Plaintiff v First Defendant Second Defendant

Plaintiff v First Defendant Second Defendant - [2014] VSC 363 - VSC 2014 case summary — Zoe

[91]

The "reasonable grounds" pleas in [24] and [28] of the State's amended defence are adequate. According to the Sykes approach, if there was a representation as to a future matter, s 51A of the TPA required (and s 4 of the ACL requires) the representor to show: (1) some facts or circumstances; (2) existing at the time of the representation; (3) on which the representor in fact relied; (4) which are objectively reasonable; and (5) which support the representation made. This approach is well established.[49]
The LMA has adopted the State's "reasonable grounds" as at the time of each relevant representation. In the premises, it is appropriate to examine the relevant contents of the State's pleading. In [24] of the State's amended defence, by reason of three matters, the State alleges that it had reasonable grounds for the BCR representation. Those three matters are as follows: (1) a cost benefit analysis demonstrated the relevant cost benefit ratio; (2) that analysis was undertaken by experts upon whom the State was entitled to rely, and (3) that analysis was subject to a pre-existing process mandated by the State for the development of robust analyses.[50] The State relies on the same matters to establish reasonable grounds for the Net Benefit representation.
The matters pleaded and particularised in [24] and [28] of the State's amended defence address each matter the subject of the Sykes approach. Under that approach, the State must show "some facts or circumstances" supporting each representation with respect to any future matter (underlining added). There is no requirement to list every fact or circumstance on which the State could rely (including those facts and circumstances recorded in documents the subject of the PII claims).
Conformably with the rules of pleading, the State and the LMA cannot rely on any grounds beyond the pleaded grounds. If the State pleads only some of the facts and circumstances on which it could rely, that is a matter for it. If the State does not or cannot rely on the contents of the cost benefit analysis, that may have a bearing on its ability to establish the reasonableness of the grounds for the two relevant representations (see point 4 in [7] above). Again, that is a matter for trial (or, possibly, some other application by the State and the LMA on analogous grounds to those considered in the Sands case discussed below at [15]).
At this stage, in respect of the "reasonable grounds" pleas in [24] and [28] of the State's amended defence, the State has satisfied the rules of pleading. The plaintiff has been put on notice of the grounds on which the defendants rely. Assuming the facts pleaded have been established, the claim is not "so manifestly hopeless that a trial would be a futility".[51]
Absent an amendment pursuant to the Rules, the defendants cannot rely on further grounds for the relevant representations. If the Court rejects the PII claims, there is nothing in r 36 of the Rules preventing the defendants from seeking to amend their respective pleadings to rely on additional grounds recorded in the documents the subject of those claims. As noted in subparagraph 3(f) above, the plaintiff effectively concedes this point.

[94]

By making the PII claims, the State and the LMA want to prevent the disclosure of certain documents relating to matters of state. Each one claims that the disclosure of such documents would be injurious to the public interest. Accordingly, in pleading to the relevant allegations in the FASOC, each defendant has not pleaded material facts evidenced by the documents the subject of the PII claims.
As noted above, public interest immunity is not a form of privilege. Unlike the privilege against self-incrimination and the privilege against exposure to penalties, a party cannot waive public interest immunity.[53] However, the disclosure of confidential information may bear on the balancing exercise for which s 130 of the Evidence Act 2008 (Vic) calls. Accordingly, at this stage, the defendants cannot run complete defences on the question of reasonable grounds for the relevant representations.
In these circumstances, the question is whether the defendants can plead to [24], [28] and [35] of the FASOC without revealing the information the subject of the PII claims. A like question arose for consideration in Sands v The State of South Australia (No 2) [2010] SASC 340. In that (defamation) case, the plaintiff sought to amend his statement of claim by the inclusion of two further imputations and a claim of misfeasance in public office. The defendant sought a permanent stay of the proceeding by reason of public interest immunity preventing it from pleading and proving its full defence. Anderson J found that the defendant was capable of filing a defence that: (1) complied with the rules of pleading; and (2) avoided disclosing the sensitive information, in respect of the imputations and the claim of misfeasance, and that the defendant was capable of proving its defence on the further imputations. However, his Honour held that the defendant would not be capable of proving its defence on the misfeasance claim by reason of public interest immunity. Absent the abandonment of the misfeasance claim by the plaintiff, Anderson J indicated the appropriateness of granting a stay.[54]
This case is analogous to Sands v The State of South Australia (No 2). In responding to the allegations in [24] and [28] of the FASOC, as explained in section D above, the State has complied with the rules of pleading. Further, in [24] and [28] of the State's amended defence, the State has avoided the disclosure of the sensitive information the subject of the PII claims.
If the Court upholds the PII claims, the defendants could not rely on any grounds in addition to those pleaded in [24] and [28] of the State's amended defence. If the Court rejects the PII claims, subject to the demands of r 36 of the Rules, there is no reason why the defendants should be prevented from pleading additional grounds.

[122]

Rule 47.04 provides for the separate trial of a question which may be one of law, of law and fact or of fact. Where the question is one of law or one of law and fact, regard must always be had by the judge making an order for preliminary trial to the question what facts if any are or may be necessary for the trial of the preliminary issue and to the question whether those facts (once identified) are to be merely assumed for the purposes of the trial of the preliminary issue or on the other hand are to be admitted or proved, and in particular whether they are to be the subject of mutual admissions by the parties.

It may be that a question of law can be determined in a preliminary way without regard to the facts. So if a judge is satisfied that the question whether "person" in a particular section of a given Act includes "corporation" is a "question in a proceeding" to be "tried" within the meaning of r 4.07 as those expressions are explained in Bhagat's case at 208-9, he may see fit to order the preliminary determination of that question without stating any factual basis on which it is to be determined. He will do this on the footing that the abstract question can be answered without regard to the facts of the particular case. But where the preliminary question cannot be properly answered without reference to the facts of the case (and this will be so with any question of mixed law and fact), the order for the preliminary trial of the question should show how the relevant facts are to be identified for the purposes of that preliminary trial and whether the relevant facts are merely to be taken as assumed for the purposes of the determination of the preliminary question or on the other hand are either to be mutually admitted or proved. Where the preliminary issue to be determined is one of law or of mixed law and fact and there are relevant facts which are in dispute, the court may in its discretion make an order for the trial of the preliminary issue on the footing that relevant disputed questions of fact will be resolved by the court in the course of determining the preliminary issue, as was done in George Wimpey & Co Ltd v Territory Enterprises Pty Ltd [1966] VicRp 43; [1966] VR 312 (evidence of surrounding circumstances as bearing on construction of contract).

The decision just cited shows that an order for the trial of a preliminary issue may be made notwithstanding the opposition of a party and that in an appropriate case it may be enough for the order to use some such words as "having regard to such relevant and admissible evidence as may be adduced" by way of providing for the identification and determination of relevant questions of fact. Indeed, in an appropriate case the court may order the trial of a preliminary issue of its own motion and notwithstanding that no party desires it: r 1.14(2).

The need for precision in the statement both of the question to be decided and of the facts on which it is to be decided was emphasised by Lord Pearson in Nissan v Attorney-General [1969] UKHL 3; [1970] AC 179 at 242-3.

Care must be taken to ensure that, in one way or another, all the facts that are on any fairly arguable view relevant to the determination of the question are ascertainable as a result of the order for the preliminary determination, as facts assumed to be correct for the purposes of the preliminary determination, or as facts which both sides accept as correct, or as facts which are to be judicially determined. Failure to do this, and in particular failure to perceive that the facts alleged in a pleading are some only of the facts relevant to the determination of the preliminary question, may make the order for preliminary determination unfruitful. So in Attia v British Gas Plc [1987] EWCA Civ 8; [1988] QB 304 the Court of Appeal set aside the order of the primary judge answering the preliminary question in the negative, not because the question should have been answered in the affirmative, but because it should not have been answered at all, since the facts pleaded by the plaintiff were insufficient for that purpose.

