Basetec Services Pty Ltd v Leighton Contractors Pty Ltd

REASONS FOR JUDGMENT 1 This is an application by the applicant for further and better discovery by the respondent. The respondent opposes the application and contends that it has made discovery in accordance with the orders of the Court. 2 The dispute between the parties relates to a contractual relationship between them whereby, under a written contract entered into on 23 November 2012, the respondent engaged the applicant to fabricate, supply and deliver glass reinforced piping required for a project involving the construction of water treatment facilities at Condabri Central and Reedy Creek in Queensland pursuant to a works contract. The project was one part of the wider Australia Pacific LNG Upstream Phase 1 Project. 3 Paragraphs 32, 33, 160 and 194 of the Amended Statement of Claim are in the following terms: 32. At all times from 24 October 2012 up to 23 November 2012 Leighton and Neil Flounders knew but did not disclose to Basetec ('the Silence') that the tender package did not accurately describe the true scope of the GRP Interconnecting works at Condabri and Reedy Creek. 33. Leighton and Neil Flounders knew that the tender package did not accurately describe the true scope of the GRP Interconnecting works at Condabri and Reedy Creek by reason of the fact that each of the Additional Drawings as pleaded at paragraphs 52 and 54 below had been created and issued to Leighton by the Principal under the Main Contract on a "for construction" basis prior to 24 October 2012. 160. On or about 17 May 2013 Leighton by-passed Basetec and entered into arrangements direct with Basetec's subcontractor RPC to deliver the remaining GRP pipes and fittings directly to site. Particulars Basetec is unable to provide further particulars of the arrangements between Leighton and Basetec's subcontractor RPC until discovery and inspection or until third party discovery and inspection. 194. By on or about 20 May 2013: 194.1 Leighton had approached RPC; 194.2 Leighton had informed RPC that it would not pay Basetec for the RPC product; and 194.3 Leighton invited RPC to sell the remaining GRP pipe and fittings it had manufactured in Indonesia for Basetec directly to Leighton or it might be left with the goods without payment. Particulars Basetec is unable to provide (sic) of these dealings until discovery of documents by Leighton. 4 On 22 January 2015, I made the following order: 1. That the respondent provide discovery of documents directly relevant to: (a) the allegations of knowledge on the part of the respondent as pleaded in [32] and [33] of the Amended Statement of Claim; (b) the dealings between the respondent and RPC Technologies Pty Ltd pleaded in [160] and [194] of the Amended Statement of Claim; (c) the estimated payments pleaded in [168] of the Amended Statement of Claim; and (d) the allegations of loss and damages in [177] of the Amended Statement of Claim within 14 days of the close of pleadings. 5 On 6 March 2015, the respondent made discovery of copies of a number of documents. It did that, it said, in compliance with the order made on 22 January 2015. 6 On 27 March 2015, I made a number of orders designed to facilitate agreement between the parties of the categories of documents to be discovered. 7 On 31 March 2015, the applicant's solicitors wrote to the respondent's solicitors identifying alleged deficiencies in the discovery made by the respondent pursuant to the order made on 22 January 2015. In terms of the application for further and better discovery, the two relevant categories are as follows: 1.5 Documents ID LCP.008.001.0441, LCP.008.001.0443 and LCP.008.001.0445 each seek responses from the recipients including a request in the first two to "Advise of documents affects (sic) on Current Schedule, Practical Completion and Cost" and in the third document to advise in respect of a broader range of issues which encompasses these three. The responses to the emails from each recipient should be provided as the allegation of knowledge is an allegation directed against Leighton. 2.6 The RPC response of 13 May 2013, document ID LPC.007.001.3097 seeks confirmation that "the 64 ISO drawings received for pricing purposes are all IFC drawings". Leighton has failed to discover the documents providing these 64 drawings to RPC or the drawings themselves. Leighton has failed to discover its response to RPC. 8 On 24 April 2015, the applicant issued an interlocutory application seeking, among other orders, an order that the respondent comply with the order made on 22 January 2015. The application was supported by an affidavit of Ms Eloise Burge, a solicitor in the employ of the applicant's solicitors. Ms Burge annexed to her affidavit the letter from the applicant's solicitors to the respondent's solicitors dated 31 March 2015. It is clear enough, I think, that the applicant was seeking an order for further and better discovery in terms of the letter dated 31 March 2015. 9 An order for further and better discovery may be made if there are reasonable grounds for being fairly certain that there are other relevant documents: Proctor v Kalivis [2009] FCA 1518; (2009) 263 ALR 461 at 468 [33], 470 [44]; Guy Carpenter and Co Pty Ltd v Grove (No 2) [2011] FCA 1190 at [5]; Shoreform (Qld) Pty Ltd v Millenium Coal Pty Ltd [2013] FCA 645 at [18]. 10 In paragraph 1.5, the applicant seeks responses to emails from an employee of the respondent to a number of employees of the respondent. The emails are dated 7 September 2012, 28 September 2012, and 18 November 2012 respectively. The emails refer to drawings and the sender asks the recipients to provide advice, in the case of the emails sent in September, of the "affects" of the drawings "on Current Schedule, Practical Completion and Cost". Mr Flounders, who is referred to in the pleading in paragraph 32 (as well as the respondent), is shown as a recipient of each of the emails. 