SMEC Australia Pty Ltd & Anor v McConnell Dowell Constructors [2012] VSC 557 | Case summary

Supreme Court of Victoria|2012-11-28|Before: VICKERY J

PRACTICE AND PROCEDURE - Application to strike out Amended Statement of Claim - Rule 23.02 of the Supreme Court (General Civil Procedure) Rules 2005 - Application granted in part - Part of statement of claim struck out - Complex proceeding to be closely managed - Proceeding to be conducted pursuant to a List of Issues settled by the Court once pleadings closed - Issues considered not amenable to being struck out at any time - Cost/benefit in proceeding with an issue to be taken into account -Practice Note No. 2 of 2009 (TEC List) paragraph 40(g) (List of Issues) applied - s 7(1) Civil Procedure Act 2010 applied.

TRADE PRACTICES - Enforcement and remedies -Action for damages - Misleading or deceptive conduct - Pleading of causal link to misleading or deceptive conduct -Representation that principal would negotiate an outcome as to delay in good faith - Whether contractor needs to prove loss on whole contract - Discrete loss sustained claimed as recoverable-Trade Practices Act 1974 (Cth) s 82; s 87.

1. This ruling follows the reasons delivered in SMEC Australia Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd & Ors (No 2) (the "Earlier Pleading Reasons").[1] The Earlier Pleading Reasons were delivered in respect of an application by the First and Second Defendants seeking orders for the Amended Statement of Claim filed by the Plaintiffs in the proceeding on 20 July 2011 (the "Amended Statement of Claim") to be struck out pursuant to rule 23.02 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) (the "Court Rules").

2. Pursuant to the Earlier Pleading Reasons it was ordered that the Amended Statement of Claim be struck out with liberty granted to the Plaintiffs to file a re-pleaded Further Amended Statement of Claim.

3. By a Second Further Amended Statement of Claim dated 31 May 2012 (the "Second FASOC") the Plaintiffs filed a re-pleaded case. The First and Second Defendants in the present application seek to strike out the Second FASOC.

4. The dispute which is the subject of this proceeding was summarised in the Earlier Pleading Reasons.[2] For completeness, I will repeat the principal observations in these reasons.

5. The proceeding arises out of the construction of the Adelaide Desalination Plant, which is situated near Adelaide, South Australia (the "Project"). The Project is continuing. However, it was agreed by the relevant parties that the Project be due for Practical Completion in February 2012. The Project is located in Port Stanvac in South Australia, 25 kilometres southwest of Adelaide.

6. The Plaintiffs, SMEC Australia Pty Ltd and Hatch Associates Pty Ltd ("SMEC" and "Hatch" respectively), together operate under a joint venture on the Project called the Design Joint Venture ("DJV").

7. The First Defendant is McConnell Dowell Constructors (Aust) Pty Ltd ("McConnell Dowell") and the Second Defendant is Abigroup Contractors Pty Ltd ("Abigroup"). Together they operate under an unincorporated joint venture on the Project called the "MAJV". The MAJV was formed for the purpose of carrying out certain works on the Project.

8. The Third Defendant is Acciona Agua Australia Pty Ltd ("Acciona Agua"). Acciona Agua was not part of the MAJV.

9. Acciona Agua, together with McConnell Dowell, Abigroup and United Utilities Australia Pty Ltd ("United Utilities"), are alleged to have formed a consortium known as the "Adelaide Aqua Consortium" ("Adelaide Aqua").

10. The Principal of the Project is the South Australian Water Corporation ("SA Water"). SA Water is a South Australian State Government instrumentality established pursuant to the South Australian Water Corporation Act 1994 (SA). It is a

business enterprise with the principal responsibility of providing water and sewerage services for the benefit of the people and economy of the State.[3]

11. It is alleged that on or about 23 September 2008, Adelaide Aqua was invited by SA Water to submit a proposal for the design, construction and commissioning of the Project.

12. The MAJV and a company associated with Acciona Agua are members of an unincorporated joint venture (the "Contractor JV") for the purpose of carrying out the design, construction and commissioning of the Project.

