Shoreform (Qld) Pty Ltd v Millenium Coal Pty Ltd

REASONS FOR JUDGMENT 1 These reasons deal with a dispute about the discovery of documents by the respondents. 2 The applicant claims that it entered into one or more contracts with the respondents or either of them for the provision of formwork services for a reclaim tunnel and associated works of a coal handling and preparation plant known as the Millennium Coal Project, located in the Bowen Basin in Queensland. Other legal characterisations are given to the facts as pleaded, being estoppel, a quantum meruit claim and claims for misleading and deceptive or unconscionable conduct. 3 In broad terms there was a head contract in early 2005 between Millennium Coal Pty Ltd as principal and Australian Coal Technology Pty Ltd as contractor. There was then a sub- contract between Australian Coal Technology Pty Ltd and Commercial Concrete Constructions Pty Ltd or Commercial Concrete Constructions Queensland Pty Ltd (both, and individually, referred to in the statement of claim as CCC) and a sub-subcontract between CCC and Shoreform (Qld) Pty Ltd, the applicant. There were deeds of novation made in or after January 2006 by which Millennium CHPP Pty Ltd became a party to the head contract and the subcontract in place of Australian Coal Technology Pty Ltd. 4 In its statement of claim, the applicant, Shoreform (Qld) Pty Ltd, relies in particular on certain statements made in early January 2006, many of those statements being oral and made by telephone. It claims that the respondents represented that it, Shoreform (Qld) Pty Ltd, would be paid by the respondents what it describes as the CCC debt. Shoreform (Qld) Pty Ltd also claims that the respondents represented that it could continue with providing formwork services for the coal handling and preparation plant as instructed or directed by a Mr Phil Toneguzzi on the terms and at the rates which it had agreed with CCC without fear of not being paid, because the respondents or one of them would ensure or guarantee that it would be paid for all work done by it and would pay for that work if CCC did not pay. 5 The applicant claims that it continued to provide formwork services until late February 2006. 6 Time does not permit what would otherwise be a fuller discussion of the claims. 7 The matter has beeen set down for final hearing for five days commencing on 9 December 2013. 8 Turning to discovery, on 27 June 2012 I ordered that the parties give standard discovery on or by 5 August 2012. 9 Ultimately, on 2 April 2013, pursuant to those orders, a further amended list of documents was filed by the respondents, the deponent to the affidavit of discovery being the company secretary of each of the respondents. 10 Before and after that affidavit of discovery there was frequent correspondence between the parties. 11 The applicant seeks an order for standard discovery so as to require the respondents to discover all documents within their custody, power and control within certain categories listed in a letter dated 27 November 2012. Alternatively, the applicant seeks an order that the respondents serve an amended list of documents of standard discovery. The applicant also sought by application made informally, ore tenus, when the matter was called on for hearing, to amend its interlocutory application, as a fallback position, to seek an order for particular discovery, being discovery of the material sought in accordance with the written submissions. This amendment was opposed by the respondents but no prejudice was pointed to by them. 12 The respondents opposed the amendment because of the requirement in rule 20.15(3) of the Federal Court Rules 2011 (Cth) relating to such an application and the absence of any affidavit satisfying that requirement. In my view although the absence of a specific affidavit may detract from the cogency with which the application for particular discovery is put, the affidavits that were read on behalf of the applicant may be taken to satisfy the rule. I allow the amendment. 13 The claims as subsisting at the commencement of the interlocutory hearing were collected in a 35 page document entitled "Applicant's and respondents' submissions with replies". That document (MFI 1) contained subheadings which give a broad idea of the areas of claim and dispute. First was "Documents referred to in respondents' discovered documents but not discovered"; second was "Categories of standard discovery by reference to the pleadings"; third was "Respondents' further amended list of documents dated 28 March 2013"; fourth was "Applicant's categories not discovered in respondents' further amended discovery"; and fifth and last was "Irrelevant documents in respondents' further amended discovery". My analysis of the claims was not assisted by these divisions. 14 As to the first and second subheadings, these were the subject of specific submissions. Also a number of the specific claims were abandoned in the course of oral submissions in reply on behalf of the applicant. I will return to them below. 15 As to the third subheading, these documents were the subject of a general submission. Counsel for the applicant conceded that there was no evidence supporting the orders which were sought and he did not make a submission that there was evidence which would indicate that those documents must exist, such as would warrant cross-examination of a director. However counsel did press the claims on the alternate basis of particular discovery. He also submitted that documents at items 46, 47, 50 and 51 which were partly discovered should be discovered as to their non-discovered parts. 