DISTRICT COURT OF QUEENSLAND
CITATION:
Drill Engineering & Pastoral Company Pty Ltd v Seymour & another [2022] QDC 136
PARTIES:
DRILL ENGINEERING & PASTORAL COMPANY PTY LTD
(Plaintiff)
V
ANNE SYEMOUR
(First Defendant)
AND
MICHAEL SYEMOUR
(Second Defendant)
FILE NO:
21/2020
DIVISION:
Civil
PROCEEDING:
Trial
ORIGINATING COURT:
Brisbane District Court
DELIVERED ON:
16 June 2022
DELIVERED AT:
Brisbane
HEARING DATE:
14, 15, 16 and 24 March 2022
JUDGE:
Porter QC DCJ
ORDERS:
1. The defendants pay the plaintiff $335,896.00
CATCHWORDS:
CONTRACTS – CONSTRUCTION OF COMMERICAL CONTRACT TERMS – Where the plaintiff claims for sum due under an informal contract to drill a water bore – Where the plaintiffs gave no warranty that an aquifer would be intersected – Where no aquifer was tapped – Where the defendants contend that the plaintiff failed to perform the contract by not drilling to a true vertical depth of approximately 1,200 metres –Whether the plaintiff undertook the drilling work with reasonable care and skill – Whether the contract was an entire contract – Whether the parties agreed to end the drilling works or the plaintiff abandoned the works
EVIDENCE – ADMISSIBILITY – EXPERT OPINION EVIDENCE – Whether the witness is an expert in a field of specialised knowledge – Where the witness lacked expertise to give expert opinion evidence on the subject matter of the issues at trial
COUNSEL:
S. B. Whitten and Y. Araki for the Plaintiff
G. Allan for the First and Second Defendants
SOLICITORS:
Swanwick Murray Roche for the Plaintiff
W J Markwell & Associates for the First and Second Defendant
Contents
Summary
The facts
The Seymour’s buy Windemere
Artesian aquifers in the Winton area
The Seymours’ investigations
Depco is retained
The development permits
Stage 1 of the drilling: 4 to 24 July 2017
Stage 2 of the drilling: 31 July to 9 September 2017
The decision to terminate drilling
The evidence
Analysis
The depth and direction of the bore hole
The issues
Mr Mann’s evidence
Mr Mann’s qualifications and area of expertise
The first report
The second report
The third report
The fourth report
The fifth and sixth reports
The seventh report
Depco’s experts
Depco’s lay witnesses
Evidence in chief
Cross examination
Admissibility of Mr Mann’s evidence
Cross examination
Parties’ submissions
Relevant principles
General observations on Mr Mann’s evidence
The inferred bore hole evidence
The admissibility of the wireline evidence
Findings
The contract
The character of the contract
Facts relevant to construction
The parties’ contentions
Analysis
Areas of consensus
Did Depco drill with ‘reasonable care’?
The entire agreement issue
Disposition of the proceedings
Summary
The plaintiff (Depco) drills water bores. Its principal, Mr Riddell, has been involved in that business for many years. The defendants (the Seymours) are graziers. They have been involved in that business for many years. In about late 2016, the Seymours purchased an additional property near Winton called Windemere. They hoped to access artesian water.
In about mid-2017, the Seymours and Mr Riddell negotiated for Depco to drill a bore on the property on terms, broadly, that Depco would drill to a depth of approximately 1200 meters and that the Seymours would pay Depco $265 per meter plus GST for that work. The objective was to tap an artesian aquifer, though Depco made no promise that it would succeed in doing so. Over some weeks, Depco drilled a bore on the property to a length of 1388m but did not tap an artesian aquifer. Depco ceased drilling on 9 September 2017 and left the property. It issued an invoice for the drilling work. That invoice was not paid. Depco brought these proceedings.
The principal issues can be summarised as follows.
Depco claims payment of $335,896.00 pursuant to a contract with the Seymours on the terms alleged. If that contract is uncertain, Depco claims in the alternative an equivalent sum as restitution.
The Seymours deny that Depco is entitled to any payment for the drilling work on the following grounds:
(a)The contract between the parties was an entire contract which required Depco to drill “as nearly as possible” to 1200m true vertical depth (TVD) and Depco did not drill to that depth. Rather, the bore hole diverted significantly from true vertical;
(b)The Seymours did not direct Depco to cease the drilling works. Rather, Depco abandoned the works and thereby repudiated the contract, which repudiation was impliedly accepted by the Seymours; and
(c)Further, as the contract was an entire contract and not performed, no right to restitution can arise.
Depco replies that:
(a)The contract was not an entire contract;
(b)In any event, Depco did not promise to drill to 1200m TVD but rather to drill with reasonable care and skill for approximately 1200m, which it did; and
(c)The Seymours directed Depco to cease the drilling works when the bore reached 1388m, and thereby agreed to the termination of the drilling work.
For the reasons which follow, I have concluded that Depco is entitled to the sum it claims under the contract.
The facts
The areas of factual dispute are confined. It is convenient to set out the uncontentious narrative, with areas of factual dispute noted for later resolution.
The Seymour’s buy Windemere
The Seymours own and operate several grazing properties in the Winton, Blackall, and Mt Isa regions, as they have done for their nearly 40 years of marriage. They purchased Windemere station in December 2016 and decided to reside there. Windemere lacked sufficient surface water to be fully productive. It had brackish sub-artesian water only. The Seymours decided to investigate tapping an artesian aquifer on the property.
Artesian aquifers in the Winton area
An artesian aquifer is an underground freshwater formation under pressure. If an artesian aquifer is intersected by a bore hole, the bore will flow without pumping because of the water pressure. Such bores are called artesian bores or flowing bores. A sub-artesian aquifer is an underground freshwater formation not under pressure. If a sub-artesian aquifer is intersected by a bore, the bore requires pumping to extract water.
There are a series of recognised artesian aquifers in the Winton area: the Toolebuc, the Hooray, the Adori and the Hutton. Those aquifers are located at different depths, and in broad terms, the above list identifies them from shallowest to deepest. However, the formations are underground geological formations and vary in depth and in other characteristics from place to place. The Adori and Hutton are the relevant aquifers in this case. [1] In the Winton area, the Adori was generally located in a range between 850 and 1100m and the Hutton below it. Artesian drilling requires a development permit to be lawful, and the development permit usually identifies the formation to be tapped.
[1] Mr Riddell at TS1-70 to 71
Artesian water is found in sandstone formations. When drilling for artesian water, the first indicator of success is that the drill starts to perform differently, with less load, and starts to return material which indicates that the drill is on sandstone.
Before the Seymours investigated drilling contractors, they undertook their own investigations of artesian aquifers which might be able to be tapped from Windemere. Such investigations can be readily undertaken by the informed lay persons because of the availability of information in the register of bores maintained by the Queensland Government which records detailed particulars of all registered water bores and other bore holes created in the petroleum, gas and resources industry and others. These records include particulars of bores drilled over 100 years ago, presumably because geological formations do not usually change much on that time scale. Examples of bore reports from the register are exhibited to the affidavit of Mr Lee White (a driller employed by Depco).[2] Amongst other information, these show the recorded date, depth, location, responsible driller, casing, strata and the aquifer tapped (at least in the opinion of the driller recording the data).
[2] Exhibit 16 LW1 to LW3
It was accepted by all witnesses that there is no guarantee that a bore will tap a particular artesian aquifer, even if it is drilled near a successful bore.[3]
The Seymours’ investigations
[3] Mr Riddell at TS1-67; Mr Seymour at TS 2-67.35; Mrs Seymour at TS2-34.46
An artesian water supply is a valuable asset. The basic facts about artesian supply set out above are well known to persons working in the water drilling industry and officers of the relevant State government department (DERM). They are probably widely known in the grazing community, though it is likely that unless a particular grazier has had cause to investigate the prospect of securing artesian water, he or she might be unaware of many of the details set out above.
The Seymours gave evidence that they were initially in the category of graziers who had not investigated artesian water when they acquired Windemere. However, by the time they obtained the Depco quote in May 2017, they were better informed because of their investigations into artesian supply for Windemere.
The Seymours consulted other local landholders on where other artesian bores were located in the area. They also did searches on the register of bores referred to above for other local artesian bores. They also sought advice from the local DERM office about obtaining a drilling permit. Mr Seymour also gave evidence that he took advice from a hydrogeologist called Mr Larsen.[4]
[4] TS2-70
The Seymours investigations provided them with sufficient information to seek a development permit for the proposed bore at Windemere. The permit application was lodged on 18 May 2017 and approved on 31 May 2017 (the first DP). The first DP, relevantly:
(a)Authorises a water bore “constructed to tap only the” Hutton aquifer; and
(b)Requires the water bore to be constructed in accordance with the DERM “Minimum Standards for the construction and reconditioning of water bores that intersect the sediments of artesian basins in Queensland” (see paragraph [28] below).[5]
[5] Exhibit 4
The application was not in evidence, but I infer that it sought a permit to tap the Hutton aquifer. Mrs Seymour gave evidence that the application for the first DP was completed at the DERM office at Longreach and that it was officers at DERM who nominated the Hutton aquifer.[6] The Seymours also obtained finance from their bank for the drilling work up to $500,000, which was ample given the likely cost.
[6] TS2-24
Based on his research, Mr Seymour decided where the bore was to be drilled without seeking input from Depco. It was not in dispute that the Seymours specified where the bore was to be drilled and that Depco made no promise as to whether or when artesian water would be tapped.
Although the precise particulars of the investigations undertaken by the Seymours were not particularised, there is no doubt in my mind that Mr Seymour at least (and probably Mrs Seymour) knew the matters in paragraphs [10] to [14], and probably a good deal more. That knowledge is demonstrated from time to time in their evidence and inferred from their confidence in obtaining development permits, obtaining and assessing drilling quotations and nominating the place for drilling.
Depco is retained
The Seymours sought quotations for the drilling of the water bore from three drillers. There is no evidence as to the information they provided to Depco, if any.
Depco provided a quotation on 3 May 2017 in the following terms (the quotation)[7]:
Hi Mick,
I have complied all the relevant information for your proposed water bore on Windermere Station and have processed the following quote for your perusal.
Due to the bores being situation in the Great Artesian Sediments these bores are required to be constructed to the Minimum National Construction Standards. This standard stipulates the type and amounts of casing that are to be used and the amount of grouting which must be incorporated into the borehole.
We expect the Bore will be constructed from 1,200 meters approximately.
Our pricing includes mobilisation…and all other drilling relates activities.
Our prices are as follows $265 per meter + GST (6’’ IS Steel Cased Bore).
Ø Please provide accommodation, meals, water access, drill sumps and a clear area.
Should any activity be required or negotiation which is outside the scope of the Principals [sic] original request, proposal or tender document, the Company will charge for such additional work at the current standard hourly rates of personnel and equipment.
[7] Exhibit 9 page 7
I make the following observations.
First, no witness gave any evidence in chief (which was by affidavit) that I could locate as to how this quotation was developed. However, in cross examination, Mr Riddell provided some background. He said he was generally aware of the likely approximate depth of the Adori and Hutton aquifers from the information available on the Winton town bores. He said that he was targeting the Adori aquifer for the Seymours’ bore because it was shallower. He understood the Adori was likely to be at 850 to 1100 meters. He said he calculated his approximate depth of 1200 to provide some leeway above his estimate as to the likely depth of the Adori.
It was put to Mr Riddell that Mr Seymour gave the figure of 1200m to Mr Riddell. Mr Riddell said he did not get the figure from Mr Seymour. Counsel for the Seymours then suggested that Mr Riddell had told a lie. Mr Riddell rejected that suggestion.[8] I could find no evidence from Mr or Mrs Seymour that they had nominated the figure of 1200m to Depco, much less to Mr Riddell. [9] I see no basis for the suggestion by counsel that Mr Riddell had lied.
[8] TS1-74.43 to .46
[9] If there is no such evidence, it is difficult to see how the suggestion of lying was reasonably justified by material available to counsel: see Rule 60(a) Barristers Conduct Rules.
However, as I have found, the Seymours acquired considerable knowledge about the artesian aquifers in the area which included the approximate depth of the Adori formation. Accordingly, it would not be surprising that Mr Seymour considered 1200m a reasonable estimate of the maximum depth which would need to be drilled.
Second, the quotation identifies that the bore had to be built to the Minimum National Construction Standards. It was common ground that this referred to the Minimum Constructions Requirements for Water Bores in Australia (February 2012, 3rd Edn) published by the National Uniform Drillers Licensing Committee 2011 fund by the National Water Commission) (the Australian standards).[10] There are separate Queensland Government standards which regulate construction and reconditioning of water bores in the Queensland artesian basin, though they do not feature in this trial (the Queensland standards).[11] The Queensland standards prevail where there is inconsistency with the National standards. The Queensland standards, and much of the National standards, are concerned with the manner of construction of water bores, as the quotation suggests.
[10] Exhibit 5
[11] Exhibit 4
Third, it is central to the Seymours’ case that it was an implied term of the contract that “the estimated depth of 1,200 metres that the bore was to be drilled to was the approximate True Vertical Depth of 1,200 metres”.[12] It might unintentional, but this allegation might suggest that the contract imposed an obligation for the bore to be drilled to a certain TVD (albeit an estimated one). The express words of the contract contain no such obligation, nor do they imply one. The quotation refers to an expectation as to the approximate distance the bore will be constructed. This sentence must be understood in the context of the common knowledge of the parties that drilling for artesian water is an uncertain activity. It must also be understood in the context of a quotation for drilling work. The key figure in that quotation is a rate per metre. It is unsurprising therefore that the quotation indicates what the Seymours might expect so as to indicate the order of magnitude of the likely price.
[12] Second Amended Defence at 14(b)
Mrs Seymour responded to the quotation on 10 May 2017 by email stating[13]:
Hi There
Just letting you that we have submitted the Permit to drill in Longreach
So will keep you in the loop…as when its all OK it’s GO for your lotAnne Seymour[13] Exhibit 9 page 8
Mr Riddell responded that day, though only to confirm the message, though it might be doubted that Mrs Seymour’s email comprised a binding acceptance. However, both Seymours gave evidence that they decided to accept the Depco quotation. Mr Seymour said that while price was relevant, he also considered that the Seymours had previously retained Depco to drill a sub-artesian bore elsewhere which had been a successful project.
The evidence diverges as to how that acceptance was communicated. It was put to Mr Riddell that the quotation was accepted by Mrs Seymour in a telephone call on 13 May 2017. Mr Riddell said he did not take the call but knew that the quotation had been accepted. Mrs Seymour said that she understood Mr Seymour rang to accept the quotation but did not hear that occur. Mr Seymour disavowed having any conversation accepting the quotation.[14] No doubt something occurred to communicate acceptance, as all parties proceeded on the basis that the quotation had been accepted. However, there is no evidence of any discussions relevant to the content of the contract at the time of acceptance.
[14] TS1-51; TS2-24; TS2-71
It is difficult to know in that context what to make of the 21 June 2017 email Mrs Seymour sent to Mr Riddell stating, “Just waiting on another quote to satisfy the bank will let you know”. However, there is no dispute that the Seymours did accept the terms of the quotation at some point.
The development permits
The work could not commence until a development permit was granted.[15] As noted, the first DP was granted on 31 May 2017 to tap the Hutton aquifer. However, in about late June 2017, Mrs Seymour applied for a revised development permit. On 4 July 2017, the second development permit was issued (the second DP).[16] It differed from the first DP in two material respects;
(a)It expressly authorised use of potassium chloride based drilling fluid; and
(b)It altered the permitted aquifer to the Adori from the Hutton.
[15] TS1-70.2
[16] Exhibit 19 pages 28 to 32
There were two drillers who worked on the bore hole who gave evidence. The first was Mr Lee White. Mr White worked on the bore from the beginning of operations until 1 August 2017. After he left the site, Mr Keith Wall began working on the site. Mr Wall gave evidence about the work on site from Mr White’s departure until Depco left the site on 10 September 2017. Other persons worked on the bore from time to time.
Mr White was involved with the preparation to begin drilling operations during which he called Mrs Seymour and requested that the first DP be changed so as to permit the use of potassium chloride because of its efficacy in relation to underground conditions he expected to encounter.[17] Mr White had considerable experience with bore drilling in that area.[18] Mr White did not recall asking Mrs Seymour to change the aquifer. However, Mr Riddell said that the proposal came from him, via Mr White, which probably explains why Mr White did not recall this. As noted above, Mr Riddell’s assumption in preparing the quotation was to target the Adori, so it is not a surprise that he suggested the change.
Stage 1 of the drilling: 4 to 24 July 2017
[17] Exhibit 15 paragraph 9
[18] TS1-113
Depco mobilised its drilling equipment in early July. The Seymours nominated the location for the drilling of the bore. All parties seemed to have acted on the basis that drilling could not commence until the approval of the second DP (though the first DP appeared to remain in effect). Work commenced on 4 July 2017. Mrs Seymour took the second DP to the site on the day it was issued so that work could commence. Hopes were high.
The work was carried out by a team of three, initially Mr White along with a Mr Farnes (another driller) and another worker known as Tim. Work proceeded for 12 hours a day. The set up and operation of the drill is central to issues in the proceedings and is dealt with separately from paragraph [118] below.
There is a licensing regime for drilling water bores. Mr White holds a class 2 drilling licence. He had previously been involved in drilling five previous bores in the area, all of which tapped an artesian aquifer. The expectation of Mr White, based on his experience, was that the drill would encounter shale and other layers before striking sandstone at about a depth of 1000m. Striking sandstone was important because it is an established marker for an artesian aquifer. Mr White explained that the material drilled was returned to the surface by the drill and was laid out on the ground for examination. The observations of the driller were then logged. Sandstone is much easier to drill than the surrounding layers. Accordingly, when a drill strikes sandstone, the operator can tell because the pressure on the drill decreases and the load on the pump decreases, making it run more quietly.
The drilling continued for three weeks until 24 July 2017. At that point, the team took a one-week break. The drill head and rods were removed, which is standard practice. At that time, Mr White believed that the bore was at a depth of about 1212m and told Mrs Seymour that. (This figure was calculated by counting the number of rods in use and multiplying by their 6m length.) Sandstone had not been encountered.
There is a difference in the evidence between Mrs Seymour and Mr White as to how smoothly the removal of the drill head and rods proceeded. Mrs Seymour said that when she walked over to the drill hole, she could see that the drillers were having trouble getting the equipment out of the hole, and heard the drillers say so over mealtimes. Mr White did not recall any unusual difficulties in removing the equipment. I suspect that if the drillers were expressing frustration in Mrs Seymour’s hearing, it was no more than is normal for performing the particular task. If things were as bad as Mrs Seymour perceived it to be, I think Mr White would have recalled it. Mr White was not cross examined on this issue. It should be recalled that Mrs Seymour had had limited experience with bore drilling and had very little ability to assess what was normal and what was unusual in a drilling operation.
Mr White expected to hit sandstone by about 1000m. That was consistent with the general view as to the depth of the Adori formation. When the drill team took a break, they believed they were at 1212m.
Stage 2 of the drilling: 31 July to 9 September 2017
Mr White returned to site on 31 July 2017. There was some mud and silt in the bottom 30m of the bore which was removed. However, Mr White had to leave the site suddenly a couple of days later for personal reasons. His replacement was a Mr Keith Wall, who arrived on 2 August 2017 and remained on site until the end of drilling.
At that time there appears to have been some concern as to whether the Adori formation had been by passed, because Mrs Seymour made a further application for a development permit for the Hutton. She demonstrated a good understanding of the broad location of those aquifers in evidence.[19] On 4 August 2017, DERM sent Mrs Seymour an email which informally approved tapping any artesian aquifer with the development permit to be provided afterwards.[20]
[19] TS2-34 to 35
[20] Exhibit 19 page 41
Like Mr White, Mr Wall was an experienced driller and a long standing employee of Depco. He held a Class 1 Water Borer’s License. At the relevant time he had drilled three other successful artesian bores in the area. He agreed with Mr White’s explanation of the importance of hitting sandstone and of how the driller could tell when that occurred from the performance of the drilling rig. He was not cross examined on his expertise or experience.
There were significant difficulties in carrying on drilling operations after the resumption on 31 July 2017. Those difficulties primarily arose from bacterial infection in the drilling mud used in the drilling process. It required specialist assistance to resolve, which was obtained by Depco. The specialist adviser counselled drilling continuously. Accordingly, over the last stage of the drilling, the rig operated 24 hours with the drillers working 12 hour shifts. Despite these difficulties (or perhaps because of them), the bore reached a length of 1388m by 9 September 2017. No artesian aquifer had been tapped.
The decision to terminate drilling
On 9 September 2017, Depco ceased operations. The circumstances in which that event occurred is hotly contested. Depco’s witnesses gave evidence that Mrs Seymour told them to cease work, and that based on that instruction, they did so and packed up. The Seymours say that Depco that decided to cease work, and that they did not understand Depco was terminating drilling works until weeks later. It is necessary closely to analyse the evidence of each witness on this key issue.
The evidence
Mr Riddell
Evidence in chief was given by affidavit. Mr Riddell swore four affidavits which were tendered. Only one affidavit dealt with this issue[21], and did so in brief terms:
11.On or around 9 September 2017, I was advised by the Plaintiff’s staff who were on site that drilling had reached a depth of 1388 meters but could not locate any water.
12.On 9 September 2017, Mrs Seymour phoned me and she [sic I?] advised her [sic me?] of the above.
13.In that conversation, she said to me words to the effect that she had seen firsthand that no sandstone had been struck, and hence the fact that the bore was dry was through no fault of the Plaintiff.
14.I then said words to the effect that with the benefit of hindsight we probably should have stopped drilling around the 1,200 metre mark, to which she agreed.
15. Mrs Seymour further acknowledged that the “boys had done a great job”.
16. Further, Mrs Seymour instructed the plaintiff to leave the hole open (i.e., not to cement it) in case they made a later decision to perform further work.
[21] Exhibit 9
Mr Riddell was briefly cross examined on this evidence[22]:
Now, the site was, I suggest to you, abandoned by the Depco drillers on the 9th of September 2017? How do you mean abandoned?
They left the site with the works uncompleted? No. We were asked that they – end of hole. They didn’t want to go any further.
They – I beg your pardon? I was told they didn’t want to go any further. Anne Seymour rang me and said she did not want to continue the hole. And then Keith rang me and said, “Is that confirmed?” I said yes, so he pulled out of the hole and we packed up.
I suggest to you that the evidence that you’ve just given, that Anne Seymour, in fact, rang you, is a lie? I only spoke to Anne Seymour once, and that was when she – she – when she booked the bore, she spoke to girls in the office. I never spoke to her. And she rang me at – at the end of hole and said, “I don’t want to go any further.”
I suggest to you that that evidence that you’ve just given is a lie…? No. It’s not.
And, in fact, what occurred, Mr Riddell, was that the only occasion that, in fact, Mrs Anne Seymour spoke to you by telephone, or at all, in the whole of the period that Depco was on Windermere Station, was earlier, in early August, when the drilling team members changed – that is, Lee White left and Keith Wall came in. That’s what I’m suggesting to you? No.
And, in fact, during that conversation Mrs Seymour said words to the effect that she wanted to thank you because Keith, who had replaced Lee, was a welcome part of the drilling team. Do you recall her saying words to that effect? Not before the last – the only conversation I’ve ever had with Anne Seymour is when she rang me and she said she’d like to cancel the hole. She didn’t want to finish it. That’s the only time that I’ve ever spoken to Anne Seymour.
[22] TS1-58.32
Mr Wall
Mr Wall’s affidavit relevantly stated[23]:
3.In probably around 4-8 September 2017, or in any event the few says prior to drilling works finishing on the bore, I had suggested to Mrs Seymour that it was becoming a fruitless task to continue drilling.
4.On around 9 September 2017, Anne Seymour approach me and said words to the effect of “Mick and I have decided that we didn’t want to go any further”.
5.After Mrs Seymour said the above to us, myself and the rest of the drilling team stopped drilling. We then began to pack up our equipment.
6.At no time during packing up our equipment did Mr or Mrs Seymour approach me and ask what we were doing, nor did I observe them do or say anything similar to any other member of our team. To the best of my recollection we were left alone.
7.…
8.I can recall on our final morning before departing Windemere having a coffee underneath the house with both Mr and Mrs Seymour.
[23] Exhibit 17
Mr Wall was cross examined briefly on this evidence[24]:
[24] TS1-116.30; 117.42
Mr Wall, in your affidavit of 11 March 2022, at paragraph 4, you say that on or around 9 September 2017, Anne Seymour approached you and said words to the effect of, “Mick and I have decided that we didn’t want to go any further”? That’s correct.
Right. Now, I suggest to you that Anne Seymour did not approach you and say those words and that what you have stated there is a lie. You must answer? Pardon?
I’m suggesting to you that what you said at paragraph 4 is a lie? No, it’s not.
And at paragraph 5, you say:
After Mrs Seymour said the above to us, myself and the rest of the drilling team stopped drilling. We then began to pack up our equipment.
And again, I suggest in respect of the words that caused you to back up – pack up the drilling equipment that Mrs Seymour never said that to you and, in fact, you packed up the drilling equipment on the instructions of Mr Riddell? No, that’s not correct.
Right. Did you take orders from Mr Riddell during the course of the drilling operation whilst you were working on the Windermere bore site? Correct.
And as his employee, you obeyed his orders? Correct.
Right. And did you get an order, then, based on what you’ve said in paragraph 5 of your affidavit, from Mr Riddell to pack up the drilling equipment because of what Mrs Seymour said? That’s correct.
…
MR ALLAN: Yes. I’m not – I’m – yes. Yes. I – just put that document to one side. Just close that document, thanks, Mr Wall. Now, I suggest to you that on or about the 9th of September 2017, that you had a conversation with Mr Seymour at that time and told him that you were not going to go any deeper, meaning, dig any deeper the bore hole at Windermere Station? No. That’s not correct.
And you further told him that you were concerned about the ability of the drill rig to go any further? Yes. I have had that conversation with them. But I don’t know whether it was on the 9th of December – 9th of August, or September, or whenever it was.
Mrs Seymour
The evidence of the Seymours was given for the most part in the form of adoption of other statements and affidavits made in previous proceedings or in previous applications. Much of it was irrelevant. This was particularly so for Mrs Seymour’s evidence which included statements prepared for use in a prosecution of Mr Riddell for operating the drill rig at times without a driller with the appropriate license. (In short, an artesian bore must be supervised by a driller with a class 3 licence. Mr Fardon had such a licence, but the other drillers did not and nor did Mr Riddell. During the 24 hour drilling period, Mr Fardon was not always present. Mr Riddell pleaded guilty to the offence. I did not find these events to be of any use in resolving these proceedings.)
Mrs Seymour’s version in chief of events around 9 September was[25]:
38.I recall that they continued to drill around the clock for 24 hours until Saturday 9th September 2017. On that day I walked over to the job site at about 4pm. Keith was on the drill rig drilling at that time and the only other persons present were Laurie and the offsider. Because the drill rig was operating I had a brief conversation with Keith and I asked him how it was going. Keith replied words to the effect, “Up the shit”. It was at this time that Mick who was at Split Rock working telephoned Keith and I walked away to let them have their conversation. (I knew the conversation was about when to stop work on the hole as I had discussed this issue with Mick earlier).
…
40.As they were departing the job site Keith, Laurie and the off-sider came over to me and gave me a “Thank you” card. I later opened the card and I saw that it said, “Thanks for all the great food and laughs. Hope I bit of good old Irish luck comes your way.” It was signed “the Day Shit Crew”. The card also contained a Gold Lotto ticket.
[25] Exhibit 19 page 13
In cross examination, Mrs Seymour denied Mr Riddell’s version. She denied that she had looked at sediments deposited from the drilling, saying that she did the house and the administration and had nothing to do with outside, only approaching the drilling site to deliver meals.[26] She denied any executive role in the events, saying she only did administration under instructions from her husband. She repeated that proposition several times in her evidence.[27]
[26] TS2-13.45
[27] TS2-28
She denied knowing that the drillers were aiming to hit sandstone and denied any discussion with Mr Seymour about aquifers and the prospects of finding water. She denied discussing the research obtained from DERM and other sources or the location for the bore. She said she had no experience with artesian aquifers or the likely cost of them. This seemed inconsistent with her affidavit which said, “we knew from experience that the costs of an artesian bore may run from 300 to 500 thousand dollars”. She said the experience she referred to was obtained from talking to people in the district.
She was cross examined about 9 September 2017. The initial questioning was as follows[28]:
Now, this is the events that occurred on the 9th of September 2017 that you were talking about there. It’s the case though that prior to the 9th of September 2017, you and Mick had discussed the drillers stopping work? No, we hadn’t.
[28] TS2-42.1
The inconsistency with the last paragraph 38 of her statement is stark. Her attempts to explain the inconsistency were muddled, though she did concede ultimately, she had a conversation with Mr Seymour that morning at about 7 am.[29] Mrs Seymour went on to conceded that she did not know that the call to Mr Wall referred to in paragraph 38 was Mr Seymour at all (again contrary to her evidence in the affidavit).[30]
[29] TS2-43 to 46.10
[30] TS2-42
She rejected Mr Riddell’s version of events when put to her and particularly said that she did not talk to him at all at this time.[31] When pressed, Mrs Seymour said[32]:
Well, I put it to you that you did have that conversation and in addition, in that conversation, you suggested – you told Wayne Riddell that he was to leave the hole open in case you later decided to do more work with it? Please, sir, I’m an interior decorator. I have got no idea. I was born and bred in Sydney. I have no idea.
[31] TS2-48
[32] TS2-49.34
She was cross examined about her understanding of the circumstances when drilling ended, and the goodbye card was given to her on Sunday 10 September. She said that she did not understand that the work was coming to an end. She said she did not discuss with Mr Seymour what he had said to Mr Wall. Amongst other things, she said[33]:
MR WHITTEN: And so while you were having coffee under the house? Yes, sir.
Receiving the thank you note, was there any discussions about whether the boys were going to continue to come back – going to come back at any stage? Well, Keith actually gave indication that they might come – he doesn’t – doesn’t – didn’t know what was going on. And – and I knew that they were having problems with the gear, but it was just general thank you and all the very best. I know Dylan was expecting a baby, so I wished her – but it was just – that was when I – but then I left – I left that conversation early because I had a – I had another meeting to go to.
[33] TS2-51.29
Mrs Seymour was further cross examined on her evidence that she did not understand work was finished. She agreed that she took no step by email or telephone to inquire with Depco when they would be returning over the next month but maintained she did not know they were not returning. She denied discussing the depth of 1388 with Mr Wall or Mr Riddell, or stopping at 1200m, though she did recall discussion of 1200m at the beginning of the job.[34]
[34] TS2-53 to .54
Mr Seymour
Mr Seymour’s relevant evidence in chief was comprised in a summary of concerns document he prepared in December 2017 and a witness statement he gave to the prosecution on 6 February 2018.
The former states[35]:
Concerned about size of Drilling Rig ‘1200’ was told it was capable of doing the job required. Asked Drillers if they were staying on the job until it was completed, they assured me they would be. (Had trouble at Allawah Tambo on previous job with change of staff)
After 3 weeks I was at Split Rock Mount Isa mustering, Lee (driller) rang me to say they were at 1212 mts and were “on the sandstone”.
The drillers then pulled the bit and rods out and went for a week’s break leaving the Bore hole unstable (section 3.1.2.) minimum standards GAB
After returning in 2 days Lee (driller) left owing to personal matters. Never to be seen or heard from again even with phone calls and text messages from us.
[35] Exhibit 21 page 6
There is then a detailed account of the difficulties in progress after drilling was resumed in early August 2017. Mr Seymour continued[36]:
After many breakdowns to the pump that supplies mud to the drill rig they continued to supposably drill to 1388mt mark.
Keith then advised me that he was no going any deeper as he was concerned about the ability of the drill rig to go any further as there was a likelihood of bogging the rod and bit in the hole and this would not be good for his reputation and the cost involved of recovery or loss. (Phone call from Split Rock)
They then pulled the bit and rods from the hole. They took the drill rig and mud pump back to Rockhampton to so some work on it as both were in pretty bad repair.
They did not cement off the top of the hold as quoted on the drillers log form (section remarks)
[36] Ibid page 9 to 10
Mr Seymour’s witness statement corrects the reference to being on the sandstone in his summary of concerns to a reference to being on the siltstone.[37] It also changes the account of the departure of Mr White, saying the following[38]:
I recall that Lee had only been back for 1 day and he then told us that night that he had to go for personal reasons. Lee told us that someone would be replacing him and that he was a driller. The next day I recall that a person by the name of Keith arrived while Lee was still here. Lee then left in his vehicle.
[37] Exhibit 21 page 13 paragraph 18
[38] Ibid paragraph 21
He then deals with the events around 9 September 2017[39]:
32.I remember on Saturday 9th September 2017 at about 4pm I got a call from Anne and she told me something (She said that there was a problem going on and that they had quit the hole). I was at ‘Split Rock’ mustering. I then telephoned Keith and I said that I would be down and he said that they would still be on site until I arrived. I then left ‘Split Rock’ and drove home. I got home about midnight. I then had a few hours’ sleep, then I went over in the morning and saw Keith at the site. Keith then told me that they were pulling out at that depth. I remember he said they were at 1388 metres. He also said that the rig was having trouble with the pull back and he didn’t want to lose the gear and his credibility as a driller.
33.After Sunday 10th September 2017, they had ceased drilling on the site and the equipment on the drill site was partially packed up. The rig had been taken away and some of their vehicles…other equipment remained on site which gave us the impression that the job wasn’t finishing and that they were returning to finish the job at a later date with a bigger rig and better mud pump.
[39] Ibid paragraph 32
Relevantly in cross examination, Mr Seymour said that big decisions involving the business outside the “house yard” were made by him. Mr Seymour was then cross examined on his evidence about 9/10 September. He confirmed he spoke to Mr Wall on 9 September but denied Mr Wall told him the drill had reached 1388m then or later. He said he spoke to Mrs Seymour at 4pm on 9 September but would not have spoken to her at 7am. He said he called at 7pm when he was away. He denied that he and Mrs Seymour discussed the drillers stopping work at any time on 9 September. It took some time for Mr Seymour to clearly deny that proposition. I found his evidence in this respect doubtful.[40]
[40] TS2-74
He was then cross examined about the circumstances in which Mr Wall and the other drillers left on Sunday 10 September[41]:
Okay. All right. We’ll leave it alone. You were under no illusion at the time that Depco were not going to continue drilling as of Sunday, the 10th of September 2017? Could you rephrase that again.
You had no doubt that Depco were not going to continue drilling from the 10th of September 2017? No. I thought they were coming back to complete the job.