[133]

In addition to the reasons given in the submissions of the LMA in favour of stating the separate questions, the State adds the following matters. Each tends strongly in favour of the statement of separate questions.
First, the proposed separate questions deal with discrete issues, which would be necessary for determination in any event. None of the matters relevant to whether the alleged representations were misleading would bear upon the separate questions. So, for example, none of the expert accounting and traffic modelling evidence which would inevitably be required to determine whether the representations were misleading will be required to determine whether the State was engaging in the conduct of a business, or in trade or commerce.
Secondly, compared to determination of whether the alleged representations were misleading - which will be complex, costly and time-consuming[79] - determination of whether publication of the documents upon which the plaintiff relies involved the conduct of a business, or trade or commerce, is likely to be considerably simpler, cheaper and quicker. That is most significant where the pendency of the proceeding affects the current tender process for this major State infrastructure project.[80]
Thirdly, given the allegations in the ASOC and the defences, it should be clear that the contention that the conduct on which the plaintiff relies involved the conduct of a business and trade or commerce by the State is speculative at best. So too, no connection is alleged between the impugned conduct and the relief sought at [B(b)] of the prayer for relief, nor any particular facts about the plaintiff so as to justify such relief at his suit.[81] It is exceedingly unlikely that the Court would conclude that relief in that form should be granted in the circumstances.
Fourthly, through the detailed allegations in the defences, the process of agreeing facts and documents, and (if necessary) judicial determination, the factual basis for the first and second questions will be fully identified. The area of contest about those facts, if any, is likely to be small. They are likely to turn mostly, if not entirely, on competing submissions about the correct legal characterisation of uncontroversial facts. That may be contrasted with whether the alleged representations were misleading, which will clearly involve significant factual controversy, requiring expert evidence.
Fifthly, the third question is suitable for determination on the assumed basis that the plaintiff is otherwise successful. It is akin to a demurrer, upon which it is assumed that the allegations in the ASOC are otherwise established.[82] Again, it is question involving purely legal submissions. If disposed of adversely the plaintiff, the critical aspect of the relief he seeks - directed to forestalling the progress of the project by the entry into contracts - could not obtained by him.
Sixthly, a particular reason to favour statement of separate questions concerns the public interest immunity claim which has been made by the State in respect of, in particular, the Short Form Business Case (other than the Executive Summary) and the detailed business case. The contents of those documents, as opposed to the fact that they were produced and the circumstances in which that occurred, is not relevant to the issues the subject of the proposed separate questions. The separate questions can thus be determined irrespective of the outcome of the public interest immunity claim. The determination of that claim may well involve cost and delay consequent upon invocation of the appellate process.

[134]

61 In my opinion, there is much force in these submissions, particularly as the parties indicated at the hearing of these applications that the separate questions hearing would last one or perhaps two days and could be prepared for and argued with approximately two weeks' notice. These questions would, if answered as the defendants would have them answered, dispose of the proceeding. If they were answered otherwise, then the matter would proceed promptly to full trial, but with the advantage of the matters the subject of the separate questions having been canvassed and, in my view, with likely utility in terms of economy of time and cost in the event that the matter did proceed to full trial.[83] The other advantage is that it would not, in my view, be necessary to deal with the public interest immunity claim prior to determination of the separate questions. The plaintiff does, however, not accept this position, but this follows, in my view, from his failure to accept the current state of the pleadings and that the pleadings in their current state provide a proper factual basis for determination of the preliminary questions on the approach applied by Finn J in the Village Building Company case and other cases to which reference has been made, namely, that the impugned conduct as pleaded can be established to have occurred. For the preceding reasons, this approach is not, in my opinion, properly criticised on the basis that it is some hypothetical determination of matters on the basis of assumed facts, but is rather a determination on the basis of the bases as pleaded by the parties. This approach also, in my view, disposes of the objection raised by the plaintiff that the determination of the preliminary questions would not be possible because the parties would not be able to agree the factual basis upon which that determination would take place. Quite apart from issues with respect to the obligations of parties under the Civil Procedure Act to facilitate civil proceedings - with particular reference to s 7 - the approach of Finn J and of the judges in the other authorities to which reference has been made does avoid these difficulties because in the absence of agreed facts the pleadings themselves provide the factual background, which is quite sufficient in the present circumstances for the determination of the preliminary questions.

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