16 As to the fourth subheading, these claims were not the subject of specific submission but in any event I am not persuaded to grant relief by reference to whether or not the respondents had regard to categories created by the applicant. I reject the contention that it is deficient of the respondents to have had no regard to the applicant's categories when undertaking their discovery obligations even if that contention were made out. I say no more about this subheading. 17 As to the fifth subheading, irrelevant documents discovered by the respondents, self-evidently nothing more needs to be said about it. 18 The parties were agreed on the relevant principle to be applied, that is, that the applicant must satisfy the Court that there were reasonable grounds for being fairly certain that there were other directly relevant documents, that is, documents meeting at least one of the criteria in rule 20.14(2) of the Federal Court Rules of which the respondents ought to have become aware after reasonable search, taking into account the criteria in rule 20.14(3). This principle was derived from the judgment of Besanko J in Procter v Kalivis (2009) 263 ALR 461, cited with approval by Jagot J in Guy Carpenter and Co Pty Ltd v Grove (No 2) [2011] FCA 1190 at [5]. Those cases obviously concerned the former rules but I accept the principle. 19 I deal first with the general submission that was made on behalf of the applicant that the respondents' affidavit evidence showed that there had been a failure to undertake a reasonable search. It was submitted that it was plain and self-evident that the discovery provided was deficient. 20 The respondents read the affidavit of Murray Paul Hundleby, affirmed on 28 March 2013, by which the further amended list of documents was verified. This affidavit refers to the deponent's state of mind in light of the enquiries and further enquiries made. The respondents also read the affidavit of Simon Richard Cobb affirmed on 15 May 2013, which provides more detail. 21 Mr Cobb is a qualified solicitor and employed as Corporate Counsel - Operations by Peabody Energy Australia Pty Ltd. He oversaw the respondents' compliance with their discovery obligations. 22 He referred first to the understanding he had in July 2012 that documents relating to the Millennium Coal Mine were retained in archives located at the Millennium Mine site in Central Queensland (Millennium Archives). He was also aware that an archive index relating to the archived materials kept in the Millennium Archives was maintained. Upon review of the archive list in consultation with the respondents' solicitors, it was determined, based on the titles of the archive boxes, which boxes might contain documents relevant to the construction of the Millennium Coal Handling Preparation Plant the subject of the proceedings. The content of those boxes was then inspected by lawyers employed by the respondents' solicitors. All relevant documents identified by those lawyers were included in the respondents' discoverable material. 23 Mr Cobb then referred to the review of material contained on the respondents' computer servers. A number of keywords were used. The searches were made at the Millennium site computer server of Millennium Coal Pty Ltd, the first respondent, and at Peabody Energy Australia's main Brisbane computer servers, also using the same keywords. 24 Mr Cobb next referred to the enquiries made with Peabody's accounts department in order to determine whether it was possible to track down any documentation through the discontinued MYOB accounting system regarding payments (if any) made from Millennium CHPP Pty Ltd, Millennium Coal Pty Ltd or Excel Coal Limited to Commercial Concrete Constructions Pty Ltd, Shoreform Pty Ltd or Shoreform (Qld) Pty Ltd between October 2005 and March 2006. He deposed to being told by Peabody's Senior Manager of Financial Reporting that there was no electronic solution for finding any invoices through MYOB due to the changeover of systems and the passage of time. 25 Lastly, Mr Cobb referred to enquiries he made in January 2013 which resulted in his being provided with an index of Peabody Group's central archives. Up to that time he had been unaware that there existed a central archive for the Peabody Group and had believed that all relevant documents would have been contained in the Millennium Archives. In the result a large number of boxes were recalled from archives for inspection, the contents of those boxes were inspected, relevant material identified and "All relevant documents identified by [the respondents' solicitors] have been included in the Respondents' supplementary discoverable material." 26 I reject the applicant's general submission that this evidence discloses a failure to conduct a reasonable search or searches. 27 A second limb to this argument was that a large number of documents should have been discovered because those documents were referred to in the documents which the respondents had discovered. In my view this is impermissible reasoning. Whether or not a document is discoverable for relevance must be assessed by whether or not it is directly relevant to the issues raised by, in this case, the pleadings. 28 I turn to the first subheading in MFI 1. As I have said, it is not a permissible approach under the rules for discovery in the Federal Court Rules merely to make a list of documents which are referred to in documents which have been discovered without demonstrating why those documents thus referred to are likely to be directly relevant. 29 The first subheading lists items 1 to 20, some of the items containing a number of bullet points. 30 In the course of his reply submissions, counsel for the applicant did not press the following claims: (i) item 1; (ii) item 2, the first bullet point; (iii) item 2, the fourth bullet point except so far as concerned documents between any of Australian Coal Technology Pty Ltd, Commercial Concrete Constructions Pty Ltd/Commercial Concrete Constructions Queensland Pty Ltd and the applicant; (iv) item 5, both bullet points except in relation to arrangements between Australian Coal Technology Pty Ltd and Commercial Concrete Constructions Queensland Pty Ltd; (v) item 9; (vi) item 10, both bullet points except so far as concerned delivery of document 20 to Commercial Concrete Constructions Queensland Pty Ltd; (vii) item 12, both bullet points; (viii) item 13, the first bullet point and the third bullet point; (ix) item 15; (x) item 16; (xi) item 18; (xii) item 19, both bullet points; (xiii) item 20, all three bullet points. 31 I now turn to what remains. 32 As to item 2, the second bullet point, I am not persuaded of the relevance for the purposes of discovery of any such material, due diligence reports, to the issues arising on the pleadings. I am also not persuaded that there has been any deficiency in the searches and discovery made by the respondents in this respect. 33 As to item 2, the third bullet point, the claim is for the Project Control Meeting minutes "referred to in schedule 1 of the Novation Deed (page 10) to the extent they are relevant." I am not persuaded that there has been any deficiency in the searches and discovery made by the respondents in this respect. 34 As to item 2, the fourth bullet point, so far as concerns documents between any of Australian Coal Technology Pty Ltd, Commercial Concrete Constructions Pty Ltd/Commercial Concrete Constructions Queensland Pty Ltd and the applicant, as so amended I am not persuaded of the substance of this claim for discovery. 35 As to item 3, I am not persuaded of the relevance for the purposes of discovery of any such material to the issues arising on the pleadings. I am also not persuaded that there has been any deficiency in the searches and discovery made by the respondents in this respect. 36 As to item 4, as I understood it, the respondents did not submit that their assessment for Commercial Concrete Constructions Queensland Pty Ltd's invoices Q027 and Q030 were irrelevant because of their timing or otherwise. In those circumstances, the respondents should file a further affidavit under rule 20.22 having conducted a further specific search, deposing to the results of that search and including further discovery of any resulting documents being their assessment or assessments of those invoices. 37 As to item 5, in relation to arrangements between Australian Coal Technology Pty Ltd and Commercial Concrete Constructions Queensland Pty Ltd, I am not persuaded that there has been any deficiency in the searches and discovery made by the respondents in respect of the first bullet point. As to the second bullet point, I am also not persuaded of the relevance for the purposes of discovery of any such material to the issues arising on the pleadings. 38 As to item 6, I am not persuaded that there has been any deficiency in the searches made by the respondents in this respect. In addition, as I understood it, counsel for the applicant put the relevance of this material as being corroborative of the applicant's case. On that basis, I am also not persuaded of the relevance for the purposes of discovery of any such material to the issues arising on the pleadings. 39 Item 7 is the high-water mark of the applicant's approach, which I have rejected, that the mere reference to a document (the second document) in a document that has been discovered (the discovered document) establishes the relevance of the second document thus referred to. Here the applicant submits that the discovered document appears to be irrelevant but seeks discovery of the second document that may have been enclosed with it. I reject this claim as I am not persuaded of the relevance for the purposes of discovery of any such material to the issues arising on the pleadings. 40 As to item 8, this refers to a document 17 dated 17 November 2005 and marked "Page 1 of 1". I am not persuaded that there has been any deficiency in the searches made by the respondents in this respect. I am also not persuaded of the relevance for the purposes of discovery of any such material to the issues arising on the pleadings. 41 As to item 11, I am not persuaded that there has been any deficiency in the searches made by the respondents in this respect. I am also not persuaded of the relevance for the purposes of discovery of any such material to the issues arising on the pleadings. 42 Item 13, the second bullet point, relates to a statement in a letter dated 21 April 2006 and refers to Millennium Coal Pty Ltd having undertaken to pay all commitments made on the Millennium project since 1 December 2005. In my opinion the respondents should file a further affidavit under rule 20.22 having conducted a further specific search, deposing to the results of that search and including further discovery of any documents relied on by the author, Mr Cameron Vorias, in making that statement. 