CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE
CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND
IMPLIED CONDITIONS
– SETTLEMENT OF DISPUTES – where the respondent agreed to design and
Source
Original judgment source is linked above.
Catchwords
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THECONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS ANDIMPLIED CONDITIONS– SETTLEMENT OF DISPUTES – where the respondent agreed to design andconstruct a manufacturing facilitypursuant to a contract with the applicant– where that contract included a clause which required certain proceduresto befollowed to resolve any dispute between the parties arising out of thecontract – where those procedures required the partiesto provide a noticeof a dispute which would then be subject to negotiation by executives of theparties and, failing such negotiations,an election by either party to submitthe dispute subject of the notice of dispute to expert determination –where, if thedispute was referred to expert determination, the contractrequired the parties to enter into an expert determination agreement withanappointed expert in terms set out in a schedule to the contract (‘Expert
Determination Agreement’) – where the
contract provided for certain
rules to apply to an expert determination under the contract
(‘Rules’) – where the
Rules relevantly required a claimant to
any dispute to submit to the appointed expert a statement with the particulars
of the dispute
and any agreed statement of facts – where the Rules
required the respondent to the notice of dispute to provide ‘a response
to
the Claimant’s submissions including any cross-claim’ – where
the parties appointed an expert but were in dispute
as to the scope of the
dispute referred to that expert – where the respondent (being the claimant
under two notice of disputes
issued under the contract) submitted that any
cross-claim brought under the contract was limited to the dispute identified in
a notice
of dispute, and which had passed through the process of executive
negotiation before being referred to expert determination –
whether an
order should be made that the respondent enter into an Expert Determination
Agreement with the applicant and the expert
– whether declarations should
be made as to the scope of the dispute referred to expert determination and the
jurisdiction
conferred on the expert to decide matters raised in the expert
determination
APM Group (Aust) Pty Ltd v Galwin Pty Ltd [2006]
VSC 325, cited
Aussie Airlines Pty Ltd v Australian Airlines Ltd
(1996) 68 FCR 406, cited
Barclays Bank plc v Nylon Capital LLP
[2011] EWCA Civ 826, applied
Bass v Permanent Trustee Co Ltd [1999] HCA 9
(1999)
198 CLR 334, cited
British Ship Builders v VSEL Consortium plc [1997]
1 Lloyds Rep 106, cited
Dance With Mr D Ltd v Dirty Dancing Investments
Pty Ltd [2009] NSWSC 332, cited
Director General of Telecommunications
v Mercury Communications Ltd [1994] CLC 1125, applied
East Rockingham
RRF Project Co Pty Ltd v Acciona Construction Australia Pty Ltd [2024] FCA
759, cited
Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd
[1996] NSWSC 104
(1996) 39 NSWLR 160, cited
General Electric Company v AI Alpine US
Bidco Inc [2021] EWHC 45 (Ch), cited
King v Poggioli (1923) 32 CLR
222
[1923] HCA 11, cited
Mehmet v Benson (1965) 113 CLR 295
[1965]
HCA 18, cited
Mercury Communications Ltd v Director General of
Telecommunications [1995] UKHL 12
[1996] 1 WLR 48
[1996] 1 All ER 575, cited
Premier
Oil UK Ltd v Shell International Trading and Shipping Co Ltd [2023] EWHC
3269 (Comm), cited
Triano Pty Ltd v Triden Contractors Ltd (1992) 10
BCL 405, cited
Judgment (98 paragraphs)
[1]
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - THE CONTRACT - CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS - SETTLEMENT OF DISPUTES - where the respondent agreed to design and construct a manufacturing facility pursuant to a contract with the applicant - where that contract included a clause which required certain procedures to be followed to resolve any dispute between the parties arising out of the contract - where those procedures required the parties to provide a notice of a dispute which would then be subject to negotiation by executives of the parties and, failing such negotiations, an election by either party to submit the dispute subject of the notice of dispute to expert determination - where, if the dispute was referred to expert determination, the contract required the parties to enter into an expert determination agreement with an appointed expert in terms set out in a schedule to the contract ('Expert Determination Agreement') - where the contract provided for certain rules to apply to an expert determination under the contract ('Rules') - where the Rules relevantly required a claimant to any dispute to submit to the appointed expert a statement with the particulars of the dispute and any agreed statement of facts - where the Rules required the respondent to the notice of dispute to provide 'a response to the Claimant's submissions including any cross-claim' - where the parties appointed an expert but were in dispute as to the scope of the dispute referred to that expert - where the respondent (being the claimant under two notice of disputes issued under the contract) submitted that any cross-claim brought under the contract was limited to the dispute identified in a notice of dispute, and which had passed through the process of executive negotiation before being referred to expert determination - whether an order should be made that the respondent enter into an Expert Determination Agreement with the applicant and the expert - whether declarations should be made as to the scope of the dispute referred to expert determination and the jurisdiction conferred on the expert to decide matters raised in the expert determination
[2]
APM Group (Aust) Pty Ltd v Galwin Pty Ltd[2006] VSC 325, cited
[3]
Aussie Airlines Pty Ltd v Australian Airlines Ltd(1996) 68 FCR 406, cited
[1] Downer EDI Rail Pty Ltd (Downer) and John Holland Queensland Pty Ltd (John Holland) are parties to a design and construct contract (D&C Contract) pursuant to which John Holland agreed to design, construct and commission a rollingstock manufacturing facility at Torbanlea in Queensland.
[2] The D&C Contract sets out, in cl 62, the procedures which are to be followed to resolve a "Dispute" between the parties.[1] Those procedures permit a party to refer a Dispute to "Expert Determination".[2] If that occurs, and an "Independent Expert"[3] is appointed to determine the Dispute, the parties are required by cl 62.4(a) to enter into an agreement with the Independent Expert on the terms contained in Schedule A15 to the D&C Contract "or such other terms as may be agreed between the parties and the Independent Expert", such agreement being described as an "Expert Determination Agreement".
[3] On 3 July 2025, John Holland issued two Notices of Dispute to Downer (3 July Notices) pursuant to cl 62 of the D&C Contract. Each of the 3 July Notices concerned a claim that John Holland had made against Downer. The first notice concerned a Dispute in respect of what John Holland described as "the Acceleration Agreement, Acceleration Direction and Acceleration Representation" (Acceleration Dispute). The second notice concerned a Dispute in respect of what John Holland described as "the Builder's CHMP Submission and the Contractor's CHMP Assessment" (CHMP Dispute). It is not necessary to set out the details of those disputes for the purpose of determining the applications that are presently before the court.
[4] On 20 August 2025, Downer referred the Disputes identified in the 3 July Notices to Expert Determination. The parties subsequently agreed that Mark Dempsey SC would be appointed as the Independent Expert and Mr Dempsey SC indicated his willingness to accept that appointment.
[5] The parties then discussed the terms of the Expert Determination Agreement. Those discussions exposed a disagreement as to the scope of the decision-making authority which the parties have agreed to confer on Mr Dempsey SC as Independent Expert. I will henceforth refer to the subject matter of this disagreement as the Construction Issue because it concerns the proper construction of cl 62.4 of the D&C Contract and the expert determination rules () found in Schedule 3 to Schedule A15 of the D&C Contract. The Rules set out the procedures which apply to an Expert Determination conducted under cl 62.4. The Construction Issue has arisen because of the reference in the Rules to "any cross-claim" made as part of a respondent's submissions in an Expert Determination.
[18]
(a) Downer has not issued any claim or Notice of Dispute against John Holland in connection with the D&C Contract and there have not been any executive negotiations in relation to any claim or Notice of Dispute issued by Downer against John Holland;
(b) The Dispute referred for Expert Determination is limited to the subject matter of John Holland's claims identified in the 3 July Notices and does not include any claim by Downer against John Holland, or (further and alternatively) any cause of action or request for relief by Downer against John Holland that does not arise from the same or substantially the same subject matter as the Dispute comprised by the 3 July Notices and form part of Downer's legal defence to John Holland's claims the subject of the 3 July Notices;
(c) The jurisdiction conferred on Mr Dempsey SC as the Independent Expert is confined to the subject matter of John Holland's claims identified in the 3 July Notices and does not include any claim by Downer against John Holland, or (further and alternatively) any cause of action or request for relief by Downer against John Holland that does not arise from the same or substantially the same subject matter as the Dispute comprised by the 3 July Notices and form part of Downer's legal defence to John Holland's claims the subject of the 3 July Notices.
[19]
[12] John Holland also seeks to restrain Downer from submitting to Mr Dempsey SC any claim by Downer against John Holland or (further and alternatively) any cause of action or request for relief against John Holland that does not arise from the same or substantially the same subject matter as the Dispute comprised by the 3 July Notices and form part of Downer's legal defence to John Holland's claims the subject of the 3 July Notices.
[13] In opposing John Holland's application, Downer submits the court should not exercise its discretion to grant any declaratory or injunctive relief because the basis for such relief is hypothetical and, in any event, the matters sought to be addressed by that relief fall within the jurisdiction of Mr Dempsey SC to determine as Independent Expert. Downer contends that the answer to the concerns John Holland has expressed about the Construction Issue is that if Downer does bring a cross-claim in the Expert Determination, and if John Holland challenges Downer's right to do so under cl 62.4 of the D&C Contract and the terms of the Expert Determination Agreement (including the Rules), that issue should be resolved by Mr Dempsey SC.
