made “in accordance with good commercial mining industry practice” (see cl 4.1(a)).  Further, certain decision makers in relation to joint venture business were obliged to decide by reference to what was in the best interests of the joint venture, considering that question, amongst other things, “from the perspective of a reasonable, direct or indirect equity investor in a coal mine in Australia” (see cl. 7.6).
    2. (b)
      The defendants correctly suggest that there are many incidents of Mr Freeman expressing a direct view as to what the joint venture would have done in hypothetical circumstances.  However my attention has not been drawn by the plaintiffs to any occasions when Mr Freeman sought to express an opinion based on either of the bases expressed in the previous subparagraph.  In any event I agree with the defendants’ submission that Mr Freeman does not purport to qualify himself as an expert in the field of mining joint venture decision making or equity investor decision making.
    3. (c)
      As a general proposition, I agree with the plaintiffs that it is not open to Mr Freeman to give expert opinion on what the joint venture would have done in hypothetical circumstances.  
  3. [61]
    As to opinion evidence as to what QR, GPA, SunWater, or Powerlink would have done in hypothetical circumstances:
    1. (a)
      Mr Freeman’s opinions in relation to QR are in a different category to the other corporations.  He was at some relevant times an employee of QR.  I do not think it is yet appropriate to express an evaluation as to whether the nature of his role might have been such that he could give admissible factual evidence of what QR would have done in a hypothetical set of circumstances.  I would not make findings on that question at this time.  If he was not in that position, then the observations I make in relation to GPA, SunWater, or Powerlink would apply.  However even if he was, it would be necessary for the expression of his opinions to meet the assumption identification rule and the statement of reasoning rule.
    2. (b)
      Mr Freeman’s opinions as to what GPA, SunWater, or Powerlink would do in hypothetical circumstances are – subject to the matters I will shortly raise in relation to the plaintiffs’ alternative argument – expressions of opinion on matters which are not properly the subject of expert opinion.  I have explained why at [54] to [58] above.  Further, even if I was wrong on that question, it would be very important that any expression of expert opinion on such matters, pay very careful attention to the assumption identification rule and the statement of reasoning rule. 
  4. [62]
    As to the opinion evidence concerning the ability of the joint venture to have secured port capacity with the Port of Gladstone, there are many items covered by the objections on which I have not yet ruled.  However, at least some of them are subject to the deficiencies identified in the previous paragraph.  In particular I agree with the defendants that it is not a proper matter for expert opinion evidence for an expert to review documents including confidential documents obtained on subpoena and to express conclusions on what the expert would infer from those documents.
  5. [63]
    During the course of oral argument before me, and without abandoning resistance to the objections advanced by the defendants to the general admissibility of the evidence, the plaintiffs advanced a fall back argument.  That argument was that at the least the evidence to which the defendants had objected could be regarded as expressing Mr Freeman’s views as to matters which would have been considered by appropriately qualified and competent experts who were preparing a hypothetical bankable feasibility study for the Monto Coal Stage 2 Project, and as identifying what conclusions those experts, acting with reasonable care and skill, would have reached on those matters.
  6. [64]
    There is support – albeit retrospective support, because that is not how Mr Freeman’s underlying reports are in fact expressed – for reading the reports in that way to be found in the joint expert reports for offsite power supply; offsite water supply and rail.  The following paragraphs appear in the joint expert report in respect of rail (and similar words appear in the other two reports):

2.2  The purpose of this JER is to set out what the experts to this report agree or disagree with respect to rail for the Monto Coal Stage 2 Project (the Project).  It is important to note that this report has been prepared, as have our underlying individual reports, to address what matters relevant to rail would have been considered by appropriately qualified and competent people who were preparing a hypothetical bankable feasibility study (BFS) for the Monto Coal Stage 2 Project, and what conclusions those people, acting with reasonable care and skill, would have reached on those matters.

2.3.  The plaintiffs' experts have been asked to assume that preparation of the hypothetical BFS occurred from 2002 to 2005.  The defendants' experts have been asked to consider the preparation of that hypothetical BFS as at May 2005.  This difference in instructions is the principal source of the differences of opinion noted in Section 4 of this JER.

2.4.  When we say that something would or would not have been decided or done, or that something is or is not correct, or is or is not reasonable, that is to be read in each case as expressing a conclusion that in, our opinion, those notionally preparing the hypothetical BFS would have reached on that “something”.

  1. [65]
    I think it is appropriate to accept the plaintiffs’ submission that, at the least, I should read Mr Freeman’s expressions of opinion in relation to offsite power supply, offsite water supply and rail as expressing his opinions as to the matters relevant to offsite power supply, offsite water supply and rail which would have been considered by appropriately qualified and competent people who were preparing a hypothetical bankable feasibility study for the Monto Coal Stage 2 Project, and as identifying his views as to the conclusions which those people, acting with reasonable care and skill, would have reached on those matters, assuming the preparation of the hypothetical bankable feasibility study in the period from 2002 to 2005.
  2. [66]
    The defendants submitted that if the reports were to be read as limited in that way, they would not press reliance on the assumption identification rule or the statement of reasoning rule.  The problem with that concession is that it is presently unclear to me how it affects the remaining objections which they advanced and which, at least in relation to some of the items upon which I have ruled, I would uphold, e.g. the various objections as to matters not being proper matters for expert opinion.  It was not clear to me whether that objection was pressed in relation to the plaintiffs’ fall back argument and, if it was, what either side’s argument was in relation to the operation of the principles which I have identified at [54](c) above.  I could imagine, as I expressed in oral argument, that even though expert opinion that SunWater would have acted in a particular way might not be admissible in Court to prove that fact (namely that SunWater would in fact have acted in that way), it might be that reasonably competent experts would nevertheless have expressed a view on that topic when preparing a hypothetical bankable feasibility study.  But whether that was a proper course would depend upon the application of the principles which I have identified at [54](c) above (or the existence of some agreement that I should regard them as satisfied).
  3. [67]
    These matters must be clarified before I finalise my ruling.  I take the plaintiffs’ argument to be that if, by virtue of my rulings on the defendants’ objections, the impugned parts of Mr Freeman’s reports concerning offsite power supply, offsite water supply and rail are otherwise inadmissible, they nevertheless should be admitted on the limited basis suggested at [65] above.  But even on that basis, how could the various statements about what the joint venture would have done be supported?  And if that is the plaintiffs’ argument, then what, if any, arguments as to inadmissibility are pressed by the defendants? 
  4. [68]
    The joint expert report in respect of port does not contain comparable statements to those I have recorded in relation to offsite power supply; offsite water supply and rail.  However, Mr Freeman’s report was, because of the peculiar chronology of the delivery of expert opinion in this proceeding, delivered as a response to one of the defendants’ experts, Mr Morton.  Mr Morton’s relevant report states:

1  I have been instructed to consider, if I were an expert advising on the preparation of a feasibility study for the development and operation of Stage 2 of the Monto Coal Project in May 2005, issues associated with the likely availability and cost of rail and port services. …

  1. [69]
    On that basis, the plaintiffs submitted that, at the least, I should read Mr Freeman’s opinions in relation to port in the same way as Mr Morton had expressed his opinion.  There are real problems with reading Mr Freeman’s expressions of opinion on port in that way.  First, he does not say explicitly in his report (or in the joint expert report) that that is how it was intended to be read.  And, as the defendants submitted to me, it is difficult to see how it could be that he meant his report in relation to port to be interpreted in that way, seeing that it explicitly relies on material which post-dated May 2005 and some of which was in any event only obtained on subpoena and even then subject to the producing party insisting on confidentiality in respect of the documents produced. 
  2. [70]
    If I was prepared to read Mr Freeman’s opinions in relation to port in that way for the purposes of ruling on admissibility, I would still need the same matters clarified as I have sought to have clarified in relation to the other subject areas of Mr Freeman’s opinion.  Accordingly the plaintiffs should clarify with precision how they contend expressions of opinion in relation to port should be read.  Should I read Mr Freeman’s expressions of opinion in relation to port as expressing his opinions as to the matters relevant to port which would have been considered by appropriately qualified and competent people who were preparing a hypothetical bankable feasibility study for the Monto Coal Stage 2 Project, and as identifying his views as to the conclusions which those people, acting with reasonable care and skill, would have reached on those matters, assuming the preparation of the hypothetical bankable feasibility study in the period from 2002 to 2005?  Or as at May 2005 (which was what Mr Morton addressed)? 
  3. [71]
    If so, is the plaintiffs’ argument then that if, by virtue of my rulings on the defendants’ objections, the impugned parts of Mr Freeman’s reports concerning port are otherwise inadmissible, they nevertheless should be admitted on the limited basis suggested at [65] above?  If that is the plaintiffs’ argument, then what, if any, arguments as to inadmissibility are pressed by the defendants?

Conclusion

  1. [72]
    For the reasons set out above and in the column headed “Ruling” in schedule 1 to these reasons, I make the following orders:
  1. In relation to the defendants’ objections to –
  1. Expert Report of Jamie Freeman (P) dated 2 November 2018 [EXP.010.005.0001];
  2. Expert Report of Jamie Freeman (P) dated 22 November 2018 [EXP.010.007.0001]
  3. Joint Expert Report on Offsite Water Supply of Jamie Freeman (P) and Gary Harradine (D) dated 15 July 2019 [EXP.500.004.0001_2]; 
  4. Joint Expert Report on Offsite Power Supply of Jamie Freeman (P) and Gary Harradine (D) dated 15 July 2019 [EXP.500.011.0001_2]; and
  5. Joint Expert Report on Port of Jamie Freeman (P) and Euan Morton (D) [EXP.500.026.0001_2],

I make the provisional rulings set out in schedule 1 to these reasons.

  1. I give the parties leave to supplement their arguments on admissibility by reference to the alternate basis on which the plaintiffs sought to support the admissibility of the impugned evidence, referred to in my reasons at [63] to [71].

SANRUS PTY LTD & ORS V MONTO COAL 2 PTY LTD & ORS
SUPREME COURT OF QUEENSLAND PROCEEDING NO. 8609/07

Schedule expressing the Court’s ruling on the defendants’ objections to reports of Mr Freeman (P)

Report of Jamie Freeman (P) dated 2 November 2018 [EXP.010.005.0001] (2 November Report)

Item

Page/paragraph

Objection

Response to objection

Ruling

Item 2 from the defendants’ schedule of objections

  1.  

[25] First and second sentences (‘I have considered…’)

Mr Freeman provides evidence about the track record of Macarthur Coal and commentary about other mining projects. 

Not proper matters for expert opinion.

Facts underpinning this opinion are not stated or proved by admissible evidence

Macarthur Coal’s “industry achievement” in relation to the prompt development of coal mines is evidenced by reference to the Moorvale development:

  • Macarthur Coal had a 77% interest in the Moorvale Project ([MAC.518.002.8283] p. 8287);
  • Moorvale was a greenfield site ([TRA.500.030.0001] T30-69/11);
  • A feasibility study in relation to the Moorvale project was produced on 22 February 2002 [MAC.906.001.0927];
  • mining lease applications were lodged on 22 February 2002 ([MAC.906.001.0927 at pdf p. .0942];
  • A mining lease was obtained in December 2002 ([TRA.500.030.0001] T30-69/31);
  • Financing was put in place in late 2002/early 2002 ([TRA.500.030.0001] T30-69/8-9);
  • Moorvale was brought into production around the middle of 2003 and the second half of 2003 ([TRA.500.030.0001] T30-69/13-14) including the construction of a new rail spur ([TRA.500.030.0001] T30-69/16-17).

Ms Hollows gave evidence that Mr Talbot considered that Moorvale could be developed within a year (T30-74/33-34).  In response to a question “that was his reputation at the time” Ms Hollows said “He did it once – doesn’t, yeah …” (T30-74/33-34).  Ms Hollows also agreed that “Moorvale, as I think you have given evidence earlier, progressed quite quickly. It was being pushed hard and it came online really in the middle of 2003” (T32-84/36-37 [TRA.500.032.0001]).

More generally, the major shareholder, Managing Director and CEO of Macarthur Coal was Mr Talbot ([MAC.518.002.8283 at pdf p. .8294]).  Mr Greenwood gave evidence that:

  • Ken Talbot was very much a 100-mile-an-hour man and wanted things moving very, very quickly all the time. He certainly didn’t like pessimists. I think there was a little balance between what was pessimism and realism on this particular issue, and I did discuss that with him and with Roger Marshall on another occasion, that the programme was very challenging, indeed” (T20-55/15-19);
  • Ken was extremely optimistic and didn’t like people with any sort of pessimism regarding the programme. And, in fact, it would not have been worth your while to have said, ‘Look, hold on; this is going to take another year’” (21-46/35-37); and
  • in relation to the development timetable “It would have been very difficult for me to have pushed it out any further. That would not have easily been accepted by Ken Talbot” (T21-47/16-17).

Mr Wallin gave the following evidence (in cross examination) (T9-65/35-44):

Now, you also knew, I suggest, that Mr Talbot had a track record for completing mine development at record speed and low cost?---Yes.

And, indeed, of making a success of a mine which needed to market its coal as a niche product?---Yes.

And Coppabella had been an example of Mr Talbot doing both?---Yes.

And you’d had some personal involvement in Coppabella which you’ve related in your evidence-in-chief?---Yes.

Otherwise, Mr Freeman’s industry experience extends to knowledge gained by involvement in the industry about the track record of significant participants in the industry, such as Macarthur Coal (which would have been notorious in the industry): see Cargill at [50(19)].

(1) I agree that the impugned sentences do not address proper matters for expert opinion in the sense I have explained that rule.  Whilst I acknowledge that expertise can be gained by experience as well as by training or study, the matters expressed fall into the category impugned by Gleeson CJ in HG v The Queen, quoted in the body of my reasons.

(2) If the subject matter was a proper matter for expert opinion, I agree that the expression of opinion has not complied with the assumption identification rule and the facts underpinning this expression of opinion have not been stated.

(3) The objection that the facts have not been proved by admissible evidence amounts to reliance on what Heydon J described as the proof of assumption rule.  If I had not found in favour of other objections, I would not have ruled before judgment on the question whether the evidence identified in the plaintiffs’ response operated to prove the facts underpinning the opinion. 

(4) For the reasons articulated, I uphold the objection.  I did not understand the plaintiffs to contend that the evidence was admissible factual evidence from this witness as to reputation of Macarthur Coal.  The evidence was not stated in that form, but I would allow the plaintiffs to address me further if that argument is put.  

