Cargill Australia Ltd v Viterra Malt Pty Ltd [2020] VSC 172 | Case summary

Supreme Court of Victoria|2020-04-16|Before: ELLIOTT J

PRACTICE AND PROCEDURE - Trial - Application to re-open case - Judgment reserved -Test - Whether exceptional circumstances - Interests of justice - Finality of litigation - Delay - Effect of re-opening of case - Supreme Court (General Civil Procedure) Rules 2015 (Vic), rr 13.10, 40.05, 49.01 - Civil Procedure Act 2010 (Vic), ss 7, 8, 9, 47, 49, - (Vic), and (2) - Application refused.

For the Plaintiff and the 1st and 2nd third parties

1 The defendants ("the Viterra Parties") apply for leave to file a summons.[1] The draft summons proposes orders be made allowing the Viterra Parties to re-open their case, to tender certain documents and to rely upon an expert report dated 12 March 2020.

2 For the reasons that follow, the application for leave to file the summons is refused.

3 A comprehensive summary of the relevant facts has been set out elsewhere, but for the purposes of this application, a short summary of the key facts is set out below.[2]

4 The plaintiff, Cargill Australia Ltd ("Cargill Australia"), made various claims arising out of its acquisition of the second third party, Joe White Maltings Pty Ltd ("Joe White"),[3] from the Viterra Parties.[4] Cargill Australia agreed to purchase Joe White for A$420 million ("the Acquisition Agreement"). The purchase was completed on 31 October 2013 ("the Acquisition").

5 Cargill, Incorporated ("Cargill, Inc"), Cargill Australia's parent company (together "Cargill"), operated, at least at the time of the Acquisition,[5] the third largest malting business in the world but had no real presence in Asia. Joe White, founded in Australia, was the largest maltster in the Asia-Pacific region and the ninth largest commercial maltster globally. Therefore purchasing Joe White and related assets ("the Joe White Business") presented a prime opportunity for Cargill to strategically expand its malting business and become a global leader in the malting industry.

6 Very broadly, in this proceeding Cargill alleged that, but for a series of misleading representations made by the Viterra Parties, Cargill would not have entered the Acquisition Agreement and agreed to acquire the Joe White Business, or (having entered into the Acquisition Agreement) would not have proceeded with the Acquisition.

7 Amongst other things, Cargill claimed that the Viterra Parties failed to disclose certain alleged practices engaged in by Joe White in the course of producing and selling malt, namely, that Joe White routinely and without informing its customers:

(1) Supplied certificates of analysis to customers that misstated the results of analytical testing on the malt supplied, so that the certificates reported that the malt complied with its customers' contractual requirements and specifications when it did not ("the Certificate of Analysis Practice").[6]

(2) Supplied malt to some customers that was produced using barley varieties other than those specified by the customer.

(3) Used gibberellic acid in the malt production process contrary to the terms of some customer contracts.

8 An integral part of the Certificate of Analysis Practice was conduct known as "pencilling". Pencilling refers to changing ostensibly non-conforming raw analysis results obtained from malt testing procedures. The conduct involves reporting the pencilled results on a certificate of analysis rather than the initial results, in circumstances where the results actually produced from the testing deviate from customer specifications. It was a longstanding practice at Joe White to pencil test results that deviated by up to 2 standard deviations from customer specifications. The pencilled results would be recorded as compliant on sign-out reports, and then those pencilled results from the sign-out reports would be reported in certificates of analysis without referring to the adjustments made.[7]

9 It was further alleged that the Viterra Practices, including the practice of pencilling, were partly recorded and endorsed by formal written policies ("the Viterra Policies").

10 Approximately 2 weeks before completion of the Acquisition Agreement was scheduled to occur, Cargill was told about some details of the Viterra Practices by a number of Joe White's executives. This gave rise to correspondence between Cargill and the Viterra Parties. Cargill also alleged the Viterra Parties' responses to Cargill's correspondence were misleading.

11 In summary, Cargill claimed that had it been properly informed of the Viterra Practices or the Viterra Policies it would not have entered into the Acquisition Agreement, or, having done so, it would not have completed the Acquisition.

13 The Viterra Parties deny they have caused any loss. In the alternative, in the event Cargill Australia is successful in establishing it has suffered any loss as claimed, they make third party claims against Cargill, Inc and Joe White (together with Cargill Australia, "the Cargill Parties"), as well as 5 individuals who are former executives of Joe White.

14 Cargill Australia commenced this proceeding on 1 October 2014. The interlocutory steps have been extensive, protracted and ongoing. To date, the court has made many hundreds of interlocutory orders.[8]

15 On 5 October 2017, Cargill Australia was ordered to file and serve any expert reports by 5 February 2018. At the same time, the Viterra Parties were ordered to file and serve any expert reports upon which they intended to rely by 5 March 2018.[9]

16 An expert report on certain issues relating to liability was filed by Cargill Australia on 17 April 2018. The Viterra Parties filed an expert report on similar issues on 30 March 2018.[10] On 7 June 2018, the experts filed a joint expert report. No further expert evidence from any other expert on questions of liability was foreshadowed.[11]

17 The trial of this proceeding commenced on 18 June 2018. The joint estimate of the duration of the trial was 14 weeks. During the trial, the parties were frequently reminded of the importance of keeping to a reasonable timetable and the considerable impact this case has had on the court's resources, including the disruption caused to the listing of other cases in the commercial court.

18 On 18 March 2019, the respective liability experts were called and, after extensive argument with respect to admissibility,[12] their reports were tendered. They were both the subject of cross-examination. Their evidence was largely concerned with industry practices and what was said to be common knowledge in the malting industry.

19 On 3 May 2019, the 85th day of trial, the Viterra Parties filed and served an affidavit annexing a further expert report on liability. On 20 May 2019, they sought leave to rely on that report. That leave was granted on 21 May 2019.[13] As a concomitant to relying on the further expert report, leave was also sought, and granted in part, to amend the Viterra Parties' defence.[14] However, the leave on that occasion was sought by the Viterra Parties, initially at least, on the basis that it was responsive to amendments Cargill Australia sought to make with respect to its claims in this proceeding.[15] The Cargill Parties decided not to put in any further expert evidence in response.

20 The further expert, Professor David Brynne Hibbert ("Hibbert"),[16] was called on 14 June 2019. His report ("the Hibbert Report") was tendered and he was cross-examined. Amongst other things, his evidence concerned the meaning of, and requirements pertaining to, "a decision rule", as well as concepts regarding testing uncertainty and expanded measurement uncertainty.[17]

21 Ultimately, the trial proceeded for a period of 111 days. It concluded initially on 21 August 2019.[18]

22 On 4 November 2019, the Viterra Parties again sought leave, this time to file a draft summons for the purposes of obtaining leave to re-open their case, to file an amended defence and to adduce further evidence. The application centred on the proper construction of a clause of the Acquisition Agreement not previously the subject of submissions. The timing of that application arose in light of the then recent completion of the sale of all of Cargill's malting businesses globally, including the Joe White Business. It was heard on 22 November 2019. The parties were informed that the outcome of that application would form part of the reserved judgment of the trial of this proceeding,[19] which is yet to be delivered.[20]

23 On 13 March 2020, the Viterra Parties filed their draft summons, affidavits in support and a draft outline of submissions, with a stated intention of re-opening their case to tender documents. Specifically, the Viterra Parties now seek to rely on 1 European Union report[21] and 6 European Union regulations[22] ("the European Union Materials").