[14] Against that background, the issues that arise for determination are:
[20]
(a) Is the Construction Issue a matter that the court should determine on the present applications, or, for the reasons advanced by Downer, should it be left for Mr Dempsey SC to determine in the event that Downer brings a cross-claim in the Expert Determination?
(b) If the Construction Issue is a matter that the court should determine, is John Holland correct in its argument as to the scope of the parties' obligation under cl 62.4 of the D&C Contract to submit to the decision-making jurisdiction of the Independent Expert?
(c) If John Holland's construction is correct, what relief (if any) should the court grant on the applications?
[21]
(a) I am satisfied that the dispute raised by John Holland is real, not hypothetical or academic, and, further, that it is in the interests of justice and convenience for the court to determine the Construction Issue on the present applications.
(b) I have concluded that, on the proper construction of cl 62 of the D&C Contract and the provisions of the Expert Determination Agreement which the parties have agreed to enter into, the scope of the decision-making authority the parties have agreed to confer on the Independent Expert is limited to determining the Dispute that is the subject of a Notice of Dispute, and which has proceeded through the stages of the cl 62 dispute resolution procedure which precede a referral to Expert Determination.
(c) I have determined that it is appropriate to order that John Holland enter into an Expert Determination Agreement in the form set out in Schedule A15, however I am satisfied that it is also appropriate to make ancillary declarations as to the scope of the Dispute referred to Expert Determination and the scope of Mr Dempsey's jurisdiction to determine that referred Dispute.
[22]
The dispute resolution procedure prescribed by cl 62 of the D&C Contract
[23]
[16] The dispute resolution procedure set out in cl 62 of the D&C Contract is mandatory. Clause 62.1(a) requires that "any Dispute will be resolved in accordance with this clause 62".[4]
[17] The procedure involves various stages:
[24]
(a) A party that wishes to progress a Dispute "will issue a Notice of the Dispute to the other party": cl 62.1(b)(iii).
(b) If a Notice of Dispute is given, "the procedure that is to be followed to resolve a Dispute" so notified commences with a process of executive negotiation: cl 62.2(a)(i). "[T]he Dispute will be referred to the Executive Negotiators and the Executive Negotiators will ... commence meetings and negotiations with a view to resolving the Dispute": cl 62.3(a).
(c) If the Dispute remains unresolved after executive negotiation, "either party may give the other party notice requiring that the Dispute be referred to Expert Determination under clause 62.4": cl 62.3(b)(i). Where a party elects to give such notice, "the Dispute will be referred to Expert Determination in accordance with clause 62.4": cl 62.2(a)(ii).
(d) If neither party refers the Dispute to Expert Determination, a party that wishes to progress the Dispute "may refer the dispute to arbitration under clause 62.5": cl 62.3(b)(ii).
(e) In a case where the Dispute is referred to Expert Determination:
(i) if an Independent Expert is appointed, "the parties will enter into an agreement with the Independent Expert on the terms contained in Schedule A15 (Expert Determination Agreement) or such other terms as may be agreed between the parties and the Independent Expert (Expert Determination Agreement)": cl 62.4(a).
(ii) the parties will not withhold agreement to any amendment the Independent Expert requests to be made to the terms contained in the Expert Determination Agreement, provided the requested amendment is reasonable and does not conflict with cl 62.4: cl 62.4(b)(i).
(iii) the Independent Expert will make an Independent Expert Decision in accordance with (relevantly) the Expert Determination Agreement and the Rules: cl 62.4(c).[5]
(iv) The Independent Expert may determine questions of law, including the proper construction of the D&C Contract: cl 62.4(e).
(v) The Independent Expert Decision will be final and binding on the parties except to the extent that a party serves a notice referring "all or part of the Dispute the subject of the Independent Expert Decision to arbitration under clause 62.5": cl 62.4(f).
[25]
[18] Downer also relies on cl 69.10 of the D&C Contract, which requires that each party "do anything (including execute any document) ... that the other party may reasonably require to give full effect to [the D&C Contract]".
[26]
[19] For the purposes of an Expert Determination Agreement in the form set out in Schedule A15, the term "Dispute" is defined in cl 1.1 to mean the dispute described in Schedule 1 to the Expert Determination Agreement. Schedule 1 to Schedule A15 provides for a description of "the Dispute" to be inserted.
[20] Recital B records that the referring party "requires that the Dispute is determined by an Expert appointed under cl 62.4" of the D&C Contract.
[21] Recital C records that "[t]he Independent Expert has been appointed to determine the Disputes referred to Expert Determination."
[22] Clause 2(a) provides that the parties appoint the Independent Expert to determine the Dispute in the manner and within the times set out in the D&C Contract, the Expert Determination Agreement and the Rules.
[23] Clause 2(b)(iv) provides that, in making the Independent Expert Decision or conducting the Expert Determination, the Independent Expert must comply with: the law; the D&C Contract; the Expert Determination Agreement; the Rules; and the requirements of procedural fairness.
[24] Clause 10(a) provides that the parties irrevocably submit to the non-exclusive jurisdiction of the Queensland courts with respect to any proceedings that may be brought at any time relating to the Expert Determination Agreement.
[27]
[25] The Rules are set out in Schedule 3 to Schedule A15.
[26] Rule 1.1 identifies the party that gave the Notice of Dispute under cl 62.1(b)(iii) of the D&C Contract as "the Claimant" in the Expert Determination and provides that the Claimant must give the other party to the Dispute ("the Respondent") and the Independent Expert the Claimant's Submissions, comprising:
[28]
(a) a statement setting out the particulars of the Dispute referred for Independent Expert Decision;
(b) any agreed statement of facts;
(c) a submission on the legal and factual issues of its claim; and
(d) all documents and other evidentiary material on which it relies.
[29]
[27] Rule 1.2 provides for the Respondent to give the Claimant and the Independent Expert "a response to the Claimant's Submissions including any cross-claim (Respondent's Submissions)." The time in which the Respondent's Submissions must be given is within 15 business days of receiving the Claimant's Submissions "or such longer period as may reasonably be required".
[28] Rule 1.3 provides for the Claimant to give the Respondent and the Independent Expert "a response to the Respondent's Submissions (including any cross-claim) (Claimant's Reply)." Again, the time in which the Claimant's Reply must be given is within 15 business days of receiving the Respondent's Submissions "or such longer period as may reasonably be required".
[29] As explained above, the Construction Issue turns on the question whether the words "any cross-claim" in Rule 1.2 and Rule 1.3 permit the Respondent to introduce a new cause of action or claim for relief into the Expert Determination that was not part of the subject matter of the Dispute referred to Expert Determination under cl 62.4.
[30] The time in which the Independent Expert must make his or her Independent Expert Decision "in relation to the Dispute" is prescribed by a second, incorrectly numbered Rule 1.1.
[31] Rule 4.2 provides that any dispute arising between the Claimant and the Respondent in respect of any matter concerning the Rules or the Expert Determination (including the Independent Expert's jurisdiction) will be submitted to and determined by the Independent Expert.
[30]
Referral of the Acceleration and CHMP Disputes to Expert Determination
[31]
[32] It is common ground that executive negotiation in relation to the Acceleration Dispute and the CHMP Dispute took place between about 8 July 2025 and 5 August 2025. Both the Acceleration Dispute and the CHMP Dispute remained unresolved after the executive negotiation process.
[33] On 15 August 2025, Downer sent a letter to John Holland which relevantly stated:
[32]
"By this notice to [John Holland], [Downer] refers the Acceleration Dispute and the CHMP Dispute to Expert Determination in accordance with clauses 62.3(b)(i) and 62.4 of the D&C Contract.
[33]
In the same letter, Downer proposed three names for John Holland's consideration for appointment as the Independent Expert, including Mr Dempsey SC.
[34]
[34] On 21 August 2025, John Holland wrote to Downer confirming that it agreed to the appointment of Mr Dempsey SC as the "expert for the determination of the claims the subject of the [3 July Notices]", noting that the parties would need to finalise terms with Mr Dempsey SC prior to his engagement.
[35] On 22 August 2025, Downer wrote to John Holland, acknowledging receipt of John Holland's agreement to Mr Dempsey SC being appointed "as the Appointed Expert for the purposes of the Expert Determination of the Acceleration Dispute and the CHMP Dispute", subject to the finalisation of terms. Downer proposed that the procedural matters in respect of the Expert Determination be resolved between the parties' respective legal representatives.
[36] On 28 August 2025, Downer's solicitors (White & Case) sent an email to Mr Dempsey SC, copied to John Holland's solicitors (Corrs Chambers Westgarth), on behalf of both parties. The email informed Mr Dempsey SC that the parties were writing in relation to an expert determination between them and stated:
[35]
"Two disputes between Downer and John Holland have been referred to expert determination under the [D&C Contract]. The parties have agreed to nominate you as expert determiner of those two disputes."
[36]
[37] Mr Dempsey SC replied to the parties' email the same day confirming that he was available and willing to act as expert determiner "with respect [sic, to] the two disputes".