  1.  

[59] Second sentence (‘In any event…’)

Mr Freeman provides evidence about the track record of Macarthur Coal and commentary about other mining projects. 

Not proper matters for expert opinion.

Facts underpinning this opinion are not stated or proved by admissible evidence.

The evidence in support of Macarthur Coal’s track record and the fact that it was a “well-established producer” includes Macarthur Coal’s 4 November 2002 prospectus [MAC.518.002.8283] which, in relation to Macarthur Coal:

  • states “Quality management with a proven track record of developing low cost, highly productive coal mines” [at pdf p. 8287];
  • lists nine individual projects within its “coal portfolio” [at pdf p. 8294]; and
  • refers to the Coppabella Coal Mine “which had been operating successfully since July 1998” [at pdf p. 8294] and in which Macarthur Coal had a 50% interest [at pdf p. 8296].

On 4 November 2002, in relation to the prospectus, the directors of Macarthur Coal resolved to confirm that “all statements that relate to knowledge, belief, intention or other state of mind of the company are accurate and not misleading” ([MAC.907.001.0472] at 0487 and [TRA.500.019.0001] at T19-47/19-27).

Otherwise, refer to the final paragraph of 1 above.

(1) I uphold the objection for the reasons expressed in relation to item 1 insofar as the sentence expresses an opinion on what Macarthur Coal being a well-established producer with a proven track record would do.  I did not understand the plaintiffs to contend that the first clause of the sentence should be admitted as factual evidence from this witness as to reputation of Macarthur Coal.  I would allow the plaintiffs to address me further if that argument is put.

(2) I also uphold the objection because the impugned sentence expresses an implicit view as to Macarthur Coal’s ability to commit to port capacity and its timing, which involves an expression of opinion as to what a third party, namely GPC would have been prepared to do.  That expression of opinion is inadmissible because:

  • it expresses an opinion on what a third party would do and that is impermissible for reasons expressed in the body of my reasons; and
  • even if such an opinion was permissible, the facts underpinning it are not stated.
  1.  

[67] Third sentence (‘Mr Morton’s rationale…’)

Mr Freeman provides evidence about the track record of Macarthur Coal and commentary about other mining projects. 

Not proper matters for expert opinion.

Facts underpinning this opinion are not stated or proved by admissible evidence

Refer to 1 and 2 above.

(1) I uphold the objection for the reasons expressed in relation to item 1.

 

  1.  

[214]-[219]

Mr Freeman provides evidence about the track record of Macarthur Coal and commentary about other mining projects. 

Not proper matters for expert opinion.

Facts underpinning this opinion are not stated or proved by admissible evidence

As to paragraph [214], refer to items 1 and 2 above.

As to paragraph [215], this is an expression of Mr Freeman’s opinion based upon his relevant expertise.

As to paragraph [216]:

  • As to the first sentence:
  • Macarthur Coal was led by Ken Talbot ([MAC.518.002.8283 at pdf p. 8294]);
  • Mr De Lacy, a former director of Macarthur Coal, gave evidence that on entry into the Joint Venture Agreement “Being able to fund these things was not an issue. We – well, we knew that we had the confidence of the market” (T42-24/6-7). Mr De Lacy also gave evidence as follows (T42-43/1-8):

Now, you said to me that had you wished to raise the funds, there would’ve been no difficulty - - -?---Yes.

- - - in raising the funds, I think?---Absolutely.

Is that a fair summary?---Absolutely. If we have a viable project and we wanted to raise the funds, … That was always my experience with Macarthur Coal. It was – well, it was a well respected company

  • Mr De Lacy also gave evidence that “I’m not aware of any time, when Macarthur Coal needed further capital, that we – that couldn’t raise the capital” (T42-45/41-42);
  • As to the second sentence, this is an expression of opinion or inference by Mr Freeman.
  • As to the third sentence, the report referenced [SAN.054.001.0802] in support of this statement [see also at pdf p. 0833].
  • As to the fourth and fifth sentences, these matters are consistent with Mr Wallin’s evidence set out in response to the objection to paragraph [25] above.  Development of Coppabella within 14 months of discovery is referenced in [MAC.151.028.0007 at pdf p. 0016].

As to the first sentence of paragraph [217], Mr Freeman is giving evidence of his own experience relating to his expertise. As to the second sentence, it is cross-referenced to a document which is in evidence [MAC.151.028.0007].

As to paragraph [218], it is cross referenced to a document which is in evidence [MAC.151.028.0007].

As to paragraph [219]:

  • The first sentence is a summary of the matters referred to above concerning Macarthur Coal’s reputation;
  • The second sentence is based upon Mr Freeman’s first-hand experience;
  • The third sentence is based upon Mr Freeman’s first-hand experience and is a logical inference from the matters set out in paragraph [219].

Otherwise, refer to the final paragraph of 1 above.

(1) As to [214], I uphold the objection for the reasons expressed in relation to item 1.

(2) As to [215], I uphold the objection because the paragraph expresses an opinion on what both the Joint Venture and the GPA would do and that is impermissible for reasons expressed in the body of my reasons.  Even if such an opinion was admissible, the facts underpinning it are not stated.

(3) As to [216], [217], [218], I uphold the objection for the reasons expressed in relation to item 1 at (1).

(4) As to [219], I uphold the objection for the reasons expressed in relation to item 1 at (1) and (2).

  1.  

[226]

Mr Freeman provides evidence about the track record of Macarthur Coal and commentary about other mining projects. 

Not proper matters for expert opinion.

Facts underpinning this opinion are not stated or proved by admissible evidence

As to paragraph [226(a)], the reference to the “expertise and achievements of Macarthur Coal” is evidenced by the matters set out in response to the other parts of this Item 2.

As to paragraph [226(b)], evidence in relation to these dates is provided in [SAN.054.001.0226] which is referred to in footnote 34 and in the report of Euan Morton [EXP.020.167.0001] at [98(a)(iv)] which refers to document [SYN.004.001.0713] (which post-dates mid-2005).

Otherwise, refer to the final paragraph of 1 above.

(1) I uphold the objection for the reasons expressed in relation to item 1.

(2) I also uphold the objection in relation to [226(b)] because it expresses an opinion as to the state of mind of the GPA and that is impermissible for reasons expressed in the body of my reasons.  Even if such an opinion was admissible, the facts underpinning it are not stated.

  1.  

[273]

Mr Freeman provides evidence about the track record of Macarthur Coal and commentary about other mining projects. 

Not proper matters for expert opinion.

Facts underpinning this opinion are not stated or proved by admissible evidence

The reference to the “industry achievements of Macarthur Coal” is evidenced by the matters set out in response to the other parts of this Item 2.  Otherwise, refer to the final paragraph of 1 above.

(1) I uphold the objection for the reasons expressed in relation to item 1.

 

Item 3 from the defendants’ schedule of objections

  1.  

[66] Second sentence (‘The Joint Venture…’)

Mr Freeman gives an opinion about what the Joint Venture (and others) would have done in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

 

This evidence is:

The Joint Venture was well progressed with discussions with QR in late 2002 and if it had committed to further studies and a viable solution in late 2002, or early 2003, it would have been able to commit to conditional rail capacity and conditional port capacity from late 2003/early 2004.”

This is not what the Joint Venture would have done.  Rather, it assumes a hypothetical and then states what would flow in respect of matters observable by Mr Freeman within his expertise.

The factual basis is also given, in addition to the documents referenced in footnote [10], A meeting of the “Stage 2 Transport Infrastructure Partnership Group” was held on 6 June 2002 [MON.002.001.0005]. The minutes identify three phases of Queensland Rail’s work (p. 0005-0006). Phase A was “a high level investigation of the rail infrastructure options. Estimated cost is $70,000” (p. 0005). Phase B was “an investigation into the preferred corridor options determined in Stage A. Estimated cost is $580,000” (p. 0005) and Phase C was “preliminary designs for civil, track, signalling and telecommunications to deliver a cost estimate of +/- 20% accuracy. The estimated cost is $145,000” (p. 0006). At the meeting, Queensland Rail were instructed to proceed with Phase A (p. 0006). Mr Greenwood gave evidence that Queensland Rail went ahead with Phase A, did not complete Phase B and did not commence Phase C ([TRA.500.021.0001] at T21-43/43-46 and T21-44/1-2).

(1) I uphold the objection because the impugned sentence expresses an implicit view as to what GPA would have been prepared to do if the Joint Venture had sought to have i do it.  That expression of opinion is inadmissible because:

  • it expresses an opinion on what a third party would do and that is impermissible for reasons expressed in the body of my reasons; and
  • even if such an opinion was permissible  the facts underpinning it are not stated.

(2) So far as the expression of opinion concerning QR, I am not presently prepared to rule on the question whether Mr Freeman might not be able to give admissible factual evidence on that question. However, even if he is, the expression of opinion based on that factual evidence would require the identification by Mr Freeman of the factual underpinning for it and the statement of his reasoning.  That has not occurred.  I uphold the objection.

(3) The objection that the facts have not been proved by admissible evidence amounts to reliance on what Heydon J described as the proof of assumption rule.  If I had not upheld the objection for the reasons stated, I would not have ruled before judgment on the question whether the evidence identified in the plaintiffs’ response operated to prove the facts underpinning the opinion.

  1.  

[162]

Mr Freeman gives an opinion about what the Joint Venture (and others) would have done in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

 

This evidence is:

“If QR decided not to fund an infrastructure upgrade to the Monto Branch Line, the Joint Venture could have gone to the State and attempted to convince them of the mine’s requirements and the need for assistance by QR. I am aware, from my own experience, that the State has been known to advise QR to take a certain course of action on several occasions. Alternatively, the mine could fund the infrastructure upgrades itself if this was the Joint Venture’s preference.”

This is evidence of what the Joint Venture could have done and not what it would have done in hypothetical circumstances.  It is based on statements of fact observable from Mr Freeman’s experience.

(1) I agree that the first and third sentences posits hypothetical courses of action which might have been open to the joint venture.   

(2) The second sentence would be capable of being regarded as a statement of fact about a past historical event, if it had any meaningful content.  But it does not. 

(3) For the foregoing reasons I uphold the objection.

  1.  

[191] Second and third sentences (‘In my experience…’)

Mr Freeman gives an opinion about what the Joint Venture (and others) would have done in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

As to [191] and [196], the objection is also on the grounds of relevance: the question of what a prudent producer would have done is not an issue in dispute in the case.

The evidence (in its context) is:

It is common practice in the Queensland coal industry to seek both below rail and port capacity at the same time even though under UT1 QR did not require proof of port capacity at the time it entered discussions with a producer. In my experience, a producer would be able to receive an allocation of port capacity and continue to negotiate this concurrently with the below rail provider if both rail and port providers were satisfied that the negotiations were progressing at the same pace. In my opinion, a prudent mine producer could have procured both below rail and port capacity subject to certain conditions precedent, by early 2004.”

When seen in its full context it is evidence about general industry practice but what would have been done in a particular hypothetical circumstance.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

As to relevance, the statement goes to the infrastructure solutions for the mine, and not what a prudent producer would have done in the circumstances.  The evidence concerns options available to a producer in the circumstances.

(1) I reject the plaintiffs’ characterisation of the evidence. Whilst the author might have been able to give admissible evidence as to relevant practices of QR and GPA, that is not what he has sought to express.  He has expressed a conditional statement of opinion, without identifying a particular practice. The only statement of practice is in the preceding sentence, and no objection is taken to it.

(2) I uphold the objection to the impugned sentences because they express opinions as to what GPA would have been prepared to do if the Joint Venture had sought to have them do it.  Such expressions of opinion are inadmissible because:

  • they express opinions on what a third party would do and that is impermissible for reasons expressed in the body of my reasons;
  • even if such opinions were permissible, the facts underpinning them are not stated.

(3) Insofar as the impugned sentences express opinions as to what QR would have been prepared to do if the Joint Venture had sought to have them do, I rule in the same way as I did in relation to item 7(2) above.

(4) The objection that the facts have not been proved by admissible evidence amounts to reliance on what Heydon J described as the proof of assumption rule.  If I had not upheld the objection for the reasons stated, I would not have ruled before judgment on the question whether the evidence identified in the plaintiffs’ response operated to prove the facts underpinning the opinion.

(4).As to the relevance objection, I reject the plaintiffs’ characterisation of the evidence.  It is expressed as a proposition as to the way in which a “prudent producer” would behave.  It is expressed as a proposition as to what the “prudent producer” could achieve.  I note that the plaintiffs have not sought to support the relevance of such a proposition and I would uphold the objection on relevance grounds too.

  1.  

[193] Third sentence (‘In my opinion…’)

Mr Freeman gives an opinion about what the Joint Venture (and others) would have done in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

In my opinion this is considered a low risk to the Joint Venture as QR would seek to mitigate loss should Stage 2 not proceed, and this procurement could form standard inventory for use across the coal network.”

The evidence is about what QR would do in general circumstances about which Mr Freeman has direct experience.

(1) I uphold the objection for the reasons expressed in relation to item 9 at (1) to (3).

  1.  

[196] Final sentence (‘A prudent producer…’)

Mr Freeman gives an opinion about what the Joint Venture (and others) would have done in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

As to [191] and [196], the objection is also on the grounds of relevance: the question of what a prudent producer would have done is not an issue in dispute in the case.

The evidence is:

“A prudent producer would be in ongoing discussions with the rail providers to negotiate amendments to the dates for satisfaction of conditions precedent if project timelines were not likely to be met.”

This is a statement about general industry practice and/or observable facts in Mr Freeman’s experience.

(1) I reject the plaintiffs’ characterisation of the impugned sentence.  It is not expressed as a statement about general industry practice.  It is expressed as a proposition as to the way in which a “prudent producer” would behave.  I note that the plaintiffs have not sought to support the relevance of such a proposition and I would uphold the objection on relevance grounds.

  1.  

[231] Second and third sentences (‘In my opinion…’)

Mr Freeman gives an opinion about what the Joint Venture (and others) would have done in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

In my opinion the Joint Venture, understanding this critical resource/path, would have made a calculated investment decision on the timing of a commitment to the Port Agreement to manage this risk.”

This is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

(1) I reject the plaintiffs’ characterisation of the impugned sentences.  They are not expressed as statements about general industry practice.  The first sentence is expressed as a proposition as to the way in which the joint venture would behave. The second sentence is expressed as a proposition as to the way in which the GPA would behave if the joint venture had taken a certain course.  I uphold the objection to the impugned sentences because they express opinions as to what the particular corporations would have done in particular circumstances.  Such expressions of opinion are inadmissible because:

  • they express opinions on what a third party would do and that is impermissible for reasons expressed in the body of my reasons;
  • even if such opinions were permissible, the facts underpinning them are not stated.

(2) The objection that the facts have not been proved by admissible evidence amounts to reliance on what Heydon J described as the proof of assumption rule.  If I had not upheld the objection for the reasons stated, I would not have ruled before judgment on the question whether the evidence identified in the plaintiffs’ response operated to prove the facts underpinning the opinion.

  1.  

[237] Second and third sentences, (‘In my opinion…’)

Mr Freeman gives an opinion about what the Joint Venture (and others) would have done in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

The evidence is:

“In my opinion, from the known reputation of the Joint Venture parties, conditional arrangements could have been secured. I am also of the opinion that independent mine can manage projects to quick set up.”

This is a comment about what the Joint Venture could have done in the circumstances and is drawn from his experience.

Mr Freeman is qualified to give evidence based on facts observed in his experience. The “known reputation” of the Joint Venture parties is evidenced by the matters set out in Item 2 above.

(1) I uphold the objection to the impugned sentences because they express opinions as to what QR and GPA would have been prepared to do if the Joint Venture had sought to have them do it.  I rule in the same way as I did in relation to item 7.

(2) The objection that the facts have not been proved by admissible evidence amounts to reliance on what Heydon J described as the proof of assumption rule.  If I had not upheld the objection for the reasons stated, I would not have ruled before judgment on the question whether the evidence identified in the plaintiffs’ response operated to prove the facts underpinning the opinion.

 

  1.  

[263]

Mr Freeman gives an opinion about what the Joint Venture (and others) would have done in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

The evidence is:

“In my opinion, Stage 2 tonnage would be discussed and secured at the same time as Stage 1 tonnage, potentially with an option provision which would enable the Joint Venture to ramp up to Stage 2 tonnage from a nominated date. Being an existing GPA customer from this time would have allowed the project to be well informed of GPA’s plans regarding capacity expansion and competing demand.”

This is evidence of facts observable by Mr Freeman in his experience.  The opinion is based on the stated assumption that the Joint Venture would have been an existing customer of GPC as a result of Stage 1. 

(1) I uphold the objection for the reasons expressed in relation to item 13.

  1.  

[345] Third sentence (‘In practice…’)

Mr Freeman gives an opinion about what the Joint Venture (and others) would have done in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

In practice, the land acquisition consultation/negotiation process would be done at the time of the Stage 2 Feasibility Study.

This is a statement of fact observable in Mr Freeman’s experience about a matter of general industry practice.

(1) I reject the plaintiffs’ characterisation of the evidence.  Whilst the author might have been able to give admissible evidence as to his experience about the relationship between the timing of the processes to which he refers and the conduct of feasibility studies, that is not how he has expressed himself.  Accordingly, I uphold the objection for the reasons expressed in relation to item 13.

  1.  

[389(b)] Final sentence (‘In my opinion it is likely that the Joint Venture…’)

Mr Freeman gives an opinion about what the Joint Venture (and others) would have done in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

 

This evidence is:

In my opinion it is likely that the Joint Venture would have selected option (ii) given the time constraints were manageable, the capital cost would be amortised over the life of the asset rather than being funded upfront, and in my experience, it was an easier and faster process to acquire an easement when undertaken by a statutory Government Owned Corporation.”

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Mr Freeman is qualified to give evidence based on facts observed in his experience.

(1) I reject the plaintiffs’ characterisation of the first clause of the impugned sentence (down to “funded upfront”).  The author expressed a view as to what the joint venture would have done and I would uphold objection to that opinion for the reasons already expressed.

(2) As to the remainder of the sentence, whilst the author might have been able to give admissible evidence as to his experience which informed the conclusion expressed, he does not do so but expresses a conclusion without the identification of the facts or assumptions which underpin the statement of comparison. 

(3) For these reasons I uphold the objections. 

 

Item 4 from defendants’ schedule of objections

  1.  

Not pressed

  1.  

[18]-[24]

[19] – [20]

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

Paragraphs [18] – [20], [44], [52] and [205] are also objected to on the basis that they rely on Mr Freeman’s ‘Technical Assessment’ (see Item 1 above)

Refer to report.

This section summarises Mr Freeman’s opinion which is set out more fully in sections 4.3 and 4.8 [EXP.010.005.0001 at pdf pp 0020-0025 and 0035-0052].

At to [18] the first sentence and points (a)-(f) are observable facts or matters within his experience.  The second sentence is evidence as to what QR would have done in the circumstances, which Mr Freeman is qualified to give evidence on.

Otherwise to the extent that [18] depends upon factual matters as opposed to matters of opinion, see QR’s Project Assessment Report [MON.004.005.1529 at pdf p. 1548].

As to [19] this is not as to what the Joint Venture or any third party would have done, it is a statement of observable fact as to availability of port/rail in the relevant period.

As to [20] this is a statement of whether rail capacity “could have been secured” and does not go to what the Joint Venture or a third party would have done.

As to [21] this summarises his opinion.

AS to [22] this notes that “capacity was available at the time of the Stage 2 Feasibility Study” which is a statement of fact which leads to him positing an opinion not on what a third party would have done but that capacity “would have been allocated to the Joint Venture upon execution of a port agreement” which is also a statement of fact within his expertise having observed that capacity is allocated upon execution of such an agreement.

As to [23] this is also not a statement about what the Joint Venture or a third party would have done, rather it is about what the Joint Venture could have done to be ahead of competing demand.

As to [24] this is also not a statement about what GPC would have done, it is about what, hypothetically, GPC could have done based on his observable experience.

(1) Many of the statements in the response are superseded by the narrowing of the objection

(2) I uphold the objections to paragraphs [19] and [20] on the basis that they express opinions as to what GPA would have been prepared to do if the Joint Venture had sought to have it do it.  Such expressions of opinion are inadmissible because they express opinions on what a third party would do and that is impermissible for reasons expressed in the body of my reasons.  See in particular the body of my reasons at [58].  So far as the expression of opinion concerning what QR would do is concerned, I rule in the same way as I did in relation to item 7(2) above.

(3) The objection that the facts have not been proved by admissible evidence amounts to reliance on what Heydon J described as the proof of assumption rule.  If I had not upheld the objection for the reasons stated, I would not have ruled before judgment on the question whether the evidence identified in the plaintiffs’ response operated to prove the facts underpinning the opinion.

  1.  

[27] the words 'would be preferred by the Joint Venture and SunWater as it' and the final sentence ('Further, I disagree…')

Third sentence, from ‘however I consider an alternative pipeline route’ through to the end of the paragraph

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

 

This evidence is:

“I agree that the source of water would be Paradise Dam, however I consider an alternative pipeline route would be preferred by the Joint Venture and SunWater as it has a lower infrastructure CAPEX.  Further, I disagree with Mr Harradine that the CAPEX is payable upfront, rather it is amortised, applied as a monthly charge and payable under a longer-term Water Transport Agreement.”

The first sentence in the quote is a matter of opinion about the CAPEX of Mr Freeman’s preferred route which is a matter of opinion.  The second sentence is a matter of observable fact about general industry practice as to typical terms in an agreement.

As to the facts underpinning the opinion, these are set out in Mr Freeman’s Technical Assessment in sections 6.2 and 6.5 [EXP.010.005.0001 at pdf pp .0094-0095 and 0101-0103].

(1) I uphold the objections to the first sentence on the basis that it expressed opinions as to the state of mind of the Joint Venture and of SunWater.  Such an expression of opinion is inadmissible for reasons expressed in the body of my reasons.  See in particular the body of my reasons at [58].

(2) I uphold the objection to the final sentence for similar reasons.  It expresses a statement as to what SunWater would have done and does not seek to justify it by first identifying proper evidence of a particular practice in the industry.  The latter might have been admissible, but that is not the form of the statement.  

(3) The objection that the facts have not been proved by admissible evidence amounts to reliance on what Heydon J described as the proof of assumption rule.  If I had not upheld the objection for the reasons stated, I would not have ruled before judgment on the question whether the evidence identified in the plaintiffs’ response operated to prove the facts underpinning the opinion.

  1.  

[29] First sentence (‘SunWater would have…’)

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

 

This evidence is:

SunWater would have been prepared to construct, own and operate the pipeline connecting into the Paradise Dam, and it would have been likely that the Joint Venture would have accepted this proposal.”

This is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

As to the facts underpinning the opinion, these are set out in Mr Freeman’s Technical Assessment in sections 6.2 and 6.5 [EXP.010.005.0001 at pdf pp .0094-0095 and 0101-0103].

(1) I uphold the objection to the impugned sentences because they express opinions as to what and the Joint Venture would have done.  Such expressions of opinion are inadmissible because:

  • they express opinions on what a third party would do and that is impermissible for reasons expressed in the body of my reasons;
  • even if such opinions were permissible, the facts underpinning them are not stated.

(2) The objection that the facts have not been proved by admissible evidence amounts to reliance on what Heydon J described as the proof of assumption rule.  If I had not upheld the objection for the reasons stated, I would not have ruled before judgment on the question whether the evidence identified in the plaintiffs’ response operated to prove the facts underpinning the opinion.

  1.  

[31] Third sentence (‘Further, I also disagree…’)

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

Further, I also disagree that the CAPEX is payable upfront, rather it is amortised, applied as a monthly charge and payable under a Connection Agreement.”

This is a fact which Mr Freeman is qualified to give based on his experience.  As to the facts underpinning the opinion, these are set out in Mr Freeman’s Technical Assessment in section 7.5 [EXP.010.005.0001 at pdf pp 0116-0122].

Not yet ruled

  1.  

Not pressed

  1.  

Not pressed

  1.  

[56]

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

 

This evidence is:

“The total number of lots to be acquired for this alignment is impractical, likely to be expensive and highly probable not to have been the option favoured by QR after detailed assessment. If QR was to pursue this Hybrid Route Alignment, QR would first have to attempt to acquire these lots itself and DTMR would only resume as a last resort. In addition, land in State Forests or Reserves is not resumed, rather its designation as State Forest must be revoked. Moreover, DTMR could only be convinced to compulsorily acquire if it was for a public purpose and necessary to retain the integrity of the railway. Refer to Section 4.9 of this Response Report for further details.”

Mr Freeman is qualified to give evidence as to what QR would have done in the circumstances as well as facts observed by him in his experience.

As to the facts underpinning the opinion, refer also to section 4.9 of the 2 November Report [EXP.010.005.0001 at pdf pp 0053-0063].

Not yet ruled

  1.  

[60]

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

 

This evidence is:

“Mr Morton’s conclusion is a BFS required executable above rail, below rail and port agreements to be in place. I am aware that both above and below rail agreements could be entered into on any number of conditions precedent and, with respect to port, GPA was prepared to allocate capacity and negotiate with a producer in order to assist the producer to commit to mine development. Therefore, this does not pose a delay to the Stage 2 Feasibility Study.”

This is not evidence about what GPC would have done in the circumstances, rather it is evidence given as observable facts derived from Mr Freeman’s experience and a conclusion drawn therefrom.

As to the facts underpinning the opinion, these are set out in Mr Freeman’s Technical Assessment in sections 4.3, 4.8, 5.2 and 5.5 [EXP.010.005.0001 at pdf pp 0020-0025, 0035-0052, 0074-0075 and 0082-0087].

Not yet ruled

  1.  

Not pressed

  1.  

Not pressed

  1.  

Not pressed

  1.  

Not pressed

  1.  

Not pressed

  1.  

Not pressed

  1.  

Not pressed

  1.  

Not pressed

  1.  

[198]-[200]

[199]

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

In my opinion, based on an evaluation of capacity, technical elements, financial benefits and commercial considerations, a rebuild of the existing Monto Branch Line as outlined in this Part B would probably have been QR’s preferred solution. 199. The issue of whether QR would fund the upgrade to the Monto Branch Line would have to have been resolved. It is likely that QR would have paid for the upgrade as the Monto Branch Line was part of the rail corridor and on the basis that the extra volume on the line would require corresponding upgrades to the mainline, for example, at Callemondah Yard, earlier than QR had planned thereby benefiting the whole Moura System. If not, the mine could have entered into infrastructure funding arrangements either with QR or with another debt provider as QR had indicated that it was actively pursuing a “Major Venture” financing package specifically for the Monto Coal Project 26 . Many different funding arrangements were in use by QR at the time including upfront contributions and AFDs. 200. The infrastructure upgrades and rollingstock configurations identified in Section 4.6of this Response Report would have been the solution QR would probably have adopted as they were the most operationally efficient, would not have involved a lengthy and costly land acquisition process and could have been achieved within the required timeframe at the lowest capital cost.”

These paragraphs are statements of what would have been QR’s preferred solution, based on facts observable by Mr Freeman in particular as to the content of common agreements.  That is a matter within Mr Freeman’s expertise. 

The basis for the opinions is identified in the foregoing parts of Section 4.9 [EXP.010.005.0001 at pdf pp 0053-0063].

Not yet ruled

  1.  

Not pressed

  1.  

Not pressed

  1.  

[227] Third and fFourth sentences (‘Both Rolleston and…’) (‘I do not consider…’)

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

 

This evidence is:

“Both Rolleston and Gindie Minerva were greenfield developments requiring innovative track and/or rollingstock solutions. I do not consider that these projects would have been considered less challenging than the Monto development.”

As to the greenfield nature of the Gindie Minerva and Rolleston projects, see documents at footnotes 58 and 60 of Mr Morton’s report ([EXP.020.022.0001_0001 at pdf p. 0042]).

As to the innovative nature of the Gindie Minerva track and/or rollingstock solutions, see [5.3.2(b)] of Mr Hunter’s report dated 27 April 2018 ([EXP.020.018.0001_0001 at pdf p. 0043].

As to the innovative nature of Rolleston track and/or rollingstock solutions:

  • Rolleston’s railway was still under construction at the relevant time ([EXP.500.026.0001 at 5.28(c) pdf p. 0024];
  • Development of Rolleston involved “construction of line from Rolleston to Kinrola by Queensland Rail” ([EXP.500.026.0001 footnote 13, pdf p. 0042].