24 The Viterra Parties also engaged a solicitor, Dr Andreas Wehlau ("Wehlau"),[23] to provide an independent expert opinion. By a letter of instruction, Wehlau was asked to prepare an expert report addressing: first, the authenticity of the European Union report; and secondly, its relationship to the 6 European Union regulations.[24] In that letter, Wehlau was asked to produce a draft report by 6 March 2020, the same day the letter was dated.[25] The final report was produced on 12 March 2020.

25 Wehlau comprehensively reviewed the European Union Materials to produce a concise 10 page report.[26] Wehlau concluded that the European Union report must be considered to be soft law.[27] Wehlau's report continued:

Since the [European Union report] is to be qualified as a Commission recommendation, it has legal effect according to the case law of the European Court of Justice and national authorities and national courts are bound to interpret and apply the European Regulations on the methods of sampling and analysis for contaminants in food in the light of the opinions expressed by the Commission. Due to the express reference to the Commission recommendation in the various Commission Regulations, it is highly likely that courts and authorities at Member State level will follow the recommendation given in the [European Union report].

Wehlau further concluded that the report is well known as the European Commission's view on measurement uncertainty, and is accepted as relevant by the scientific literature used by those working for food supervision authorities. On this basis, Wehlau surmised that he "would therefore expect" that practitioners with experience in the export of food or feed to the European Union, who deal with food sampling and analytical results, including "practitioners abroad", would be aware of the adjustment recommendation in the European Union report.

26 In the European Union report itself, an explanation of the basis for "a decision rule" is introduced as follows:[28]

All analytical results actually take the form of "a ± 2u" or "a ± U" where "a" is the best estimate of the true value of the concentration measured (the analytical result) and "u" is the standard uncertainty and "U" (equal to 2u) is the expanded uncertainty. "4u" is the range within which the true value is estimated, with a high probability, to fall. The value of "U" or "2u" is the value which is normally used and reported by analysts and is hereafter referred to as "measurement uncertainty" ...

(Original emphasis.)

27 The European Union report stipulates that laboratories performing analyses "for the official control of foodstuffs" are required to be formally accredited, participate in proficiency testing schemes, and use internal quality control procedures and appropriately validated methods of analysis.[29]

28 Further, concern is expressed that some laboratories both underestimate the size of their uncertainties and report unrealistically small uncertainties to their customers. After setting out a table of expanded uncertainty with respect to different concentrations in chemical analyses, the European Union report states that values falling within the ranges identified may be regarded as being of the same analytical population.[30]

29 The European Union report expresses the need for the interpretation of analytical results to be consistent for there to be equivalence across the European Union.[31] Also, under the heading "Action", it is recommended that "measurement uncertainty" be used when assessing compliance with a specification.[32] The Viterra Parties submitted that this recommendation was a decision rule.

30 The European Union report contains recommended procedures for the estimation of measurement uncertainty,[33] including the International Standards Organisation guide to the expression of measurement uncertainty[34] and the Eurachem guide to quantifying uncertainty in analytical measurement.[35] Both these documents are already in evidence, and were the subject of expert evidence. They specifically address error, uncertainty in measurement, decision rules, expanded uncertainty, acceptance zones, rejection zones and compliance. (Some of these topics were also the subject of lay evidence.) In the European Union report,[36] the Eurachem guide is summarised. With respect to calculating expanded uncertainty, it records that this is achieved by multiplying the combined standard uncertainty by a coverage factor. It states that for "most purposes" a coverage factor of 2 is chosen.[37] The Viterra Parties submitted the selection of such a coverage factor was another way of describing the quantification measurement uncertainty as 2 standard deviations. What the Viterra Parties submissions did not address was the statement in the summary that a coverage factor of 2 "gives a level of confidence of approximately 95%".[38]

C.2 Overview of the contended significance of the further evidence

31 The Viterra Parties sought to rely on the European Union Materials to challenge a number of aspects of Cargill's allegations concerning malt supplied by Joe White before 1 November 2013; and thereby also to rebut Cargill's criticism of the Certificate of Analysis Practice.

32 The Viterra Parties submitted that the European Union Materials are important because they "set out a decision rule to assess compliance with a food and feed specification by correcting the raw result for the 'expanded measurement uncertainty'" (emphasis in original). That is, a ± 2u,[39] with "a" being the raw result and "2u" being the expanded uncertainty. In the case of Joe White, the Viterra Parties submitted this approach had been adopted by the 2 standard deviations of each particular parameter of the customers' specifications being ascertained from a particular source.[40]

33 In his supporting affidavit, Matthew Weber ("Weber"), group counsel at Glencore, who is based in Switzerland, pinpointed the use of this decision rule in the 6 European Union regulations sought to be tendered. Each regulation was in force in 2013 leading up to the Acquisition Agreement being executed. It was submitted that regulation 882/2004 laid down the general rules and required that measurement uncertainty be taken into account in methods of analysis directed at official control for the verification of compliance and European food and feed law. It was further submitted that the balance of the European Union regulations expressly required adjustments to recorded measurement results for the purpose of decision-making in respect of compliance assessment for applicable specification limits.

34 Accordingly, the Viterra Parties' submitted that the European Union report and these regulations endorsed the Certificate of Analysis Practice of adjusting raw analytical results by reason that a recorded result was considered compliant with a specification if it was within 2 standard deviations. On this basis, relying on the European Union Materials, the Viterra Parties submitted, amongst other things, that Joe White's practice of pencilling was not improper. Rather, it was contended that Joe White's adjustments were compliant with the decision rule set out in the European Union report.

35 They further submitted that this approach to compliance is the accepted approach in the European Union and, by virtue of Cargill's presence in Europe, Cargill was in fact aware (through certain employees) of this decision rule. The Viterra Parties therefore submitted that this knowledge undermined Cargill's underlying contention that, had it known of the Certificate of Analysis Practice, or more generally of the Viterra Practices or the Viterra Policies, it would not have proceeded with the Acquisition.

36 In addition, the Viterra Parties contended that the further evidence sought to be led goes to another key issue in the case. In essence, the Viterra Parties seek to rely on the further evidence to argue that, prior to the Acquisition, if the results of testing by Joe White of the malt parameters came within 2 standard deviations of the required specifications, then there was no failure to comply with the contractual requirements and specifications.[41] This was contended to be the position because a raw analytical measurement result is always subject to uncertainty and is only ever an estimate of the true value. Thus, this fact gives rise to the need for calculations of, or adjustments for, measurement uncertainty. The Viterra Parties contended that the European Union Materials provide a widely used decision rule by reference to the expanded uncertainty being quantified and expressed as 2 standard deviations. It was submitted that, in substance, this was the primary decision rule properly operated by Joe White until 1 November 2013.

37 Accordingly, the Viterra Parties want to now positively contend, for the first time, that statements made before the execution of the Acquisition Agreement to the effect that Joe White met the "exact specifications" of its customers were accurate representations.[42] Up until now, the Viterra Parties have simply not admitted that such representations were misleading.

38 Coupled with this contention, the Viterra Parties emphasised the relevant allegations were concerned with compliance, and not with the manner in which test results were reported. The Viterra Parties submitted it was illogical to suggest that malt did not comply with customer specifications "simply because Joe White in some way failed to report the measurement uncertainty associated with the adjusted parameter".

39 Relevantly, the European Union regulations require the analytical results to be reported so as to show the raw result and the expanded measurement uncertainty, not simply the corrected or adjusted result.[43]

40 Despite the lateness of this application, from April 2019 the Viterra Parties and their former solicitors, King & Wood Mallesons ("Mallesons"), were aware that the European Union report existed. The report was first identified by Weber in the first half of April 2019. It was discussed with Mallesons. On 26 April 2019, it was provided by Mallesons to Hibbert. Absent a "published decision rule",[44] Hibbert was reticent to draw upon the European Union report. Further, Weber was informed that, despite searching, Mallesons had not been able to identify a published decision rule beyond what was contained in the European Union report.

41 The European Union report was not mentioned by Hibbert in his expert report, nor in his oral evidence. Notwithstanding this and the late stage at which the trial had then reached, Weber instructed Mallesons to continue searching for a published decision rule. None was located.[45]

42 Following the Cargill Parties' closing submissions in August 2019, Weber has deposed that he formed the view that there was a material change in the case. This was put on the basis that Weber understood the Cargill Parties' position on the proper testing of malt had become that "'legitimate' changes to measured test results could be made in 'certain circumstances' provided that a 'certain process' was followed". After reviewing the transcript of the closing submissions, Weber fortified his view that this change had occurred, particularly regarding Cargill's case concerning Cargill's:

(1) Actions when it decided to cease Joe White's Certificate of Analysis Practice.

(2) Pleaded case that it would not have proceeded with the Acquisition had it known about the Viterra Practices.

(3) Allegations that the Certificate of Analysis Practice and the Viterra Policies were "per se illegitimate".

(4) Purported lack of knowledge of measurement adjustment practices that may be legitimate.

This view prompted Weber to undertake his own research into the European Union report.

43 Weber began a more thorough consideration of the contents of the European Union report to identify regulations and directives referred to. He also had discussions with various colleagues. In addition, he searched the European Commission website, where, on 31 October 2019, Weber identified 1 of the 6 European Union regulations sought to be tendered. Soon after, Weber identified all but 1 of the remaining regulations.[46]

44 On 9 November 2019, Weber provided copies of the European Union regulations he had then found to Mallesons. He instructed Mallesons he wanted the additional documents tendered. Mallesons informed Weber that the European Union report had not been tendered at trial.[47] Weber then decided it was necessary to engage the Viterra Parties' current solicitors.

45 Weber has sworn that had he known of the European Union regulations and had he "not been mistaken as to, or failed to realise the significance of, the European Union report" in May 2019 when the defence was being amended, he would have taken steps to include the European Union Materials at an earlier stage of this proceeding as the "cornerstone of the defence ... concerning the alleged 'Viterra Practices' relating to Joe White's certificate of analysis policy and procedures".

46 The court has the power to grant an application for leave to re-open in order to adduce further evidence, both in its inherent jurisdiction and from various other sources.[48]

47 In determining this application, "[t]he overriding principle is that the court consider whether, taken as a whole, the justice of the case favours the grant of leave to re-open".[49] There are 4 classes of cases in which the court may grant leave to re-open, being:[50]

(1) Fresh evidence, unavailable or not reasonably discoverable before, becomes known and available.

(3) There has been a mistaken apprehension of the facts.

(4) There has been a mistaken apprehension of the law.

49 A range of factors may be relevant to the exercise of the court's discretion.[52] These include:

(2) Whether the occasion for calling the further evidence ought to reasonably have been foreseen.

(3) The consideration of fairness that the opposing party is entitled to know all of the evidence it has to meet in taking forensic decisions as to cross-examination and the nature and extent of the evidence it will adduce on the matters in question.

(4) The extent to which the party seeking leave has embarked upon calling evidence on the issue in question in its case in chief.

(5) The importance of the issue on which the further evidence is sought to be adduced to the pleaded issues in the case.

(6) The degree of relevance and probative value of the further evidence sought to be adduced and its potential to involve an undue waste of time.

(7) The prejudice to the opposing party in terms of delay in the completion of the proceeding and the consequential costs.

(8) The public interest in the timely conclusion of litigation.

(9) What explanation is offered by the party seeking leave for not having called the evidence in chief.

50 On the importance of the evidence to be called if leave were granted, the court will be less likely to grant leave if the evidence could not possibly affect the outcome of the trial or is peripheral to the main issue.[53] Further, if inadvertent error is identified as the reason for the application, the nature and reasons for the error must be considered in determining whether it is in the interests of justice to give leave.[54]

51 If an application to re-open is made after the trial has concluded and judgment is reserved, then the circumstances must be exceptional for leave to be granted.[55] In addition to the requirement for discipline in the presentation of a case and the need for finality of litigation, the rationale for this approach is that the court should not be "bedevilled" with arguments about the scope of any re-opening, or whether a party is using the step to "polish" or "enlarge" its case.[56]

52 In considering how to exercise its discretion, the court must seek to give effect to the overarching purpose of the Civil Procedure Act 2010 (Vic) to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.[57] In so doing, the court must have regard to certain objects, including: the just and the timely determination of the proceeding; the efficient conduct of the business of the court; and the efficient use of judicial and administrative resources.[58]

53 Additional considerations may apply when leave is sought to belatedly introduce expert evidence. In recently refusing an application for leave to file expert evidence, McDonald J, in Fonterra Brands (Australia) Pty Ltd v Bega Cheese Ltd (No 5),[59] noted that the party seeking leave had failed to notify the court of its intention to adduce expert evidence at the trial, and accordingly had not complied with the requirement of s 65G of the Civil Procedure Act.[60]

54 Further, McDonald J referred to the objects of the court's power in relation to expert witnesses, including to enhance the court's case management powers and restrict expert evidence to that which is reasonably required to resolve a civil proceeding.[61]

55 Furthermore, the applicability of the principles underlying the overarching purpose identified in the Civil Procedure Act means that any resolution of this application is not determined simply by reference to an absence of prejudice or by the Viterra Parties agreeing to pay any costs thrown away. The reasoning of the High Court, in Aon Risk Services Australia Ltd v Australian National University,[62] to the effect that there is no entitlement to run an arguable point simply by paying the costs thrown away by reason of any late amendment, applies equally to the late service of an expert report.[63]

56 Lastly, it is relevant to consider the resources available to the party seeking to re-open.[64] It may also be relevant to consider the resources of the opposing party.

E. The Viterra Parties' submissions as to why leave should be granted

E.1 The consequential effect on the conduct of the trial if leave were granted

57 The Viterra Parties submitted that, if leave were granted to lead the further evidence there would be minimal disruption and delay. Further, they submitted it would not be necessary for any lay witnesses to be called or recalled.[65] Furthermore, it was contended that only a short oral hearing would be required so that Wehlau's report could be tendered, together with the European Union Materials. Moreover, they submitted that the Cargill Parties would suffer no prejudice if leave were granted.

58 On the topic of the practical consequences that would be likely to follow any granting of leave, it must be observed that the trial proceeded strictly on the basis that the issues for determination were confined to those that arose on the pleadings. In opposing this application, Cargill highlighted the fact that no application to amend the Viterra Parties' defence had been made or foreshadowed. They contended the further evidence was outside the existing pleaded defence and accordingly was not material to the outcome of the issues in dispute.

59 In reply submissions on this point, the Viterra Parties shied away from any suggestion that an amendment would be necessary. The Viterra Parties submitted that the defence pleaded to the allegations as set out in paragraphs 7 and 9 above encapsulated the further evidence sought to be led. Particular reference was made to paragraph 30(e) of the defence, which the Viterra Parties submitted "squarely enough raises these issues in a particular way rather than simply putting in issue" Cargill Australia's allegations concerning the existence and implementation of the relevant parts of the Viterra Practices and the Viterra Policies.

60 In order to come to the nub of this issue, it is necessary to refer to the relevant part of the Viterra Parties' defence and how it evolved.