[38] I infer that the "two disputes" referred to in the email sent by White & Case on 28 August 2025 are the Acceleration Dispute and the CHMP Dispute. This is confirmed by an amended version of Schedule A15 to the D& C Contract which White & Case prepared, which included procedural matters such as details of the Dispute, and sent by email to Mr Dempsey, copied to Corrs Chambers Westgarth, on 19 September 2025. Schedule 1 to that draft amended Expert Determination Agreement described the Dispute referred to Expert Determination as:
[37]
"(a) The 'CHMP Dispute', being the dispute as to the entitlement (if any) that the Claimant [that is, John Holland] has pursuant to the 'Builder's CHMP Submission' as described in the Claimant's Notice of Dispute dated 3 July 2025 with reference QTMP-MFG-JHG-CM-CON-000638.
[38]
(b) The 'Acceleration Dispute', being the dispute as to the entitlement (if any) that the Claimant has pursuant to the alleged 'Acceleration Agreement, Acceleration Direction and Acceleration Representation' as described in the Claimant's Notice of Dispute dated 3 July 2025 with reference QTMP-MFG-JHG-CM-CON-000637."
[39]
[39] John Holland also relies on the evidence of Robin Riley, a Commercial and Risk Manager who has been involved in the train manufacturing project since November 2023. Mr Riley has access to the document sharing and management platform (called InEight) used by John Holland and Downer for the purposes of the train manufacturing project and is responsible for reviewing:
[40]
(a) payment claims submitted under the D&C Contract by John Holland and payment schedules issued in response by Downer; and
(b) other claims made by John Holland against Downer under the D&C Contract (including, for example, claims to variations or extensions of time) and Downer's responses to the claims made by John Holland.
[41]
[40] Mr Riley deposed that, based upon the information available to him and his review of relevant project records, including correspondence exchanged through InEight, Downer has not:
[42]
(a) submitted any claims to John Holland, including for payment or other relief under the D&C Contract;
(b) issued any Notice of Dispute to John Holland under the dispute resolution procedure set out in cl 62 of the D&C Contract;
(c) engaged in executive negotiations with John Holland about any claims by Downer against John Holland; or
(d) applied any set-off or deduction in response to any of John Holland's 27 monthly payment claims whether in relation to alleged defects, delays, backcharges or on any other grounds.
[43]
[41] I accept Mr Riley's evidence about those matters. It was not controverted by any of Downer's evidence.
[44]
The parties' discussions concerning the Construction Issue
[45]
[42] From about 26 August 2025, White & Case and Corrs Chambers Westgarth discussed the terms of the Expert Determination Agreement contemplated by cl 62.4(a) of the D&C Contract. On that day, there was a telephone conversation between Mr Earwaker of Corrs Chambers Westgarth and Ms Perumal of White & Case. Mr Earwaker later summarised the effect of that discussion in a letter he sent to Ms Perumal on 25 September 2025 (see [47] below), as follows:
[46]
"On 26 August 2025, we discussed by phone, in general terms, the proposed expert determination. I noted the reference to 'cross-claim' at paragraphs 1.2 and 1.3 of Schedule 3 of Schedule A15 of the Contract. I said that John Holland was of the view that the concept of a 'cross-claim', in its application to the current expert determination process, is limited to the CHMP Claim and Acceleration Claim as referred to expert determination by Downer. You said you would consider this position."
[47]
[43] On 2 September 2025, White & Case issued an amended draft of the Schedule A15 Expert Determination Agreement to Corrs Chambers Westgarth. Mr Earwaker's letter of 25 September 2025 (see [47] below) recorded that, on the same day, Ms Perumal sent him an email in which she stated:
[48]
"Downer does not accept that it is restricted in its ability to bring a cross claim against [John Holland] as part of the Respondent's Submissions (as contemplated by in [sic] Rule 1.2). Downer reserves its right to pursue either of these matters and any challenge by [John Holland] should be determined by the Independent Expert in accordance with the procedure contemplated (including rule 4.2)."
[49]
[44] Mr Earwaker and Ms Perumal spoke again over MS Teams on 9 September 2025. From the summary of that discussion in Mr Earwaker's letter of 25 September 2025 (see [47] below), it appears that Mr Earwaker conveyed John Holland's disagreement with the position set out in Ms Perumal's email of 2 September 2025.
[45] Mr Earwaker set out John Holland's position in more detail in a letter he sent to Ms Perumal on 16 September 2025. That letter relevantly stated:
[50]
Downer and John Holland are currently in disagreement over Downer's assertion of a right to make a cross-claim against John Holland in the anticipated expert determination process.
John Holland notes that a cross-claim is not part of either dispute that Downer has referred to the expert determination. Further, John Holland has not been notified of any cross-claim by Downer and has no details of the quantum, legal or factual basis of any cross-claim that might be referred to expert determination. This runs contrary to the clear and express intent of the dispute resolution clause which involves the notification of issues in dispute followed by executive negotiations to attempt to resolve those notified issues in advance of referral to expert determination or arbitration.
The use of the word 'cross-claim' in clauses 1.2 and 1.3 of Schedule 3 of Schedule A15 of the D&C Subcontract do not support an approach to the dispute resolution clause which is contrary to the clear and express intent described above.
[51]
It would be imprudent for John Holland, Downer and Mr Dempsey SC to execute an expert determination agreement in circumstances where John Holland and Downer are already in express dispute as to the meaning and effect of the terms of that proposed expert determination agreement.
The 'cross-claim' issue requires resolution between John Holland and Downer to enable a time and cost efficient alternative dispute resolution process to occur, and to ensure that the expert determination agreement reflects a mutual agreement between all signatories to it."
[52]
[46] Ms Perumal wrote in response to Mr Earwaker on 20 September 2025. After setting out cll 62.4(a) and (b) of the D&C Contract, Ms Perumal stated:
[53]
"3. These provisions are clear and unambiguous. They require Downer and [John Holland] to enter into an agreement with the Independent Expert on the terms contained in Schedule A15, unless other terms are agreed between the parties and the Independent Expert.
[54]
Despite the parties' efforts, there have been no 'such other terms' agreed. Therefore, Downer and [John Holland] are required to enter into an agreement with the Independent Expert on the terms contained in Schedule A15, subject to any reasonable amendments requested by the Independent Expert in accordance with clause 62.4(b).
[55]
We do not agree with your characterisation of the issue with respect to any potential cross-claim that may or may not be brought by Downer. Downer's position is that it is not required to make any concession, or to consent to any departure from the terms set out in Schedule A15, with respect to any cross-claim.
Rules 1.2 and 1.3 expressly contemplate a cross-claim which may be brought by the Respondent. There is no qualification or drafting note included with respect to those rules.
Whether or not any cross-claim which may be brought by Downer is valid, or validly made, is plainly within the bounds of the Expert Determination. Should your client wish to raise a complaint of the kind contemplated by paragraphs 3 and 4 of your letter, it may do so. The resolution of such matters by the Independent Expert is expressly contemplated by rule 4.2.
Further, and for completeness, neither we nor our client has indicated that it would bring a cross-claim, but only that it is not obliged to make any concession of the kind sought, as a condition on the commencement of the Expert Determination.
The position set out in paragraphs 7 and 8 of your letter is inconsistent with clause 62.4 of the D&C Contract, and rule 4.2 contained within Schedule A15. These provisions demonstrate that the parties turned their minds to the possibility of disputes relating to matters 'concerning these Rules or the Expert Determination' and agreed that they 'will be submitted to and determined by the Independent Expert'."
[56]
[47] Mr Earwaker wrote to Ms Perumal again on 25 September 2025, stating that Ms Perumal's letter had not addressed John Holland's concerns. After summarising the previous discussions as set out in [42] to [46] above, Mr Earwaker stated that "Downer's reservation of a right to introduce a cross-claim at a later stage introduces uncertainty and procedural imbalance". He contended that the mechanism provided in rule 4.2 would not address John Holland's fundamental concern about entering into the expert determination process without knowing the full scope of the issues that Downer might seek to agitate, particularly in light of the time frames specified in the Rules.
[48] Ms Perumal responded to Mr Earwaker by letter dated 29 September 2025 stating:
[57]
"2. Downer is not making any request of [John Holland] that [John Holland] has not already agreed to by the terms of clause 62.4 of the D&C Contract and the agreed terms in Schedule A15. Downer is simply requiring [John Holland] to perform its contractual obligations and proceed on the basis of Schedule A15.
[58]
Rather, it is [John Holland] that demands that Downer depart from the terms of the D&C Contract, because [John Holland] now asserts that those agreed terms to be [sic] prejudicial to it. Any 'uncertainty and procedural imbalance' (if it indeed exists, which is not accepted) in the expert determination process set out in the D&C Contract was accepted by [John Holland], when [John Holland] entered into the D&C Contract and so agreed to apply the specific process in Schedule A15 in the absence of any agreed amendments.
[59]
For the avoidance of doubt, Downer does not accept its ability to bring a cross-claim in an expert determination, as envisaged in the form of agreement in Schedule A15, in any way causes prejudice to [John Holland].
There is no 'asymmetry' in the parties' knowledge of the scope of the dispute at this stage of the process. Neither party is aware of the precise legal and factual submissions that the other may make in the expert determination. [John Holland] may well seek to make such submissions which relate to the subject matter of the Notices of Dispute which have previously not been communicated to Downer. Schedule A15 expressly provides for that scenario, by allowing Downer to decide whether to make a cross-claim at the time of making its responsive submissions. [John Holland's] ask [sic] that Downer forego this right without first seeing the full extent of the claim put to it in this expert determination causes prejudice to Downer. Schedule A15 does not create a 'procedural imbalance' where the rules allow for [John Holland] to be given a full opportunity to respond to any cross-claim."