These facts are otherwise observable by Mr Freeman in his experience.  The final sentence is a statement of opinion as to the nature of the Monto development as compared to those observed by Mr Freeman.

Mr Hunter’s report refers to significant delays concerning the Bauhinia Line (which is related to the Rolleston project) ([EXP.020.165.0001_0001 at pdf p. 0030].

Not yet ruled

  1.  

[229]

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

 

This evidence is:

“Whilst the Joint Venture may have had to compete for the capacity allocation over 2003/2004, it would have been at least an equal contender for the available capacity from a reputation perspective, even if industry reputation was a criterion for the allocation process, (which it was not).”

This is not a statement of what the Joint Venture or a third party would have done, it is a statement about the reputation of the Joint Venture and industry practice, which are matters observable by Mr Freeman in his experience.

Not yet ruled

  1.  

[245]

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

 

This evidence is:

“Both announced expansions were to deliver additional capacity at or prior to the 1 July 2007 railings commencement. This is supported by the 2004/5 CQPA Annual Report (ALL.001.001.0259) which states that the sharp increase in demand for coal resulted in the State Government’s approval to expand RGTCT to 65mtpa and BPCT to 7mtpa, with this increase from 45mtpa occurring by 2007. Given the Monto Stage 1 tonnage would already be handled by GPA, the Joint Venture had an established relationship with GPA, and the Stage 2 contract would have been under discussion during the feasibility period, it would have been probable that the Joint Venture could commit to the port capacity prior to competing demand.”

This is not a statement about what the Joint Venture would have done, it is a statement, based on a hypothetical assumption about what the Joint Venture could have done in the circumstances which is a matter within Mr Freeman’s expertise.

As to the basis of the pre-existing use of the port, this is addressed in paragraph [215] of the November Report [EXP.010.005.0001 at pdf p. 0069].

Not yet ruled

  1.  

[286] Fifth sentence (‘In my opinion SunWater…’)

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

“In my opinion SunWater and the Joint Venture would have considered other routes, the topographically constraints and CAPEX/OPEX outcomes to arrive at an alternative solution.”

This is a statement about what Mr Freeman considers, in his opinion, would have been considered by the parties, not what a third party would have done in making a decision.

Not yet ruled

  1.  

[288] the words 'however I consider it unlikely that SunWater would have objected to HDPE pie as a suitable product.' (‘Second sentence: ‘I acknowledge that…’)

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

“I acknowledge that SunWater generally chose metallic pipes (MSCL or DICL), however I consider it unlikely that SunWater would have objected to HDPE pipe as a suitable product.”

This is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Not yet ruled

  1.  

Not pressed

  1.  

[295] Second sentence (‘In my opinion…’)

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

“In my opinion, with the coverage of a commercial arrangement whereby the project would have been accountable for the costs of any pre-construction activities, SunWater would have commenced preconstruction activities (i.e. design, planning, approvals, etc.) ahead of the Joint Venture’s Stage 2 Mining Lease being granted.”

This is evidence of observable fact within Mr Freemans experience about SunWater. 

Not yet ruled

  1.  

[327(c)]

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

Water Transport: The pipeline capital expenditure of $99.69M82 and annual O&M costs in the order of $500,000 per annum would be amortised applied in line with the agreed billing provisions (e.g. quarterly) of the Water Transport Agreement. This would likely be under Part A $10.15M per annum (fixed) and under Part B $118 per ML (variable).”

This is a statement of observable fact as to usual provisions to include in an agreement and otherwise matters of opinion within Mr Freeman’s expertise.

The cost estimate is expanded upon in paragraph [312] and Appendix 8 of the November Report [EXP.010.005.0001 at pdf p. 0103]. 

Not yet ruled

  1.  

Not pressed

  1.  

[335]

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

“I do not consider that all capital would require upfront funding, rather the capital costs would be amortised and applied as a monthly or quarterly fixed charge.”

This is a statement of a fact observable by Mr Freeman in his experience.

Not yet ruled

  1.  

[336]

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

“I disagree with Mr Harradine that SunWater would not enter into contracts for the supply of water without Monto Coals Stage 2 Mining Lease being granted. In my opinion, with the appropriate commercial arrangements whereby the project would have been accountable for any costs or risks ahead of the grant of the Mining Lease, SunWater would enter into contracts for the supply of water.”

This is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Not yet ruled

  1.  

[339] Second sentence (‘I do not believe Powerlink…’)

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

“I do not believe Powerlink would approve Mr Harradine’s connection to the Calvale-Tarong transmission as it is a critical piece of Powerlink infrastructure and subject to strict minimum standards.”

This is predominately a statement of fact observable by Mr Freeman in his experience.  And otherwise is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Not yet ruled

  1.  

[342] Third sentence (‘In my opinion Powerlink…’

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

“In my opinion Powerlink would not have approved the proposed alignment and connection, due to the proposed tee connection.”

This is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Not yet ruled

  1.  

Not pressed

  1.  

[344]

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

 

This evidence is:

“In paragraph 3.18 [of Mr Harradine’s report] the lead times of 24 months commence only post award of the Mining Lease which I consider overly conservative and not what was done during this time. Powerlink would not have required the award of the mining lease and could commit to agreements including early works arrangements with the provision of appropriate commercial provisions whereby the project would have been accountable for any costs or risks ahead of the grant of the Mining Lease. Powerlink would require 16months for construction and would work with the Joint Venture to ensure all planning/approval activities were conducted prior to the final investment decision for the project to enable deliverables by the required dates.”

Whilst expressed in terms of what Powerlink “would have” done, it is in truth simply a statement of what Mr Freeman has observed in his experience.

Not yet ruled

  1.  

[348] First sentence (‘In my opinion Powerlink…’)

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

 

This evidence (in context) is:

In my opinion Powerlink would not have approved Mr Harradine’s solution (EXP.020.017.0001) as he has proposed. To meet Powerlink’s standards a new 275kV substation would be required. Whilst I generally agree that the cost proposed by Mr Harradine (i.e. $21.2M) reflects his proposed transmission, the cost could increase to approximately $55M with the inclusion of a new 275kV substation.”

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  The basis for the opinion is set out in the remainder of the paragraph.

Not yet ruled

  1.  

Not pressed

  1.  

[351] Second sentence (‘This is not my understanding…’)

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

“This is not my understanding of Ergon contracts.”

This is a statement of fact observable by Mr Freeman in his experience. 

Not yet ruled

  1.  

[353] Second sentence (‘In my opinion…’)

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

“In my opinion Powerlink would have entered into such arrangements with appropriate commercial provisions whereby the project would have been accountable for any costs or risks ahead of the grant of the Mining Lease.”

This is a statement of fact observable by Mr Freeman in his experience as to the content of commercial agreements not about what Powerlink would have done in a particular circumstance.

Not yet ruled

  1.  

[378]

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

“Where Powerlink funds the remaining transmission infrastructure (i.e. $21.69M), the capital expenditure and operation and maintenance costs would be amortised over the agreed term of the Connection Agreement (most likely a 20-year term) and require payment of a fixed charge per month.”

This is a statement of fact observable by Mr Freeman in his experience.

Not yet ruled

  1.  

[390]

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

 

This evidence is:

“Powerlink would have required the Joint Venture to enter into a Connection Agreement, the terms and conditions of which would have been based on Powerlink’s standard Connection Agreement and negotiated on a reasonable basis with the Connecting parties prior to execution.”

This is predominately a statement of fact as to what Powerlink’s Connection Agreement terms were and when they were negotiated.  Otherwise, this is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Otherwise, Mr Freeman is qualified to give evidence based on facts observed in his experience. Mr Freeman here gives evidence as to typical terms which may be entered into between mine operators and Powerlink, which is a proper matter for expert evidence based upon Mr Freeman’s experience.

Not yet ruled

  1.  

[392] Last sentence ('However, if necessary, Powerlink…')

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

“Powerlink’s standard practice was to incorporate the early works in the Connection Agreement which would be executed prior to the time of commencing the early works. However, if necessary, Powerlink may have entered into an early works agreement, in order to meet project time requirements.”

This is predominately a statement of fact observable by Mr Freeman in his experience.  Otherwise this is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Not yet ruled

  1.  

[394] First sentence, the words: ‘and would not be approved by Powerlink’

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence (in context) is:

I believe Mr Harradine’s solution (EXP.020.017.0001) is technically flawed and would not be approved by Powerlink. In my opinion, having reviewed 10 options, there was a power solution available to the Joint Venture which is technically sound and minimises time and cost blowout risk.”

When seen in context this is not about what Powerlink would have done in particular circumstances, it is evidence of opinion about a preferred solution to include in a feasibility study based on knowledge of practice.

Not yet ruled

  1.  

[399]

Mr Freeman purports to give evidence about how QR, GPC, Powerlink and SunWater would have acted in a hypothetical situation.

Not proper matters for expert opinion.

Facts or assumptions underpinning the opinion not proved by admissible evidence.

This evidence is:

“I disagree that Powerlink would not enter into arrangements for the supply of the power infrastructure without the Stage 2 Mining Lease being granted. In my opinion Powerlink would have entered into such arrangements ahead of the Joint Venture’s Stage 2 Mining Lease being granted with the coverage of commercial provisions such that if the project did not achieve financial close the arrangements would be terminated and the project would be liable for any costs incurred by Powerlink up to that point.”

This is an observation about what Powerlink had done in the past and is a statement of fact observable by Mr Freeman in his experience.  Otherwise, this is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Not yet ruled

Item 5 from the defendants’ schedule of objections

  1.  

[22] Second sentence (‘I disagree with…’)

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

 

This evidence is:

“I disagree with this opinion as capacity was available at the time of the Stage 2 Feasibility Study (i.e. 2002- 2005) and would have been allocated to the Joint Venture upon execution of a port agreement.”

These are statement of fact observable by Mr Freeman in his experience.

As to the basis for this opinion, refer to Section 5 of the 2 November Report [EXP.010.005.0001 at pdf pp 0068-0092].

(1) I uphold the objection and agree with the characterization of this aspect of Mr Freeman’s opinions asserted by the defendants.  I reject the plaintiffs’ characterization of the impugned sentence as a statement of fact observable by Mr Freeman.  In fact it expresses a conclusion as to the outcome of hypothetical conduct by the Joint Venture and by the GPA.  Such an expression of opinion is inadmissible for reasons expressed in the body of my reasons.  See in particular the body of my reasons at [58]. 

(2) Further I would uphold the objection on the basis that I agree that the assumptions underpinning the opinion are not identified.  I do not think the submission made by the plaintiffs as to the basis of those assumptions is sufficient to rectify the defect as to form.

(2) The objection that the facts have not been proved by admissible evidence amounts to reliance on what Heydon J described as the proof of assumption rule.  If I had not upheld the objection for the reasons stated, I would not have ruled before judgment on the question whether the evidence identified in the plaintiffs’ response operated to prove the facts underpinning the opinion.

  1.  

[23] Second sentence (‘I disagree with…’)

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

“I disagree with this timeframe and consider the Joint Venture had until mid-2006 to execute a contract to be ahead of competing demand.”

This is a statement of fact observable by Mr Freeman in his experience.

As to the basis for this opinion, refer to Section 5 of the 2 November Report, in particular paragraphs 242-250 [EXP.010.005.0001 at pdf pp 0073-0081].

Not yet ruled

  1.  

[24]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

The statements concerning taking a calculated risk in the secondary market (see [255]), accelerating expansions and undertaking further expansions ([24], [254] and [259]) are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

“Although I consider port capacity was available for the Joint Venture to secure, I am also of the opinion the port had the ability to expand further to meet growing industry demand. The expansion options available to GPA could have enabled the port to expand to capacity of 100mtpa.”

This is evidence of fact observable by Mr Freeman in his experience and his opinion about GPC’s capacity, not what GPC would do in a hypothetical situation. 

As to the basis for this opinion, refer to Section 5 of the 2 November Report, in particular paragraphs 242-250 [EXP.010.005.0001 at pdf pp 0073-0081].

Not yet ruled

  1.  

[25] Third sentence (‘I am also of the opinion…’)

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

“I am also of the opinion that given the Stage 1 tonnage would have been already contracted with the port during the Stage 2 Feasibility Study period, Stage 2 would not be considered a “greenfield” mine but rather a mine expansion.”

This is a statement of fact observable by Mr Freeman in his experience on a specified assumption and not what GPC would do in a hypothetical situation.

As to the basis for this opinion, refer to Section 5 of the 2 November Report, in particular paragraph [215] [EXP.010.005.0001 at pdf p. 0069].

Not yet ruled

  1.  

[58] Second sentence, the words: ‘In my opinion RGTCT had enough capacity at the time.’

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

“In my opinion RGTCT had enough capacity at the time and QR itself stated in October 2002 (SAN.001.021.0030) that, while RGTCT had a capacity of 45mtpa, QR was railing 36mtpa, which was well below its contracted rail capacity of 42mtpa at that time.”

This is a statement of fact observable by Mr Freeman in his experience (and drawn from underlying evidence).

Not yet ruled

  1.  

[59] Third sentence (‘In addition, the Stage 1 tonnage…’)

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

“In addition, the Stage 1 tonnage would have been under agreement with the port, further establishing the producer/supplier relationship.”

This is an observation about the consequences of a particular assumption and not about what GPC would have done in a particular circumstance.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Otherwise, Mr Freeman is qualified to give evidence based on facts observed in his experience. 

As to the basis for this opinion, refer to Section 5 of the 2 November Report, in particular paragraph [215] [EXP.010.005.0001 at pdf p. 0069].

Not yet ruled

  1.  

[62] Second sentence (‘GPA would negotiate…’)

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

“GPA would negotiate for significantly long periods of time to provide certainty for producers so that producers could commit to mine development.”

This is a statement of fact observable by Mr Freeman in his experience.  Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

As to the basis for this opinion, refer to Section 5 of the 2 November Report [EXP.010.005.0001 at pdf pp 0068-0091].

Not yet ruled

  1.  

[64] Third sentence (‘In my view…’)

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

“In my view, the conclusion that Mr Morton’s holds is not correct as in my opinion rail capacity could have been available from mid-2007 based on my technical assessment in section 4.8.”

This is not a statement about what any party would have done in a hypothetical circumstance it is about a matter of observable fact and within Mr Freeman’s expertise, namely the availability of rail capacity.

