RSA (Moorvale Station) Pty Ltd v VDM CCE Pty Ltd

The documents Sought 7 As a result of discussions between the parties, the ambit of the documents sought by RSA has been reduced to the following: - (a)correspondence and records relating to the dates of manufacture or fabrication, and delivery of components in respect of three items described by the parties as "Accommodation Unit Roof Trusses", "Community Centre Structural Steel" and "Joinery Items" (together "the Items") (but not including associated email traffic); (b)certain identified programs and progress reports in respect of the Items (but, again, not associated email traffic); and (c)correspondence, invitations to tender, letters of intent, letters of acceptance, purchase orders, and contracts between VDM and suppliers (but not associated email traffic). 8VDM does not dispute that it has in its possession documents answering each of these categories ("the Documents").

Stage reached in the proceedings 9The matter is fixed for hearing for three weeks commencing 29 July 2013. 10The parties have served their evidence in chief, including expert evidence, and have been ordered to file evidence in reply by 29 May 2013.

Mr Griffith's report 11On or about 18 March 2013, VDM served an expert report prepared by Mr Mark Griffith, a civil engineer from Hinds Blunden. 12Mr Griffith has summarised the work done in his report as follows: - "I have analysed the delay events on the Moorvale Station project to determine the impact that [various] events would have had on the forecast Date of Practical Completion and the applicable extension to the Date for Practical Completion. The likely impact of each delay has been assessed by inserting an activity into the baseline programme which is current at the time of the start of the delay. This activity is then linked by inserting a relationship to the impacted activities. By comparing the dates of the impacted Practical Completion milestones against those in the baseline programmes, I can determine the overall critical delay for each event." 13Mr Griffith has made an assessment of what he describes as "Critical Delay Events", "Critical and Deemed Delay Events" and "Delay Costs". 14VDM submitted, and RSA has not disputed that: - (a)it has provided to RSA all of the documents it provided to Mr Griffith for the purposes of his report (such documentation comprising some 10 volumes of material together with the programs prepared and used by VDM in the course of the works and for the performance of the works); (b)VDM has served statements from the various project managers addressing the events which are asserted to have affected progress in completion of the works and from the Construction Programmer who prepared and updated the construction programs for the performance of the works and in the course of the works; and (c)VDM has produced all of the material requested by RSA in respect of this evidence.

Proposed reply evidence from Mr Senogles 15RSA has engaged Mr James Senogles, a civil engineer and construction consultant, to prepare a report in reply to that of Mr Griffith. Mr Senogles has sworn an affidavit saying that he needs to see the Documents to ascertain the chronology of manufacture and delivery of items fabricated off site and to assess the relationship between those activities to the on-site activities shown on VDM's construction program. 16RSA submits that Mr Senogles needs the Documents because Mr Griffith has expressly assumed that the cause of delay of each delayed event examined is one for which VDM is entitled to an extension of time. RSA submits that, because Mr Griffith has not identified all the documents that he examined in relation to delay events, it is not clear that Mr Griffith has examined all relevant delay events, and not just those delay events that favour VDM. 17RSA submits that without the Documents, it would not be able to test the assumptions made by, assess the methodology used by and challenge the opinions given by Mr Griffith. 18Mr Sonogles has stated that he would need "at least six weeks" from receipt of the Documents to complete his report. 19In cross-examination, Mr Senogles agreed that he could determine, from documents already available to him, when the key components arrived at the site and when they were installed. 20Mr Senogles said that the Documents sought would enable him to ascertain why there was delay in the arrival at the site of some components and gave the following evidence: - "Q: Why do you need to know that to do your report? A: Because in responding to the Hinds Blunden report which adopts a time impact method in his contemporaneous method of looking at delays, it looked at projected program forward not actual events. It looked at critical path, which is projected forward. That assessment is necessary to have a critical path program which covers all the work under the contract, not just on site works but off site works as well. Q: Why to carry out that exercise do you need to know why the components arrived "late"? A: Depending on whether the contemporaneous program of time impact analysis works. That would comprise a non-qualifying cause of delay which needs to be taken account of. Q: Do you have any reason to suppose that the reason the components arrived was because of the actions or inactions of parties of this litigation, or something that happened with a third party, or don't you know? A: I can't say why. I need the information to be able to assess that." 21Mr Hicks, who appeared for VDM, challenged Mr Senogles in relation to this evidence and put to him that he could determine whether there was any critical delay in respect of the Items from documents already to hand. 22Mr Senogles nonetheless maintained the position that he needed to see the Documents to formulate his response to Mr Griffith and said that the "programming task" he would undertake would be incomplete without the Documents. 23In my opinion, it is neither necessary, nor appropriate, for me to express any view about the correctness of Mr Senogles' contentions. 24I am satisfied that Mr Senogles genuinely holds the belief that the Documents are necessary for him to complete his report. 25In my opinion, that is sufficient to establish the relevance of the Documents and, in that sense, the necessity for their disclosure at this stage. It is necessary that the disclosure be made now so that RSA can serve this aspect of its evidence; such disclosure must thus be made before that evidence is served.

Availability of the Documents otherwise than by disclosure 26The solicitor for RSA, Mr James Beatty, agreed in cross-examination that the only step he had taken "to procure" the Documents was this application for disclosure. 27Mr Beatty also agreed that he had not reviewed documents produced on subpoena by other members of the VDM group to see whether they included copies of the Documents and that he had not communicated with consultants of RSA to ascertain whether they were willing to produce copies of the Documents. Mr Beatty was not able to say whether documents produced by the project's superintendent, or the superintendent's representative, included copies of the Documents. Mr Beatty also agreed that he had not enquired of RSA's architect as to whether he had copies of the Documents.

Time and trouble to locate documents 28Mr Mark Pemmelaar, a senior Project Manager from VDM, gave evidence as to the time and trouble that would be involved in locating the Documents. He said that it would be necessary to search and review over 150 lever arch files and ten archive boxes of hard copy documents and to search and review "tens of thousands" of electronic documents and emails. 29Mr Pemmelaar's estimates were made at a time when the range of documents sought by RSA was very much wider than now. In particular, as I have mentioned, RSA no longer seeks any email traffic associated with the categories of documents sought. 30Ultimately, Mr Pemmelaar gave this evidence: - "Q: Before you swore your affidavit in these proceedings, did you make any inquiries of anybody within VDM as to when particular orders were placed on particular suppliers in relation to off-site fabrication? A: No. Q: No? You see what I want to suggest to you is that in relation to the three items now the subject of this application, namely accommodation unit roof trusses, community centre structural steel and the joinery items, it would not be a time consuming or difficult and expensive matter to make inquires through whatever item it is VDM has as to where those documents can be located, would it? A: I would agree with that." 31Mr Pemmelaar said he understood the second of those questions to be directed to the question of searching for purchase orders. Nonetheless, I am not satisfied that such work as may be involved in a search for the Documents is anything like that originally estimated by Mr Pemmelaar. 32In any event, the likely cost of searching for the documents is not, in my opinion, without more, a reason to refuse disclosure.

Are there "exceptional circumstances necessitating disclosure"? 33The Court has considered the requirements of the Practice Note on a number of occasions including in Armstrong Strategic Management and Marketing Pty Ltd Expense Reduction Analysts Group Pty Ltd [2012] NSWSC 393 at [65] - [66] per Begin CJ in Eq; Leighton International v Hodges; Thiess v Reinforced Earth [2012] NSWSC 458 at [14] per McDougall J and SkyMesh Pty Ltd v Ipstar Australia Pty Ltd [2012] NSWSC 696 at [7] - [9] per Sackar J. 34In Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue; Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2012] NSWSC 913 at [17] Gzell J said: - "[T]o be exceptional the circumstance need not be unique or unprecedented or very rare. What is needed is an appraisal of all the circumstances and the context in which the expression must be satisfied. Are there circumstances necessitating disclosure before evidence in the sense that the party's case cannot be put without the disclosure? Are those circumstances exceptional?" 35Every case must be examined in its own context. This case is different from many others that have been considered in light of the Practice Note. Here, to a very large extent, the evidence of the parties has been served. The Documents are sought to enable a particular witness, Mr Senogles, to have access to all the material that he considers he needs to properly prepare his expert response to the report of Mr Griffith. 36A three week hearing is less than three months away. The time by which RSA must serve Mr Senogles' report is less than three weeks away; and the unchallenged evidence of Mr Senogles is that he will need considerably more time than this to prepare his report, assuming immediate access to the Documents. 37If disclosure is not ordered now, it appears inevitable that RSA will renew its application for disclosure of the Documents after service of Mr Senogles' report. It seems to me highly likely that RSA would establish, at that stage, that the Documents were "necessary for the resolution of the real issues in dispute in the proceedings" for the purposes of par [5] of the Practice Note and that the Documents would then be produced. It is likely that, in the result, Mr Senogles would produce a revised or supplementary report. It seems to me to be far more satisfactory that the Documents be produced to Mr Senogles immediately so that he can prepare a final report as soon as possible. 38Mr Hicks submitted that RSA had not shown that it had taken all reasonable steps to obtain copies of the Documents from sources other than VDM. Mr Hicks submitted that "exceptional circumstances necessitating disclosure" could never be established in the absence of such evidence. In my opinion, no such hard and fast rule can be formulated in relation to the Practice Note. Every case must be examined in light of its own circumstances. 39It may be that some or all of the Documents could have been obtained by RSA from sources other than VDM. However, the simple fact of the matter is that VDM does have the Documents and the evidence of Mr Senogles' establishes, to my satisfaction, that it is necessary that they be disclosed before his evidence is finalised. 40I am also satisfied that the circumstances that I have outlined, particularly the imminent hearing date and due date for the service of reply evidence is sufficient to enable me to characterise the current circumstances as "exceptional" for the purposes of the Practice Note. 41For those reasons, I order that VDM disclose the Documents.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 May 2013