Respondent's submissions
64 Senior counsel for the respondent submitted that the applicants had not met the requirements of O 15A r 6(a) because there was objectively, insufficient evidence which inclined the mind towards the asserted case of misleading and deceptive conduct and breach of contract.
65 In relation to the possible claim for misleading and deceptive conduct based on the alleged representation as to the required generating capacity of the plant, senior counsel for the respondent submitted that the decisive act of reliance on the part of the applicants occurred no later than 6 August 2004. This, he said, is evident from Mr Trumble's evidence that, had he known of the respondent's willingness to accept a proposal which provided for the generation of less than 300MW to 330MW of power for up to 85 per cent of the time, it is likely he would have submitted a different non‑binding proposal. The applicants submitted a non‑binding proposal for a coal‑fired power station on 6 August 2004. The applicants were precluded by the Bid Agreement from changing the nature of the fuel for the proposed power station in the final bid. Therefore, said senior counsel, the only representations relevant were those made prior to 6 August 2004.
66 Senior counsel for the applicants said that for the purposes of this application at least, the applicants were content to rely only on the documents that predated 6 August 2004 as evidencing the representation as to generating capacity.
67 The documents which predate 6 August 2004, are primarily the various press releases by the respondent to which reference has previously been made, and the correspondence between the applicants and the respondent including Bulletin # 2, issued by the respondent on 16 April 2004.
68 Senior counsel for the respondent said there were three answers to the applicant's asserted claim that it relied upon the conduct of the respondent to form the mistaken impression that the tender was in respect of a power station with the capability to produce 300MW to 330MW of power on a constant sent‑out basis.
69 Firstly, the respondent submitted that there is and always was a distinction between the generating capacity of the future power station and the operational requirement of that power station. The applicants have confused the generating capacity with the operational requirements and that that confusion is not attributable to any conduct on the part of the respondent.
70 Secondly, the respondent submitted that the media releases did not represent that the operational requirements of the power station would be 300MW to 330MW. The respondent says that the press releases referred to the generating capacity and not the operational requirements.
71 Thirdly, the respondent also submitted that the applicants knew that the power station was not intended to operate at the generating capacity for 100 per cent of the time because of communications that had occurred between the respondent and the bidders. In particular, the respondent referred to Bulletin # 2, which was issued on 16 April 2004, whereby the respondent informed the bidders that the plant would be expected to turn down every night resulting in a variation of output over a 24 hour period. It also relied upon the following statement made in that same bulletin, which it said put the matter beyond doubt:
'Committing to volume and capacity at the same level would imply a plant that operated 100 per cent of the time. That is neither physically nor commercially practical.'
72 The respondent also said that, the applicants had been advised by Mr Harvey that the plant's capacity factor was expected to be between about 75 per cent to 80 per cent.
73 Accordingly, it is argued that there is no reasonable basis for the asserted belief that the plant was required to generate 300MW to 330MW 100 per cent of the time.
74 The respondent also submitted that it was difficult to accept that Mr Trumble would rely upon the material that was contained in the press releases bearing in mind the voluminous and comprehensive nature of the documentation subsequently signed by the applicants as part of the tender and that the project would involve a substantial expenditure by the winning bidder in the order of $300 million to $550 million.
75 As to the environmental considerations the respondent said that there was no absolute requirement to meet the environmental standards in the bid information referred to by the applicants.
76 As to the environmental issues, the respondent relies upon the following parts of cl 6.3 of the Bid Information Memorandum which states:
'Plant Environmental Performance
The best commercially available environmental performance for the fuel and unit size is taken to be described in the following paragraph. Bidders must strive to meet or exceed these levels of performance.'
77 Wambo was assessed as having met the 'striving requirement' in cl 6.3.
78 As to the potential cause of action for breach of contract, the respondent submitted that any claim for breach of contract would be met by the terms of the disclaimer clauses in the bid agreement at cl 3.4 and cl 11.