The basis for this opinion, refer to Section 4.8 of the 2 November Report [EXP.010.005.0001 at pdf pp 0035-0052].

Not yet ruled

  1.  

[69] Third sentence (‘In my experience, GPA was willing…’)

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

“In my experience, GPA was willing to enter into contracts subject to conditions precedent (including the issue of the Mining Lease).”

This is a statement of fact observable by Mr Freeman in his experience.

As to the basis for this opinion, refer to Section 5 of the 2 November Report [EXP.010.005.0001 at pdf pp 0068-0091].

Not yet ruled

  1.  

[89]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

“I also consider it probable that, regardless of the timing of the rail works in the Callemondah-RGTCT area, the Joint Venture could have secured port capacity for some of Stage 2 volumes at BPCT. In doing this the Callemondah-RGTCT area could have been avoided for some of the Stage 2 volume.”

This is not a statement about what the Joint Venture would have done in a hypothetical circumstance, it is rather a statement of observable fact about the availability of port capacity which the Joint Venture could have obtained.

Mr Freeman is qualified to give evidence based on facts observed in his experience.  Otherwise evidence concerning the increase in the capacity of BPCT is addressed in paragraph [245] of the 2 November Report [EXP.010.005.0001 at pdf p. 0078]. 

This increase is also addressed in Mr Morton’s report at [80(a)] ([EXP.020.022.0001_0001 at pdf p. _0037].

Not yet ruled

  1.  

[197]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

“If the project did not proceed after commitment to rail and port agreements, or the tonnage railed was not 10mtpa, there would have been enough demand for capacity such that unutilised tonnage could be traded on the secondary market.”

This is not evidence about what a third party would have done in a particular circumstance, it is a matter of observable fact, namely about the tradability of capacity on the secondary market, which is within Mr Freeman’s experience.

As to the basis for the opinion, Mr Freeman explains the secondary market in paragraphs [174(b)] (rail) and [299(b)] (port) and agrees with Mr Morton’s summary of it in paragraphs [208] and [241] of the 2 November Report [EXP.010.005.0001 at pdf pp 0056, 0098, 0068 and 0077].

Not yet ruled

  1.  

Not pressed

  1.  

Not pressed

  1.  

[230]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

“In my opinion the key criteria for port allocation are notification of project requirements as soon as practicable (to register an interest in the capacity), ongoing discussions, negotiation of contract and commitment to a port agreement. These criteria were on schedule to be met given the project capacity requirements were tabled and documented in 2001. In addition, the relationship would have been established for the Stage 1 capacity, and negotiations could have been held over 2003.”

These are statements of fact observable by Mr Freeman in his experience and otherwise is about facts and assumptions underpinning his opinion.

The basis for the opinion regarding the availability of capacity up until 2006 is addressed in paragraphs [248] and [249] of the 2 November Report [EXP.010.005.0001 at pdf pp 0080-0081].

Not yet ruled

  1.  

[232]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

“In paragraph 98 Mr Morton states “I consider that the Monto Coal Project would need to have been allocated capacity no later than mid 2004”. In my opinion this is not a reasonable statement given the environment of competing demand. It was not until late-2006 that additional capacity was contracted by other producers that would have prevented the Monto Coal Project from securing it’s full 10mtpa.”

This is a statement of fact observable by Mr Freeman in his experience and an opinion which flows from it.

Not yet ruled

  1.  

Not pressed

  1.  

[242]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

“In my opinion capacity was available at the Port of Gladstone and the Joint Venture had the opportunity to negotiate the appropriate agreements within the Stage 2Feasibility Study period (2002-2005).”

This is a statement of fact observable by Mr Freeman in his experience.

(1) I uphold the objection and agree with the characterization of this aspect of Mr Freeman’s opinions asserted by the defendants.  I reject the plaintiffs’ characterization of the impugned sentence as a statement of fact observable by Mr Freeman.  In fact it expresses a conclusion as to hypothetical conduct by the GPA and as to its preparedness to take a particular approach to the Joint Venture.  Such an expression of opinion is inadmissible for reasons expressed in the body of my reasons.  See in particular the body of my reasons at [58]. 

(2) Further I would uphold the objection on the basis that I agree that the assumptions underpinning the opinion are not identified.

(2) The objection that the facts have not been proved by admissible evidence amounts to reliance on what Heydon J described as the proof of assumption rule.  If I had not upheld the objection for the reasons stated, I would not have ruled before judgment on the question whether the evidence identified in the plaintiffs’ response operated to prove the facts underpinning the opinion.

  1.  

[244]-[253]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

The statements concerning taking a calculated risk in the secondary market (see [255]), accelerating expansions and undertaking further expansions ([24], [254] and [259]) are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

Refer to these paragraphs in the report.

These paragraphs are largely statements of fact observable by Mr Freeman in his experience and otherwise are summaries of and the drawing of inferences from documents based on Mr Freeman’s experience which is a matter on which he is capable of giving evidence.

Paragraph [245] is a statement of Mr Freeman’s opinion drawn from the assumptions made.

Paragraph [246] is a statement drawn from Mr Freeman’s direct experience.

Paragraph [249] does not say what the Joint Venture would have done but rather what it could have done which is a matter within Mr Freeman’s expertise (i.e. to comment on the content of a feasibility study).

Paragraph [253] is a statement of fact observable by Mr Freeman in his experience.

The bases for the opinions are given by reason of the material referred to in the paragraphs.

(1) I uphold the objection to the impugned paragraphs and, as a general proposition, I agree with the characterization of these paragraphs which is asserted by the defendants These opinions as to what the GPC and the Joint Venture would do are inadmissible for reasons expressed in the body of my reasons.  See in particular the body of my reasons at [58]. 

(2) As to [244], [245], [247], [248] [249], [251], [252] and [253], I would not uphold objection on the basis of the assumption identification rule.   I think the basis for the opinion stated is sufficiently clear.  Reference to those paragraphs does, however, provide support for the conclusion I have expressed in the previous paragraph.

(3) As to [246], I would uphold the objection on the basis of the assumption identification rule.  Although Mr Freeman references his experience, he does not say what the experience in fact was in any meaningful way.  I would uphold the assumption identification rule objection in relation to [253], as the bases are not stated.

(4) I would not rule on the relevance objections in the absence of a developed argument.  Those arguments can be advanced in final submissions.

(5) The objection that the facts have not been proved by admissible evidence amounts to reliance on what Heydon J described as the proof of assumption rule.  If I had not upheld the objection for the reasons stated, I would not have ruled before judgment on the question whether the evidence identified in the plaintiffs’ response operated to prove the facts underpinning the opinion.

  1.  

[254] Second sentence (‘In my opinion…’)

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

The statements concerning taking a calculated risk in the secondary market (see [255]), accelerating expansions and undertaking further expansions ([24], [254] and [259]) are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

“In my opinion the export capacity of the RGTCT could have been increased, or further expanded by GPA to accommodate additional export volumes.”

This is opinion evidence about what the GPC could have done which would be relevant to the preparation of a feasibility study.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Otherwise, Mr Freeman is qualified to give evidence based on facts observed in his experience. 

Not yet ruled

  1.  

[255] Second sentence (‘Despite the above evidence…’), [256]-[262]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

The statements concerning taking a calculated risk in the secondary market (see [255]), accelerating expansions and undertaking further expansions ([24], [254] and [259]) are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

Refer to these paragraphs in the report.

These paragraphs are largely statements of fact observable by Mr Freeman in his experience and otherwise are summaries of and the drawing of inferences from documents based on Mr Freeman’s experience which is a matter on which he is capable of giving evidence.

Paragraph [261] is a statement about what a person negotiating supply agreements would do, which is a matter about which Mr Freeman has direct experience.

Not yet ruled

  1.  

[266]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

“Committing to a port contract and then not proceeding with the project poses a manageable risk in an environment of high demand. It is probable that any relinquished tonnage could be reallocated at no extra cost up to a certain point in time given the volume of expansion tonnage (e.g. 6months post 2005). Aside from these known Blackwater and Moura expansion plans, the DBCT corridor users were also keen to commence increased railings south to counteract congestion and bottlenecks at the port.”

This is a statement of observable fact and also a matter within Mr Freeman’s experience, regarding reallocation of tonnage and is a matter as to the content of a feasibility study.

As to the potential for coal typically exported using the DBCT to be exported further south at Gladstone, this is addressed in the 2006 Coal Rail Infrastructure Master Plan [AUR.002.001.0085 at pdf p. 0115] (section 5.4).

Not yet ruled

  1.  

[274]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

“In my opinion, there was available port capacity for commitment during the Stage 2 Feasibility Study period on the primary market at RGTCT/BPCT coal terminals for the long term mine production. Had the Joint Venture committed to a Port Agreement by mid-2006, it would have secured the port capacity allocation in a market of competing demand.”

This is not a statement of what the Joint Venture would have done, it is a conclusion based on a matter of fact within Mr Freeman’s experience, namely that there was available port capacity.

Mr Freeman is qualified to give evidence based on facts observed in his experience.  The basis for Mr Freeman’s opinion as to the availability of port capacity is set out in paragraphs [244]-[249] of the November Report [EXP.010.005.0001 at pdf pp 0077-0081].

Not yet ruled

  1.  

[275]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  • Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not required the application of specialised knowledge;
  • Speculation as to how Gladstone Port Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  • Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

Facts or assumptions underpinning the opinion not set out or proved by admissible evidence.

This evidence is:

GPA does not follow a regulated process for capacity allocation, rather it notes the date a request is lodged, liaises with the parties and then negotiates terms and conditions. GPA did not allocate port capacity based on its belief in a project, instead the capacity was allocated once a contract was committed.”

This is a statement of fact observable by Mr Freeman in his experience.

Mr Freeman is qualified to give evidence based on facts observed in his experience.  The basis for Mr Freeman’s opinion as to the availability of port capacity is set out in paragraphs [244]-[249] of the November Report [EXP.010.005.0001 at pdf pp 0077-0081]. 

Mr Morton also gives evidence that GPA operates on an un-regulated basis ([EXP.020.022.0001_0001 at [117] pdf p. 0049].

Not yet ruled

Item 6 from the defendants’ schedule of objections

 

  1.  

Not pressed

  1.  

Not pressed

  1.  

Not pressed

  1.  

Not pressed

  1.  

Not pressed

  1.  

Not pressed

  1.  

Not pressed

Item 7 from the defendants’ schedule of objections

  1.  

[301] First sentence (‘I have been advised…’)

Hearsay. Limited to statement of assumption.

Agree that this should be limited to statement of assumption.

(1) The sentence can be admitted on the basis that it is so regarded.

Response Report (Actual Costs) of Jamie Freeman (P) dated 22 November 2018 [EXP.010.007.0001] (Costs Report)

No

Page/paragraph

Objection

Response to objection

Ruling

Item 8 from the defendants’ schedule of objections

  1.  

[17(b)]

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“In my opinion, it is likely that the Joint Venture would have been able to procure both rail infrastructure and port capacity through the Moura System to RGCT/BPCT via the primary market from QR and GPA respectively during the feasibility period of 2002- 2005, to support Stage 2 tonnages of 10mtpa (paragraph 191 of my Response Report).”

This is not a statement of what the Joint Venture would have done in a hypothetical situation, it is a statement of his opinion about the availability of capacity, a matter within his expertise and how that might factor into a feasibility study.

This summarises the 2 November Report.  The basis for Mr Freeman’s opinion as to the availability of port capacity is set out in paragraphs [244]-[249] of the 2 November Report [EXP.010.005.0001 at pdf pp 0077-0081].

Not yet ruled

  1.  

Not pressed

  1.  

[38(a)]

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“In my opinion, there was available port capacity for commitment during the feasibility period on the primary market at RGTCT/BPCT coal terminals for the long term mine production (Section 5.4 of my Response Report). Had the Joint Venture committed to a Port Agreement by mid-2006, it would have secured the port capacity allocation in a market of competing demand.”

This is a statement of observable fact from Mr Freeman’s experience and a conclusion drawn from those facts about what the Joint Venture would have been able to secure had it committed to a Port Agreement.  It is not about what the Joint Venture would have done.

Mr Freeman is giving evidence of observable facts obtained in the course of his experience preparing and advising on feasibility studies.

The basis for Mr Freeman’s opinion as to the availability of port capacity is set out in paragraphs [244]-[249] of the 2 November Report [EXP.010.005.0001 at pdf pp 0077-0081].

Not yet ruled

  1.  

[38(b)] Second sentence (‘I disagree that…’)

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“I disagree with this opinion as capacity was available during the feasibility period and would have been allocated to the Joint Venture upon execution of a port agreement.”

This is a statement of fact observable by Mr Freeman in his experience.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Otherwise, Mr Freeman is qualified to give evidence based on facts observed in his experience. 

The basis for Mr Freeman’s opinion as to the availability of port capacity is set out in paragraphs [244]-[249] of the 2 November Report [EXP.010.005.0001 at pdf pp 0077-0081].

Not yet ruled

  1.  

[39]-[40]

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“I consider that the Joint Venture could have negotiated a port agreement in 2003-2004, with the costs of the port services stated in the contract in line with that recorded by GPC for 2003. In my experience these would have escalated at CPI throughout the negotiation period until contract execution.

In my opinion a likely term for a port agreement would be 10 years commencing 1 July 2007 with a renewable option for a further 10 years. In my experience port agreements had options to renew at 5-year or 10-year intervals.

These are statements of facts including as to the content of common agreements observable by Mr Freeman in his experience and not about what third parties would have done in particular circumstances.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

Not yet ruled

  1.  

[51]

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“In general, SunWater would seek to recover actual outturn costs under the Water Transport Agreement (i.e. amortised capital charge). I consider it is likely the outturn cost would have been in the order of my estimate $101.9M ($2005). I do not consider capital would be funded upfront, instead the capital costs would be amortised and applied as a quarterly charge.”

These are statements of fact observable by Mr Freeman in his experience and not statements about what a third party would have done in hypothetical circumstances.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

The basis for the calculation of this amount is set out in the 2 November Report [EXP.010.005.0001 at pdf p. 0161].

Not yet ruled

  1.  

[59] First sentence (‘As set out in…’)

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“As set out in paragraph 378 of my Response Report (EXP.010.005.0001), the Connection Agreement covering the infrastructure works and amortised capital charge would be for a term of 20 years.”