And you had no basis for that thought, though, did you? I only discussed it with Keith, and they left all the other gear behind. Didn’t take it with them because I thought they’d come back to complete the job.
So you were here in court yesterday when Mr Wall was giving evidence, weren’t you? That’s correct
And you heard your barrister cross-examine him, didn’t you? Yes, correct.
And yet nothing of what you just said in that conversation with Keith Wall was put to Mr Wall by your barrister? That’s his job, not mine, sir.
Analysis
[41] TS2-76.9
The witnesses
Based on my observations, Mr Riddell, Mr White and Mr Wall were doing their best to tell the truth. I reject the suggestion by counsel for the Seymours that they were lying, and frankly I cannot see any proper basis for that suggestion. Nor was there any aspect of their demeanour or their account which was improbable or inconsistent or suggested that their evidence was not reliable. That is not to say that I necessarily accept every detail of their evidence. Many years have passed since the events they were narrating, and it does not appear there was any contemporaneous records kept, apart from the brief notes in the drilling log. However, I consider they were generally reliable historians.
The same cannot be said for the evidence of the Seymours.
The unsatisfactory aspects of Mrs Seymour’s evidence were as follows.
First, there was the inconsistency about talking to Mr Seymour when to stop work on the bore before 9 September: see [56] and [57] above. That was a stark inconsistency on a central issue. Further, Mrs Seymour’s response in cross examination to the inconsistency was evasive. This alone significantly affected her reliability.
Second, I was troubled by her insistence on her purely administrative role in the water bore. She continually tried to minimise her understanding of the process and decision making in relation to the project, despite being involved in dealing with DERM and obtaining the development permits. She is obviously an intelligent woman. She swore (as was the fact) that she had been a grazier for 40 years. Even in her “administrative” role she clearly had to write and read all correspondence that passed through the grazing business. She also regularly spoke to Mr White and Mr Wall.[42] The idea that she did not understand the basic parameters of the process underway in the artesian bore is not credible. Yet under cross examination about a key allegation by Mr Riddell (that she rang and spoke to him about Depco pulling out), she told the Court she was an interior decorator from Sydney. That glib comment reflected poorly on her reliability. In my view it was said to avoid dealing properly with the question put by counsel.
[42] See paragraphs 22 and 35 of her witness statement: Exhibit 19 and the findings at [41]
Third, linked to the second point was her evidence that she did not discuss key events in the drilling project with Mr Seymour, even when on the telephone to him (such as in the call on about 8 September or the implications of the departure of Depco’s staff in September 2017). Even if Mrs Seymour’s writ ran only in the home paddock, it was plain that the Seymours were engaged in a joint undertaking in their grazing business. The move to Windemere included taking up residence. The bore was important. The idea that they did not discuss the project, its status and prospects in detail is not credible.
Finally, she gave evidence that she did not know the drillers were looking to hit sandstone.[43] For the reasons in paragraph [72] above, that is extremely improbable. But further, in her witness statement exhibited to her affidavit she swears that Mr White told her he had struck sandstone.[44] Even if that is an error and was meant to be a reference to siltstone (see the drilling log), that evidence shows she was quite familiar with the word in the context of the drilling project.
[43] TS2-14.32
[44] See paragraph 22 of her witness statement: Exhibit 19
There were also unsatisfactory elements of Mr Seymour’s evidence.
First, in his initial complaint he commented: “After returning in 2 days Lee (driller) left owing to personal matters. Never to be seen or heard from again even with phone calls and text messages from us.” This comment painted Depco in a bad light. It was also unjustified and misleading. Depco’s other drillers remained on site and Mr White was replaced by Mr Wall in less than 48 hours. There was no opportunity for phone calls or text messages and no interruption in Depco’s staffing or operations. Further, Mr Seymour swore to the opposite situation in his witness statement: see [64].
Second, in Mr Seymour’s witness statement he swore that Mr Wall told him that the drill was at 1388m. However, in cross examination Mr Seymour refused to accept that Mr Wall made that statement and did so in a manner which I found evasive.[45] This is no irrelevant slip on a minor detail. Mr Seymour knew the approximate expected depths of the Adori and Hutton aquifers; that information was almost notorious in the area and Mr Seymour is the one who did the research and spoke to the hydrogeologist and determined where to drill. He knew that the contract contemplated drilling to 1200m. So, his knowledge that the drill was at 1388m would make it harder to sustain the proposition that he did not know the drillers were terminating their drilling efforts, and I consider he denied knowing that fact to try to bolster his account.
[45] TS2-73.12
Third, Mr Seymour denied that Mrs Seymour discussed the drillers stopping work in their call on 8 or 9 September. I found his evidence to that effect to be unpersuasive. My strong impression is that Mr Seymour did not really recall whether such a conversation happened or not and was reluctant to concede that it could have.[46]
[46] TS2-74
Finally, as will be seen, their version is generally less consistent with the uncontroversial evidence and the likely course of events.
Findings
I find that the events leading up to Depco leaving Windemere are as follows.
I accept Mr Wall’s evidence that in the days prior to drilling works finishing on the bore, he suggested to Mrs Seymour that it was becoming a fruitless task to continue drilling. That evidence is entirely consistent with the objective circumstances. The bore was supposed to tap the Adori well above 1388m. The drill rig was at the limit of its operations with a bore of that length. No sandstone had been encountered at any point. The bore had been difficult and absorbed considerable resources since early August but was only 160m deeper than it was after the first three weeks. It would be astounding if Mr Wall did not think that it was time to stop and the person, he would have told was Mrs Seymour, who he saw regularly and had a good relationship with.
I also find that Mrs Seymour rang Mr Seymour and told him about Mr Wall’s opinion and that she and Mr Seymour decided to finish up work on the bore, as Mrs Seymour said in her witness statement. Apart from Mrs Seymour’s witness statement, there are three other factors strongly favouring that finding:
(a)As I have explained, I did not find Mr Seymour’s evidence denying this occurred persuasive.
(b)For the reasons set out in the previous paragraph, both Seymours would have been aware that the bore was well below a level where it was objectively likely to strike an artesian aquifer, and it is likely that they would have been considering the future of the drilling; and
(c)The Seymours were partners in the project and in their grazing business. Even if Mr Seymour was the ultimate decision maker, Mrs Seymour was his eyes and ears on the project in his absence. It is extremely likely then that she would have told Mr Seymour of Mr Wall’s opinion and discussed ending the work in one of their regular calls.
Accordingly, I find that the Seymours had agreed that the drilling work should stop in a telephone conversation prior to 9 September 2017.
The next question is what communications there were between the Seymours and Mr Riddell and Mr Wall thereafter. I find that Mrs Seymour told Mr Wall on 9 September 2017 that the Seymours had decided to end the drilling after agreeing to that course with her husband. I also find that that was communicated to Mr Riddell. Apart from Mr Wall and Mr Riddell’s evidence, there are a number of matters which objectively support that finding:
(a)First, once the decision was made to end the drilling, it is highly likely that Mrs Seymour would have communicated this to Mr Wall, especially as they appear to have had on-going discussions and a good relationship. Even if Mr Seymour was (as he believes) the primary decision maker, it is plain from Mrs Seymour’s role in the project that she would have been comfortable communicating the decision. Further, I do not think that Mr Seymour’s quick return from Split Rock suggests the contrary. The ending of drilling and packing up is a process which it is understandable he might have wished to be on hand to manage if required.
(b)Second, all witnesses agreed that Mr Wall and the other drillers had started packing up on Saturday 9 September, before Mr Seymour had returned to Windemere. That is exactly what he would have done if told by Mrs Seymour on that day that the Seymours agreed that work should be brought to a stop.
(c)Third, the alternative account of the Seymours has Mr Wall unilaterally deciding to pack up and leave the site. The Seymours give no evidence of any discussion by them with Mr Riddell about that, though they knew that Mr Riddell was the boss. It is highly improbable that the drilling activities would have ended without a discussion with Mr Riddell.
(d)Fourth, once those matters are recognised, it is highly probable that there was a conversation of the kind described by Mr Riddell with Mrs Seymour, once Mr Riddell was informed by Mr Wall of the Seymour’s decision. Further, the conversation described by Mr Riddell is one which seems objectively likely to have occurred given the progress of the drilling over July to September. There is nothing improbable about Mrs Seymour referring to the 1388m depth because that figure was undoubtedly mentioned by Mr Wall. And the comment about the workers having done a good job from Mrs Seymour rings true. I accept Mr Riddell’s account of that conversation is substantively accurate.
I accept that it is possible that Mr Wall had a conversation with Mr Seymour on the telephone at some point before Sunday 10 September in which Mr Wall made comments of the kind described by Mr Seymour. After all, it is objectively true that the rig was close to its operating limits at 1388m, and it is understandable that Mr Wall would have had concerns about the operational implications of continuing. However, the fact that some such conversation might have occurred and been forgotten by Mr Wall is unremarkable given that the key conversations were with Mrs Seymour, and it is those he is more likely to recall.
I now turn to the last day of Depco’s presence at Windemere and the events on that day. I make the following findings.
I do not accept that Depco negligently left the hole uncovered. I accept Mr Riddell’s evidence that the Seymours asked for the hole to be left open in case the Seymours wanted to do further work. Not only does Mr Riddell testify to this, but that evidence is consistent with one of the few contemporaneous documents relating to the work: the bore log prepared by Mr Fardon which observes “plugged for possible future development” (as opposed to cemented over for permanent remediation). This language shows a deliberate decision was made not to cement the hole and for the purpose referred to by Mr Riddell. The language is quite inconsistent with Depco coming back to continue its work; that is not suggested by the idea of possible future work.
The consequence of this finding is that there was discussion about potential future work at the time that Depco pulled out. It might be this discussion which the Seymours have built up in hindsight to justify their evidence that they believed that Depco was returning with larger equipment. However, I reject the proposition that any reasonable person in their position could have concluded that was going to happen for the following reasons, and I do not accept that they believed that at the time at all:
(a)First, it was plain that the prospect of hitting an artesian aquifer below 1400m in that region was remote and the Seymours knew that.
(b)Second, Depco had made a significant effort post July to give the bore hole every prospect of success, undoubtedly at considerable cost, without having extended the bore hole by much. It is objectively unlikely that Depco would then return with even more expensive equipment to continue;
(c)Third, the idea that Mr Wall did not seem to know what was going on when they packed up their equipment is inherently improbable. It was uncontentious that Mr Wall frequently called Mr Riddell. He would not have packed up Depco’s equipment not knowing what was intended. Further to that, of course, is the thank-you card and the tenor of the Sunday farewell coffee, which was clearly that Depco’s work on Windemere was over.
(d)Fourth, while I accept that things might move a little more slowly in Western Queensland, given the distances involved, it is hard to believe that the Seymours believed that Depco was coming back and yet made no contact with them for the next month.
The depth and direction of the bore hole
The issues
There are two primary issues upon which opinion evidence is relevant:
(a)First, the depth and direction of the bore hole drilled by Depco; and
(b)Second, whether Depco carried out its contract to drill the bore hole with reasonable care and skill and in particular, with taking reasonable care to keep the hole as vertical as possible.
These points are related. The Seymours allege in broad terms that Depco is not entitled to any payment under the contract because, on its proper construction, it was an entire contract to drill approximately 1200m measured as the true vertical depth (TVD) of the bore. It is not contentious that the bore measured 1388m long when Depco ceased work. The Seymours therefore seek to prove that although the bore might have been 1388m long, it was not approximately 1200m TVD. They rely on expert evidence of Mr Edward Mann to make good that proposition. Depco relies on expert evidence of a Mr Rossiter and Mr Jordan by way of critique of Mr Mann’s method of determining the ultimate TVD of the bore hole.
Depco alleges that on the proper construction of the contract, Depco was only required to drill the bore hole with reasonable care and skill to keep the bore hole vertical, not that it was required to reach a certain TVD. They rely on opinion evidence in that regard from their two experts and on opinions from Mr Riddell, Mr Wall and Mr White. They also rely on evidence from the Depco witnesses as to the steps taken to keep the bore hole vertical.
The Seymours respond to this evidence with further expert evidence from Mr Mann.
These two issues of fact engage both expert evidence and lay evidence. It is convenient to approach the matter first from the perspective of what evidence from the Seymours’ witness Mr Mann is relevant and admissible.
Mr Mann’s evidence
Mr Mann’s qualifications and area of expertise
Mr Mann’s areas of expertise was described by him as in this way[47]:
2.I am a ‘wireline engineer’ who amongst other things, collects data from below ground since 4 July 2005. The description of a ‘wireline engineer’ is widely accepted within the petroleum exploration industry and also in the water drilling industry. The term ‘wireline’ is the methodology for collecting this data. My curriculum vitae is contained to in Annexure A of Report No. 1. My experience and expertise is in the following areas and disciplines:- wireline data collection, processing and interpretation (including deviation analysis); geophysics, namely, the study and interpretation of the physical properties of geological formations; environmental science (including water and microbiology sampling); hydrogeology, namely, the study and interpretation of the distribution and movement of groundwater in rock and; bore condition assessment which includes investigating and determining the integrity of the casing, the cementing of the bore and the performance and functioning of the bore.
3.The minimum qualifications for wireline engineers employed by multi-national and national companies are a STEM (Science, Technology, Engineering and Mathematics) degree. I estimate that in Queensland, those persons working in the national and multi-national companies that have equivalent expertise to my own based on the STEM qualifications and training, there would be approximately fifty (50) people. Insofar as my expertise include water bore construction investigations, to the best of my knowledge and belief, I am the only person undertaking this type of work routinely at present within the Great Artesian Basin area.
4.As part of my training as a wireline engineer, I completed (as is recorded in my curriculum vitae) a period of twelve (12) months intensive, structured training and development with Weatherford. Weatherford is one of the top four (4) providers of the wireline industry.
[47] Exhibit 22.2
Mr Mann’s university education was in biotechnology. His expertise was said to arise from his work as a wireline engineer. Despite that description, Mr Mann is not a professional engineer registered under the Professional Engineers Act 2002. He has no engineering qualifications. His curriculum vitae from 2020 reveals that he was studying for a Masters of Petroleum Engineering, but had been doing so since 2010.
Paragraph 4 requires some closer consideration. While it suggests that the twelve months training was only part of Mr Mann’s training, nothing in his Education or Accreditation sections of his CV suggests any other substantive or sustained study or training. Twelve months with an industry supplier (Weatherford) is a rather short period of instruction to become an expert in so many fields, all of which are themselves separate areas of expertise based in specialised university education. However, it is unclear that there was even 12 full months of training. In evidence Mr Mann described “training with Tier 1 Service Company, Weatherford. I’ve completed approximately 20 weeks of training in America. Probably half of that was involved in the theory of measurement of the wireline tools and the interpretation of that data. There’s both simple and advanced interpretation classes as part of that training.”[48] Perhaps there was another 30 weeks training at some other time, though the tenor of this evidence is to the contrary and he never said there was. The reference to a ‘Tier 1’ company seems only to mean a relatively large corporate supplier of wireline products.
[48] TS 3-76.1 to .5
Analysis
Areas of consensus
The parties are not so far apart on some key issues.
First, both parties agree that the contract included a term that if Depco tapped an artesian aquifer, it would stop drilling and was entitled to payment under the contract at the contractual rate. It matters little how this term is characterised: as a term arising from the dealings of the parties or a term implied to give business efficacy. It was so obvious it went without saying.
Second, neither party contends that, in the event Depco did not tap an artesian aquifer, it had to drill 1200m TVD to become entitled to payment. That is understandable. The quotation does not contain such a term and nor could the words in their ordinary meaning be construed as stating that strict obligation as explained in paragraph [29] above.
Further, the following matters of context known to both parties were directly against that conclusion:
(a)It was impossible to know what was under the ground, and what kind of geological formations the drill would strike from time to time;
(b)It was impossible to be confident when and where a flowing bore would be tapped within a wide range of depths; and
(c)There was no provision expressly or by implication, for a survey of the bore hole and no objective expectation that one would occur (failing which TVD would be impossible to assess).
The Seymours recognised those compelling considerations both in their pleading (where they articulated the obligation as the “approximate TVD”) and final submissions (“as nearly as possible” to the TVD). The formulation in final submissions seems more permissive.
So the difference between the parties on this point is the difference between “as nearly as possible to TVD” and “reasonable care to keep the hole as vertical as possible within practical limits using appropriate equipment”. The Seymours formulation seems to invoke notions of reasonableness. The concession by Depco that the hole should be as vertical as possible using appropriate equipment approaches the obligation asserted by the Seymours. The difference in the two formulations does not seem that great. Indeed, at one point the Seymours’ submissions are articulated in almost identical terms to the Depco submission.[90]
[90] Seymours’ trial submissions at paragraphs 64 to 65
Although the difference is not great, I consider that the obligation when drilling is as articulated by Depco. It has the advantage of being sourced in the Australian standards, which are identified in the quotation. It also has the advantage of being articulated in a document with statutory force which is concerned with the way artesian bores are to be developed.
The question is whether it has been established that Depco failed in that regard.
Before dealing with that issue, it is convenient to deal with the evidence given by Mr Riddell in response to my questioning which is relied upon by the Seymours in their written submissions. The exchange in question was as follows[91]:
MR ALLAN: Thank you. Thank you. That is the cross-examination. Thank you, your Honour.
HIS HONOUR: Just one second
MR WHITTEN: Thank you, your Honour.
HIS HONOUR: …while I think about whether I’m going to ask a certain question or not. Just give me a second, hey. Yes.
So here’s my question, Mr Riddell. Is it the practice in the industry for drilling for subsurface water in Queensland that when a contract specifies a drilling depth, people in the industry would assume that that was a true vertical depth, subject to minor deviation? Yes.
[91] TS1-84.28 to .41
The Seymours understandably rely on this answer to sustain their, perhaps stricter, articulation of the obligation to reach a TVD of as nearly as possible to 1200m. They rely on this answer as supporting that construction because it amounts to a term implied by custom. I do not think it does. The issue did not arise on the pleadings and had not been raised by either counsel at all. It was a leading question asked by the trial judge. Mr Riddell gave further context to his answer in re-examination which revealed I think the kind of considerations which informed the qualification which I stated as minor deviation[92], which was more consistent with the position adopted by Depco.
Did Depco drill with ‘reasonable care’?
[92] TS1-85 to .86
The subheading uses the phrase reasonable care as short-hand for the implied obligation articulated by Depco: that the contract obliged Depco to drill with reasonable care using equipment adequate and appropriate for the work to keep the bore hole straight and plumb within practical limits.
Failure to comply with this obligation would involve a breach of contract. The onus lay the Seymours to establish the breach. They have failed to do so. Indeed, even if the onus lay on Depco somehow to establish that they had drilled in accordance with that obligation to become entitled to payment, the evidence establishes that conclusion.
First, the evidence of the experienced drillers that they drilled using reasonable care to keep the bore hole straight and plumb within practical limits was not contradicted by any admissible evidence and not challenged in cross examination.
Second, the mere fact that the bore hole deviated as identified by the wireline survey at 790m does not lead to the conclusion that Depco did not meet its obligations. Given the uncertainties of underground drilling and the unchallenged evidence of Depco’s drillers, res ipsa loquitor does not apply (though the Seymours did not submit that it did). There is no other reason to conclude from the proved deviation that Depco did not meet its contractual duty.
Third, there was also no evidence to suggest that the drill rig used was not adequate and appropriate for the work. Indeed, the opposite was established on the evidence. The rig managed to drill to 1388m in length (if not in true depth) and to be capable of continuing to drill despite the difficulties after the break in drilling in July.
Fourth, the evidence did not establish that it was an essential requirement for meeting the contractual duty that directional surveys were undertaken. It was uncontentious that this was expensive and almost never done in practice. Section 8 of the Australian standards is not articulated in terms which would make such surveys a necessary condition to competent drilling.
Fifth, for the reasons given in paragraphs [184] to [187] above, I am not satisfied that the progress of the bore hole after 790m sustains any failure to comply with the obligation articulated by Depco. If anything, those findings sustain the opposite conclusion.
I should add that even if one adopted the term articulated by the Seymours (as nearly as possible to TVD), the above considerations would still lead to the conclusions in [207] above.
The entire agreement issue
The dispute on the entire agreement is moot. The Seymours accept that Depco had not warranted that it would drill 1200 TVD but rather that it would “as nearly as possible” to TVD. As I have said, as nearly as possible necessarily imported notions of reasonableness and reasonable care and skill. There was never any dispute that Depco drilled well over 1200m, the question was whether they did so while complying with their obligations to drill with reasonable skill (however articulated).
Further, it is a necessary element of the Seymours’ case on the entire agreement argument that Depco abandoned the bore hole without the Seymours’ consent. I have found already that the Seymours initiated the termination of the drilling efforts. It is unnecessary to say any more on this subject.
Disposition of the proceedings
The consequence of my findings is that Depco has succeeded on its claim under the drilling contract. I order judgment in favour of Depco for $335,896.00. I will hear the parties on interest and costs.