Bengalla Mining Company Pty Ltd v MACH Energy Australia Pty Ltd - [2017] NSWLEC 121 - NSWLEC 2017 case summary — Zoe

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Bengalla Mining Company Pty Ltd v MACH Energy Australia Pty Ltd

[2017] NSWLEC 121

Land and Environment Court (NSW)|2017-09-15|Before: Robson J

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Source facts

Court

Land and Environment Court (NSW)

Decision date

2017-09-15

Before

Robson J

Source

Original judgment source is linked above.

Judgment (21 paragraphs)

[1]

Judgment

Before the Court is a Notice of Motion filed by the applicant, Bengalla Mining Company Pty Limited ('Bengalla'), seeking orders to partially set aside a Notice to Produce ('Notice') issued by the respondent, MACH Energy Australia Pty Ltd ('MACH') to Bengalla, and four separate Subpoenas to Produce ('Subpoeanas') issued by MACH to Wesfarmers Bengalla Limited, Taipower Bengalla Pty Limited, New Hope Bengalla Pty Ltd and Mitsui Bengalla Investment Pty Ltd (collectively 'Addressees').
Bengalla operates an open cut coal mine near Muswellbrook, in the Hunter Valley ('Bengalla Mine'). The Addressees are the current shareholders of Bengalla and are parties to a Joint Venture Deed dated 24 May 1993 with respect to the Bengalla Mine ('JV Deed'). Bengalla currently operates the Bengalla Mine pursuant to a development consent granted in March 2015 ('Bengalla Mine consent') for the extraction by open cut mining of 15 million tonnes of coal for 24 years commencing in 2015.
MACH is the holder of a development consent granted in December 1999 in relation to the Mount Pleasant Coal Project ('MPCP') which is situated on land directly north of the Bengalla Mine.
The Notice and Subpoenas relate to the substantive Class 4 proceedings commenced by Bengalla on 19 April 2017 seeking declarations that MACH has breached s 76(1) of the Environmental Planning and Assessment Act 1979 (NSW) ('EPA Act') by failing to comply with a condition of development consent granted in respect of the MPCP.
The hearing on the Notice of Motion proceeded on 12 July 2017 and again on 15 September 2017.

[2]

[4]

Notice of Motion

The Notice and Subpoenas are in similar form and each seeks four separate categories of documents from both Bengalla and the Addressees. A copy of the schedule to the Subpoenas is attached as Annexure A to this judgment. A note recording the changes to the wording of the paragraphs proffered by MACH at the hearing on 12 July 2017 is Annexure B.
In summary, the categories of documents sought are: 1. category 1: documents constituting the joint venture arrangement and recording the terms of the joint venture; 2. category 2: documents constituting, evidencing or recording communications between various classes of persons (including any current or former shareholder of Bengalla and any person acting on behalf of the joint venture) relating to condition 37 of the MPCP consent, the Deed of Undertaking (and any draft), the subject matter of the Deed of Undertaking, or any novation of the Deed of Undertaking; 3. category 3: documents constituting, evidencing or recording the appointment or engagement of any person, whether formally or informally, as an operator or manager of the Bengalla Mine; and 4. category 4: all agendas, records, papers and minutes of meetings of the Board of Bengalla or meetings of any operating committee of the joint venture that refers to the terms of the joint venture or the matters identified in category 2 (being condition 37 of the MPCP consent, the Deed of Undertaking, and the Deed of Novation).
In the circumstances it is clear that the Notice and Subpoenas are directed towards Bengalla's allegations that it was not consulted on the Deed of Undertaking or the Deed of Novation.
The Notice of Motion seeks a confidentiality undertaking in respect of the documents sought in category 1, to set aside categories 2 and 4 in full, and to set aside category 3 except to the extent that it seeks documents relating to Bengalla's appointment as operator of the Bengalla Mine.
In support of the Motion, Bengalla relies on two affidavits of Alan Joseph McKelvey, solicitor for Bengalla, sworn 4 and 11 July 2017 respectively, which attest that the JV Deed appoints Bengalla as the 'operator' of the Bengalla Mine, and exhibits a (confidential) copy of the JV Deed. Mr McKelvey gives evidence as to the time and effort required in producing the documents sought, and the source of his instructions from Bengalla and each of the Addressees.
In support of the Notice and Subpoenas, MACH relies on an affidavit of Julia Green, solicitor for MACH, affirmed 10 July 2017, which annexes the Further Amended Points of Claim filed 30 June 2017, the Points of Defence filed 5 July 2017, a letter to Bengalla's solicitors dated 10 July 2017 seeking an admission that the negotiations regarding the MCA began in 2006, and a media release from New Hope Group dated 30 September 2015 in relation to its acquisition of a 40% interest in the Bengalla Mine.

[12]

Category 2

MACH submits that the forensic purpose of seeking the documents in this category is to test Bengalla's contention that it was not consulted by obtaining communications relating to condition 37, the Deed of Undertaking and the Deed of Novation. Accordingly, MACH submits that the documents have a forensic purpose as they have an "apparent relevance" and "have a bearing on an issue which is not unreal, fanciful or speculative"; Wong v Sklavos [2014] FCAFC 120; (2014) 319 ALR 378 at [12], and the communications themselves may be evidence of consultation for the purpose of condition 37 of the MPCP consent.
Further, one of the contentions raised by MACH in the substantive proceedings is that any breach of condition 37 of the MPCP consent is of such limited practical significance so as to warrant a denial of relief for discretionary reasons. Accordingly, MACH submits that the documents in this category are relevant to demonstrate that Bengalla did not view any non-compliance with condition 37 to be material.
In relation to Bengalla's submission regarding the time period of the documents sought, MACH submits that it is necessary to seek documents dating from 1 January 2006 as MACH understands that negotiations for the MCA commenced in or about 2006. Subsequent to the filing of the Notice of Motion however, MACH adjusted the date to 1 January 2008.
MACH submits that Bengalla has not made out that the category is oppressive in the sense described by Talbot J in Commonwealth of Australia v Randwick City Council [2000] NSWLEC 171; (2000) 109 LGERA 297 ('Randwick City Council') at [24]-[31] - noting that a subpoena may be oppressive "if great numbers of documents are called for and it appears that they are not sufficiently relevant" (emphasis added). MACH further noted Talbot J's comments at [30] that the size of an organisation is of significance in determining whether a subpoena is oppressive, with organisations that are highly organised and well-staffed being less likely to be considered burdened by the subpoena.
MACH also submits that Bengalla has not put on evidence from any person who can be meaningfully cross-examined in relation to the asserted oppressiveness, nor has it given evidence of the enquiries made to identify the likely quantum of documents that will need to be reviewed, or the time involved. In any event, MACH submits that the documents sought are sufficiently related to a forensic purpose, and are sought from commercial parties engaged in a large scale mining project who would be "highly organised and well-staffed".

[16]

Category 2 - Communications regarding condition 37 and deeds

In dealing with category 2 (and below category 4), I am conscious that although MACH is presently carrying out the development in relation to the MPCP, the MPCP consent was originally obtained by Coal & Allied, and MACH obtained the benefit of the consent only after acquiring the assets of the MPCP from Coal & Allied on 4 August 2016. It is clear therefore that any alleged consultation for the purpose of condition 37 of the MPCP consent would have occurred prior to MACH's involvement and would have been conducted with or by persons other than MACH.
In my view, the documents sought in category 2 go to a primary issue in the proceedings - being to test Bengalla's contention that there was no relevant consultation - and there is accordingly a legitimate forensic purpose in seeking the documentation. Given the centrality of this issue to the proceedings, I find that there is a reasonable basis, beyond speculation, that the documents sought will likely materially assist on this identified issue.
MACH also submits and I accept with some caution, that a further forensic purpose is to obtain communications evidencing that Bengalla does not view any non-compliance with condition 37 to be material and the objective facts underlying that view.
Despite Bengalla's concerns, I am satisfied that the time period for the documents sought (now adjusted to 1 January 2008) is appropriate given the factual evidence surrounding the date of entry into the Deed of Undertaking.
I do have a concern in relation to the breadth of the material that is sought, however I accept as noted in Randwick City Council per Talbot J at [26] (referring to the comments of Street CJ in The Commissioner for Railways v Small (1938) 38 SR 564 at 573) that whilst "great numbers of documents" may be a relevant matter, particularly if they are "not sufficiently relevant", the nature of the recipient of the subpoena is a matter to be taken into account. Given the sophistication of the parties in the present matter, I adopt also Talbot J's further comments, adopting the words of Smithers J in Lucas Industries Ltd v Hewitt (1978) ALR 555 at 570, that "[l]arge business entities may be thought to be highly organized and well staffed. What may be burdensome to lesser entities may be of small significance to a large one."
I note that the documents are sought from commercial parties engaged in a large mining project, and in any case, I accept MACH's submission that the evidence relied upon by Bengalla as evidence of oppression is not sufficiently compelling so as to support the contention.
While I have a concern that dealings with and communications between the Addressees may be at the periphery of relevance to the identified issues, I accept MACH's position that the type of document sought in category 2 may well constitute 'consultation', and that these communications could have occurred through Bengalla (as a distinct entity) or through the Addressees (as joint venture partners). As noted above at [2], the Addressees are the current shareholders of Bengalla and are parties to the JV Deed. To the extent the Addressees have any documents responsive to the category of documents sought, I consider these should be produced and, on the present evidence, I do not consider the search for such documents to be oppressive.
In the circumstances, I do not make the orders sought in 1(b) and 2(b) of the Notice of Motion.

Bengalla Mining Company Pty Ltd v MACH Energy Australia Pty Ltd

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