Koolan Iron Ore Pty Ltd v Infrassure Ltd (No 3) [2024] FCA 643
Background
In Koolan Iron Ore Pty Ltd v Infrassure Ltd (No 2) [2023] FCA 1654, Jackson J decided on the claim of Koolan against Infrassure. Infrassure was part of a group of insurers providing coverage under a business interruption policy Koolan had purchased. While the parties concurred that the business interruption incident warranted indemnity, they disagreed on the quantum.
In these proceedings, Koolan sought leave to reopen its case in order to adduce expert accounting evidence. The purpose of reopening would have been to put a case that was different from the case put at trial but nevertheless, it was an alternative way of calculating the indemnity of which Infrassure and the court were aware.
Expert witness evidence
Koolan sought to reopen its case after delivery of the trial judgment to introduce a further report from its accounting expert Mr JM. While Mr JM agrees with Infrassure's accounting expert Mr MP, that 'strictly applying the Court's conclusions', the value of Koolan's claim was $1,661,812 plus interest, he said that disallowance of Koolan's claim under the Increase Cost of Working (ICW) issue had a 'consequence not specifically addressed in the judgment'.
Mr JM opined that this means Koolan's total claim against Infrassure, considering the resolution of all agreed-upon issues, amounted to $2,960,919. This figure matched the amount that would have been reached if the claim under the ICW issue had been fully approved.
The court classified this case as an application after reasons are given but before any final orders are made.29 Citing Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22, the court said that "In every case the overriding principle to be applied is whether the interests of justice are better served by allowing or rejecting the application for leave to re-open." 31 Considering this, it was held that it was not in the interests of justice to allow a party to reopen its case, without very good cause, after it has received the reasons for the decision and had the chance to evaluate how its evidence or arguments might be improved to counter unfavorable findings.33
The court stated that the following factors are also relevant: the likely prejudice to the party opposing the application and the probability that the additional evidence will impact the result. If reopening is unlikely to change the trial's outcome, it would argue against subjecting the parties and the court to the associated delays, difficulties and resource expenditures.36
The court refused Koolan's application, because Koolan did not point to a misapprehension of fact or law or inadvertence to explain why the different case it was pushing for in this application was not put at trial. Something exceptional would have to be identified to warrant reopening the case in these circumstances but Koolan identified nothing of that kind.37
Further, Infrassure has established that it would be prejudiced if the case would be reopened because Koolan's new case would have required Infrassure to engage an expert witness accountant and possibly also a mining engineer.45 Had leave been given to reopen, it would have been necessary to permit Infrassure to adduce responsive expert evidence before assessing the merits of that opinion.14
Koolan further argued that if the Court did not accept Mr JM's opinions on the accounting implications of the Court's reasoning, the matter should be referred to an expert referee specialising in accounting and business interruption loss adjustment.
The court did not accept Koolan's attempts to characterise the proposed reopening as an accounting adjustment resulting from the trial judgment. It was held that the court is not performing an accounting exercise; it is deciding what orders to issue based on the claim. In this case, the court has determined that Koolan has not met the burden of proof for the ICW component of its claim. Therefore, the claim fails, meaning the court's orders will not include it. The implications for any specific set of accounts are irrelevant to the court. Consequently, there was no need to refer any matter to an expert accountant or loss adjuster acting as a referee.38
Key Takeaways:
- Reopening a case after the trial judgment requires more than a simple disagreement with the decision. A misapprehension of fact or law or any inadvertence that would justify reopening the case must be identified.
- Potential prejudice to the other party and the likelihood that the new evidence would change the trial's outcome are factors to consider in the reopening of a case.
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