13. The proceeding does not involve a typical engineering or building contract where a defined construction is to be produced at the end of the project which is to be completed within a defined time. Rather, this was a consultancy or service contract pursuant to which DJV contracted to provide to MAJV thousands of engineering documents in the nature of drawings, specifications, sketches, plans, designs, estimates, calculations and expert reports. Each item of work is described in a work package and each was programmed to be completed within a milestone date set for each.

The Amended Statement of Claim Pleaded Agreements

14. It was alleged in the Amended Statement of Claim that the Contractor JV and SA Water are parties to a contract dated 16 February 2009 for the design, construction and commissioning of the Project.

15. It was further alleged in the Amended Statement of Claim that between 6 February and 7 November 2009, Adelaide Aqua entered into a series of Tender Services Agreements ("TSA 1-10" and "TSA") with the Plaintiffs' joint venture DJV, as project designers for the initial tender and design services to be provided in relation to the Project.

16. It was further alleged in the Amended Statement of Claim alleged that on or about 22 August 2009 Adelaide Aqua and/or MAJV entered into a further agreement pursuant to which DJV was to carry out detailed design and associated sub-consultancy works for the Project (the "22 August Agreement").

17. It was further alleged in the Amended Statement of Claim that on or around 9 October 2009, the MAJV entered into a Professional Services Contract ("PSC") with the DJV for the provision of design services for the Project.

18. In the Second FASOC, it is now alleged that a similar but different suite of agreements was entered into. It appears that the agreements described below are the central contractual arrangements now relied upon by the Plaintiffs.

19. It is alleged that on or about 5 February 2009, Adelaide Aqua and DJV entered into an agreement whereby Adelaide Aqua requested, and the DJV agreed to provide, engineering design and associated services to Adelaide Aqua in consideration of Adelaide Aqua agreeing to pay DJV on a 100% fee basis (including expenses) (the "5 February 2009 agreement") (paragraph 9).

20. It is alleged that pursuant to the 5 February 2009 agreement, during the period 6 February 2009 until about 16 February 2009, DJV provided engineering design and associated services including associated services referred to by the parties as "Project Office Shared Services" (paragraph 10).

21. It is then alleged that in breach of the 5 February 2009 agreement, Adelaide Aqua has failed to pay DJV for the engineering design and associated services performed pursuant to the 5 February 2009 agreement during the period 6 February 2009 and about 16 February 2009, and loss and damage is claimed (paragraphs 11-12).

22. It is then alleged that on or about 16 February 2009, the 5 February 2009 agreement was varied and was further varied (the "5 February 2009 agreement as varied") (paragraphs 15-17).

23. It is then alleged that during the period 6 February 2009 to 9 October 2009, DJV provided engineering design and associated services pursuant to the 5 February 2009 agreement as varied, for which DJV claims it has not been paid in full (paragraphs 18 and 21) and it has suffered loss and damage (paragraph 22).

24. Then follows allegations that during the period 12 June 2009 until 9 October 2009 MAJV directed DJV to undertake variations to the engineering design services pursuant to clause 6.1 of the 5 February 2009 agreement as varied and DJV undertook the variation work as directed (the "additional engineering design services"), for which DJV claims payment (paragraphs 19-20) and it has suffered loss and damage (paragraph 22).

25. Further breaches by Adelaide Aqua of the 5 February 2009 agreement as varied are pleaded in respect of which loss and damage is claimed (paragraphs 24-26).

26. It is then pleaded that by an agreement entered into between MAJV and DJV on or about 9 October 2009, the MAJV requested and the DJV agreed to provide engineering design and associated services, including Construction Support and Project Office Shared Services, in consideration of the MAJV paying to the DJV the Services Fee specified in the agreement (the "Professional Services Contract" or "PSC"). The terms of the PSC relied upon are set out in Schedule 1 of the Second FASOC (paragraphs 37-38). Variations are then pleaded to the PSC (paragraph 39), and a claim for payment is made for all additional engineering design services directed by MAJV since 12 June 2009 pursuant to clause 18.1 of the PSC (paragraph 40). It is then pleaded that in breach of the PSC, MAJV has failed, refused or neglected to pay DJV the outstanding balance for additional engineering design services pursuant to clause 18.1 the PSC (paragraph 41) and DJV has suffered loss, damage and expense thereby (paragraph 42).