Disposition
79 I deal, firstly, with the applicants' postulated potential claim for a contravention of s 52 of the TP Act. There are three main elements that the applicants would have to establish in order to obtain relief under s 82 or s 87 of the TP Act in respect of the postulated potential claim, namely, misleading or deceptive conduct by the respondent, reliance and damage.
80 In their respective submissions the parties have dealt separately with each of the two component representations comprising the composite representation, which senior counsel for the applicants identified as the basis for a potential claim. This composite representation is referred to at [13] above. The first representation relates to the generating capacity of the plant and, the second, to the need for the plant to meet prescribed environmental standards.
81 I deal, firstly, with the alleged representation as to the generating capacity of the plant. For the purposes of this application, both senior counsel appeared to accept that in respect of this representation, the question of whether there is reasonable cause to believe that the applicants may have the right to obtain relief, is to be assessed by reference to the alleged critical act of reliance by the applicants, namely, the submission of the non‑binding proposal, having occurred on 6 August 2004. I will, therefore, proceed on that basis.
82 The question, applying the test in Rabo, is whether there is evidence in support of the potential claim which elevates the potential claim beyond 'mere assertion' and 'more than suspicion or conjecture'.
83 I deal, firstly, with the evidence in relation to the making and meaning of the potential representation. In my view, the evidence establishes that the respondent made statements in its press releases dated 7 June 2002, 20 December 2002, 26 February 2003 and 31 March 2004 that are capable of comprising representations that the power station, in respect of which tenders were called for under the second stage of the PPP, was to have a baseload generating capacity of 300MW to 330MW.
84 Further, Mr Trumble deposed that a baseload plant is one that provides a constant amount of power throughout its operation cycle; and is designed to meet what is known as 'baseload demand' which is the basic level of electricity required to meet normal level of demand. In his evidence, Mr Trumble distinguished a baseload plant from a peaking plant as one whose power output can be increased or decreased swiftly to meet peak demand for electricity. He also said that a plant may combine both baseload and peaking features as different components of its capacity, as was the case with the plant proposed by Wambo which consisted of 240MW of baseload capacity and a further 80MW of capacity. Mr Trumble also deposed that a power station having the characteristics of the Wambo power station would not commonly be understood in the power generation industry as a 'baseload plant' or as generating 'baseload capacity' above the level of 240MW.
85 Mr Trumble was not cross‑examined on that evidence. There is also evidence from other sources which appears to support Mr Trumble's evidence that his understanding of baseload capacity and peaking capacity accords with the common understanding of those terms in the power generation industry. Firstly, the respondent itself in its press release of 7 June 2002 distinguished between the procuring of '240MW peaking generation capacity' in respect of Stage 1 of the PPP and 'approximately 300MW of baseload generating capacity' in respect of Stage 2.
86 Secondly, in the Minister for the Environment's statement dated 7 November 2005, there are statements reflecting the distinction between baseload capacity and peaking capacity in respect of the proposed Wambo plant, which appear to be consistent with the distinction drawn by Mr Trumble in his evidence. Thus, for example, Sch 1 of the document states:
'The power station will be operated in two modes:
· as a base load power station providing 240 megawatts of power (65‑85% of operating time); and
· with auxiliary duct‑firing to provide an additional 80 megawatts of power during times of peak demand (10‑15% of operating time).'
87 Also, in 'Table 1 - Key Proposal Characteristics', which forms part of the Minister's statement, 'Plant Operation' is described as 'Base load (65‑85% of operation time) plus peaking capacity (10‑15% of operation time)'.
88 On the basis of that evidence, I am of the view that there is a foundation beyond mere assertion upon which the applicants can base a potential claim that, in referring in its press releases to the proposed power station as having a 300MW to 330MW of baseload generating capacity, the respondent, thereby, represented that it 'would only consider tenders that provided for a generated capacity of at least 300 megawatts to 330 megawatts constantly provided on that sent‑out basis'.
89 There is also the evidence upon which the respondent relied. Firstly, there is the evidence of Mr Harvey that the respondent advised the applicants and other proponents at a meeting on 5 April 2004, and later in Bulletin # 2, that the expected capacity factor for the new power station was 75 per cent to 80 per cent. There is also the evidence that the respondent in Bulletin # 2, issued on 16 April 2004, responding to queries from the applicants and other proponents, said that the plant would need to turn down overnight and that this would result in a variable dispatch profile over a 24 hour period, and that it was 'neither physically nor commercially practical for the plant to operate 100 per cent of the time'.
90 However, it is not obvious that this evidence must inevitably lead to the conclusion that Mr Trumble did, and could not as a reasonable member of the power generation industry have, understood the term 'baseload capacity' in the way that he has deposed. Firstly, Mr Trumble was not cross‑examined on his evidence. Secondly, the evidence does not address the apparent conflict between the respondent's stated requirement in the bid information, of the plant's high availability, which Mr Trumble said was in the order of 90 per cent, and the 'capacity factor' referred to of 75 per cent to 80 per cent. Thirdly, after 6 August 2004, the respondent issued, as part of the bid information a terms sheet for the ACA which provided that as a performance requirement, the proponent must ensure that the TCO is available from the Power Station at all times during the term - a statement, which could arguably be construed as articulating a performance requirement which is consistent with Mr Trumble's understanding of the term 'baseload capacity'.
91 What, can, however, be said of the evidence upon which the respondent relies is that it would, in the context of an actual proceeding between the parties founded on the potential claim, raise a serious question to be tried as to whether Mr Trumble did, and could as a reasonable member of the power generation industry have held the understanding that he says he did, based upon the respondent's statements as to 'baseload capacity' in the respondent's press releases. But this does not mean that, for the purposes of this application, the status of the applicants' postulated potential claim is thereby reduced to a 'mere assertion', 'conjecture' or 'speculation'; nor does it incline the mind against the characterisation of that potential claim as one which may give the applicants a right to relief.
92 I am satisfied that the evidence as to reliance and damage in respect of the potential claim founded upon the generating capacity representation, also causes those elements to rise above the status of 'mere assertion'. It follows that, in my view, the applicants have established that there is reasonable cause to believe that the applicants may have the right to obtain relief founded upon the statements in the press releases issued by the respondent prior to 6 August 2004.
93 I now deal with the potential claim in relation to the representation that the respondent would only consider tenders which complied with the prescribed environmental conditions. There is plainly evidence in support of the making of that representation which is to be found in cl 6.1 and cl 6.3 of the Bid Information Memorandum dated 21 September 2004 and para 7 of the Final Bid Invitation issued by the respondent in April 2005.
94 Further, there is no dispute between the parties that on the evidence, the proposed Wambo power station does not meet the requirements that are stated in cl 6.3.1 and cl 6.3.2 of the Bid Information Memorandum. The answer which the respondent makes to the potential claim is that the requirements referred to in cl 6.3.1 and cl 6.3.2 did not impose absolute standards, but were only standards that a proponent should 'strive' to meet or exceed. Whether this is a complete answer or not, would be a matter for trial. It suffices to say that the evidence establishes that there is a potential claim for a contravention of s 52 of the TP Act, beyond a 'mere assertion', founded on the representation that the respondent would only accept tenders which satisfied the minimum environmental conditions specified in the tender documents.
95 There is, in addition, evidence from Mr Trumble that he relied upon those statements in submitting the tender and evidence that the applicants spent several million dollars on the bid, which I am satisfied also causes those elements of a potential claim under the TP Act to rise above the characterisation of 'mere assertion'. I, accordingly, find that there is reasonable cause to believe that the applicants may have a right to obtain relief against the respondent founded upon the statement in the Bid Information Memorandum and the Final Bid Invitation which relate to the compliance with environmental conditions.
96 It follows that, in my view, the applicants have satisfied the provisions of O 15A r 6(a) in relation to both components of the composite representation identified by senior counsel for the applicants at [13] above. Although there was no issue between the parties in this respect, I am also of the view, the applicants have satisfied the provisions of O 15A r 6(b) and O 15A r 6(c). It also follows, therefore, that, subject to considering the respondent's argument on the exercise of discretion, I would order that the respondent provide discovery as sought in the applicants' application.