The Supreme Court of Queensland made a determination late last week (14 April) on the case of Santos Limited v Fluor Australia Pty Ltd & Anor, in which the gas giant has, thus far, expended significant financial resources on legal counsel and costs and has seen the parties in question produce a disclose a significant number of documents throughout the proceedings. 

The case arose from the construction of the upstream component of a coal-seam gas project between 2011 and 2014 and is part of litigation between Santos and Fluor Australia Pty Ltd and Fluor Corporation (Fluor), and concerns alleged overpayments made by Santos to Fluor.

Prior to commencing proceedings, the gas giant began a year-long investigation into these alleged overpayments and began engaging legal advisers to assess legal options. 

Santos’ solicitor informed the court that in the proceeding, the plaintiff expended over 120,000 solicitors’ hours, $36.5 million in expert fees, $21 million in counsel fees, and $2.5 million in other costs. 

The scale of the proceeding was also of significant note; the parties disclosed over five million documents (5,700,349), there were 14 experts who produced 81 expert reports, and 90 lay witnesses who produced 178 witness statements.

Along with this, the parties’ experts prepared eight as-built tables containing approximately 15,947 start and finish dates.

The judge presiding over the case, the Honourable Justice Peter Applegarth AM, noted that the parties are “engaged in litigation on a monumental scale”. The case has been characterised by numerous interlocutory disputes and appeals.

The court mentioned that the parties “inflicted prodigious quantities of submissions on us”.

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The court referred questions arising on pleadings to three referees, and hearings were heard before the referees between November 2021 and August 2022. 

The referees’ jurisdiction was to inquire and provide a report to the court. The referees submitted a draft report on 7 March 2023 and allowed parties to make further written submissions by 4 April, and oral submissions on 17 and 18 April.  

The referees pointed out key features of the submissions made by the parties: “One is the extraordinarily verbose and repetitive nature of the pleadings.”

“Next, there is the disjointed manner in which the hearing proceeded.

“The third is the vast amount of material put into evidence,” the referees stated.

The referees outlined that Santos’ written opening submissions comprised 1,400 pages over three physical volumes; Fluor’s comprised 1,486 pages over two volumes.

Santos’ written closing submissions comprised 2,983 pages over seven volumes, and Fluor’s comprised 2,377 pages over three volumes. 

Each party gave the court written reply submissions: 775 pages from Santos and 780 from Fluor.

“On top of all that material, there were four days of oral openings and five days of oral closings,” the referees stated. 

“We have not dealt with every variation of every argument put by one party or the other in its submissions.

“It may not have been possible to do so, but even to attempt that task would have delayed the production of this report by many months and ramped up immensely the already substantial cost of writing it, all for little if any gain.

“Instead, our approach has been to identify the essential arguments of each party on the real issues in dispute as they appeared from the submissions and to grapple with those arguments and the relevant evidence so as to express our conclusions on them.”

The defendants applied to stay the conduct of the reference until further order — practically, to stop the referees from completing their report.

Fluor submitted that “to permit the reference to continue is against the maintenance of public confidence in the administration of justice, because it will place the defendants in the position of dealing with an ongoing process conducted by referees”. Fluor put forward concerns that the completion of the report would create bias against them.

Santos opposed the stay application.

The court ordered that the application to stay the conduct of the reference until further order is dismissed, with Fluor ordered to pay the plaintiff’s costs of and incidental to the stay application.

The parties were ordered to submit directions for the expeditious hearing of the defendant’s application to set aside the referral order.

The proceedings are set to continue.