[60]
[49] On 3 November 2025, after receiving Downer's written submissions on the present applications, Corrs Chambers Westgarth sent draft consent orders to White & Case on an open basis. The covering email indicated the orders were intended to address concerns raised in Downer's submissions about the use of the word "claim" in John Holland's application. The draft orders included undertakings by both Downer and John Holland. It was proposed that Downer would undertake not to submit for determination by Mr Dempsey SC "any cause of action or request for relief that does not arise from the same or substantially the same subject matter as the Dispute [defined to comprise the Acceleration Dispute and the CHMP Dispute] and form part of its legal defence to John Holland's claims the subject of the Dispute." In return, John Holland would undertake to execute an Expert Determination Agreement with Downer and Mr Dempsey SC in the form contained in Schedule A15 of the D&C Contract, with such reasonable amendments as Mr Dempsey SC might request, and with Schedule 1 completed to define the Dispute as comprising the Acceleration Dispute and the CHMP Dispute. The wording used in the proposed undertaking by Downer was the genesis of the amendments to the John Holland application for which leave was granted at the commencement of the hearing (see [11] above).
[50] White & Case responded by email the following day, 4 November 2025, advising that the form of undertaking sought from Downer was not satisfactory because Downer was being asked to anticipate what it would do in the future and the proposed undertaking might impact Downer's ability to respond to submissions that John Holland was yet to serve in the Expert Determination. This was in contrast to Downer's existing right in Rule 1.2 to "give the Claimant and the Independent Expert a response to the Respondent's [sic Claimant's] Submissions including any cross-claim". The email also stated that giving the proposed undertaking would expose Downer to unacceptable risk because the consequences of breaching the undertaking would be that Downer would be in contempt of court which would be a materially different consequence to the parties submitting the question of the scope of Mr Dempsey SC's jurisdiction for him to determine under Rule 4.2. Downer further proposed that amendments could be made to the timeframes imposed by Rules 1.2, 1.3 and 1.4 to assist the parties to manage responses to each other's submissions in the Expert Determination.
[61]
"... It is not acceptable to John Holland that Downer continues to refuse to provide any information as to the subject matter of potential cross-claims and declines to agree to any reasonable boundary on the nature of any cross-claim it may ask Mr Dempsey SC to determine. That continuing position reinforces John Holland's view that Downer is not ready, willing and able to comply with its obligations under clause 62 of the D&C Contract and the terms of the proposed expert determination agreement.
[62]
The scope of a cross-claim that could permissibly be the subject of submissions to Mr Dempsey SC cannot genuinely be entirely at large. It must necessarily be connected to the subject matter of the Dispute and arise in the course of Downer's defence of the John Holland claims forming part of that dispute. John Holland does not seek to constrain Downer's genuine defence of the John Holland claims in the dispute. Rather, it seeks to obtain clarity as to the proper boundaries of Mr Dempsey's jurisdiction and to ensure the process will not be derailed by new causes of action or claims for relief by Downer which are extraneous to the subject matter of the existing Dispute and in relation to which Downer has given no prior notice."
[63]
Rather than continue to press for an undertaking from Downer, the email proposed that the definition of the Dispute in Schedule 1 of the proposed Expert Determination Agreement be amended to provide that:
[64]
"For the avoidance of doubt, the Independent Expert is not to determine any cause of action or request for relief by [Downer] that does not arise from the same or substantially the same subject matter as the Dispute and form part of [Downer's] legal defence to [John Holland's] claims the subject of the Dispute."
[65]
[52] On 6 November 2025, White & Case sent an email to Corrs Chambers Westgarth stating that Downer's position remained as previously communicated to John Holland in the letters sent by White & Case on 20 September 2025 and 29 September 2025 (see [46] and [48] above), and in Downer's written submissions on the present applications. Based on that communicated position, Downer refused to agree to the proposed amendment to the definition of the Dispute in Schedule 1 of the proposed Expert Determination Agreement.
[53] The present applications were heard on 7 November 2025.
[66]
Should the court determine the Construction Issue?
[67]
[54] Downer's submissions on this issue commence from the proposition, which I accept, that what the parties have given the Independent Expert authority to do can be found in the pre-agreed terms of the Expert Determination Agreement which are set out in Schedule A15. As Hansen J observed in APM Group (Aust) Pty Ltd v Galwin Pty Ltd,[6] that authority can be as specific and detailed as the parties might choose to provide both as to matters of substance and matters of procedure. Absent such agreement, the procedure to be applied is to be decided by the expert as the contractually agreed resolver of disputes.[7]
[55] From that position, Downer submits that in circumstances where the parties have expressly authorised the Independent Expert to determine questions of jurisdiction or construction, that agreement should be given full effect. This, Downer submits, reflects the principle that when parties to a commercial contract agree, at the time of making the contract, and before any disputes have arisen, to refer any dispute or difference arising out of the agreement to expert determination, their agreement should not be construed narrowly.[8]
[56] Downer submits that Rule 4.2 of Schedule 3 to Schedule A15 represents such an agreement, with the parties entrusting the Independent Expert with the authority to resolve disputes about "any matter" relating to the Rules or the Expert Determination, including the scope of the Independent Expert's jurisdiction. It follows, Downer submits, that pursuant to Rule 4.2, any question as to whether a responsive submission constitutes a "cross-claim" falling within the scope of the Expert Determination is one for the Independent Expert to decide. Downer argues that John Holland is now asking the court to rule on a question that the parties have already agreed the Independent Expert should decide.
[57] Downer seeks to draw additional support for its position from English authorities.
[58] The first is the dissenting decision of Hoffmann LJ (as his Lordship then was) in Director General of Telecommunications v Mercury Communications Ltd (Mercury Communications).[9] Although recognising that, as a matter of substantive law, a court will intervene to correct a decision-maker who has acted outside what the court determines to be his or her decision making authority based on the proper meaning of the agreement, Hoffmann LJ stated that it does not follow that a court will declare in advance what the limits of that authority are. This is not a matter of substantive law but procedural convenience because, in advance of the decision, the true meaning of the principles upon which the decision-maker must decide the dispute is usually a hypothetical question. It will only become a live issue if one of the parties thinks that the decision-maker has reached a wrong decision. The practice of the courts is not to decide hypothetical questions because it is always possible that the decision-maker may reach the right decision and therefore it would be wasteful and premature to come to the court until the decision has been made.
[68]
"The Court has jurisdiction ahead of a determination by the expert to determine a question as to the limits of his remit or the conditions which the expert must comply with in making his determination, but (as a rule of procedural convenience) will (save in exceptional circumstances) decline to do so. This is because the question is ordinarily merely hypothetical, only proving live if, after seeing the decision of the expert, one party considers that the expert got it wrong. To apply to the Court in anticipation of his decision (and before it is clear that he has got it wrong) is likely to prove wasteful of time and costs - the saving of which may be presumed to have been the, or at least one of the, objectives of the parties in agreeing to the determination by the expert."
[69]
[68] In Barclays Bank plc v Nylon Capital LLP,[12] Thomas LJ (with whom Etherton LJ and Lord Neuberger MR agreed) set out the statements of principle made by Hoffmann LJ and Lord Slynn in Mercury Communications and the fifth principle identified by Lightman J in British Shipbuilders before stating:
[70]
"In my view it is not necessary to go further than the statement of principle by Hoffmann LJ in Mercury Communications; it does not assist to describe the circumstances in which a court will intervene as 'exceptional'. The court has to determine first whether it is faced with a dispute that is real and not hypothetical and then if it is real, whether it is in the interests of justice and convenience to determine the matter in issue itself rather than allowing the expert to determine it first."
[71]
[69] Similar statements of principle can be found in the recent decisions in General Electric Company v AI Alpine US Bidco Inc[13] and Premier Oil UK Ltd v Shell International Trading and Shipping Co Ltd.[14]
[70] According to those statements of principle, the first issue I must determine is whether the court is faced with a dispute that is real and not hypothetical.
[71] Having regard to the positions taken by the parties in the discussions set out at [42] to [52] above, I am satisfied that the dispute raised by John Holland is real. It is not hypothetical or academic. I do not accept Downer's submission that, because the parties and the court do not presently know whether Downer will make a cross-claim under Rule 1.2, the dispute is hypothetical. To the contrary, there is a real dispute between the parties as to the scope of their obligation to submit to the decision-making jurisdiction of the Independent Expert. Downer's stated position involves the implicit assertion that cl 62.4 requires John Holland to submit to the determination by the Independent Expert of (in addition to the Acceleration Dispute and the CHMP Dispute notified by the 3 July Notices) such additional, as yet unknown, claims by Downer against John Holland as Downer may choose to introduce as a cross-claim during the Expert Determination. John Holland says it has no contractual obligation to submit to an Expert Determination that might encompass causes of action or claims for relief by Downer that fall outside the Dispute that has been referred (comprised by the Acceleration Dispute and the CHMP Dispute notified by the 3 July Notices). The dispute as to the true effect of the bargain which the parties struck when they agreed to the dispute resolution procedure prescribed by cl 62 of the D&C Contract is real and not hypothetical.
[72] The second issue I must determine is whether it is in the interests of justice and convenience for the court to determine the Construction Issue on the present applications. I am satisfied that is the case here. There are several reasons I have reached that conclusion.
[73] First, it is important to consider the connection between the determination of the Construction Issue and the proper resolution of the present applications. The primary relief sought on Downer's application is equitable relief (in the form of mandatory injunctions analogous to specific performance) in aid of its legal rights under cl 62.4 of the D&C Contract. The right of each party to have a Dispute resolved by Expert Determination in accordance with cl 62.4 involves a corresponding obligation to submit to the decision-making jurisdiction of the Independent Expert. By seeking to compel John Holland to execute an Expert Determination Agreement on the terms set out in Schedule A15, Downer seeks to enforce that contractual obligation. In my view it would not be appropriate for the court to make orders having the effect of enforcing John Holland's obligation to submit to the decision-making jurisdiction of the Independent Expert without resolving the dispute as to the scope of that obligation. Put another way, I am satisfied that, in order to determine whether to grant the injunctive relief Downer seeks and whether to mould such relief in a manner that the court considers would meet the justice and equity of the present case by granting some or all of the auxiliary relief sought in John Holland's application, the court should first determine the dispute over the scope of the contractual obligation Downer seeks to enforce.
[72]
What is the scope of the decision-making authority the parties have agreed to confer on the Independent Expert?
[73]
[78] Downer submits that, on the proper construction of cl 62 of the D&C Contract, the parties have agreed that if either of them elects to refer a Dispute to Expert Determination, the Respondent (being the party which received the Notice of Dispute) has an entitlement, as part of that Expert Determination, to make a cross-claim which responds to the Claimant's Submissions. That is, the entitlement of the Respondent to bring a cross-claim is part of the pre-agreed machinery for resolving a Dispute by Expert Determination.
[79] Downer's submissions on the textual features of cl 62, Schedule A15 and the Rules which support that argument, proceed as follows:
[74]
(a) The language used in cll 62.2(a)(ii) and 62.3(b) demonstrates that the parties have agreed that the Expert Determination of a Dispute must occur in accordance with the procedure established by cl 62.4. This can be seen in the parties' agreement in cl 62.2(a)(ii) that when the election is made to refer the Dispute to Expert Determination, the Dispute "will be referred to Expert Determination in accordance with clause 62.4". Similarly, in cl 62.3(b)(i), the parties have agreed that the right of a party to elect to refer the Dispute to Expert Determination is expressed to be a right to give a notice requiring that "the Dispute be referred to Expert Determination under clause 62.4".
(b) By their use of the words "will enter" in cl 62.4(a), the parties have assumed a mandatory obligation to enter into an Expert Determination Agreement with the Independent Expert on the terms contained in Schedule A15 (if, as is the case here, there is no agreement to alter those terms). That is, the parties have agreed that if a Dispute is referred to Expert Determination then the regime established by Schedule A15 will govern how that Dispute is to be determined.
(c) The language used in cll 2(a) and 2(b)(iv) of Schedule A15 demonstrates that the parties have agreed that the Expert Determination must proceed in accordance with the Rules. This can be seen in the parties' reference in cl 2(a) to the Independent Expert having been appointed "to determine the Dispute in the manner ... set out in the D&C Contract, [Schedule A15] and the Rules." It is reinforced by the agreement recorded in cl 2(b)(iv)(D) that, in making the Independent Expert Decision or conducting the Expert Determination, the Independent Expert "must proceed in accordance with ... the Rules".
(d) Rule 1.1 provides that the Claimant (being the party that gave the Notice of Dispute) must give to the Respondent and the Independent Expert the Claimant's Submissions, which must include: "a submission on the legal and factual issues of its claim" (Rule 1.1(c)) and "all documents and other evidentiary material on which it relies" (Rule 1.1(d)). This obligation is not limited by words of restriction which would only permit the Claimant to advance the claim or claims that have been notified in the Notice of Dispute. On the ordinary meaning of the words used, what the Claimant is required to do is to provide any submissions that it wishes to make and any evidentiary material it wishes to rely on in advancing its claim or claims.
[75]
[80] Downer submits that the evident commercial purpose of the parties' agreement to the procedure established by Rules 1.1 and 1.2 is to have all aspects of a Dispute resolved by the Independent Expert and to avoid fragmentation of the real issues that bear upon its resolution. An expansion of the Dispute referred to Expert Determination to include matters not previously raised in a Notice of Dispute is accounted for in the flexible time periods (evident in the parties' use of the words "or such longer period as may reasonably be required") provided for in Rule 1.2 (for delivery of the Respondent's Submissions) and Rule 1.3 (for delivery of the Claimant's Reply).
[81] I accept Downer's submissions set out in [79](a) - [79](c) above. However, I do not accept the submissions set out in [79](d) or [79](e). While I accept that the Expert Determination must be conducted in accordance with the Rules, I do not accept that, when considered in the context of cl 62 of the D&C Contract and the terms of the Expert Determination Agreement set out in Schedule A15, the Rules permit either the Claimant (by the Claimant's Submissions given under Rule 1.1) or the Respondent (by the Respondent's Submissions given under Rule 1.2) to expand the scope of the Expert Determination, or the jurisdiction of the Independent Expert to deliver an Independent Expert Decision, beyond the Dispute that has been referred to Expert Determination.
[82] The architecture of the dispute resolution regime created by cl 62 (including Expert Determination in accordance cl 62.4) and the language used by the parties in the relevant provisions set out at [16] to [30] above, reveals that the parties intended that the procedure would be employed to resolve "the Dispute" identified in a Notice of Dispute, and not some broader claims or disputes first introduced (by either the Claimant or the Respondent) during an Expert Determination.
[83] The Notice of Dispute is the initiating document that identifies the Dispute that the issuing party wishes to progress towards resolution: see cl 62.1(b)(iii). In that way, the Notice of Dispute defines the scope and subject matter of the Dispute which is being progressed.
[76]
(a) the Dispute that the parties must seek to resolve by executive negotiation is the Dispute a party has sought to progress by issuing the Notice of Dispute: cll 62.2(a)(i) and 62.3(a). There can be no executive negotiation of a Dispute unless the Dispute has been identified in a Notice of Dispute, thereby initiating the dispute resolution procedure.
(b) the Dispute that a party may elect to refer to Expert Determination under, or in accordance with, cl 62.4 is the Dispute which remains unresolved after executive negotiation (having previously been identified in the Notice of Dispute): cll 62.2(a)(ii) and 62.3(b)(i). In circumstances where Expert Determination is defined as "the process under which an expert makes a determination as to a Dispute between the parties", the mandatory requirement that any Dispute be resolved in accordance with the procedure set out in cl 62 - see cl 62.1(a) - means this can only apply to a Dispute that has passed through the preceding stages of the procedure. That is, there can be no Expert Determination of a Dispute unless: it has been identified in a Notice of Dispute; it has been the subject of unsuccessful executive negotiation; and it has been the subject of a referral to Expert Determination.
[77]
[85] In this way the scope of the Expert Determination, and the corresponding jurisdiction of the Independent Expert to deliver an Independent Expert Decision, is confined to the subject matter of the Dispute referred to Expert Determination.
[86] As already observed at [81] above, I accept that the parties have agreed the following matters: the Expert Determination of a Dispute must occur in accordance with the procedure established by cl 62.4; the regime established by Schedule A15 will govern how that Dispute is to be determined; the Schedule A15 regime includes a requirement that the Expert Determination proceed in accordance with the Rules. However, none of that constitutes an agreement to expand the scope of the Expert Determination beyond the Dispute referred to Expert Determination. To the contrary, an Expert Determination conducted in accordance with cl 62.4 requires that the Independent Expert make an Independent Expert Decision: see cl 62.4(c). An Independent Expert Decision is defined as "the determination of a Dispute" by an Independent Expert. For the reasons just explained, in the context of cl 62, that can only mean the determination of a Dispute that: has been identified in a Notice of Dispute; has been the subject unsuccessful executive negotiation; and has been the subject of a referral to Expert Determination.
[87] The terms of the Expert Determination Agreement set out in Schedule A15 are consistent with this analysis. The Dispute that has been referred to Expert Determination must be expressly identified in the Expert Determination Agreement: see Recital B and Schedule 1. As previously explained, that Dispute will have already passed through the preceding stages of the dispute resolution procedure before it could be referred to Expert Determination. The parties expressly record that the Independent Expert has been appointed to determine the Dispute referred to Expert Determination: see Recital C and cl 2(a). In that way, the parties expressly acknowledge the scope of the jurisdiction which they are conferring on the Independent Expert.
[88] The requirement that the Independent Expert make the Independent Expert Decision and conduct the Expert Determination in accordance with (among other things) the Rules, and the provision in Rule 1.2 for the Respondent to bring a cross-claim, does not expand the scope of the Expert Determination beyond the Dispute that has been referred. Downer's submissions in and above ignore the requirement in Rule 1.1(a) that the Claimant's Submissions include "a statement setting out the particulars of the Dispute referred for Independent Expert Decision". That is a clear textual indication that the remaining parts of the Claimant's Submissions, including those prescribed in Rule 1.1(c) and (d), and the Respondent's Submissions (including any cross-claim) that are delivered as a response to the Claimant's Submissions, must be directed to the Dispute referred to Expert Determination under cl 62.4.
[78]
[96] John Holland submits that if I decide the Construction Issue in its favour (as I have) then I should conclude that Downer has demonstrated, by the position it has taken in the discussions set out at [42] to [52] above, that it is not ready, willing and able to comply with its obligations under cl 62 of the D&C Contract; that by reserving what it asserts to be its right under the Rules to bring a cross-claim against John Holland as part of the Expert Determination of the Acceleration Dispute and the CHMP Dispute, Downer has indicated its willingness to advance a claim which has not gone through the steps mandated by cll 62.1(a), 62.1(b)(iii), 62.1(e), 62.2(a)(i) and (ii) and 62.3(a). John Holland's submits that conclusion is a basis for refusing Downer's application for injunctive relief analogous [16] specific performance.16
[97] Downer submits that, for the purpose of determining whether the relief sought in its application should be granted, the relevant obligation is that set out in cl 62.4(a); namely, to enter into an Expert Determination Agreement in the form of Schedule A15. If that is correct then, plainly, Downer is ready, willing and able to comply with that obligation.
[98] Ultimately, given the position John Holland has taken in respect of the ancillary relief sought in its application, I have not found it necessary to resolve this aspect of the dispute.
[99] In response to a query as to what would follow a refusal by the court to grant the relief sought in Downer's application, senior counsel for John Holland submitted (without retreating in any way from the position that Downer had shown itself unwilling to comply with its obligations under cl 62.4) that the declaratory relief sought in John Holland's application would enable the court to order entry into an Expert Determination Agreement with Mr Dempsey SC but also avoid what John Holland describes as the unfairness that would result from making such an order without also declaring the scope of the decision-making authority that will be conferred on Mr Dempsey SC by the agreement that is to be entered into. That is, upon the grant of that additional declaratory relief, Downer's unwillingness to comply with cl 62 would fall away as a discretionary factor weighing against the exercise of the court's coercive powers to compel entry into an Expert Determination Agreement. In adopting that approach, the court would seek to exercise its discretion in granting relief in a manner that will best facilitate compliance with the parties' obligation (as I have construed it) to submit the Acceleration Dispute and the CHMP Dispute to be determined by Mr Dempsey SC as Independent Expert. That is, the court would seek to tailor the relief in the way it considers best gives effect to the parties' bargain. I accept those submissions and have adopted the approach urged by John Holland when considering the relief the court should grant.
[79]
"For a party to have sufficient standing to seek and obtain the grant of declaratory relief it must satisfy a number of tests which have been formulated by the courts, some in the alternative and some cumulative. I shall formulate them in summary form as follows:
[80]
The proceeding must involve the determination of a question that is not abstract or hypothetical. There must be a real question involved, and the declaratory relief must be directed to the determination of legal controversies. The answer to the question must produce some real consequences for the parties.
The applicant for declaratory relief will not have sufficient status if relief is 'claimed in relation to circumstances that [have] not occurred and might never happen'; or if the court's declaration will produce no foreseeable consequences for the parties.
The party seeking declaratory relief must have a real interest to raise it.
Generally, there must be a proper contradictor."
[81]
[107] In Downer's submission the declaratory relief John Holland seeks does not satisfy either the first or the second of those preconditions.
[108] I do not accept Downer's submission that the declaratory relief John Holland seeks is based on a hypothetical state of affairs. I have explained, at [71] above, my reasons for concluding that there presently exists a real dispute between the parties as to the scope of the decision-making authority that will be conferred on Mr Dempsey SC in the event that the court orders the John Holland to enter into an Expert Determination Agreement in the form of Schedule A15. As stated at [100] above, that is the course I propose to take on Downer's application. The fact that the parties' dispute over the Construction Issue has thus far prevented them from entering into an Expert Determination Agreement does not mean that the question which has arisen is abstract or hypothetical.
[109] Further, the parties' dispute concerning the Construction Issue, and my determination of it, is based on concrete facts: the existence and terms of the D&C Contract; the passage of the Acceleration Dispute and the CHMP Dispute through the cl 62 procedures before the referral to Expert Determination; and, the positions the parties adopted in the discussions between their legal representatives which exposed the Construction Issue. These concrete facts establish that the dispute presently exists and (unless it is resolved by the court) will continue to exist when the parties enter into an Expert Determination Agreement with Mr Dempsey SC. This is not a case of John Holland claiming relief in relation to circumstances that have not occurred and might not occur.
[110] Finally, I am satisfied that the declaratory relief John Holland claims is directed to the determination of the parties' dispute. The making of declarations reflecting the court's determination of the Construction Issue will have real consequences for the parties. When the parties enter into an Expert Determination Agreement with Mr Dempsey SC, they will be bound by the declarations the court makes concerning the scope of the decision-making authority that will be conferred on Mr Dempsey SC by that agreement and, therefore, will be precluded from taking steps in the Expert Determination which are inconsistent with the declarations.
[82]
[114] For the reasons set out above, I will make the following orders:
It is ordered that John Holland Queensland Pty Ltd (John Holland) enter into an Expert Determination Agreement with Downer EDI Rail Pty Ltd (Downer) and Mr Mark Dempsey SC (the Independent Expert appointed for the Expert Determination of the Acceleration Dispute the subject of the Notice of Dispute titled 'Direction to Accelerate' issued by John Holland and dated 3 July 2025, and the CHMP Dispute the subject of the Notice of Dispute titled 'Clause 36B Project CHMP Requirements Difference' issued by John Holland and dated 3 July 2025) on the terms set out in Schedule A15 to the contract between Downer and John Holland dated 29 June 2023 and styled 'D&C Contract Queensland Train Manufacturing Program' (D&C Contract), as may be amended in accordance with any reasonable request of Mr Dempsey SC pursuant to clause 62.4(b) of the D&C Contract.
It is declared that the Dispute the subject of the Expert Determination Agreement referred to in order 1, and to be defined in Schedule 1 of that Expert Determination Agreement, is the Acceleration Dispute the subject of the Notice of Dispute titled 'Direction to Accelerate' issued by John Holland and dated 3 July 2025 and the CHMP Dispute the subject of the Notice of Dispute titled 'Clause 36B Project CHMP Requirements Difference' issued by John Holland and dated 3 July 2025 (the Referred Dispute), and does not include any cause of action or request for relief by Downer against John Holland that does not arise from the same, or substantially the same, subject matter as the Referred Dispute and does not form part of Downer's legal defence to John Holland's claims the subject of the Referred Dispute.
It is declared that the jurisdiction conferred on Mr Dempsey SC by the Expert Determination Agreement referred to in order 1 to deliver an Independent Expert Decision is confined to the subject matter of the Referred Dispute and does not extend to any cause of action or request for relief by Downer against John Holland that does not arise from the same, or substantially the same, subject matter as the Referred Dispute and does not form part of Downer's legal defence to John Holland's claims the subject of the Referred Dispute.
[83]
[1] The term "Dispute" is defined in cl 1.1 of the D&C Contract to mean "a dispute, difference, claim of whatsoever nature between [Downer] and [John Holland] in relation to the formation, operation or interpretation of, or otherwise in connection with, or arising out of, this deed".
[84]
[2] The term "Expert Determination" is defined in cl 1.1 of the D&C Contract to mean "the process under which an expert makes a determination as to a Dispute between the parties".
[85]
[3] The term "Independent Expert" is defined in cl 1.1 of the D&C Contract to mean "an expert appointed to resolve a Dispute".
[86]
[5] The term "Independent Expert Decision" is defined in cl 1.1 of the D&C Contract to mean "the determination of a Dispute by an Independent Expert".
[7]Triano Pty Ltd v Triden Contractors Ltd (1992) 10 BCL 405, applied in APM Group (Aust) Pty Ltd v Galwin Pty Ltd[2006] VSC 325, [39].
[89]
[8] This principle was recognised in the context of arbitration agreements in Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd[1996] NSWSC 104; (1996) 39 NSWLR 160, 165 and subsequently applied to expert determination agreements in Dance With Mr D Ltd v Dirty Dancing Investments Pty Ltd[2009] NSWSC 332, [52].
[6] In summary, John Holland contends that on the proper construction of the D&C Contract, the scope of the decision-making authority which the parties have agreed to confer on an Independent Expert is limited to the Dispute which has been identified in a Notice of Dispute, and which has passed through a mandatory process of executive negotiation before being referred to Expert Determination. The reference to a cross-claim in the Rules does not permit a respondent to introduce a new cause of action or claim for relief into an Expert Determination that was not part of the existing subject matter of the Dispute referred to Expert Determination.
[7] Downer disputes John Holland's construction. In discussions which preceded the filing of the present applications, Downer maintained it is not required to concede to John Holland's position before the Acceleration Dispute and the CHMP Dispute proceed to Expert Determination. Downer has expressly reserved what it asserts to be its right under the Rules to bring a cross-claim if it considers that the case brought forward by John Holland in the Expert Determination justifies it doing so. Downer rejects the proposition that its ability to bring a cross-claim against John Holland as part of the Expert Determination of the Acceleration Dispute and the CHMP Dispute is restricted or limited in the way John Holland contends.
[8] Due to this disagreement, the parties have been unable to agree on changes to the terms of the Expert Determination Agreement provided for in Schedule A15. In those circumstances, Downer submits that John Holland is obliged by the terms of cl 62.4(a) to execute an Expert Determination Agreement in the form of Schedule A15 (subject to any reasonable changes that Mr Dempsey SC might request). In proceeding BS 4350/25, Downer applies for orders to enforce that contractual obligation (Downer's application).