43 As to item 14, referring to document 27, after the correction of typographical errors this item refers to four documents referred to in document 27. As to the first of these, I am not persuaded that the letter dated 20 March 2006 has not been discovered. As to the second of these, which in MFI 1 should be Reference D, contract no 3145, this may be a reference to invoice Q026 which has been disclosed and to contract no 3146 but in my opinion the respondents should file a further affidavit under rule 20.22 having conducted a further specific search, deposing to the results of that search and including further discovery of any resulting document in relation to contract no 3145. As to the third of these, which in MFI 1 should be Reference E, I am not persuaded that there has been any deficiency in the searches made by the respondents in this respect. As to the fourth of these, which in MFI 1 should be Reference F, the applicant accepts that the respondents have discovered this 8 May 2006 facsimile and that issue is therefore moot. 44 Lastly, under this first subheading, as to item 17, referring to document 32. The area of remaining contention is as to the payment certificate of invoice Q30. In my opinion the respondents should file a further affidavit under rule 20.22 having conducted a further specific search, deposing to the results of that search and including further discovery of any resulting document in relation to invoice Q30. 45 I now turn to the second subheading. This comprises items 21 to 31. 46 Item 21 was not pressed and item 23 was pressed only with respect to the Commercial Concrete Constructions Queensland Pty Ltd contract. 47 As to item 22, I am not persuaded of the relevance for the purposes of discovery of this material to the identified part of the pleading, being paragraph 15. The allegation in that paragraph is that there was a conversation in which it was represented that Australian Coal Technology Pty Ltd would guarantee payment to the applicant. The material sought to be discovered is documents recording all communications between the respondents and Australian Coal Technology Pty Ltd between 1 November 2005 and 1 March 2006 referring to the state of Australian Coal Technology Pty Ltd's liabilities to its contractors, subcontractors, suppliers or consultants and arrangements for payments to those entities. 48 As to item 23, pressed only with respect to the Commercial Concrete Constructions Queensland Pty Ltd contract, as so limited I am not persuaded that there has been any deficiency in the searches made by the respondents in this respect. 49 As to item 24, I am not persuaded of the relevance for the purposes of discovery of this material to the identified parts of the pleading. 50 As to item 25, the first bullet point, I am not persuaded that there has been any deficiency in the searches made by the respondents in this respect. As to the second bullet point, I am not persuaded of the relevance for the purposes of discovery of this material to the identified parts of the pleading. As to the third bullet point, again I am not persuaded of the relevance for the purposes of discovery of this material, as articulated, to the identified parts of the pleading. 51 As to item 26, this refers to paragraph 20(a) of the Statement of Claim which merely refers to the contents of the notice dated 3 January 2006. I am not persuaded that the documents sought under this item are relevant for the purposes of discovery to the contents of the notice as pleaded. 52 As to item 27, I am not persuaded that there has been any deficiency in the searches made by the respondents in this respect. Further, it is not clear to me that it is likely that the respondents have documents answering this description. 53 As to item 28, I am not persuaded that there has been any deficiency in the searches made by the respondents in this respect. Indeed, it is not clear to me that it is likely that there are documents answering this description. 54 As to item 29, I am not persuaded of the relevance for the purposes of discovery of this material. Neither am I persuaded that there has been any deficiency in the searches made by the respondents in this respect. 55 As to item 30, its relevance is speculative. Paragraph 22 of the Statement of Claim does not refer to a meeting on or around 2 March 2006. Further, as counsel for the applicant accepted, the applicant's role had been terminated by the date referred to in item 30, March 2006. 56 Lastly under this subheading, as to item 31, I am not persuaded of the relevance of this material for the purposes of discovery. 57 The third subheading, being items 32 to 51, encompasses the following documents: 62, 64, 66, 68-116, 118, 119, 125, 126, 131, 139, 149, 156, 159, 176, 178 (twice), 179-192, 194, 215 and 234. 58 I was not taken to these documents and the applicant accepted that there was no evidence indicating that those documents existed. Nevertheless it was submitted by the applicant that evidence was unnecessary in relation to documents which had been discovered in part and where the applicant sought the balance of those documents. In this group were items 46 (document 178), 47 (document 178 second occurring), 50 (document 215) and 51 (document 234). 59 As to items 32 to 51 generally, the effect of the applicant's concession is that these claims must fail as there are not reasonable grounds for being fairly certain that there are other directly relevant documents. I do not make an order for particular discovery of items 32 to 51 generally. 60 As to items 46 (document 178), 47 (document 178 second occurring), 50 (document 215) and 51 document 234), reviewing their descriptions in MF1 1, I am not persuaded that there is any deficiency in the respondents' discovery in respect of these documents. 61 Beyond the orders I have indicated, I am not satisfied that the further discovery the applicant seeks will facilitate a just resolution of the proceedings as quickly, inexpensively and efficiently as possible. 62 As to costs, in my opinion in light of the breadth of the interlocutory application, as originally pressed and as amended in the course of the hearing, the terms in which the claims were made and the very limited success that the applicant has had, the applicant should pay the respondents' costs of the interlocutory application. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson.