These proceedings arise out of a suite of contracts entered into in November 2017 for the construction, operation and maintenance of the Springvale Water Treatment Facility, including the treatment of water emanating from mining operations at the Springvale Coal Mine and the Angus Place Coal Mine. The suite of contracts includes:
1. a Water Treatment Services Contract (WTSC) between the plaintiff (MP Water) and third parties pursuant to which MP Water agreed to design, engineer, construct and commission the Springvale Water Treatment Facility (the Facility);
2. a contract between MP Water and the defendant (Veolia) pursuant to which MP Water's design and construction obligations under the WTSC were sub-contracted to Veolia (the D&C Contract); and
3. a contract between MP Water and Veolia pursuant to which MP Water's service delivery obligations under the WTSC were sub-contracted to Veolia (the SPA).
The proceedings were commenced on 14 May 2021.
On 20 May 2021, Rees J made interim orders requiring the defendant (Veolia) to comply with a Step-In Notice issued by MP Water to Veolia on 13 May 2021 and with directions given by MP Water to Veolia under that Step-In Notice: MP Water Pty Ltd v Veolia Water Australia Pty Ltd [2021] NSWSC 582. These reasons assume familiarity with her Honour's judgment and the defined terms therein.
The matter subsequently proceeded by way of pleadings. MP Water filed its List Statement on 3 June 2021 and Veolia's List Response was filed on 9 June 2021.
The parties have served their evidence in accordance with directions made by the Court. MP Water has served affidavits of Mr Benjamin Bowen (a chemical engineer and representative of MP Water) and an expert report of Mr Luke Adams. Veolia has served affidavits of Ms Yvette Waterfall (the commercial director of Veolia) and an expert report of Mr Rod McLeod.
Very late on the evening of 16 July 2021, MP Water filed a notice of motion seeking leave to amend its List Statement and leave to file a further affidavit of Mr Benjamin sworn on 16 July 2021.
The solicitor for MP Water, Mr Kon Nakousis, swore an affidavit in support of that notice of motion. Mr Nakousis' affidavit addressed the substance of the proposed amendments and their relationship to the matters arising for determination from the existing List Statement and List Response, the timing of the application for leave to amend, and the impact of the proposed amendments on the final hearing commencing on 26 July 2021. Mr Nakousis deposed that, in his opinion, the proposed amendments did not raise substantial new disputed factual issues and did not necessitate substantial new evidence from Veolia. It is plain that MP Water assumed at that time that, if leave to amend were granted, the issues raised by the amendments could be heard and determined together with the issues raised by the existing List Statement and List Response at the final hearing commencing on 26 July 2021.
The solicitor for Veolia, Mr Emanuel Confos, swore an affidavit on 20 July 2021 in which he identified 21 issues that Veolia intended to raise in response to the amendments if leave were granted, and foreshadowed that Veolia would also file a cross-claim if the amendments were allowed. Mr Confos deposed that the Veolia would serve further lay and expert evidence in relation to the 21 issues. The further expert evidence identified by Mr Confos included evidence in different fields of expertise to the evidence of Mr McLeod served to date.
After reviewing Mr Confos' affidavit, MP Water accepted that Veolia would raise the 21 issues, file a cross-claim and serve further lay and expert evidence if leave to amend were granted. MP Water did not suggest that this could be done in time for the final hearing to commence on 26 July 2021. Nor did MP Water apply to vacate the final hearing to allow time for the further steps identified in Mr Confos' affidavit. Rather, MP Water informally amended its notice of motion to seek leave to make the proposed amendments coupled with an order under r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) for "separate determination … of the issues the subject of the Plaintiff's proposed amended Summons and amended List Statement". MP Water pressed the amendment application only together with the application under r 28.2. I will refer to it simply as the application.
Veolia opposes the application.
Having considered the existing List Statement and List Response, the evidence of Mr Nakousis and Mr Confos referred to above, and the parties' written and oral submissions, I have decided to refuse the application for the following reasons that can be stated briefly without referring to all of the details of the evidence and submissions.
It is plain from MP Water's submissions that the application was motivated by:
1. a concern that, even if the issues raised by the existing List Statement and List Response are determined in its favour, it is likely that the further issues that are the subject of the proposed amendments will need to be litigated in order to resolve the question of who is required to perform all of the work necessary for Blowdown Pond B and the Springvale Water Treatment Facility to operate as intended;
2. a concern that Veolia may rely on the doctrine of Anshun estoppel as precluding MP Water from commencing or maintaining fresh proceedings to determine those further issues; and
3. a belief that the further issues (which arise only if MP Water succeeds on the issues raised by the existing pleadings) may be heard and determined more expeditiously as a separate question within these proceedings than if they are the subject of fresh proceedings commenced immediately after the determination of these proceedings.
Veolia does not dispute that there is likely to be further litigation in relation to the issues that are the subject of the proposed amendments if the issues raised by the existing List Statement and List Response are determined in favour of MP Water. However, Veolia has undertaken that it will not take any Anshun estoppel point in any fresh proceedings in respect of the proposed amendments.
MP Water's belief that the determination of the issues raised by the proposed amendments could be determined more expeditiously as separate questions at a second hearing within these proceedings rather than in fresh proceedings is mistaken. The precise scope of the separate questions is not yet known, and could not be known unless and until Veolia formulated a response to the proposed Amended List Statement and also formulated its proposed cross-claim, and MP Water formulated its response to that proposed cross-claim. All of that work would need to be done in order for MP Water to prosecute the claims that are the subject of the proposed amendments, irrespective of whether it is done within this proceeding or in fresh proceedings. The Court is in no position to allocate future hearing time to the determination of matters not yet formulated, which may or may not need to be determined depending on the outcome of the issues raised by the existing List Statement and List Response, and in the absence of any reasonable basis for estimating the length of the potential hearing. It would be most unfair on other litigants for the Court to do so. The Court has some ability to list a fresh proceeding for hearing on an urgent basis (assuming that urgency is demonstrated) as it would have to facilitate the hearing of further questions in these proceedings after the matters raised by the existing pleadings are determined. In circumstances where Veolia has advance notice through this application of MP Water's claims to be made in any such fresh proceeding, and it has given some consideration to the matters that it wishes to raise in response to those claims and the evidence it wishes to adduce, it is difficult to see how Veolia could resist directions for the expeditious preparation and hearing of any fresh proceeding that MP Water commences (again, assuming that urgency is demonstrated).
My observations immediately above assume that the determination of the issues raised by the proposed amendments has the urgency for which MP Water contends. I do not consider it appropriate to express a view about that in circumstances where the evidence of urgency relied on by MP Water was served less than two hours before the hearing of its application on 22 July 2021 and Veolia did not have a meaningful opportunity to respond to that evidence.
As I have already said, the precise scope of the proposed separate questions is not yet known and, for that reason, the terms of the questions cannot be formulated at this stage beyond MP Water's proposal that the question whether it is entitled to the relief in the proposed additional prayers of the Summons on the grounds contended for in the proposed additional paragraphs of the List Statement be determined separately after the trial commencing on 26 July 2021.
In my opinion, it is not appropriate to make an order under UCPR r 28.2 in such general terms in circumstances where it is clear from the proposed amendments and from Mr Confos' description of Veolia's proposed 21 issues and foreshadowed cross-claim that there is at least some degree of overlap between the issues raised directly by or as a consequence of the proposed amendments and the issues for determination on the existing pleadings. In particular, paragraph C86 of the proposed Amended List Statement pleads that Veolia refused to accept the handover of Blowdown Pond B or to perform the Mine Water Buffer Pond Demonstration Criteria Work. Substantially the same issue is raised for determination by paragraphs C28 and C29 of Veolia's existing List Response. The cross-claim foreshadowed by Veolia in response to the proposed amendments is described as a cross-claim seeking orders as to the works to Blowdown Pond B that MP Water was required to undertake before the commissioning work included in the Mine Water Buffer Pond Demonstration Criteria Work could be undertaken. Substantially the same issue is raised by paragraphs C29 and C62 of the List Response, although there is no existing claim by Veolia for relief in respect of that issue.
I accept the submission made by senior counsel for Veolia that the terms of the proposed separate questions would need to be carefully formulated in order to avoid the need for issues of fact or law to be considered more than once within these proceedings, with the consequent risk of inconsistent determinations. MP Water's proposal that this problem be addressed by granting its application but revisiting the terms of the separate questions at a later stage lacks merit, in my opinion. It is likely to give rise to satellite disputes about the appropriate terms of separate questions and, for the reasons already outlined above, offers no advantage over the alternative course of commencing separate proceedings once the outcome of the present proceedings is known.
In all the circumstances, including the Anshun undertaking given by Veolia, I consider that it would be contrary to the overriding purpose to make the orders sought by MP Water.
For completeness, I note that the overlap of issues referred to at [17] above would have been one important consideration if MP Water had applied for leave to amend on the basis that the final hearing would need to be vacated in order to facilitate a final hearing including the issues raised by the amendments. However, MP Waters did not make this application. Both parties wished to maintain the hearing commencing on 26 July 2021.
Subject to one qualification, the reasons above are sufficient to dispose of MP Water's application and it is not necessary to refer to the other matters addressed in the parties' submissions, including whether MP Water has failed to comply with contractual dispute resolution provisions in relation to the subject matter of the proposed amendments.
The qualification is that it is not clear to me whether MP Water maintains its application for leave to file and rely on Mr Bowen's affidavit sworn on 16 July 2021 and, if so, whether that application is opposed. That application will be stood over to the final hearing commencing on 26 July 2021.
It is convenient to reserve the question of the costs of the application to be determined at the same time as the costs of the final hearing.
For those reasons, I make the following orders:
1. Stand over prayer 2 of the notice of motion filed by the plaintiff on 16 July 2021 to 26 July 2021.
2. The notice of motion filed by the plaintiff on 16 July 2021 is otherwise dismissed, with costs reserved.
[2]
Amendments
23 July 2021 - typographical error: replaced "same" with "some" at [14]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 23 July 2021