[9] Although John Holland has no objection to Mr Dempsey SC being engaged as the Independent Expert to determine the Acceleration Dispute and the CHMP Dispute, it opposes Downer's application because, on its submission, the parties are in dispute as to the scope of the contractual bargain they made under cl 62.4, being the contractual obligation to submit to the decision-making jurisdiction of the Independent Expert.
[10] In addition to opposing Downer's application, John Holland applies in proceeding BS 4615/25 for what it describes as ancillary orders, in the form of declarations and injunctions, in the event the court grants any of the relief sought by Downer (John Holland's application).
[11] The declarations that John Holland seeks concern the scope of the Dispute that is to be referred to Expert Determination, and the jurisdiction that is to be conferred on Mr Dempsey SC to decide matters raised in the Expert Determination (on the assumption that the court orders John Holland to enter into an Expert Determination Agreement). Following amendment of its originating application by leave at the commencement of the hearing, John Holland seeks declarations to the effect that:
[51] On 5 November 2025, Corrs Chambers Westgarth sent an email to White & Case stating that Downer's proposal did not provide any appropriate means of resolving the core issues in dispute in Downer's application and John Holland's application. The email continued:
[59] However, Hoffmann LJ went on to observe that, because the rule of procedure is flexible and based upon convenience, where it is shown that the question as to the limits of a decision-maker's authority is real and not hypothetical, the overriding principle is that whether to intervene to declare the principles upon which the decision-maker must decide is a matter for the discretion of the judge according to what is just and convenient and in accordance with the parties' agreement as to how the decision should be made.
[60] The nature of the dispute in Mercury Communications and the outcome of that case are instructive. British Telecommunications (BT) was required by statute to enter into agreements with other licensed operators of telecommunications services to permit those operators to connect to BT's telecommunications network. That requirement was imposed as a condition of a new licence granted to BT in 1984 (Condition 13). Condition 13 included a scheme which prescribed matters about which BT and the other operator would seek to agree. If terms could not be agreed regarding those matters then the Director General of Telecommunications (Director) would determine the terms considered to be reasonably necessary to secure certain prescribed objectives.
[61] Mercury was a licensed operator which had entered into an interconnection agreement with BT in 1982. When BT was granted its new licence in 1984, Mercury negotiated with BT to vary the earlier agreement to bring it into conformity with Condition 13. The parties were unable to reach agreement on certain matters and referred the disputed points to the Director. As a result of the Director's determination, the parties entered into a new interconnection agreement in 1986. The 1986 agreement provided for a further review of its terms. The review clause said that after two years from the date of the 1986 agreement and from time to time thereafter either party could ask the Director to determine whether there had been a material change of circumstances and, if there had, he could be asked whether the agreement should be modified, replaced or amended. In that case, the Director was authorised to make a determination in accordance with the criteria laid down in Condition 13.
[62] In 1992, the parties asked the Director for his determination of revised charges for connection and conveyance of calls on BT's network. The Director determined that there had been a material change in circumstances and determined that the 1986 agreement should be modified in accordance with a schedule which contained new charging clauses. Mercury took issue with the way the Director construed certain provisions of Condition 13. Mercury's primary concern was the meaning the Director gave to expressions used in Condition 13 ("fully allocated costs attributable to the services to be provided" and "relevant overheads"). The Director attributed to the services provided to Mercury a proportion of the whole of BT's costs for providing similar services for the purposes of its own business and those of all other licensed operators. Mercury contended that "attributable to the services to be provided" meant the marginal or additional costs of providing such services. Similarly, the Director took into account a proportion of the whole of BT's overheads attributable to the kind of services provided to Mercury, whereas Mercury contended that the Director should only have taken into account the extent to which BT's overheads were increased by the services it provided to Mercury.
[63] Despite what Mercury considered to be flaws in the Director's methodology, it regarded the charges the Director had determined as commercially acceptable and decided to enter into the modified agreement. The modified agreement also included a revised review clause which required that each year the parties initiate a review of the charging clauses and negotiate in good faith with a view to making any modifications to the agreement. If the parties failed to agree, the Director would make a determination limited to such matters that the Director would have power to determine under Condition 13.
[64] When the matter came before the court, the modified agreement had not been executed but both parties intended that it would be. The question which arose for the court's consideration concerned the scope of the parties' mutual obligation to negotiate in good faith about the charging clauses once the modified agreement was executed. As Hoffmann LJ observed, the parties were at odds as to the basic ground rules of such a negotiation. Based upon its view of the Director's methodology in making the previous determination, Mercury wanted to talk about what would be the marginal costs and overheads incurred by BT in providing services to Mercury, whereas BT wanted to talk about its average costs and overheads. Furthermore, Mercury knew that if the Director was asked to resolve the impasse by determination under the review clause, he would side with BT. Mercury considered that would not accord with the Director's duty under the review clause which was to apply the principles set out in Condition 13. In those circumstances, Mercury commenced proceedings seeking declarations concerning various questions as to the construction of Condition 13. It joined BT and the Director as defendants. Both defendants applied to strike out the proceedings for reasons which included that the court should not rule on those construction issues before the Director had made his determination.
[65] At first instance, the defendants' strike out applications were dismissed. On appeal from that dismissal, Hoffmann LJ (in dissent) would have dismissed the appeal. In concluding that it was just and convenient to entertain Mercury's application for declarations at that stage, Hoffmann LJ held that the question was not hypothetical. Further, that there was no question of Mercury trying to avoid the procedural consequences of having agreed to a particular form of decision-making. In the circumstances of that case, it was commercially more sensible for Mercury to apply for declarations when it did than for it to submit to a fruitless negotiation followed by a predictable determination before being able to demonstrate, if it was right in its construction of Condition 13, that the determination was made according to principles other than those to which Mercury had agreed.
[66] The dissenting reasons of Hoffmann LJ were approved on further appeal to the House of Lords. Lord Slynn observed that the court normally will not give a ruling as to the meaning of words to be applied by another decision-maker before that person has had a chance to express his or her own views about it. Further, the courts will not answer questions which are wholly academic and hypothetical. However, Mercury's application for declarations did not raise questions that were academic or hypothetical or wholly in the future in the sense that they may or may not arise. It made a good deal of sense in the circumstances of that case that the matters Mercury had raised should be decided at that stage. Importantly, permitting Mercury to take the course that it took did not amount to permitting it to rewrite the contract with BT. Where, as a matter of law, the court has jurisdiction to interpret the words at issue then the contractual obligations undertaken by the parties must be, if the interpretation of the words is referred to the court, that which the court decides. For the parties to be bound by that interpretation is not to rewrite the contract.[10]
[67] In British Shipbuilders v VSEL Consortium plc,[11] Lightman J cited the dissenting judgment of Hoffmann LJ and the speech of Lord Slynn in the Mercury Communications case as authority for five principles governing the status of decisions made by a person occupying the role of expert. Relevantly, the fifth principle was:
[74] Secondly, a decision by Mr Dempsey SC as to whether he has jurisdiction to hear a cross-claim would not be final. Consequently, it might ultimately prove to be wasteful for the court to defer a decision on the Construction Issue. If the issue comes before Mr Dempsey under Rule 4.2 and he decides in John Holland's favour, then any challenge to that decision would mean that the court would have to decide the Construction Issue in any event. If Mr Dempsey SC determined he had jurisdiction to determine a cross-claim, but the court held subsequently that he was wrong to do so, then "nothing could be more wasteful than the expert entering into a determination of the substance of the dispute when he had no jurisdiction to do so".[15]
[75] Thirdly, the Construction Issue has been argued on the present applications. I consider that it would be wasteful of time and costs, and contrary to the interests of justice and convenience, to defer a decision on the Construction Issue after hearing that argument.
[76] Fourthly, John Holland is not seeking to pre-empt the contractual machinery. It has raised the Construction Issue in response to Downer's application to enforce the obligation to submit to the decision-making jurisdiction of the Independent Expert. Further, John Holland is not seeking to rewrite cl 62.4 of the D&C Contract, the provisions of Schedule A15 or the Rules. As Lord Slynn explained in Mercury Communications, the contractual obligations undertaken by the parties must be those that the court decides. For the parties to be bound by that interpretation is not to rewrite the contract.
[77] Accordingly, I turn to consider the Construction Issue
(e) Rule 1.2 then provides that the Respondent must give a response to the Claimant's Submissions, including the submission referred to in Rule 1.1(c) and the evidentiary material referred to in Rule 1.1(d). Again, the text of Rule 1.2 does not include limiting words. The response that the Respondent must give is not a response to "the Dispute" of "the Notice of Dispute", it is a response to the Claimant's Submissions. That response can include "any cross-claim". Those words should be given their plain meaning. By those words, the parties have agreed that the Respondent is entitled to bring any cross-claim that can be said to be a response to the Claimant's Submissions. The Respondent is not limited to bringing a cross-claim that already forms part of the Dispute referred to Expert Determination.
[84] The dispute resolution procedure to which the parties have agreed is one which they have agreed to follow to resolve a Dispute that has been notified by means of a Notice of Dispute: see cl 62.2(a). The procedure consists of a series of mandatory stages. A Dispute identified in a Notice of Dispute must pass through each stage in sequence. Subsequent stages cannot occur until the parties have complied with the preceding stages. In that way:
[89] Even without that textual indication in Rule 1.1(a), Downer's submissions do not address the difficulty that cl 62 takes precedence over the provisions of Schedule A15 (including the Rules) by virtue of cl 1.7(a)(i) of the D&C Contract. Given that express agreement as to the priority afforded to the different contractual provisions (and even if there had been no agreement about that), I accept John Holland's submission that the Rules which form part of Schedule A15 ought not be construed as implicitly permitting a departure from the mandatory and sequentially staged dispute resolution procedure which the parties agreed to in cl 62 without clear words to that effect. The words "including any cross-claim" in Rule 1.2 are not sufficiently clear to support such a construction.
[90] Consistent with my findings above, I am satisfied that, properly construed in the context of the relevant provisions of cl 62, Schedule A15, and Rule 1.1(a), the words "any cross-claim" in Rule 1.2 refer to a cross-claim that forms part of the Dispute referred to Expert Determination (after having previously been identified in a Notice of Dispute). This construction accounts for the fact that, as John Holland submits, the Claimant in the Expert Determination (being the party that issued the Notice of Dispute) need not be the party which seeks relief through the resolution of the Dispute. A party that receives a claim for payment or other relief may dispute its liability to grant or provide such relief to the other. To progress a Dispute over its liability, the party might issue a Notice of Dispute. Accordingly, the Claimant (as defined by Rule 1.1) will not necessarily be the party prosecuting the claim for relief. Furthermore, a Dispute might involve competing claims concerning the same subject matter such that both parties are prosecuting claims for relief; for example, a claim by Downer for damages for delay in performance might be met with a claim by John Holland for an extension of time. It is in circumstances such as those that a Respondent, seeking to prosecute a claim for relief which forms part of the Dispute referred to Expert Determination, would bring a cross-claim under Rule 1.2 in response to the Claimant's Submissions.
[91] I do not accept Downer's submission that the flexible time periods provided for in Rules 1.2 and 1.3 indicate an intention that either the Claimant or the Respondent should be permitted to expand the scope of the Expert Determination to include matters falling outside the Dispute referred under cl 62.4. That flexibility indicates nothing more than the parties' recognition that they could not anticipate, in advance, the size and complexity of every Dispute that might be referred to Expert Determination. If a Dispute identified in a Notice of Dispute, and ultimately referred for Expert Determination, is so large and complex that a period of 15 business days would not be sufficient to deliver submissions then the parties recognise that the time should be extended for as long as reasonably required. That does not mean that the ability to extend those time periods supports Downer's position on the Construction Issue.
[92] Finally, I do not accept Downer's submission that the parties' commercial purpose in agreeing to the procedure established by Rules 1.1 and 1.2 is to have all matters in dispute between them resolved by the Independent Expert. As I have endeavoured to explain, the Dispute which the parties agree to submit to Expert Determination is not at large; it is the Dispute that is identified in a Notice of Dispute, and which passes through the mandatory stages of the dispute resolution procedure set out in cl 62, before being referred to Expert Determination.
[93] This construction of the procedure established by the Rules as only permitting the Claimant and the Respondent to agitate a claim (or cross-claim) that forms part of that Dispute does not involve fragmentation of the issues that bear upon the resolution of the Dispute referred to Expert Determination. To the contrary, it confines the claims (or cross-claims) the parties are permitted to agitate, and which the parties have authorised the Independent Expert to determine, to those which have been the subject of the mandatory cl 62 procedures. That makes commercial sense. In that regard, I accept John Holland's submission that no sensible business person would contemplate that either the Claimant or the Respondent could unilaterally expand the scope of the Dispute to be determined by the Independent Expert by making submissions in the Expert Determination that raise a claim (or a cross-claim) which has not been the subject of the cl 62 procedures and, consequently, for which there has been no prior notice as to it being the subject of the Expert Determination.
[94] Confining the scope of the Expert Determination in this way does not prevent either party from progressing a Dispute founded on a claim (or a cross-claim) which falls outside the Dispute referred to Expert Determination. However, a Dispute that arises from that further claim (or cross-claim) must be notified in a Notice of Dispute and progress through the cl 62 procedures before itself being referred to Expert Determination.
[95] In summary, I am satisfied that, on the proper construction of cl 62 of the D&C Contract, the scope of the decision-making authority that the parties have agreed to confer on the Independent Expert is limited to determining the Dispute that is the subject of a Notice of Dispute, and which has proceeded through the stages of the mandatory cl 62 dispute resolution procedure which precede a referral to Expert Determination. A cross-claim which purports to introduce a new Dispute in an Expert Determination, which has not been the subject of a Notice of Dispute, and which has not proceeded through the earlier stages of the cl 62 procedure, falls outside the authority the parties conferred on the Independent Expert to decide the referred Dispute. The reference to "any cross-claim" in Rule 1.2 does not expand the decision-making authority that the parties have agreed to confer on the Independent Expert.
[100] On that basis, I will make an order in the terms order 1 at [114] below.
[101] John Holland's response to Downer's application does not cause me to think that any further order giving effect to the obligation of cooperation in cl 69.10 of the D&C Contract is either necessary or warranted in the circumstances of this case (paragraph 2 of Downer's application). Upon making the order set out above, it would also be unnecessary to make any declaration as to John Holland's obligation to enter into such an agreement pursuant to cl 62.4(a) of the D&C Contract (paragraph 3 of Downer's application).
[102] I turn then to the question whether I am satisfied that it is just and equitable in the circumstances of the present case to exercise my discretion in favour of granting the ancillary relief John Holland seeks.
[103] In opposing that course, Downer submits that the declaratory relief John Holland seeks concerns a hypothetical state of affairs, in that it would have effect only upon the occurrence of future events that have not occurred, and would introduce ambiguity into the Expert Determination and risk further disputation between the parties.
[104] As to the hypothetical basis for the declarations, Downer submits that the occasion for it to bring a cross-claim has not yet occurred, and will not occur until Downer is required to give the Respondent's Submissions to John Holland and Mr Dempsey SC in the Expert Determination. On the present state of affairs there is no cross-claim before Mr Dempsey SC, no dispute regarding his jurisdiction to consider that claim, and no factual basis upon which the court could grant the declarations John Holland seeks. Downer submits that, in seeking such relief, John Holland invites the court to anticipate and decide, in the abstract, how a hypothetical future step might be taken, and what its legal consequence might be. The court should not exercise its jurisdiction to grant declaratory relief in such circumstances.
[105] In support of these submissions, Downer relies on the decision of the High Court in Bass v Permanent Trustee Co Ltd,[18] which emphasised that it is central to a judicial determination that it include a conclusive or final decision based on a concrete and established or agreed situation which aims to quell a controversy. The existence of a concrete situation based on facts, found or agreed, is to be distinguished from an advisory opinion or declaration which does no more than declare the law upon facts which are not stated, or which cannot be identified with any precision. In the development of the jurisdiction to grant declaratory relief, the courts have traditionally been reluctant to provide an answer to hypothetical questions.
[106] Downer also referred to the summary of the preconditions for granting declaratory relief in Aussie Airlines Pty Ltd v Australian Airlines Ltd:[19]
[111] I also do not accept Downer's submissions that the declaratory relief John Holland seeks would be productive of uncertainty or ambiguity in the Expert Determination so as to be likely to generate fresh controversy and fragmentation of the Expert Determination. The submission proceeds on the basis that the parties will likely disagree as to whether Downer's conduct in the Expert Determination amounts to it having brought a "claim" against John Holland. It seems to me that whatever force this submission might otherwise have had has been greatly diminished by the revised form of declarations John Holland seeks in its amended originating application. It is difficult to imagine that the parties would fall into a dispute about whether Downer has brought a "cause of action or request for relief" against John Holland.
[112] There will always remain the possibility that, if declarations of the sort John Holland seeks are made, John Holland might object to matters raised by Downer in the Respondent's Submissions on the basis that that go beyond the scope of the referred Dispute by raising matters which do not arise from the same or substantially the same subject matter as the Acceleration Dispute or the CHMP Dispute (just as Downer might object on the same basis to something included by John Holland in the Claimant's Submissions). If such an objection is taken then that is a matter which would fall to Mr Dempsey SC to decide pursuant to Rule 4.2. However, that objection would be resolved solely on the basis of Mr Dempsey's assessment of the scope of the Acceleration Dispute or the CHMP Dispute. It would not be open to Downer to contend (or Mr Dempsey SC to determine) that the provision for bringing a cross-claim in Rule 1.2 entitled Downer to raise matters in response to the Claimant's Submissions that fell outside the scope of the Acceleration Dispute or the CHMP Dispute as determined by Mr Dempsey SC. I am satisfied that, in that sense, there is utility in making ancillary declarations as to the scope of the Dispute referred to Expert Determination and the scope of Mr Dempsey's jurisdiction to determine the referred Dispute in the form of orders 2 and 3 at [114] below.
[113] Upon making those declarations, I do not consider that there is any further utility in making a declaration to the effect that Downer has not issued any claim or Notice of Dispute in the terms sought by paragraph 1(a) of John Holland's amended originating application. Nor do I consider it appropriate to grant injunctive relief restraining Downer from submitting matters to Mr Dempsey SC in the terms sought in paragraphs 2 or 2A of John Holland's amended originating application.