27. DJV makes the following further claims in the Second FASOC:

(a) Conduct in breach of s 52 of the Trade Practices Act 1974 (Cth) (the "TPA") arising from representations allegedly made by MAJV on 6 October 2009 and 8 October 2009, prior to DJV entering into the PSC for which relief is claimed under s 82 and s 87 of the TPA (paragraphs 27-36) (the "TPA Claims");

(b) Claims for extensions of time arising from or associated with the delays pursuant to clause 17 of the PSC (paragraphs 43-47) (the "EOT Claims");

(c) Delay damages claims arising from delays and disruption alleged to have occurred to the work of DJV resulting in it being entitled to be paid direct extra costs and expenses arising from or associated with the delays pursuant to clause 17 of the PSC (paragraphs 48-49) (the "Delay Damages Claims");

(d) Disruption and loss of productivity claims said to arise from breaches of the terms of the PSC by reason that the MAJV and or others for whom it was responsible, disrupted DJV in the performance of its Services including the completion of its Deliverables. Loss and damage is claimed under this head of claims (paragraphs 24-26 and 50-51) (the "Disruption/Loss of Productivity Claims");

(d) Money claims in respect of "Project Office Shared Services"/"Project Services" and "Construction Support Services" said to arise from an agreement between DJV and MAJV made on or about 30 October 2009 (paragraphs 10, 11, 12, 18, 29(b), 21(b) 22 and 52-64) (the "Services and Expenses Claims"). It is unclear whether these claims are made pursuant to a variation of the PSC or whether they are made pursuant to a discrete further agreement. However, it is clear that they have their foundation in a contract;

(e) A claim that the PSC was varied by an agreement made 23 April 2010, but effective from 1 April 2010, to the effect that DJV would continue to provide and charge for all services as "Construction Support Services" (including "any remaining original design work scope and variations thereto but excluding Intake Hydraulic Design and Outfall Hydraulic Design") (paragraph 54) (the "1 April 2010 Agreement"). A money claim is made under this agreement for outstanding payments in respect of "Project Office Shared Services/Project Services and Construction Support Services and Expenses" and loss and damage is claimed by reason of the non-payment (paragraphs 55-57);

(f) In the alternative to the claims made under the 1 April 2010 agreement, it is then pleaded that DJV is entitled to claim for all outstanding monies for all engineering services undertaken by DJV during the period commencing 1 April 2010 pursuant to the PSC, unamended by the 1 April 2010 agreement (paragraph 58);

(g) Two further claims are made, which are as yet unparticularised, save that they are said to arise under the PSC:

(i) Alternative claims for Construction Support Services performed during the period 6 February 2009 to 1 April 2010 (paragraph 59); and

(ii) Alternative claims for Construction Support Services being "all design works undertaken post issue of AFC/Rev1 drawings under the PSC" at rates set out in an annexure to the PSC (paragraph 60); and

(h) Pursuant to a contractual notice issued on or about 23 July 2009 under the PSC called a "Separable Portion 2 Notice to Proceed", DJV makes a claim for an "unpaid balance of Project Office Shared Services/Project Services and Expenses provided in connection with Separable Portion 2" (paragraphs 61-64).

28. At this point, the Defendants have not filed or served defences or counterclaims. MAJV says that it intends to pursue counterclaims against the Plaintiffs in respect of the services provided by DJV.

