Kuypers v Ashton Coal Operations Pty Ltd & Anor (No 5) [2015] NSWSC 1184

Supreme Court New South Wales

Medium Neutral Citation: Kuypers v Ashton Coal Operations Pty Ltd & Anor (No 5) [2015] NSWSC 1184 Hearing dates: 4, 5 August (Evidence on Commission); 7, 10 – 14, 17 – 18 August 2015 Date of orders: 18 August 2015 Decision date: 18 August 2015 Jurisdiction: Common Law Before: Campbell J Decision: Paragraph 13 of Mr McKinnon's statement allowed Catchwords: PROCEDURE – civil – admissibility of paragraph of witness statement Category: Procedural and other rulings Parties: Benjamin Kuypers (Plaintiff); Ashton Coal Operations Pty Ltd (First defendant); Silver City Drilling (NSW) Pty Ltd (Second defendant) Representation: Counsel: B. Dooley SC with M. Perry (Plaintiff); R.A. Cavanagh SC with Ms D.J. Dinkha (First defendant); A.R. Harris QC with I.D. Roberts SC and S.L.C. Flett (Second defendant)

Solicitors: Taylor & Scott Lawyers (Plaintiff); Curwoods Lawyers (First defendant); Lee Legal Group (Second defendant) File Number(s): 2012/393861

revised extempore judgment 1. I have heard much evidence that is relevant, for present purposes, to available methods of drilling the type of borehole, which is the subject of this case. The first method and the method being engaged in at the time of the accident is rotary hammer drilling using compressed air. The second method is what is referred to as mud drilling which is, as I understand the evidence so far, does not require the use of compressed air and uses water as a medium for removing cuttings from the hole and for coating the hole to retain it. 2. I have also heard evidence generally that mud drilling is a slower process than air drilling. There is evidence before me that it is charged for by the defendant on a different basis, that is to say, by the hour rather than by the metre. As in all things commercial a law of diminishing returns may apply. For instance in the present case where water was struck on 12 August 2012 and was being lifted out of the hole at a great rate, there is a question as to whether it is best to continue with the generally cheaper option of air drilling or whether one should change and employ the mud drilling method. This is basically because of the extra cost in having a fleet of sucker trucks, as they are called, empty the sump and the downtime of equipment whilst the sump is emptied. 3. The evidence which is now objected to is a statement by Mr McKinnon at [13] in the following terms: … The choice as to whether mud drilling is used instead of hammer drilling is an issue for the client. In my experience it comes down to a question of cost, bearing in mind that mud drilling is slower, and therefore, more expensive than hammer drilling. 1. The original concern about the statement was the emphasis of choice being an issue for the client. Mr Cavanagh was understandably concerned that this was being put forward as a statement of the nature of the legal relationship between the first and second defendants. To put it another way, he was concerned that Mr McKinnon was seeking to offer evidence that it was a term of the contract that any change to mud drilling was a decision for the first defendant, and the first defendant alone. There is no question in this case but that the ordinary principles of the interpretation of contracts and the objective theory of contract in Australian law are applicable. 2. I think the evidence is admissible and I propose to admit it, not as evidence of either Mr McKinnon's subjective intention as the agent of the second defendant in negotiating with the first defendant, at least for some purposes, but rather as a general statement as to the different costings relevant to air drilling and mud drilling. It seemed obvious that if there is to be a change in the basis on which a client is going to be charged for work the client may have an input into the decision‑making process. 3. I will permit the passage.