This is a statement of fact observable by Mr Freeman as to the content of agreements in his experience and not a statement about what a third party would have done in a hypothetical situation.
Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

It is based on paragraph [378] of the 2 November Report [EXP.010.005.0001 at pdf p. 0123].

Not yet ruled

Joint Expert Report on Offsite Water Supply of Jamie Freeman (P) and Gary Harradine (D) dated 15 July 2019 [EXP.500.004.0001_2] (Joint Report (Water))

No

Page/paragraph

Objection

Response to objection

Ruling

Item 9 from the defendants’ schedule of objections

  1.  

[4.1]

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

Mr Freeman considered the pipeline CAPEX would be amortised over a 20 year term and applied on a monthly basis with payments escalating at CPI.

This is not a statement about what a third party would do in a hypothetical situation it is what the terms of an agreement are likely to be based on observable fact.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

Not yet ruled

  1.  

[4.5] the words 'and would have been for 20 years'

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“Mr Freeman does not agree to the term proposed by Mr Harradine as in his experience the term was nominated and negotiated between the parties and would have been for 20 years. Mr Freeman has applied a lower rate of return (7%) based on his experience with Sunwater contracts at that time where, under a contract for 20 years, the principal would be repaid close to 2 times.”

This is not a matter of what a third party would do in a hypothetical situation it is rather evidence of facts observable by Mr Freeman in his experience.

Not yet ruled

  1.  

[4.6]

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“Mr Freeman arrived at his commercial parameters for Monto with respect to managing and varying the water solution for Isaac Plains, which in part was assigned from Carborough Downs. Further Mr Freeman has been involved in several feasibility studies and due diligence processes for various coal projects throughout Queensland (refer Attachment 2).”

This simply describes Mr Freeman’s experience.

Not yet ruled

  1.  

[5.3] Third sentence (‘Mr Freeman considers…’)

Not proper matters for expert opinion.

Basis of opinions not set out.

 

This evidence is:

“Mr Freeman considers the Sunwater Water Transport and Supply Agreements would be executed in July 2005 with Sunwater having managed the environmental approvals and land requirements prior to this date under the Early Works Deed.”

This is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Not yet ruled

  1.  

[5.5] the words '(pre financial close i.e. indicatively mid 2004)' and '(post financial close i.e. mid 2005)

Not proper matters for expert opinion.

Basis of opinions not set out.

 

This evidence is:

“Mr Freeman has been instructed to respond only to Mr Harradine’s expert report of 2018 (not Mr Smith’s expert report), and in doing so has outlined how water infrastructure would be acquired based on his experience in dealing with the infrastructure provider. This includes but is not limited to, interactions with Sunwater through the feasibility period to determine timeframes, critical risks, infrastructure and OPEX spend and commercial terms. In Mr Freeman’s experience the work would be split into Early Works (pre financial close i.e. indicatively mid 2004) and Construction (post financial close i.e. mid 2005). The environmental and approvals process would be identified during the initial interactions with Sunwater and managed during the Early Works stage.”

This is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Not yet ruled

  1.  

[5.10] The words ‘prior to mid-2005’ First sentence (‘Mr Freeman considers…’)

Not proper matters for expert opinion.

Basis of opinions not set out.

 

This evidence is:

“Mr Freeman considers environmental processes, other approvals as they may apply, and land access agreements would have been managed and finalised by Sunwater, not the Project, prior to mid-2005 under an Early Works Deed.”

This is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Not yet ruled

  1.  

Not pressed

  1.  

[5.17] First sentence

Not proper matters for expert opinion.

Basis of opinions not set out.

 

This evidence is:

“In Mr Freeman’s experience the environmental investigations would be managed by Sunwater, Environmental impacts at that time until present were minimized by Sunwater through the design optimisation process whereby local alignment adjustments would be made to the alignment to reduce the extent and impact upon matters which would trigger an EIS. Whilst the time allowed in the indicative project schedule for environmental investigations would need to be extended if a full EIS were required in 2004, this need would have been identified early by Sunwater and the project schedule would be adapted accordingly.”

This is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Not yet ruled

  1.  

[5.20] the words ‘over ‘2003’

Not proper matters for expert opinion.

Basis of opinions not set out.

 

This evidence is:

“Mr Freeman considers Sunwater would determine if an EPBC Act (1999) referral was required during its discussions with the customer over 2003. If so Sunwater would likely have prepared the Referral suitable for submission to the Department of Environment (DoE) with time requirements outlined to the JV. Sunwater would complete a site reconnaissance to assess the required technical studies methodologies and potential study constraints, meet with various department representatives (DoE and DEWR), Whilst Sunwater would try to reroute to minimise these impacts, in need this is a process that could be undertaken in the early works agreement, with time frames identified in early discussions.”

This is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Not yet ruled

  1.  

[5.27] the words '(pre financial close i.e. indicatively mid 2004)’ and '(post financial close i.e. mid 2005)'

Not proper matters for expert opinion.

Basis of opinions not set out.

 

This evidence is:

“Mr Freeman was instructed to respond only to Mr Harradine’s expert report of 2018 (not Mr Cavanagh’s expert report), and in doing so has outlined how water infrastructure would be acquired based on his experience in dealing with the infrastructure provider. This includes but is not limited to, interactions with Sunwater through the feasibility period to determine timeframes, critical risks, infrastructure and opex spend and commercial terms. In Mr Freeman’s experience the work would be split into Early Works (pre financial close i.e. indicatively mid 2004) and Construction (post financial close i.e. mid 2005). The land acquisition process would be identified during the initial interactions with Sunwater and managed during the Early Works stage.”

This simply describes Mr Freeman’s experience.

Not yet ruled

  1.  

[5.32]

Not proper matters for expert opinion.

Basis of opinions not set out.

 

This evidence is:

“Based on Mr Freeman’s experience with Sunwater (as the infrastructure provider), as set out in Attachment 2, Mr Freeman is of the opinion that Sunwater would have undertaken a detailed assessment and design of the alignment and would have adjusted that alignment to avoid such costs as derived by Mr Cavanagh.”

This is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Not yet ruled

  1.  

Not pressed

  1.  

Not pressed

  1.  

[5.44]

Not proper matters for expert opinion.

Basis of opinions not set out.

 

This evidence is:

“Mr Freeman has determined the likely approval and land compensation durations for the water supply pipeline, and thereafter advised of the likely construction capital spend over financial years 2006 and 2007.”

This simply explains the process Mr Freeman has undertaken.

Not yet ruled

  1.  

[6.7]

Not proper matters for expert opinion.

Basis of opinions not set out.

 

This evidence is:

“Based on Mr Freeman’s experience with Sunwater (as the infrastructure provider), as set out in Attachment 2, the parties would enter into an Early Works Reimbursement Deed to cover survey, environmental investigations, detailed design, planning i.e. in the order of $8m.”

This statement is observable fact based on Mr Freeman’s experience and otherwise this is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Not yet ruled

  1.  

[6.13] First sentence

Not proper matters for expert opinion.

Basis of opinions not set out.

 

This evidence is:

“Mr Freeman is of the opinion that infrastructure providers would seek to minimise disruption to land holders by considering the opportunity to co-locate with other infrastructure providers (road, rail, power, gas water) in existing or proposed infrastructure corridors (refer Attachment 5, page 4 - “The Study Corridor”).”

This is evidence of a general nature as to the practices of infrastructure providers in the industry.

Not yet ruled

  1.  

Attachment 1 Mr Freeman’s ‘easement’ and ‘early works’ references

Not proper matters for expert opinion.

Basis of opinions not set out.

 

This summarises evidence previously given by Mr Freeman.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Otherwise, Mr Freeman is qualified to give evidence based on facts observed in his experience.  As to the basis for the opinion, it is contained in the 2 November Report at paragraphs [293] and [312] (re ‘easement’) and paragraphs [291], [295], [316], [328], [329] and [334] (re ‘early works’) [EXP.010.005.0001 at pdf pp 0095-0097, 0103, 0104, 0106-0108 and 0110].

Not yet ruled

Item 10 from the defendants’ schedule of objections

  1.  

Not pressed

Item 11 from the defendants’ schedule of objections

  1.  

[7.11] the words 'as it clearly evidences the intention of infrastructure providers to co-locate their infrastructure corridor with others, i.e. power and water'

Irrelevant.

This evidence is responsive to Mr Harradine and is relevant.

Not yet ruled

  1.  

[7.12] the words 'however it accords with what Mr Freeman believes, and understands, would have been the case during the period when the Project would have been in discussions with, and negotiating arrangements with Powerlink.’

Irrelevant.

Mr Freeman is qualified to provide background information drawn from documents to support his reasoning and to draw inferences from those documents based on his expertise.

Not yet ruled

Joint Expert Report on Offsite Power Supply of Jamie Freeman (P) and Gary Harradine (D) dated 15 July 2019 [EXP.500.011.0001_2] (Joint Report (Power))

No

Page/paragraph

Objection

Response to objection

Ruling

Item 12 from the defendants’ schedule of objections

  1.  

[4.1]

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“Mr Freeman considered the power CAPEX would be amortised by Powerlink over a 20 year term and applied on a monthly basis with payments escalating at CPI.”

This is not a matter of what a third party would do in a hypothetical situation it is rather evidence of facts observable by Mr Freeman in his experience.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

Not yet ruled

  1.  

[4.5] the words from 'and in the case of this Project' through to the end of the paragraph

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“Mr Freeman does not agree to the term proposed by Mr Harradine as in his experience the term was nominated and negotiated between the parties, and in the case of this Project, Mr Freeman believes it would have been for 20 years. Mr Freeman has applied a higher rate of return (13%) based on his experience with Powerlink where under a contract for 20 years the principal would be repaid close to 3 times.”

This is not a matter of what a third party would do in a hypothetical situation it is rather evidence of facts observable by Mr Freeman in his experience based on the content of common agreements.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

Not yet ruled

  1.  

[4.6]

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“Mr Freeman arrived at his commercial parameters for Monto power infrastructure from negotiating and managing a power solution for Eagle Downs and negotiating and managing the Ergon arrangements with respect to Isaac Plains. Further, Mr Freeman has been involved in several feasibility studies and due diligence processes for various coal projects throughout Queensland (refer Attachment 2).”

This simply a summary of Mr Freeman’s experience.

Not yet ruled

  1.  

[5.3] Third and Fourth sentences (‘Mr Freeman states…’)

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“Mr Freeman states that the JV would enter into a Connection Agreement with Powerlink in mid 2004. This would cover both the early works requirements, provisions such that if the project did not achieve financial close the Connection Agreement would be terminated (and the project liable for costs incurred by Powerlink up to that point), and the scope of works and amortised capital values.”

This statement, at least in part, states facts observable by Mr Freeman in his experience, i.e. as to the content of Connection Agreements and what would be considered for a feasibility study.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

Not yet ruled

  1.  

[5.6] the words '(pre-financial close i.e. indicatively from mid-2004)' and '(post financial close i.e. mid 2005)'

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“Mr Freeman has been instructed to respond only to Mr Harradine’s expert report of 2018 (and not Mr Smith’s Expert Report), and in doing so has outlined how power infrastructure would be acquired based on his experience in dealing with the infrastructure provider. This includes but is not limited to, interactions with Powerlink through the feasibility period to determine timeframes, critical risks, infrastructure and OPEX spend and commercial terms. In Mr Freeman’s experience the work would be split into Early Works (pre-financial close i.e. indicatively from mid-2004) and Construction (post financial close i.e. mid 2005). The environmental and approvals process would be identified during the initial interactions with Powerlink and managed during the Early Works stage.”

This is a statement of Mr Freeman’s experience.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

Not yet ruled

  1.  

[5.10]

Not proper matters for expert opinion.

Basis of opinions not set out.

 

This evidence is:

“Mr Freeman considers environmental processes, other approvals as they may apply, and easement resumption would have been managed and finalised by Powerlink from August 2004 to January 2006 under the early works component of the Connection Agreement. This is outlined in the indicative project schedule (Response Report 367). These time frames and stages are indicative and it is noted that early interaction with Powerlink would identify and allow mitigation of timing risks relating to design, planning and approvals (refer Attachment 3, page 4 – “The Study Corridor”). Mr Freeman considers these timeframes reflect how Powerlink would have planned the task which is similar to that planning for Wandoan South to Eurombah Network Project (refer Attachment 3, page 7, where the timetable allows 2yrs from the release of the draft EIS to when the transmission line is commissioned). This project, although at a later date and for higher voltage transmission, is of a similar distance to that proposed for Monto. It demonstrates that Powerlink undertakes an EIS and ministerial designation. The time frame is 2 years in total from release of draft EIS to completion of construction which includes all approvals. This is in line with Mr Freeman’s recollection of the manner in which Powerlink planned and delivered the Eagle Downs power solution from 2008.”

In part this contains statements of fact observable by Mr Freeman in his experience and otherwise goes to the content of a feasibility study.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Mr Freeman is qualified to give evidence based on facts observed in his experience.  Otherwise, Mr Freeman is qualified to provide background information drawn from documents to support his reasoning and to draw inferences from those documents based on his expertise. 

Further, these opinions are cross referenced to a Powerlink document contained in Attachment 3.

Not yet ruled

  1.  

Not pressed

  1.  

[5.18] Final sentence (‘The time allowances…’)

Not proper matters for expert opinion.

Basis of opinions not set out.

 

This evidence is:

The time allowances are reasonable for this work which would be undertaken in 2004.”

This is a statement of assumption and opinion based on his analysis of work which would be undertaken drawing on his experience, not about what a third party would have done in particular circumstances.  It is estimation for the purposes of a feasibility study.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Otherwise, Mr Freeman is qualified to give evidence based on facts observed in his experience.  The basis for the time period is contained in Appendix 12 to the 2 November Report [EXP.010.005.0001 at pdf pp 0165-0168].

Not yet ruled

  1.  

[5.19]

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“Mr Freeman considers the timeframes in his indicative project schedule reflect how Powerlink would have planned the infrastructure task, which is similar to how Powerlink planned Wandoan South to Eurombah Network Project (refer Attachment 3, page 7, where the timetable allows 2yrs from the release of the draft EIS to when the transmission line is commissioned). This project, although at a later date and for higher voltage transmission, is of a similar distance to that proposed for Monto. Australia Pacific LNG required connection to the transmission network for its future gas processing facilities. This process demonstrates that Powerlink undertakes an EIS and ministerial designation, for an industrial customer. The time frame is 2 years in total from release of draft EIS to completion of construction which includes all approvals, ministerial designation and easement acquisition. This planning structure is in line with Mr Freeman’s experiences in dealing with Powerlink in regard to Powerlink proposals to place an easement for transmission infrastructure across the Eagle Downs tenement.”

This evidence is largely (with the exception of the first sentence) not about what a third party would do in a hypothetical situation, it is about facts observable in Mr Freeman’s experience and drawn from documents which Mr Freeman summarises.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Mr Freeman is qualified to give evidence based on facts observed in his experience.  Otherwise, Mr Freeman is qualified to provide background information drawn from documents to support his reasoning and to draw inferences from those documents based on his expertise. 

Not yet ruled

  1.  

Not pressed

  1.  

Not pressed

  1.  

[5.28]

Not proper matters for expert opinion.

Basis of opinions not set out.

 

This evidence is:

“Mr Freeman’s indicative schedule for construction from September 2005 is for off-site manufacture of key infrastructure items including transformer, transmission line poles, conductor, earth wire, insulators and hardware and substation plant. Mr Smith has incorrectly interpreted this element of the schedule. Mr Freeman’s project schedule (Response Report paragraph 367-368) allows for key stages of the infrastructure project, along with physical construction on site which commences from February 2006. Mr Freeman considers the timeframes in his indicative project schedule reflect how Powerlink would have planned the infrastructure task, which is similar to how Powerlink planned Wandoan South to Eurombah Network Project for Australia Pacific LNG as outlined in previous sections (refer Attachment 3, page 7, where the timetable allows 2yrs from the release of the draft EIS to when the transmission line is commissioned).”

With the exception of the phrase “Mr Freeman considers the timeframes in his indicative project schedule reflect how Powerlink would have planned the infrastructure task” the evidence is of opinion about the project schedule and facts observable by Mr Freeman in his experience.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Mr Freeman is qualified to give evidence based on facts observed in his experience.  Otherwise, Mr Freeman is qualified to provide background information drawn from documents to support his reasoning and to draw inferences from those documents based on his expertise. 

Not yet ruled

  1.  

[5.31]

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“Mr Freeman was instructed to respond to only Mr Harradine’s expert report of 2018, and in doing so has outlined how power infrastructure would be acquired based on his experience in dealing with the infrastructure provider. This includes but is not limited to, interactions with Powerlink through the feasibility period to determine timeframes, critical risks, infrastructure and OPEX spend and commercial terms. In Mr Freeman’s experience, the work would be split into Early Works (pre financial close i.e. indicatively mid 2004) and Construction (post financial close i.e. mid 2005). The land acquisition process would be identified during the initial interactions with Powerlink and managed during the Early Works stage.”

This is a statement of Mr Freeman’s experience.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Otherwise, Mr Freeman is qualified to give evidence based on facts observed in his experience. 

Not yet ruled

  1.  

[5.36]

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“Based on Mr Freeman’s experience with Powerlink (as the infrastructure provider), as set out in Attachment 2, Mr Freeman is of the opinion that Powerlink would have undertaken a detailed assessment and design of the alignment and would have adjusted that alignment to avoid such costs as derived by Mr Cavanagh (refer Attachment 3, page 4 - “The Study Corridor” , and page 8 – “How is the final alignment of a transmission line chosen?”).”

This evidence is in part the summary of a document drawing on Mr Freeman’s experience.  Otherwise, this is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Mr Freeman is qualified to provide background information drawn from documents to support his reasoning and to draw inferences from those documents based on his expertise. 

Not yet ruled

  1.  

[5.41] Sixth, Seventh, Eighth and Ninth sentences (‘Mr Freeman considers his indicative estimates…’)

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“Mr Freeman considers his indicative timeframes reflect how Powerlink would have planned the Monto power task which is similar to that planning for Wandoan South to Eurombah Network Project (refer Attachment 3, page 7, where the timetable allows 2yrs from the release of the draft EIS to when the transmission line is commissioned). This project, although at a later date and for higher voltage transmission, is of a similar distance to that proposed for Monto. It demonstrates Powerlink’s process. Further, the time frame is 2 years from release of draft EIS to actual completion of construction, and land acquisition is completed within that 2 year time frame, which is in line with Mr Freeman’s indicative project schedule.”

This evidence is (with the exception of the 1st phrase, which is of general practice) statements of fact observable by Mr Freeman in his experience.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Otherwise, Mr Freeman is qualified to provide background information drawn from documents to support his reasoning and to draw inferences from those documents based on his expertise. 

Not yet ruled

  1.  

[6.11]

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“Mr Freeman states that the parties could have entered into a Connection Agreement with Powerlink in mid-2004 covering the early works requirements. This agreement would contain provisions such that if the project does not achieve financial close the Connection Agreement would be terminated and the project liable for costs incurred by Powerlink up to that point, as this was the case for Eagle Downs. This would cover works in the order of $1.5m which enables the planning, design, approvals to be undertaken prior to financial close.”

This evidence is not about what a third party would do in a hypothetical circumstance rather it is a statement of an option available to the Joint Venture based on statements of fact observable by Mr Freeman in his experience as to the content of agreements.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

Not yet ruled

  1.  

[6.18] First sentence (‘Mr Freeman is of the opinion…’)

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“Mr Freeman is of the opinion that infrastructure providers would seek to minimise disruption to land holders by considering the opportunity to co-locate with other infrastructure providers (road, rail, power, gas water) in existing or proposed infrastructure corridors (refer Attachment 3, page 4 - “The Study Corridor”).”

This is evidence about what infrastructure providers would do as a matter of general practice and is admissible.

Mr Freeman is qualified to give evidence based on facts observed in his experience.  Otherwise, Mr Freeman is qualified to provide background information drawn from documents to support his reasoning and to draw inferences from those documents based on his expertise. 

Not yet ruled

  1.  

[6.22]

Not proper matters for expert opinion.

Basis of opinions not set out.

This evidence is:

“Mr Freeman has outlined the indicative project schedule in working with an infrastructure provider through a feasibility study and construction phase. The Powerlink Connection Agreement, with early work, scope and amortised capex provisions, would be entered into in mid-2004 with provision to terminate should the Joint Venture not reach financial close.”

This is an assumption (i.e. entry into the Powerlink Connection Agreement) and a comment about an observable fact in Mr Freeman’s experience (i.e. provision to terminate).

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Mr Freeman is qualified to give evidence based on facts observed in his experience.  Otherwise, Mr Freeman is qualified to provide background information drawn from documents to support his reasoning and to draw inferences from those documents based on his expertise. 

Not yet ruled

  1.  

Attachment 1 Mr Freeman’s ‘early works’ references

Not proper matters for expert opinion.

Basis of opinions not set out.

This summarises evidence previously given by Mr Freeman.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Mr Freeman is qualified to give evidence based on facts observed in his experience. 

The basis for the opinion is given in the 2 November Report at paragraphs [344], [353], [367], [392] and [397] [EXP.010.005.0001 at pdf pp 0112-0113, 0114, 0119-0120, 0128 and 0130].

Not yet ruled

Item 13 from the defendants’ schedule of objections

  1.  

Not pressed

Item 14 from the defendants’ schedule of objections.

 

  1.  

[7.7] the words 'however it accords with what Mr Freeman believes, and understands, would have been the case during the period when the Project would have been in discussions with, and negotiating arrangements with Powerlink.'

Irrelevant

Mr Freeman is qualified to provide background information drawn from documents to support his reasoning and to draw inferences from those documents based on his expertise.

Not yet ruled

Joint Expert Report on ‘Port’ of Jamie Freeman (P) and Euan Morton (D) [EXP.500.026.0001] (Joint Report (Port))

No

Page/paragraph

Objection

Response to objection

Ruling

Item 15 from the defendants’ schedule of objections

  1.  

[2.1] Mr Freeman’s items 3, 4, 5, 6, 7, 8 and 10

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

Refer to report.

With the exception of 7 (second bullet) and 10 (second and third bullets) these are matters of fact observable by Mr Freeman in his experience, including as to how GPC operates and Macarthur Coal’s standing in the industry (which would have been notorious: see Cargill at [50(19)].

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Mr Freeman is qualified to give evidence based on facts observed in his experience.  Otherwise, Mr Freeman’s industry experience extends to knowledge gained by involvement in the industry about the track record of significant participants in the industry, such as Macarthur Coal (which would have been notorious in the industry): see Cargill at [50(19)].

As to item 3, the possibility of a secondary market for port capacity was addressed in Mr Stephan’s evidence ([TRA.500.029.0001] at T29-56/9-21). 

As to item 4, see the 2 November Report [EXP.010.005.0001 at [254(a)] and [254(b)] pdf pp 0082-0083].

As to item 5, see the response to the objection to paragraph [222] of [EXP.010.005.0001] above.

As to item 6, the availability of capacity is addressed in paragraphs [242]-[250] of the 2 November Report [EXP.010.005.0001 at pdf pp 0077-0081].

As to item 7, the basis for Mr Freeman’s opinion on this issue is addressed in paragraphs [228]-[229] of the 2 November Report [EXP.010.005.0001 at pdf pp 0073-0074].

As to item 8, the first bullet point is addressed in paragraph [215] of the 2 November Report [EXP.010.005.0001 at pdf p. 0069].

As to item 10, Mr Freeman’s reasoning on this issue is set out in paragraph [239] of the 2 November Report [EXP.010.005.0001 at pdf p. 0076]. The experts agree that “there was no formal process, procedure, or policy specifying how GPC allocated capacity” ([EXP.500.026.0001 at pdf p. 0013]).

Not yet ruled

  1.  

[3.4]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

Mr Freeman, based on his experience (refer Appendix 6- Details of Mr Freeman's Relevant Experience) considers it is the Joint Venture that must satisfy itself that mine production will be able to be exported in such a way so as to attract and secure funding (i.e. by whatever means). For clarity, Mr Freeman does not have a view on how the Joint Venture may have been looking to secure funding for the Project.”

This is not a statement about what the Joint Venture would have done in a hypothetical circumstance, rather it is a statement of fact.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.

Not yet ruled

  1.  

[3.7]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

In additional to capacity in the primary market, the experts agree that: (a) There may be potential to acquire capacity on the secondary market (i.e. via agreement with another miner to purchase its contracted capacity); and (b) There may be potential to use capacity on an uncontracted basis (i.e. on an 'ad hoc' basis).”

This is evidence as to facts observable by the experts in their experience.  It is not a statement of what the Joint Venture or any third party would have done in hypothetical situations.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.

Not yet ruled

  1.  

[3.9]-[3.13] [3.12]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

“The experts agree that there was no formal process, procedure, or policy specifying how GPC allocated capacity. The negotiation process was 'fluid'. 3.1 0. Coal Handling Agreements (CHAs) provided the legally binding allocation of capacity. Prior to that, there was a spectrum of arrangements which provided increasing certainty that GPC would allocate capacity to the mine (e.g. agreed commercial terms, formal exchange of letters, heads of agreement).

GPC would agree commercial terms, and then there would be time allowed to finalise detailed contract negotiations and execute agreements, with some of the other forms of deal sometimes used as intermediate steps to provide increased certainty.

Once the commercial principles had been agreed, if another party was willing to sign a ToP contract for that capacity, there may be a process of GPC requiring 'sign up', or 'let it go'.

GPC appeared to tolerate extended periods to finalise agreements even in the face of known competing demand, provided that it remained confident that the agreement would be signed in accordance with the agreed commercial terms, as evidenced by the protracted negotiations with Anglo for the Dawson project (although the specific circumstances around this negotiation are unknown).”

This is evidence summarising observable facts about the operations of GPC it is not evidence about what GPC would have done in a particular hypothetical circumstance.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

Various coal handling agreements of the kind referred to in these paragraphs are in evidence ([GPC.001.001.1019], [GPC.001.001.1088], [GPC.001.001.1196], [GPC.001.001.1249], [GPC.001.001.1302], [GPC.001.001.1449] and [GPC.001.001.1496]).

Not yet ruled

  1.  

Not pressed

  1.  

[4.4]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

“Mr Freeman considers that the Monto JV could have secured committed capacity by mid-2004. While he considers that the Monto JV would have preferred this to be conditional upon: (1) FlD by the Monto JV; and (2) an approved mining lease, he considers that the Monto JV could have been willing to sign an unconditional contract if GPC would not accept these conditions given the market of high demand (Response Report paragraph 266).”

This is predominately statements of facts observable in Mr Freeman’s experience.  Otherwise it is about what the Joint Venture could have done, which is a matter relevant to the content of a feasibility study.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  The basis for this opinion is set out in the 2 November Report at paragraph [266] [EXP.010.005.0001 at pdf p. 0088].

Not yet ruled

  1.  

[5.5]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

“Mr Freeman contends that the Project may have accepted a calculated risk taken to rely on ad hoc or secondary market capacity should capacity in the primary market fall short of the required 10 mtpa.”

This is about what the Joint Venture could have done, which is relevant to the content of a feasibility study.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

Not yet ruled

  1.  

[5.12] second sentence

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

"Despite this, Mr Freeman considers that had the demand profile required earlier additional capacity, then GPC would have accelerated expansions or initiatives per Appendix 5 paragraphs A5.11 and A5.17.”

This is opinion evidence about general industry practices based on facts observed by Mr Freeman in the course of his experience and what participants in the industry (with whom he has dealt) would be likely to do in particular circumstances.

Not yet ruled

  1.  

[5.15]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

Beyond the planned expansion of RGTCT to 65mtpa, Mr Freeman claims that there were additional opportunities for GPC to expand RGTCT to 75-80mtpa through operational improvements or to 100 mtpa through infrastructure investment. Mr Freeman considers that, had there been sufficient demand for such capacity, by mid2005 GPC would have investigated and ultimately committed to such expansions, and that this could have occurred by mid-2007 in conjunction with GPC's other planned expansions. Mr Freeman has reviewed the additional and unredacted GPC documents made available in June 2019 and prepared a supporting analysis of how GPC has considered expansions or available capacity. In doing so, Mr Freeman remains of the view that GPC had opportunity for further expansions in 2005 (refer Appendix 5, paragraphs A5.11 to A5.12).”

To the extent that this evidence is based on Mr Freeman summarising and drawing inferences from the documents in exercising his expertise, it is admissible.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Mr Freeman is qualified to give evidence based on facts observed in his experience.  Otherwise, Mr Freeman is qualified to provide background information drawn from documents to support his reasoning and to draw inferences from those documents based on his expertise. 

The basis for the first sentence of this paragraph is set out in the 2 November Report [EXP.010.005.0001] at [254(a)] and [254(b)] pdf pp 0082-0083]. 

Not yet ruled

  1.  

[5.17]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

The experts disagree as to the application, and weighting, of factors that may have been considered by GPC in allocating capacity to coal customers.”

This goes to matters of fact observable by Mr Freeman in his experience.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.

Not yet ruled

  1.  

[5.18]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

Mr Freeman considers that GPC would allocate capacity based on customer's willingness to sign a ToP contract and does not consider that GPC, nor its shareholding ministers, would get too concerned about project bona fides in executing a contract. Mr Freeman has reviewed the additional and unredacted GPC documents made available in June 2019 and prepared a supporting analysis of how GPC behaved with competing mines and Monto during 2002-2006 (refer Appendix 5 - Mr Freeman's Supporting A) . In doing so, Mr Freeman remains of the view that Monto could have secured the capacity by entering either a conditional port contract from mid-2004, or HOA if that was GPC's preferred mechanism. Refer Appendix 5 paragraphs A5.1 to A5.1 0.”

This is evidence of facts observable by Mr Freeman in his experience.  It is also is based on Mr Freeman summarising and drawing inferences from the documents in exercising his expertise and is admissible.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

Not yet ruled

  1.  

[5.22]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

While Mr Freeman acknowledges that there was a 'window' within which there was sufficient available developable capacity for 10 mtpa in 2003-04, he maintains that there were still opportunities between mid-2004 and mid-2006, albeit with increased risk that Monto could be 'pipped at the post' by other customers signing ToP agreements. Mr Freeman stated in his Response Report that the contract would likely be negotiated over 2003-04 (paragraph 261 and 270), with conditions that would include relevant approvals to proceed with the development of Stage 2. Mr Freeman has reviewed the additional and unredacted confidential GPC documents made available in June 2019 and prepared a supporting analysis of how the Port behaved toward competing mines and Monto during 2002-2006. In doing so, Mr Freeman remains of the view that Monto could have secured the capacity by entering either a conditional port contract from mid-2004, or Heads of Agreement (HOA) if that was the Port's preferred mechanism. Refer Appendix 5 paragraphs A5.1 to A5.1 0 and A5.33 to A5.36.”

This is evidence of facts observable by Mr Freeman in his experience.  It is also is based on Mr Freeman summarising and drawing inferences from the documents in exercising his expertise and is admissible.  It is not evidence about what a third party would have done in hypothetical circumstances.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances. 

As to the availability of capacity, this is addressed in paragraphs [242]-[250] of the 2 November Report [EXP.010.005.0001 at pdf pp 0077-0081].

Not yet ruled

  1.  

[5.25]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

Mr Freeman considers that no other mine project would have been given preference ahead of Monto in securing capacity. Monto would have been allocated capacity on the basis that it was established with GPC through negotiations of Stage 1 and Stage 2 tonnage and would have signed a ToP contract (with conditions) in mid-2004. Mr Freeman has reviewed the additional and unredacted GPC documents made available in June 2019 and prepared a supporting analysis of how GPC and Shareholding Ministers considered capacity during 2002-2006. In doing so, Mr Freeman remains of the view that Monto could have secured the capacity by entering either a conditional port contract from mid-2004, or Heads of Agreement (HOA) if that was GPC's preferred mechanism to plan and allocate capacity. Refer Appendix 5 paragraphs A5.13 to A5.19.”

To the extent that this evidence is based on Mr Freeman summarising and drawing inferences from the documents in exercising his expertise, it is admissible.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Mr Freeman is qualified to give evidence based on facts observed in his experience.  Otherwise, Mr Freeman is qualified to provide background information drawn from documents to support his reasoning and to draw inferences from those documents based on his expertise.  Monto’s status as being established with GPC is addressed in paragraph [215] of the 2 November Report [EXP.010.005.0001 at pdf p. 0069].

Not yet ruled

  1.  

[5.31]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

Mr Freeman considers that Stage 1 tonnages are relevant as it would have enabled Monto to establish a relationship with GPC and have access to information on 'who else' wanted capacity and their readiness to sign a contract with GPC. Mr Freeman notes that Mr Talbot of Macarthur was known within the Blackwater Corridor having set up Jellinbah mine prior to Coppabella, and given the industry and supply chain is small, the parties would have been aware of his achievements and reputation.”

This evidence is statements of fact observable by Mr Freeman in his experience, as well as assumptions made by him and comments about the track record of significant participants in the industry, such as Macarthur Coal (which would have been notorious in the industry): see Cargill at [50(19)].

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Mr Freeman is qualified to give evidence based on facts observed in his experience.

As to the first sentence, Monto’s relationship with GPC as a result of Stage 1 is addressed in paragraph [215] of the November Report [EXP.010.005.0001 at pdf p. 0069].

As to the second sentence, the reputation of Mr Talbot and Macarthur Coal is addressed in response to the objections to paragraphs [25], [59], [67] and [214]-[219] of [EXP.010.005.0001] as set out above.

Not yet ruled

  1.  

[5.34]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

Mr Freeman maintains that it is likely that GPC would have accepted a ToP agreement from Monto subject to mining lease approval, and possible that GPC would have accepted a ToP agreement from Monto subject to final investment decision. Mr Freeman has reviewed the additional and unredacted GPC documents made available in June 2019 and prepared a supporting analysis of the risk position GPC had in relation to timing and volumes. In doing so, Mr Freeman remains of the view that GPC would agree to conditions precedent, for achievement of ML and financial investment decision. Refer Appendix 5 paragraphs A5.22 to A5.32.”

To the extent that this evidence is based on Mr Freeman summarising and drawing inferences from the documents in exercising his expertise, it is admissible.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.

Not yet ruled

  1.  

[5.37]

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

This evidence is:

Mr Freeman argues that commercial terms between Monto and GPC could have been locked in during 2003. Therefore, he maintains that prices would have reflected charges that prevailed in 2003 and then escalated to 2005 dollars. Mr Freeman has reviewed contracts and other documents released by GPC in June and maintains his position that the price during the negotiation period would have been incorporated into the agreement. This is addressed this further in Appendix 5 paragraphs A5.37 and A5.38.”

This is evidence of facts observable by Mr Freeman in his experience.  It is also assumptions made by him.  Moreover, to the extent that this evidence is based on Mr Freeman summarising and drawing inferences from the documents in exercising his expertise it is admissible.  It is not evidence about what a third party would have done in a hypothetical situation.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.

Not yet ruled

  1.  

Appendix 3 paragraphs in the Mr Freeman’s column at pp.30-33

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

Refer to report.

This evidence summarises Mr Freeman’s opinions.

Mr Freeman is qualified to give evidence as to what participants in the industry would have done in the circumstances.  Mr Freeman is qualified to give evidence based on facts observed in his experience.  Otherwise, Mr Freeman is qualified to provide background information drawn from documents to support his reasoning and to draw inferences from those documents based on his expertise. 

As to the entry on page 30, the possibility of a secondary market for port capacity was addressed in Mr Stephan’s evidence ([TRA.500.029.0001] at T29-56/9-21).  Otherwise, the bases for these matters are set out in the 2 November Report as cross-referenced in Appendix 3 [EXP.010.005.0001 at pdf p. 0146].

Not yet ruled

  1.  

Appendix 5

Not proper matters for expert opinion.

Rather, Mr Freeman’s opinions are based on:

  1. Mr Freeman’s interpretation of documents prepared by Gladstone Ports Corporation, which does not require the application of specialised knowledge;
  2. Speculation as to how Gladstone Ports Corporation (and the Joint Venture) would have acted in a hypothetical factual situation, which is a question of fact;
  3. Mr Freeman’s observations, as a non-participating onlooker, of how Gladstone Ports Corporation operates.

Otherwise, basis of opinions not set out.

The statements concerning taking a calculated risk in the secondary market, accelerating expansions and undertaking further expansions are irrelevant.  Further, Mr Freeman has no demonstrated expertise in planning or constructing port expansions.

Refer to report.

This evidence is based on Mr Freeman summarising and drawing inferences from the documents in exercising his expertise and is admissible. 

Not yet ruled

Footnotes

[1] In this proceeding, and because there are so many expert witnesses, I have adopted the convention of distinguishing between expert witnesses called by the plaintiffs and those called by the defendants by inserting post-nominals “P” and “D”, respectively.

[2] There has been a pleading amendment which asserts an alternative case with a slightly smaller NPV but that does not need presently to be considered.

[3] See my order of 21 December 2019 at [9]. 

[4] See my order of 21 December 2019 at [9].

[5] The trial is being conducted as an electronic trial.  Numerical references in this format identify relevant documents with precision.

[6] Transcript day 53, T55-49 line 3 to T55-50 line 3 [TRA.500.055.0001].

[7] Transcript day 53, T55-50 lines 22 - 29 [TRA.500.055.0001].

[8] Transcript day 53, T55-50 lines 31 - 38 [TRA.500.055.0001].

[9] The notification was received after working hours on the day it was required, but the plaintiffs took no point about that minor degree of lateness.

[10] Clark v Ryan (1960) 103 CLR 486 at 491 – 492 (Dixon J); DPP v Jordan [1977] AC 699 at 717 – 718 (Wilberforce L); ASIC v Rich (2005) 53 ACSR 110 at [280]; Honeysett v The Queen (2014) 253 CLR 122 at [43] – [46]; R v Butler [2010] 1 Qd R 325, [60] (Keane JA).

[11][2008] QCA 130 at [68].

[12]  cf Beaven v Wagner Industrial Services Pty Ltd [2018] 2 Qd R 542 per Fraser JA at [4].

[13]  See Allstate Life Insurance Co v ANZ Banking Group Ltd (No 5) (1996) 64 FCR 73 at 75‑76; Seltsam Pty Ltd v McNeill [2006] NSWCA 158 at [118] – [123]; La Trobe Capital & Mortgage Corporation Limited v Hay Property Consultants Pty Ltd (2011) 190 FCR 299 at [53] – [55]; Vella v The Queen [2015] NSWCCA 148 at [117] – [119].

[14]  See Hughes Aircraft Systems International v Airservices Australia (1997) 80 FCR 276 at 280; La Trobe Capital & Mortgage Corporation Limited v Hay Property Consultants Pty Ltd (2011) 190 FCR 299 at [56] – [58].

[15]Beslic v MLC Ltd (No 2) [2016] NSWSC 746 at [96].

[16] ASIC v Vines (2003) 48 ACSR 291 at [13], [20]; Lucantonio v Kleinert [2009] NSWSC 853 at [8](1); Howe v Fischer [2014] NSWCA 286 at [81].

[17] ASIC v Vines (2003) 48 ACSR 291 at [20].

[18] ASIC v Vines (2003) 48 ACSR 291 at [21]; Lucantonio v Kleinert [2009] NSWSC 853 at [8](3); MB v Protective Commissioner [2000] NSWSC 718 at [2] – [5]; Adler v ASIC (2003) 46 ACSR 504 at [617] – [620], [632].

[19] ASIC v Vines (2003) 48 ACSR 291 at [31].

[20] ASIC v Vines (2003) 48 ACSR 291 at [22] – [26]; MB v Protective Commissioner [2000] NSWSC 718 at [5] – [10]; Maronis Holdings Ltd v Nippon Credit Australia Pty Ltd (2001) 38 ACSR 404 at [380]; Weller v Phipps [2010] NSWCA 323 at [76].

[21] MB v Protective Commissioner [2000] NSWSC 718 at [9].

Close

Editorial Notes

  • Published Case Name:

    Sanrus Pty Ltd & Ors v Monto Coal 2 Pty Ltd & Ors (No 5)

  • Shortened Case Name:

    Sanrus Pty Ltd v Monto Coal 2 Pty Ltd (No 5)

  • MNC:

    [2019] QSC 210

  • Court:

    QSC

  • Judge(s):

    Bond J

  • Date:

    27 Aug 2019

  • White Star Case:

    Yes

Litigation History

Event Citation or File Date Notes
Primary Judgment [2018] QSC 308 19 Dec 2018 Plaintiffs' application for leave to rely on reports delivered outside a Court directed timetable allowed; plaintiffs' application for leave to amend their statement of claim granted; consequential alterations to Court directed timetable allowed; defendants' cross-application for an order that plaintiff not be permitted to rely on certain expert reports refused; plaintiffs' to pay defendants' costs thrown away on the indemnity basis: Bond J.
Primary Judgment [2019] QSC 144 07 Jun 2019 Plaintiffs' application for further disclosure pursuant to r 223(1)(b) of the Uniform Civil Procedure Rules 1999 (Qld) on the grounds of waiver of privilege dismissed (with ancillary directions as to document removal and redaction): Flanagan J.
Primary Judgment [2019] QSC 162 26 Jun 2019 Plaintiff's application for leave to adduce further expert evidence (and other ancillary orders) part way through the hearing of a trial refused: Bond J.
Primary Judgment [2019] QSC 185 01 Aug 2019 Defendants' application for leave to rely on two affidavits as lay evidence mid-way through trial granted subject to conditions: Bond J.
Primary Judgment [2019] QSC 199 12 Aug 2019 Plaintiffs' application for leave to rely at trial on new material in the joint expert reports and consequential leave to amend the plaintiffs' statement of claim granted; defendants granted leave to rely at trial on responsive expert reports: Bond J.
Primary Judgment [2019] QSC 210 27 Aug 2019 Provisional rulings on defendants' objections to expert evidence: Bond J.
Primary Judgment [2019] QSC 214 29 Aug 2019 Consequential directions as a result of the Court of Appeal's (majority) decision in [2019] QCA 160: the plaintiffs have leave to produce a further report from Mr Chris Hartley by 3 September 2019 with ancillary directions as to what the evidence is to be directed to: Bond J.
Notice of Appeal Filed File Number: Appeal 6710/19 27 Jun 2019 -
Appeal Determined (QCA) [2019] QCA 160 20 Aug 2019 Appeal from [2019] QSC 162 allowed; orders made on 18 June 2019 set aside; appellants permitted to adduce expert evidence in the form of the report of Mr Chris Hartley filed 10 June 2019 (save for certain paragraphs): McMurdo JA and Bradley J (Applegarth J dissenting).

Appeal Status

{solid} Appeal Determined (QCA)