29. The First and Second Defendants in making this renewed application rely upon Rule 23.02 of the Court Rules, which provides:

23.02 Striking out pleading

Where an indorsement of claim on a writ or originating motion or a pleading or any part of an indorsement of claim or pleading-

(a) does not disclose a cause of action or defence;

(b) is scandalous, frivolous or vexatious;

(c) may prejudice, embarrass or delay the fair trial of the proceeding; or

(d) is otherwise an abuse of the process of the Court -

the Court may order that the whole or part of the indorsement or pleading be struck out or amended.

30. The renewed application was made under Rules 23.02 (a) and (c).

31. Save for the analysis of any part of the Second FASOC which is to be struck out, as the Court as presently constituted will continue to manage the proceeding to trial and will more than likely conduct the trial, it is undesirable that it provide detailed reasons in respect of those claims which are permitted to go forward.

Trade Practices Claims ("TPA Claims") (paragraphs 27-36)

32. It was noted in the Earlier Pleading Reasons that paragraphs 54-62 of the Amended Statement of Claim sought to plead claims for misleading and deceptive conduct contrary to s 52 of the TPA. The Plaintiffs sought relief by way of damages under s 82 of the TPA and other orders under s 87.

33. On 1 January 2011 the TPA was substantially amended to facilitate the commencement of the Australian Consumer Law (the "ACL"). The TPA was re-named the Competition and Consumer Act 2010 (Cth) (the "CCA"). The ACL has also been enacted as a law of each of the States and Territories. The text of the ACL is now found in Schedule 2 to the CCA. The ACL has its own section numbering commencing at section 1 through to section 287.

34. Sections 52, 82 and 87 of the TPA have been amended by replacement sections of the ACL which cover the same causes of action and relief provided in the TPA, although with some modifications to the text to provide for a new national approach to consumer protection which is intended to replace State and Territory consumer laws and place them under a common national umbrella.

35. Section 52 of the TPA is no longer in force. Section 18 of the ACL now provides:

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

With one difference of significance, as identified below, section 18 is to be read as s 52(1) of the TPA used to read, namely:

A corporation shall not [now: a person must not], in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

[Section 18 amendment added as underlined]

36. Actions for damages in respect of loss or damage caused by conduct in contravention of the misleading and deceptive conduct provision are no longer available under s 82 of the TPA, but rather are available under s 236 of the ACL.

37. Section 82 of the TPA provided for recovery of damages where a person suffered loss or damage, inter alia, by the misleading or deceptive conduct of another person. The reference to "by" in s 82 has been relied on to import into s 82 the common law's approach in contract and tort to limiting damages by reference to concepts such as remoteness.[4]

38. Section 236 of the ACL on the other hand refers to a person who suffers loss or damage because of the conduct in question.

39. Whether the new damages provision in the ACL which replaces s 82 of the TPA invites a new body of jurisprudence on the issue of remoteness of damage or whether the existing law should continue to apply is a matter for further consideration and definition.

40. Section 87 of the TPA provided broad power for the Court to make orders as it considered appropriate directed either to compensating persons who had suffered or are likely to suffer loss or damage and preventing or reducing any such future loss or damage. Section 87 of the CCA, supported by s 238 of the ACL, now provide a similar facility extending to circumstances where there has been a contravention of the ACL.

41. However, for transactions that occurred prior to 1 January 2011, the previous national, State and Territory consumer laws continue to apply, including the TPA. The conduct relied upon to constitute the misleading or deceptive conduct in question is pleaded by the Plaintiffs in both the Amended Statement of Claim and the Second FASOC to have occurred in October 2009. Accordingly, the TPA in its unamended form applies.

42. The background to the representations relied upon arises from an email letter dated 2 October 2009 sent to a representative of MAJV (Mr David Jurd) by a representative of DJV (Mr Neil Evans), prior to the execution of the PSC on 9 October 2009, where it is said by Mr Evans that

...we agree prior to the signing of the contract in the form of [sic] letter that we will negotiate in good faith the effects of the following on both program and cost.

Then follows a list of some 13 items. Then follows the statement

I would add that we would put a time limit for this negotiation and suggest that you and I be involved to expedite it.

This letter is pleaded in paragraph 27 of the Second FASOC. The 2 October letter was followed by a letter from Mr Jurd of MAJV to Mr Evans of DJV dated 8 October 2009, sent the day before the PSC was signed. Mr Jurd said in the letter, amongst other things:

With regard to the points raised it is agreed that the MAJV and DJV make equal commitments to negotiate in good faith the effects on both program and costs related to key issues. On consideration of the list of issues provided and taking into account those issues already addressed in the negotiation of the Contract the key issues appear to fall into the following categories.

Three categories of issues and some "MAJV concerns" are then referred to. The letter ends with the following observation:

In closing, I would like to thank you for your assistance in concluding this Contract. I have instructed our contracts team to prepare the requisite Contract documents for execution by the parties.

The letter was apparently unsigned by Mr Jurd, but was sent in this form. This letter is also pleaded in paragraph 27 of the Second FASOC. The representations alleged by DJV are pleaded to be supplemented by telephone discussions between Mr Evans of DJV and Mr Jurd of MAJV which are alleged to have taken place on 6 October 2009.

43. DJV's email of 2 October 2009 (at 1.55 pm) and an unsigned letter from Mr Jurd for and on behalf of Adelaide Aqua/MAJV to Mr Neil Evans for and on behalf of DJV dated 8 October 2009 which were both referred to in the pleading were produced and addressed by senior counsel for the Plaintiffs in the course of argument in the present application. The Defendants did not object to this course.

44. It is put that in fact no negotiations took place prior to execution of the PSC which was executed on 9 October 2009.

45. Two representations were alleged to be conduct in contravention of s 52 TPA. The representations pleaded in paragraph 55 of the Amended Statement of Claim were:

(a) the effects of preceding Adelaide Aqua/MAJV delays referred to in DJV's correspondence of 2 October 2009 and their impact on program and cost would be negotiated in good faith; and

(b) the deficiencies in the Rev 6 Program referred to in DJV's correspondence of 2 October 2009 and their impact on program and cost would be negotiated in good faith.

46. It was alleged in paragraph 56 of the Amended Statement of Claim that:

The MAJV representation was false and untrue on the date or dates on which it was made as MAJV did not have regard to whether following entry into the PSC referred to in paragraph 63 hereof, it had the means or intention to address the program and cost implications of:

(a) the effects of proceeding Adelaide Aqua/MAJV delays referred to in DJV's correspondence of 2 October 2009;

(b) the deficiencies in the Rev 6 Program referred to in DJV's correspondence of 2 October 2009;

(c) variations undertaken by DJV at the request of Adelaide Aqua/MAJV during the period 12 June 2009 until entry into the PSC.

47. It was noted in the Earlier Pleading Reasons that the falsity and untruthfulness of the representations pleaded in paragraph 56 did not follow from the representations which were alleged in paragraph 55. A clear disconnection was observed to arise.

48. Furthermore, even if the representations alleged were false and misleading, it was noted in the Earlier Pleading Reasons that it was not pleaded how any loss and damage was suffered by any and which of the Plaintiffs arising from representations that they would negotiate the matters in question "in good faith".

49. It was on this basis that paragraphs 54-62 (inclusive) of the Amended Statement of Claim were struck out under r 23.02(c).

50. The Trade Practices misleading and deceptive conduct allegations (called the "MAJV representations) have been re-pleaded in the Second FASOC in paragraphs 27-36 in the following form (the "Revised TPA Claim"):

On 2 October 2009 (by email of that date), Mr Neil Evans, on behalf of the DJV, communicated to Mr David Jurd, for and on behalf of the MAJV, that DJV would agree to enter into the Professional Services Contract, in the draft form in which it then existed, containing the Revision 6 Program issued to DJV on 12 June 2009, provided it was agreed by MAJV that as soon as practicable following entry into the PSC:

(a) the effects of preceding Adelaide Aqua/MAJV conduct and delays as set out in the said email dated 2 October 2009, and their impact on the Rev 6 program, and the cost thereof, would be negotiated in good faith so that the DJV would not be prejudiced by the said conduct and those delays and costs not being taken into account when the Rev 6 Program was applied under the PSC (as defined in paragraph 37);

(b) the deficiencies in the Rev 6 Program would be negotiated in good faith so that the DJV would not be prejudiced by those deficiencies;

(c) the Rev 6 Program would not be applied to DJV if Adelaide Aqua/MAJV did not do as they undertook to do in (a) and (b) of this sub-paragraph.

PARTICULARS

Copies of the Rev 6 Program and DJV's email of 2 October 2009 (at 1.55 pm) may be inspected at the offices of the Plaintiffs' solicitors by appointment.

On 6 October 2009 and 8 October 2009, prior to DJV entering into the PSC, MAJV represented, in trade and commerce, that if the DJV entered into the PSC then as soon as practicable after the DJV entered into the PSC:

(a) MAJV would negotiate in good faith with DJV to ensure that the effects of preceding Adelaide Aqua/MAJV conduct and delays and their impact on the Rev 6 program, and the cost thereof, would not prejudice DJV and DJV would not be prejudiced by the said conduct and delays and costs not being taken into account when the Rev 6 Program was applied under the PSC;

(b) MAJV would negotiate in good faith with DJV to ensure that the deficiencies in the Rev 6 Program would not prejudice DJV;

(c) The Rev 6 Program would not be applied to DJV, if Adelaide Aqua/MAJV did not do as they undertook to do in (a) and (b) hereof.

The MAJV representations were partly in writing, partly oral, and partly to be implied.

Insofar as they were in writing, they were constituted by letter from Mr Jurd for and on behalf of Adelaide Aqua/MAJV to Mr Neil Evans for and on behalf of DJV dated 8 October 2009. A copy of the said letter may be inspected at the offices of the Plaintiff's solicitors by appointment.
Insofar as the representation[s] were oral, they were constituted by the telephone discussions that took place between Neil Evans on behalf of DJV and David Jurd on behalf of MAJV on 6 October 2009, during which, insofar as material, Mr Jurd made statements to Mr Evans, in substance to the effect alleged in paragraph 28(a), (b) and (c) hereof.

Insofar as the representations were to be implied it was [they are] to be implied from:

(i) the DJV email correspondence of 2 October 2009 referred to in paragraph 27 hereof;

(ii) the written representation by letter dated 8 October 2009 referred to in paragraph A herein.

The MAJV representations were false and untrue on the date on which they were made, because MAJV did not intend to negotiate in good faith as represented, further or alternatively, was unable to address the effects referred to in paragraph 28(a) and the deficiencies in paragraph 28(b), in a good faith negotiation, further or alternatively, MAJV did not have the means to make good the said representations.
Insofar as the MAJV representations related to future matters, MAJV did not in good faith (at all) negotiate:

(a) the effects of preceding Adelaide Aqua/MAJV conduct and delays and their impact on the Rev 6 program, and consequential cost thereof, so that the DJV was not prejudiced by the said conduct and delays and costs not being taken into account when the Rev 6 Program was applied under the PSC;

(b) the deficiencies in the Rev 6 Program so that the DJV would not be prejudiced by those deficiencies; and

(c) applied the Rev 6 Program and relevant terms of the PSC to DJV even though MAJV did not do as it undertook to do in sub-paragraphs 28(a) and (b) hereof.

The MAJV refused to grant DJV extensions of time in relation to the periods of delay and disruption during the period 12 June 2009 until 9 October 2009 inter alia as follows:

(a) MAJV letters to DJV dated 13 May 2010; and

(b) MAJV letter dated 21 December 2010.