11 The respondent submits that the two emails sent in September 2012 were before the engagement of the applicant by the respondent, but does not otherwise deny the relevance of documents related to the general topic. It submits that there are no documents relevant to the work that the applicant was engaged to perform, and the pleas the applicant relies upon. 12 Paragraph 1.5 relates to paragraph 1(a) of the order I made on 22 January 2015. Paragraph 1(a) was repeated in category 8 of the categories of documents which were the subject of an order for discovery which I made on 11 May 2015. 13 The respondent responded to the order for discovery made on 11 May 2015 by serving a list of documents which was verified by an affidavit sworn by the respondent's secretary. Furthermore, the respondent's solicitor, Mr Macpherson, swore an affidavit on 15 May 2015 which sets out the steps the respondent has undertaken in order to provide proper discovery in accordance with the orders of the Court. 14 It is not necessary for me to set out the details of Mr Macpherson's affidavit. I have considered the matter carefully. I am not satisfied, having regard to the respondent's list of documents verified on 12 or 13 May 2015 and the affidavit of Mr Macpherson, that there are reasonable grounds for being fairly certain that there are other relevant documents in relation to paragraph 1.5, and I refuse to make an order for further and better discovery in terms of that paragraph. 15 Paragraph 2.6 relates to paragraph 1(b) of the order I made on 22 January 2015. Paragraph 1(b) was repeated in category 36 of the categories of documents which were the subject of the order for discovery made on 11 May 2015. 16 The applicant's case is that it engaged RPC Technologies Pty Ltd ("RPC") to supply glass reinforced piping to it under a subcontract, and the respondent induced a breach by RPC of the subcontract. 17 The document referred to in paragraph 2.6 was an email from an employee of RPC to an employee of the respondent dealing with the "supply of GRP spools for Condabri" and it was in the following terms: Thank you for your email confirmation, we shall proceed with preparation to manufacture without delay, we shall advise expected delivery within next week. Can you please confirm if the 64 ISO drawings received for pricing purposes are all IFC drawings. 18 The respondent's response to the applicant's claim for further and better discovery in relation to paragraph 2.6 was that all reasonable searches had been conducted by the respondent as evidenced by Mr Macpherson's affidavit, that in fact the drawings had been discovered, and that the manner of delivery of the drawings might not be reflected in a document and, or alternatively, was irrelevant. 19 I am not satisfied on the material before me that the drawings have been discovered. There is no direct evidence to that effect and, in fact, in a letter from the respondent's solicitors to the applicant's solicitors dated 15 June 2015 the following statements are made: We confirm that our further review has not identified any documents responding to that email nor any copies of the 64 drawings mentioned therein. We acknowledge that document LCP.007.001.3097 refers to 64 ISO drawings and suggests that they were received by RPC from our client. However, we note that this email does not indicate how, when or by whom those 64 drawings were provided to RPC. Nonetheless and notwithstanding the searches we have already conducted, our client will continue to search for any relevant documents responding to your concerns, in line with its continuing discovery obligations. For completeness, we note that in the course of conducting these additional searches we identified a number of documents which contain drawings or lists of drawings sent by our client to RPC and which have already been discovered by our client in this proceeding. We note that these documents may be relevant to the concerns raised in paragraph 2.6 of your letter dated 31 March 2015 and we therefore list them below: • LCP.010.001.0984; • LCP.001.001.9063; and • LCP.011.001.0001. 20 I think that there are reasonable grounds for being fairly certain that there are other relevant documents in relation to paragraph 2.6. I will make an order for further and better discovery of the drawings and any documents providing the drawings to RPC referred to in discovered document ID LPC.007.001.3097. 21 That leaves for consideration the question of the costs of paragraph 2 of the applicant's interlocutory application. The applicant has succeeded as to one paragraph, but failed as to the other. That might suggest that the appropriate order is that there be no order as to costs. However, I think that the appropriate order is that the respondent pay the applicant's costs of paragraph 2 of the interlocutory application up to and including 15 May 2015, and that with respect to the period thereafter, there be no order as to costs. The respondent asserted, and I accept, that the applicant knew when it issued its interlocutory application that the orders made on 22 January 2015 would be repeated in the orders to be made with respect to the agreed categories of documents. Nevertheless, I do not think that the applicant acted unreasonably in including paragraph 2 in the interlocutory application. There was an order of the Court which it seemed had not been complied with and, although the respondent suggested to the applicant that it await the more detailed discovery to come, it was not conceding deficiencies in its earlier discovery. I think it reasonable that the respondent pay the applicant's costs up to and including 15 May 2015 because until the verified discovery on 12 or 13 May 2015 and Mr Macpherson's affidavit sworn on 15 May 2015, the applicant was entitled to press paragraph 1.5, and there were a number of other deficiencies in the respondent's discovery which were not remedied until then. I refer to the documents identified in paragraphs 1.8, 2.3, 2.4, 2.5, 3.4, 4.2 and 4.3 of the letter from the applicant's solicitors to the respondent's solicitor dated 31 March 2015, and paragraphs 10-18 of Ms Burge's affidavit sworn on 3 June 2015. 22 I will make the following orders: