Kicking it to the referee(s) – the Queensland Supreme court refers $1.4bn dispute to panel of three referees 

In Santos Limited v Fluor Australia Pty Ltd & Anor (No 2) [2020] QSC 373 (Santos) the Queensland Supreme Court has ordered all questions “raised on the pleadings as amended from time to time” in relation to a $1.4bn dispute concerning the Surat Basin gas extraction and pipeline project to three referees nominated by the parties.   

The referral was opposed by the defendants in the proceeding, Fluor Australia Pty Ltd and the Fluor Corporation (the Fluor Parties).  The Fluor Parties contended that: 

• rule 501 of the Uniform Civil Procedure Rules 1999 (QLD) did not allow the “whole of the proceeding” to be referred out for determination; and
• the decision to refer all questions raised on the proceeding to a panel of three referees was not appropriate, as it could not be shown that “the potential referees…have superior expertise that would cause the proceeding to be decided more quickly, or more correctly, than a judge” and the nature of the issues in the proceeding (which involved credit findings and findings regarding misleading and deceptive conduct) were not appropriate for determination by referees.

Both arguments were rejected.  Bradley J drew a distinction between orders “referring out the whole of the proceeding” for determination, and referring all questions in the proceeding for determination.  In circumstances where the Court retained control of the proceeding – by making directions as to how the inquiry should be conducted and determining whether the referees’ report should be adopted – his Honour found that the referral proposed by Santos was within the Court’s power pursuant to r 501.

His Honour similarly rejected the Fluor Parties argument that the questions to be referred were not appropriate for determination by referees.  In doing so, his Honour noted that historically questions had been referred out because they involved “time-consuming, even tedious, consideration of documents or accounts, local inspections and broad enquiries of witnesses”. His Honour correspondingly found that the “the size and scale of the Project and the ensuing claims seems to recommend itself to a reference, rather than to disqualify it”, and determined that the reference out was appropriate.

The decision continues a longstanding trend of Australian courts embracing the power to refer all or a large portion of the questions in a proceedings to referees to allow innovative and modern dispute resolution practices to be used to resolve complex claims. NSW and Victoria in particular have frequently embraced the referral power as a means of managing complex disputes for some time.  While the Queensland Supreme Court has traditionally been hampered by the narrow scope of the referral power under r 501 – which until 2019 only permitted the Court to refer “a question of fact” to a special referee – amendments to the Uniform Civil Procedure Rules and the decision in Santos now paves the way for a more expansive approach to be adopted by the Court.

Bill Stephenson

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