61 For a significant period of time, including for a substantial part of the trial, in substance the Viterra Parties simply did not admit Cargill Australia's allegations, as referred to in paragraphs 7 and 9 above. In short, they made no admissions with respect to the existence of the Viterra Practices and the Viterra Policies. 66

62 Belatedly, in December 2018, the Viterra Parties admitted the existence of the Viterra Policies in the form of 2 documents, namely the "Malt Blend Parameters Procedure" and the "Viterra Malt Certificate of Analysis Generation Procedure". Further, the Viterra Parties consequently admitted that the business of Joe White was generally conducted in accordance with the procedures set out in these 2 documents,[67] but otherwise did not admit the allegations with respect to the Viterra Practices. In other words, when this amendment was introduced, there was no positive allegation in the defence that malt supplied by Joe White up to 31 October 2013 complied with the contractual requirements and specifications of Joe White's customers.[68]

63 Pursuant to leave granted, in May 2019, paragraph 30(e) was added. It reads as follows:

As to paragraph 19, they say further that:

(i) any laboratory test measurement of the properties of material such as malt is necessarily subject to error and uncertainty;

(ii) the main causes of such error and uncertainty are:

(A) inherent limitations on the precision of the testing equipment and testing procedures;

(B) random effects, including natural variability of the material;

(C) sampling effects; and

(D) systematic/recovery bias errors;

(iii) as a result, any laboratory test measurement is only an estimate/approximation of the true value of the measurand (ie the physical/chemical property being measured) and merely implies a range of values which can be reasonably attributed to the measurand, such that the true value of the measurand cannot be determined;

(iv) accordingly, the supplier/producer must seek to ensure that any laboratory test measurement best takes into account all of the known effects of error and uncertainty including by the application of the subjective experience or expertise of the laboratory professionals conducting the measurements;

(v) recognising the matters sets out in (iii) and (iv) above, a supplier/producer's process for determining whether or not a product complied with contractual specifications such that it can be released to its customer, can include a set of decision-making rules or polices (a Decision Rule);

(vi) uncertainty in laboratory test measurement can be addressed by the application of subjective experience/expertise of a suitably qualified person;

(vii) a Decision Rule can take into account:

(A) inherent limitations on the precision of the testing equipment and testing procedures; and/or

(B) random effects including natural variability of the material,

by reference to industry accepted objective quantification of the magnitude of such uncertainty;

(viii) one such objective quantification accepted within the commercial malting industry and brewing industry is that derived from continuing (corroborative) programs such as the ASBC Laboratory Proficiency Program (LPP)[69] and the Maltsters of Great Britain Malt Analytes Proficiency Testing Scheme (MAPS) to incorporate a tolerance of two standard deviations to the measurement of measurands in respect of malt;

(ix) the Viterra Malt Certificate of Analysis Generation Procedure referred to at subparagraphs (bb) and (bc) above[70] is an example of a Decision Rule ([Joe White] Decision Rule).

Particulars

The defendants refer to:

(a) The expert report of Professor D Brynn Hibbert dated 3 May 2019;

(b) Eurachem/CITAC Guide entitled "Use of uncertainty information in compliance assessment" (2007);

(c) JCGM 100:2008 entitled "Evaluation of measurement data - Guide to the expression of uncertainty in measurement", and referred to in the expert report of Professor Hibbert as the "GUM";

(d) JCGM 106:2012 entitled "Evaluation of measurement data - The role of uncertainty in conformity assessment"; and

(e) JCGM 200 entitled "International vocabulary of metrology - Basic and general concepts and associated terms".

64 Self-evidently, paragraph 30(e) makes no reference to the European Union Materials, either expressly or implicitly. Notwithstanding this fact, the Viterra Parties position is that the further evidence is covered by the existing pleading.

E.2 Elaboration of alleged materiality of further evidence

65 On the basis of the matters set out in the overview above,[71] the Viterra Parties proffered a number of propositions, in various parts of their written submissions, in support of the contention that the further evidence is material to the issues in the case. They were as follows:

(1) [If] [Cargill Australia] had any genuine concerns about the adequacy of Joe White's disclosure of its adjustments to raw analytical results, it was open to it to have continued with Joe White's policies and procedures [after completion of the Acquisition Agreement] albeit with whatever greater reporting disclosure [Cargill Australia] deemed appropriate.

(2) If [Cargill Australia] was actually concerned about making adjustments beyond the 2 standard deviations error (sic) margin,[72] it was open to it to have discontinued just that aspect of Joe White's policies and procedures.

(3) [T]he court should infer that Hermus[73] was aware, and that Cargill was aware through Hermus (and/or other employees),[74] that the accepted approach within the European Union was to make compliance decisions by taking measurement uncertainty into account and not simply reporting the "raw" recorded result with no allowance for measurement uncertainty.[75]

(4) The court should also not conclude that the Information Memorandum or Management Presentation contained any statements that were inaccurate as a result of the practice of making adjustments to raw measurement results.

(5) The court should therefore infer that Cargill and Cargill Australia understood that malthouses such as Joe White had to account for measurement uncertainty in decisions about whether to ship malt, and knew it was important to understand how compliance with specifications were assessed within Joe White.[76]

(6) The court should conclude that Cargill Australia failed to call any representative from Heineken because he or she would have given evidence that European Union food and feed controls operated on the basis of adjusting recorded results by the expanded uncertainty, and relying on the adjusted measurement result for purposes of assessing and determining whether a food or feed product complies with an applicable specification limit.

(7) Such evidence [as referred to in subparagraph (6) above] would also have in effect shown that there was no basis to argue that Joe White's policies and procedures caused Cargill Australia any loss because it could legitimately have chosen to continue with those policies and procedures after it took control of Joe White.

(8) [R]aw analytical results that are within [2] standard deviations of the customer's specifications cannot on any scientifically valid basis be established as being non-compliant.

66 When reading the Viterra Parties' written submissions before the hearing of this application, I had no recollection of any of the above propositions being put at trial. Accordingly, at the hearing, the Viterra Parties were asked whether any of these propositions had been put to any witness. They were unable to identify any. In order to respond more fully to this inquiry, the Viterra Parties were given leave to file supplementary submissions.

67 By those submissions, the Viterra Parties acknowledged that none of the propositions set out in paragraph 65 above had been put in those precise terms. However, with the exception of the proposition in paragraph 65(6) above, the Viterra Parties gave transcript references in support of the contention that either the "general topic" had been explored, a proposition substantially to the same effect arose "by inference", or the topic of whether results within 2 standard deviations could be regarded as compliant or non-compliant had been explored. 77 In addition, some references were provided without any express explanation.

68 It is difficult to know what to make of these responses. Leave was granted to provide the transcript references to identify where the relevant propositions had been put. The Viterra Parties' responsive submissions arguably go well beyond the leave granted. Further, given the combative manner in which this litigation has been conducted by the key parties, it can be said with certainty that there will be disagreement about whether, or the extent to which, such matters have been squarely and fairly raised during the trial with the relevant Cargill witnesses.

69 In any event, having read through the evidence for each of the transcript references provided with respect to the considerable number of witnesses referred to,[78] together with the other references,[79] it is plain the substance of none of these recently articulated propositions has been squarely put to any witness.[80] Further, to conduct a fair trial, it would be necessary for the relevant witnesses (or at least some of them) to be given the opportunity to respond to these further propositions. Furthermore, any list of witnesses provided by the Viterra Parties cannot be considered conclusive. In submitting that the European Union Materials and their potential relevance had not been put to any witness, Cargill identified (non-exhaustively) 4 European-based witnesses as relevant, only 1 of whom had been referred to by the Viterra Parties.[81]

70 As to the propositions in paragraph 65(3) above, they were not addressed by the Viterra Parties in the supplementary submissions. Perhaps this is explained by the oral submissions that were made on the hearing of the application. In relation to this, it is material that, contrary to the Viterra Parties' written submissions, it was acknowledged that further lay evidence may be a necessary consequence of any granting of leave.82

71 With respect to paragraph 65(6) above, the Viterra Parties acknowledged that no such proposition has been put to any witness, and no transcript references were provided to suggest the topic may have been raised in any manner. Notably, the Viterra Parties extensively cross-examined a number of Cargill witnesses regarding Heineken's position concerning the testing of malt. Such questioning involved the applicable processes, including auditing procedures, and requirements regarding the parameters of any malt delivered.

72 In summary, with respect to the matters raised in the overview above, coupled with the particular propositions identified in paragraph 65 above, the Viterra Parties maintained their significance to the outcome of this proceeding. They submitted it was appropriate for leave to be granted so these further matters may be properly ventilated.

F.1 No satisfactory explanation for the delay in making the application

73 Despite the necessity to go into considerable detail to properly address the matters raised on this application, its disposition is relatively straightforward. Given the very significant delay, particularly after judgment has been reserved for a considerable period of time, an integral aspect of this application to re-open must be an acceptable explanation for its timing. In this regard, the Viterra Parties have failed to provide a satisfactory explanation.

74 Weber first identified the European Union report in April 2019.[83] The significance of the contents of the report, at least to Weber's mind, was sufficiently apparent to Weber that he chose to raise it then with the Viterra Parties' solicitors here in Australia.[84] The affidavit in support is silent as to whether or not the Viterra Parties obtained legal advice from Mallesons with respect to the European Union report. Presumably they did. However, whether or not that is the case, obviously it was open to the Viterra Parties to get professional advice, legal or otherwise, upon Weber discovering the existence of the report.

75 In any event, the European Union report was provided to the expert then retained by the Viterra Parties. Hibbert considered the report and decided that it was not necessary to refer to it for the purpose of demonstrating and explaining the concepts and other matters the subject of the Hibbert Report. Although Hibbert, like the Viterra Parties, did not have the benefit of the relevant European regulations, he did have a decision rule as outlined in the European Union report at his disposal.[85] Hibbert made a conscious decision not to refer to it. The Viterra Parties chose not to get a second opinion with respect to this approach.

76 To put the matter in further context, in April 2019, the Viterra Parties were actively reviewing their defence on the very topic of uncertainty and error in the testing of malt, and the appropriate forms of analyses and reporting. Further, the trial had been on foot for 10 months. In May 2019, the Cargill Parties were already, not unreasonably, expressing disquiet about the timing of the earlier leave application.[86] It is instructive to repeat what was said almost a year ago about the delay that already existed and some other relevant factors taken into account at that time:[87]

However, it must be stated that the Cargill Parties were justified in their criticism of the timing of this application. It is extremely late. Further, the Hibbert Report could have been prepared long before the trial commenced as it does not arise out of matters that have been disclosed for the first time during the course of the trial. That said, the obvious oversight by the legal representatives of the Viterra Parties (which was candidly acknowledged by them) must be seen in the context of a very large case with multifarious issues. In a difficult case such as this, and in the circumstances presently before the court, some latitude ought to be given for delay which is the product of mere oversight, rather than a deliberate tactical decision to delay raising an issue until late in the trial.[88] A similar attitude was taken recently by the court in relation to the Cargill Parties' application for leave to file the Proposed Fifth Further Amended Statement of Claim.

(Emphasis added.)

77 The observations made in the second half of the passage quoted above explaining why some latitude had been given in the past to both the Viterra Parties and the Cargill Parties can only go so far. No matter how large or complex the litigation, at some stage a point must be reached when the overarching purpose mandated by the Civil Procedure Act dictates that no more latitude should be given. Naturally, precisely when that point may arise will differ depending on all the circumstances, including the particular application being made.

78 Further, the circumstances of this application are distinguishable, and materially so, from the application that was made in May last year when the trial of the proceeding was still ongoing.[89]

79 Returning to Weber's affidavit, he explained his justification for the delay based on what he contended was a material change in Cargill's position.[90] This characterisation of what occurred in August 2019 cannot be accepted. The mere fact that the Cargill Parties acknowledged in closing submissions that it was legitimate to make changes to test results in certain circumstances was to accept the obvious. Self-evidently, if testing equipment were calibrated incorrectly or inconsistently with other testing equipment being used, any test results arising out of that incorrectly or inconsistently calibrated equipment would need to be adjusted to take this flaw or inconsistency in the testing equipment into account. There was evidence to this effect long before August 2019.

80 Further, in the Cargill Parties' opening, this point was made expressly by referring to structural variation between laboratories on a systemic basis. It is of no moment that the point was made by reference to Cargill's theoretical blend approach to reporting test results.[91] The need to make an adjustment in these circumstances applies regardless of which underlying approach to analysis is adopted.

81 Furthermore, in substance, in their closing submissions the Cargill Parties did no more than accept a proposition for which the Viterra Parties contended during the trial. If what occurred amounted to a concession in favour of the Viterra Parties, this, of itself, does not provide a basis for the case to be re-opened. When this matter was raised with the Viterra Parties' lead senior counsel at the hearing of this application, this position was properly acknowledged. In short, the court was informed by senior counsel that Weber's evidence in this regard has no significance beyond explaining why Weber began conducting the searches that he did, ultimately in October 2019.

82 Next, the Weber affidavit does not properly address approximately 2 months of delay, namely the time between when the Cargill Parties put their position in closing submissions and Weber making any meaningful progress concerning the European Union report by his personal discovery of the regulations now sought to be relied upon. Weber deposes that a "month or more" went by without him being able to identify any published decision rule. The affidavit is largely silent as to what occurred in that period of time. Further, very little detail is given of the "various telephone discussions" he had with colleagues within Glencore Agriculture; neither the timing nor the substance of those discussions was disclosed.

83 Moreover, having located all but 1 of the regulations on 31 October 2019, there was an inordinate delay in bringing this application. In circumstances where judgment was reserved, the consideration of any possibility of the Viterra Parties re-opening their case should have been treated as a matter of the utmost urgency. In seeking to explain the delay of over 4 months, Weber referred to the need to obtain separate legal representation, the requirement of those lawyers to seek to introduce the European Union Materials and the identification of an appropriately qualified expert witness. None of these matters individually, or when considered collectively, provide a proper explanation for this significant delay.

84 First and foremost, counsel who appeared on this application for the Viterra Parties were counsel retained throughout the trial. Whatever complications arose with respect to Mallesons continuing to act provided no obstacle to the Viterra Parties briefing existing counsel through another firm of instructing solicitors.

85 Secondly, counsel retained by the Viterra Parties appeared before me on 22 November 2019, and were plainly available in the period leading up to the hearing on that day. No reason why those individuals could not have assisted in November 2019 is apparent. None was proffered.[92]

86 Thirdly, in a case such as this, with so many barristers retained,[93] if it be the case that 1 or more of the incumbent barristers was not available over the Christmas break, that does not provide a satisfactory explanation for the lack of progress. The supporting affidavit is devoid of detail in this regard.

87 Fourthly, evidence to the effect that persons relevant to the making of the decision as to whether this application should be instigated were "on leave at various times including over the Christmas break" is unsatisfactory. It does not justify Weber's suggested consequence of "effectively halt[ing] any meaningful progress of these matters between mid-December 2019 and the end of January 2020". The supporting affidavit does not identify the persons involved, nor the times at which they were unavailable. Further, it is unusual in corporate life in this era for senior executives not to be available for such an extended period, at least by email. A much more detailed explanation was required, at the very least from Weber (if not the executives themselves) based on the available information and his belief, if the Viterra Parties were to satisfactorily explain this significant period of some 6 or 7 weeks of delay by a very large corporation.

88 Fifthly, the supporting affidavit is unduly vague with respect to the retention of the Viterra Parties' current solicitors. Weber deposed that he decided during "the period November 2019 to February 2020" that it was necessary to obtain separate legal representation. There is no explanation as to why this was not done in November last year. The current solicitors only came on the record on the day the draft summons was filed with the court, namely on 13 March 2020. Precisely when they were retained was not disclosed.

89 Sixthly, there was no suggestion there was any difficulty obtaining the services of an independent expert. On the contrary, as noted above,[94] Wehlau was only approached on 2 March 2020 and was able to provide a final report within 10 days.

90 Seventhly, Weber gave no evidence about when the decision was actually made to obtain the expert evidence, much less when the Viterra Parties became aware that they may seek to adduce further expert evidence.[95]

91 In conclusion, the explanation for the considerable delay in making this application is wholly unsatisfactory. On the most favourable view of the facts,[96] the Viterra Parties took approximately 4½ months from the time they had substantially all the information they now seek to rely upon until they informed the court and the other parties of the intention to apply to re-open. The circumstances as to how the Viterra Parties belatedly seek to advance their case on materials that have been available to them for a significant period of time cannot be described as exceptional in the relevant sense.[97] Nor can it be sensibly said that, taken as a whole, justice favours leave being granted after such significant and unjustifiable delay.[98] Accordingly, the Viterra Parties application for leave must be refused.

92 Despite the matters set out above, further observations should be made in case the issues raised in this application are to be taken any further.

F.2 Resources of the Viterra Parties and the Cargill Parties

93 The determination of this application has been made in the context where, in this case, the Viterra Parties have been extremely well-resourced. The evidence before the court shows not only do they have very deep pockets, but when it has come to conducting this litigation they have been willing to expend considerable amounts in the pursuit of their interests.

94 During the course of the trial, the Viterra Parties have had 5 silks appear on their behalf (3 of them for the duration of the trial) and 6 juniors. Further, most days, there have been a team of solicitors from Mallesons in attendance, presumably with others working in the background. The Mallesons partners previously involved are very experienced litigation lawyers. Furthermore, not only were a large number of lawyers available to assist the Viterra Parties, but it has been readily apparent that they have been attentive and hard-working.

95 Moreover, the Viterra Parties have had the benefit of Weber's services and supervision of the proceeding. Weber is a long-standing employee of Glencore. As Cargill submitted on this application, he is an experienced in-house counsel. He has previously given evidence and been the subject of cross-examination in this proceeding. He was an impressive witness.[99] His evidence was to the effect that he has been very hands-on with the conduct of this litigation, including being intimately and exhaustively involved in the contents of the discovered documents.[100]

96 In short, it cannot be said that there has been any lack of capacity on the part of the Viterra Parties to be able to explore the bases of any defences that were open to them.

97 There is no need to factor in Cargill's position, beyond the obvious inconvenience that would be caused if leave were granted. No prejudice has been identified. Cargill is also a very large organisation with substantial resources and would suffer no real hardship in the event this application were successful.

98 Two key aspects of the further evidence are the concepts of a decision rule and expanded measurement uncertainty. Both these concepts have been dealt with at trial already. Hibbert, who was called by the Viterra Parties and whose expertise was not in question, directly addressed both these matters.

99 In the parties' written submissions on this application, a total of 5 pages was dedicated to summaries of the evidence given by Hibbert,[101] and what was said to flow from that evidence. I do not propose to address the individual matters raised. What will ultimately be made of Hibbert's evidence will be the subject of the reserved judgment. For present purposes it suffices to repeat that the subject matter as identified above was addressed at trial. In short, whether or not there was a legitimate scientific basis for the relevant aspect of the Viterra Practices and the Viterra Policies already existed as an issue; and this issue has been extensively addressed.

100 Further, on the evidence available, it is far from apparent that the European Union Materials had any connection or relevance to any presumed expectation of Cargill about what practices Joe White might have had in place in Australia in 2013, or to the actual formulation of the Viterra Practices or the Viterra Policies themselves.

101 At a general level, and assuming for the sake of argument some similarity between the decision rule reflected in the European Union Materials and the Viterra Practices and the Viterra Policies or their rationale (about which I say nothing),[102] it is not clear how the existence of "soft law" in Europe could give rise to a reasonable inference that the same or a similar regime or underlying rationale would necessarily apply, or would have been likely to have been applied, in establishing and implementing malt production and reporting procedures in Australia. This must be particularly so in circumstances where there is no evidence as to how widely any such rule was used in the European Union specifically for malt in 2013, or in a period immediately before then.[103] This issue is different from the question of whether the Certificate of Analysis Practice was scientifically justifiable.

102 Turning to the facts already before the court, Douglas Stewart,[104] a person who was directly involved in the formulation and evolution of the Viterra Practices and the Viterra Policies, was called by the Viterra Parties. In his evidence, he made no reference to the European Union Materials. Further, nothing in his testimony, nor in the contents of the Viterra Policies, could be understood to implicitly make reference to the European Union Materials themselves. The Viterra Parties did not contend otherwise.

103 Furthermore, the evidence put forward on this application does not establish that the regime existing by reason of the European Union Materials, whatever it might be, applies to the testing of malt in the European Union, or, at the very least, the testing of the parameters that Joe White tested in order to seek to meet its customers' specifications. In opposing the granting of leave, the Cargill Parties prepared a table identifying the subject matter of each of the 6 European Union regulations. Having done that, they then contended that each regulation was not relevant to the testing of malt by Joe White.[105] Neither in the written reply submissions, nor in oral submissions, did the Viterra Parties engage in this debate.[106] Further, the expert evidence of Wehlau says nothing on the topic. Accordingly, though making no finding, I cannot be satisfied that the decision rule identified in the European Union Materials necessarily applies to malt production throughout the European Union.

104 Finally, there are already in existence written reasons on this part of the case contained in the draft reserved judgment. Although this is not the place to foreshadow what those reasons are or whether the issues will be determined in any particular way, it is appropriate to say that this additional evidence the Viterra Parties seek to rely upon would not make a difference to the outcome.

F.4 The real potential for disruption and further delay

105 In allowing leave to amend and introduce further expert evidence back in May 2019, a key factor in favour of that outcome was the minimal inconvenience it was likely to cause. There was a period of time that had been provided before closing submissions were then due to commence on 20 June 2019.[107] Hibbert was available before then and his evidence was not going to take more than a day. Accordingly, there was little, if any, disruption to the overall timetable as a consequence of the granting of leave.

106 In contrast, if leave were granted on this application it would inevitably lead to further delay in the delivery of the reserved judgment. Indeed, the determination of this application has taken me away from advancing those reasons for a not insignificant period of time.

107 Another source of significant delay may arise from something asserted in the Viterra Parties' written submissions. The Viterra Parties contended that the European Union Materials were relevant to an assessment of the credibility of experts who had already given evidence on the existence of industry practices in the malting industry. When I raised the possibility that those experts may have had an answer as to why they did not refer to the European Union Materials, the Viterra Parties initial response was that the submission was of very modest importance. When pressed as to how the court could make such an assessment without the experts being informed and having the opportunity to respond, the Viterra Parties then stated that the submission was withdrawn.

108 Notwithstanding the stance ultimately taken, this exchange highlights the difficulty in introducing the further evidence so late in the proceeding. Speaking generally, a substantial body of evidence has already been led on topics that touch on the further evidence without the relevant witnesses being invited to consider what effect, if any, it would have on the evidence they have given. This is obviously problematic. And particularly so when 1 of the experts who gave evidence on a relevant question, although based in Canada, had extensive work experience in the malting industry in Europe but made no reference to the European Union Materials.[108] More specifically, on this particular matter, the fact that this submission was withdrawn does not alleviate the difficulty that must arise in light of the Viterra Parties' submission that the further evidence is relevant to determining what were or were not industry practices in the malting industry in 2013. It might be asked rhetorically, how is the court to properly assess this without having the benefit of the experts' opinion on the matter?

109 Further, as is already apparent from these reasons,[109] there is a real and substantial risk that a significant number of lay witnesses may need to be recalled if leave were granted.

110 Conversely, if I were to assume that no further lay witnesses or previous expert witnesses were recalled, then in all fairness leave could not be granted. Not only would it mean that some witnesses would not have the opportunity to respond to matters that may have been material to their evidence (or, if it be the fact, to explain why it was not material), but the court would be left in the invidious position of being asked to consider evidence and to draw inferences without the benefit of hearing from relevant witnesses on the point.

111 In conclusion, on either scenario, it would be likely that there would be significant disruption to the orderly conduct and conclusion of the trial if leave were granted.

F.5 The further evidence does not fall within the pleaded defence

112 The relevant pleadings have been referred to at some length above in order to demonstrate that the further evidence does not fall within them.[110] This is hardly surprising given that those responsible for settling the existing defence were not instructed to include, or it would seem even to consider, the European Union Materials.

113 In short, the limited admissions with respect to the allegations in paragraph 19 of the statement of claim, together with the non-admissions, in no way can be said to raise anything to do with the European Union Materials. Further, nothing contained in paragraph 30(e) of the defence makes any reference to any existing regulatory regime by which a decision rule is imposed or expanded measurement uncertainty is enshrined. Indeed, precisely what materials are relied upon in seeking to justify the Certificate of Analysis Practice is expressly identified and limited to the particulars provided at the end of paragraph 30(e)(ix).

114 In any event, paragraph 30(e) is concerned with seeking to justify the Certificate of Analysis Practice by reference to scientific procedures, coupled with accepted "objective qualification" of measurement tolerance within the commercial malting industry. This aspect of the defence says nothing about Cargill's knowledge, nor how any such knowledge may have affected its approach to its intentions with respect to the Acquisition Agreement.[111]

115 Further, if knowledge of Cargill on this new basis were to be alleged, the particulars of knowledge would need to be provided as a matter of pleading.[112] The Supreme Court (General Civil Procedure) Rules 2015 (Vic) impose such an obligation to ensure the opposing parties know the case they have to meet, in a clear and timely manner.[113]

116 Furthermore, if the allegation had been properly pleaded in a timely manner, it could be expected documents would be in Cargill's possession that would have needed to have been discovered. Alternatively, if such documents have already been discovered, they might have needed to be the subject of evidence to either support or rebut the inferences that the court is now being invited to draw.[114] Accordingly, the court can have no certainty that this is not yet another basis upon which there will need to be further steps in the proceeding if leave were granted and a fair trial is to be maintained.

117 If I am incorrect in my conclusion that the inadequate explanation for the very significant delay in bringing this application is not a sufficient reason of itself to refuse the application, then taking into consideration all the matters referred to above, the application must be refused.

118 In summary, the proceeding is substantially concerned with a dispute between 2 large multinationals, both of whom have had ample opportunity to present their case. The first defence was filed over 5 years ago. On numerous occasions over an extended period of time, the court has permitted the Viterra Parties to revisit and amend their defence, including on matters directly related to the Viterra Practices and the Viterra Policies. Although far from determinative, it is relevant that the further evidence sought to be relied upon is not fresh evidence; it has been available at all times since the proceeding commenced in October 2014.

119 If leave were granted, it is likely it would give rise to substantial disruption and delay. The Cargill Parties have not previously had the opportunity to raise the allegations now sought to be made with a number of potential relevant witnesses, both lay and expert. Although this could be done in the future, it is not possible to forecast with any certainty the extent to which any of these witnesses will need to give further evidence.

120 That said, in all the circumstances, it is far more likely than not that the Cargill Parties would need to call supplementary evidence from numerous witnesses to address the further evidence. They have already indicated they would call expert evidence in response to Wehlau if leave were granted. Of course, expert evidence falls into a category of evidence that ordinarily is required to be disclosed well before any trial commences.

121 Further, the court is not satisfied that the further evidence is material. Much of the reasoning as to why that is so is set out above.[115]

122 Although no real prejudice has been demonstrated by the Cargill Parties, that of itself does not indicate that leave ought to be granted. There is a substantial public interest in this litigation coming to an end. It has consumed public resources on a scale rarely seen in commercial disputes in this court.

123 For the reasons stated, the Viterra Parties' application for leave to file a summons to re-open their case is refused.

124 In concluding, I make some further observations.

125 It is important that this court provides an accessible forum for commercial organisations to resolve their disputes. This applies equally to smaller corporations and to large multinationals.[116] As to the latter, it is fundamental to commerce that multinationals can conduct business in this country and, as in this case, choose Australian law to govern the determination of their disputes with the confidence that access to justice shall be provided and the rule of law will be applied by Australian courts.

126 However, there must be a limit on the extent to which large multinationals, with seemingly endless resources to advance their cases, may properly, consistent with the Civil Procedure Act, avail themselves to the finite resources of the court. In my opinion, in the current circumstances, it would be entirely inconsistent with the overarching purpose to permit the Viterra Parties to re-open on the grounds relied upon.

127 Finally, as they have acknowledged, the Viterra Parties' submissions in support of this application in a number of respects go beyond what has previously been put at trial. For the avoidance of any doubt, the submissions in support of this application will be exhausted upon its determination. To the extent that these submissions differ from, or seek to extend, the closing trial submissions, they will not be taken into account in the determination of the substantive issues in this proceeding.[117]

[1] As a result of the large number of interlocutory applications being made in this proceeding, orders made on 5 October 2017 require the parties to obtain leave of the court before filing any further interlocutory application: Cargill Australia Ltd v Viterra Malt Pty Ltd (No 5) [2017] VSC 798, [8]-[11]. The hearing of this leave and arguments with respect to the underlying application were heard together.

[2] For a more detailed account of the facts, see Cargill Australia Ltd v Viterra Malt Pty Ltd [2017] VSC 126, [2]-[28] (Daly AsJ).

[3] Joe White was subsequently known as Cargill Malt Asia Pacific Pty Ltd.

[4] The Viterra Parties comprise the 3 vendor companies: Viterra Malt Pty Ltd, Viterra Operations Ltd and Viterra Ltd (now Viterra Pty Ltd), as well as Glencore International AG ("Glencore"), the ultimate holding company. Glencore was not a party to the Acquisition Agreement.

[5] As discussed at par 22 below, Cargill, Inc more recently undertook the sale of its entire global malting business.

[6] Certificates of analysis accompanied malt supplied by Joe White to its customers and included details relating to the malt supplied, including the results (sometimes adjusted) of testing that had been conducted in respect of that malt.

[7] At trial, evidence was also given that there was a process in place at Joe White that would allow 2 general managers to sign off on non-conforming malt deviating by more than 2 standard deviations from customer specifications. The nature and extent of the Certificate of Analysis Practice and related matters are issues for determination in this proceeding.

[8] The interlocutory orders made by me total in excess of 800 individual orders, with approximately 366 of those made before trial. Other judges have also heard interlocutory applications and made consequential orders, including: Cargill Australia Ltd v Viterra Malt Pty Ltd (No 14) [2018] VSC 541 (Riordan J); (No 8) [2018] VSC 193 (Macaulay J); (No 7) [2018] VSC 99 (Macaulay J); (No 3) [2017] VSC 650 (Daly AsJ); (No 1) [2017] VSC 126 (Daly AsJ). Proceedings were also commenced in the United States of America to attempt to put in place interlocutory steps to be ordered by a foreign court and to be carried out before the trial of this proceeding: see Cargill Australia Ltd v Viterra Malt Pty Ltd (No 5) [2017] VSC 798; (No 2) [2017] VSC 283.

[9] At this time, the trial was scheduled to commence in early May 2018. It had previously been scheduled to commence on 9 October 2017, but was adjourned on 7 July 2017 at the request of the key parties because of outstanding interlocutory steps and disputes.

[10] Both these expert reports were subsequently amended, but it is unnecessary to refer to the detail. Equally, for present purposes, expert reports with respect to Cargill Australia's alleged loss and relating to the laws of foreign jurisdictions need not be discussed.

[11] That is, leaving aside the loss experts and experts relating to the laws of foreign jurisdictions.

[12] Cargill Australia Ltd v Viterra Malt Pty Ltd (No 20) [2019] VSC 44.

[13] Cargill Australia Ltd v Viterra Malt Pty Ltd (No 22) [2019] VSC 351, [68].

[14] Ibid, [39], [51], [61]-[67].

[15] Ibid, [15]-[24], [33]-[34], [59].

[16] Hibbert is an emeritus professor in analytical chemistry. He resides in Australia.

[17] For a more detailed summary of the Hibbert Report, see Cargill Australia Ltd v Viterra Malt Pty Ltd (No 22) [2019] VSC 351, [23], [39], [40], [66].

[18] Some delay in the trial was caused by an interlocutory appeal by the Cargill Parties, which was compounded by the subsequent unavailability of expert witnesses.

[19] The raising of this issue was based on evidence which was uncontroversial and admitted. Beyond the evidence relied upon on the application for leave, the determination of whether or not leave should be granted did not give rise to the possibility of further evidence being put before the court in the event leave was granted.

[20] The parties' written closing submissions total approximately 2,500 pages. The oral closing submissions went for a period of 12 days. The transcript of the trial exceeds 10,000 pages.

[21] European Commission, Report on the Relationship between Analytical Results, Measurement Uncertainty, Recovery Factors and the Provisions of the EU Food and Feed Legislation, with Particular Reference to Community Legislation Concerning: Contaminants in Food (Council Regulation (EEC) No 315/93 of 8 February 1993 Laying Down Community Procedures for Contaminants in Food [1993] OJ L 37/1_), Undesirable Substances in Feed (Directive 2002/32/EC of the European Parliament and of the Council of 7 May 2002 on Undesirable Substances in Animal Feed_ [2002] OJ L 140/10_) 2004_.

[22] Being: Regulation (EC) No 882/2004 of the European Parliament and of the Council of 29 April 2004 [2004] OJ L 165/1; Commission Regulation (EC) No 401/2006 of 23 February 2006 [2006] OJ L 70/12; Commission Regulation (EC) No 1882/2006 of 19 December 2006 [2006] OJ L 364/25; Commission Regulation (EC) No 333/2007 of 28 March 2007 [2007] OJ L 88/29; Commission Regulation (EC) No 152/2009 of 27 January 2009 [2009] OJ L 54/1; Commission Regulation (EC) No 252/2012 of 21 March 2012 [2012] OJ L 84/1. The Viterra Parties sought to rely upon s 174(1)(b) of the Evidence Act 2008 (Vic) to tender the European Union Materials. This provision permits evidence of foreign law to be adduced by the production of a book or other publication, containing, relevantly, a statute or proclamation that appears to the court to be a reliable source of information. Section 174(2) effectively provides that regulations are treated as being within the operation of subs (1). Cargill accepted s 174(2) permitted evidence of the regulations to be adduced. Cargill did not accept the European Union report was admissible under s 174, but, for the purposes of this application only, informed the court that the point would not be taken so that the court could focus on the substantive matters in issue on this application.

[23] Wehlau is admitted to practice and a partner of a law firm based in Germany. He has practised in German and European food law in Germany for over 24 years and has published more than 50 articles in legal journals. No issue was raised concerning his expertise.

[24] The letter referred to order 44 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), and attached it together with the expert witness code of conduct and ss 76 to 80 of the Evidence Act.

[25] On the hearing of the application, the court was informed that Wehlau had only been spoken to for the first time in relation to this case on 2 March 2020. Accordingly, there was no suggestion from Cargill that there had been any delay by Wehlau in the production of his report.

[26] The European Union Materials consist of over 400 pages. The Viterra Parties sought to rely upon them in their entirety.

[27] Soft law was explained by Wehlau to mean the adoption by European institutions, primarily the European Commission, of formally non-binding recommendations and opinions, by reference to article 288 of the Treaty on the Functioning of the European Union. Documents containing such recommendations and opinions are said to "exert a certain guiding influence, without being legally binding in the strict sense and without originating from a full parliamentary process". Further, Wehlau reported that the European Court of Justice, while confirming the non-binding nature of such recommendations, has held that national courts are bound to take the recommendations into consideration in deciding disputes.

[28] Section 4.1, which is the introduction to "Reporting of results with respect to their measurement uncertainty".

[32] Section 4.4. See also par 26 above.

[38] Ibid. See also par 37 below.

[39] See par 26 above.

[40] Derived from an industry laboratory testing system known as the Malt Analytes Proficiency Testing Scheme (though the extent to which this scheme was reliably adopted by Joe White as part of the Certificate of Analysis Practice, and whether any lapse in doing so was material, are matters for determination in the resolution of the proceeding).

[41] No reference was made to the terms of any contracts between Joe White and its customers in making this submission.

[42] These statements were made in an information memorandum provided to Cargill in May 2013 ("the Information Memorandum") and a management presentation given on 26 June 2013 ("the Management Presentation").

[43] Regulation 401/2006, Annex II, r 4.4; reg 1882/2006, Annex, r D.4; reg 333/2007, Annex, r D.1.3; reg 152/2009, Annex II, r C.6; reg 252/2012, Annex IV, r 9.

[44] To adopt the language used by Hibbert.

[45] There is no suggestion the Viterra Parties sought to obtain legal or other expert advice from any European expert at the time. Nor was there any explanation as to why that was not done beyond Weber stating that he did not properly appreciate the significance of the European Union report in April or May 2019: see par 45 below.

[46] Regulation 152/2009 was identified in early February 2020.

[47] There was no evidence of whether or not Mallesons expressed an opinion about the materiality of the additional documents. The court was informed that the Viterra Parties did not intend to waive privilege. The court was also told that it could infer that there was some dissatisfaction with Mallesons' handling of the issue of the European Union report and their searching for any related regulations.

[48] Supreme Court Rules, rr 40.05, 49.01; Civil Procedure Act 2010 (Vic), ss 9, 47, 49.

Cargill Australia Ltd v Viterra Malt Pty Ltd

At a glance

Court

Decision date

Before

Source

Judgment (266 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (4)