Further, the MAJV did not have reasonable grounds for making the MAJV representations because it did not intend, further or alternatively, was not able to address the effects referred to in paragraph 28(a) and the deficiencies referred to in paragraph 28(b) in good faith, or alternatively make good the MAJV representations after DJV entered into the PSC.
But for the MAJV representations, DJV would not have entered into the PSC.
By making the MAJV representations, MAJV engaged in misleading or deceptive conduct contrary to Section 52 of the Trade Practices Act 1974 (Cth) (TPA).
As a result of MAJV's conduct in contravention of s 52 of the TPA, DJV has suffered loss and damage within the meaning of s 82 of the TPA, namely:

(a) by entering into the PSC, which MAJV now contends binds DJV to perform in accordance with the Rev 6 Program and the PSC provisions relating to delay and delay damages, and being thereby being exposed to liability for delay damages (which DJV expressly denies); and,

(b) MAJV has refused to resolve and pay DJV for the costs of delays caused by the effects of delays referred to subparagraph 28(a) and the deficiencies in subparagraph 28(b);

In the alternative to paragraph 34 and further to paragraph 32 hereof:

(a) as a result of MAJV's contravention of s 52 of the TPA, following entry into the PSC on or about 9 October 2009, DJV has suffered and claims loss and damage within the meaning of s 82 of the TPA being its costs of delay and or disruption as set out in paragraphs 48 and 51 hereof which MAJV has failed to negotiate in good faith and pay on the basis that DJV is bound by the Rev 6 Program and the Terms of the PSC in relation to delay costs;

(b) the DJV is entitled to and seeks a declaration pursuant to s 87 of the TPA to the effect that:

(i) the Rev 6 Program is null and void and time under the PSC is set at large; alternatively,

(ii) the SP1 Dates for Completion of the Services stipulated in Appendix D.1 and the Rev 6 Program are null and void, alternatively are adjusted to reflect the delays claimed in paragraph 45 hereof; and,

(iii) the SP1 Dates for Completion of the Deliverables in Appendix D.2 are null and void, alternatively be adjusted to reflect the delays during the as claimed in paragraphs 45 hereof.

Further, insofar as the MAJV representations pertained to future matters, DJV relies on Section 51A of the TPA.

51. However, the pleading of the Revised TPA Claim remains deficient, both in respect of the content of the misrepresentations and the chain of causation from that conduct leading to compensable loss or damage.

52. Loss or damage is the gist of the cause of action under s 82 TPA. In Elna Australia Ltd v International Computers (Australia) Pty Ltd (No 2) ("Elna") Gummow J sitting as the trial Judge said:

It is the suffering of loss or damage which translates into a cause of action what otherwise would be no more than a contravention of the statute. The "loss or damage" is the gist of the action. But that expression does more than identify an integer in the cause of action. By describing the subject matter of recovery in that action as "the amount of the loss or damage", the legislature has marked out the measure of damages. Wrapped up within s 82 are thus concepts the common law would describe by the terms "causation" and "remoteness" and "measure of damages".

...

The use of the preposition "by" indicates the necessity for some sufficient cause or reason linking the conduct with the recoverable loss or damage ...[5]

[Citations omitted]

53. The Plaintiffs also claim other relief under the former s 87 of the TPA. This section can only apply in the present circumstances where "a person who is a party to the proceeding has suffered, or is likely to suffer, loss or damage by the conduct of another person that was engaged in" contravening conduct, including a breach of s 52. Relief under s 87 does not depend on proof of actual loss or damage. Relief may also be granted under that section if a person is "likely to suffer" loss or damage.

54. The governing words in s 82 and s 87 are "by conduct of".[6] In order to establish an entitlement to damages and other relief, the Plaintiffs have to plead and ultimately establish that they suffered a loss by conduct of the Defendants which contravenes s 52 of the TPA. However, there is not a single immutable test for causation for the purposes of s 82 and s 87. The purpose of these sections of the statute is to provide relief for persons who suffered loss by the defined contravening conduct.

55. The award of damages under the TPA is aided by analogy to the law governing damages under contract, tort, deceit and equitable remedies.[7] However, under the TPA they are not so limited. In Marks v GIO, a case cited by the Plaintiffs in argument, Gaudron J expressed the position of the High Court in the following terms:

... there is no basis for thinking that relief under s 82 is to be confined by analogy either with actions in contract or in tort. With regard to that last matter, all members of the Court are agreed. [8]

... Indeed, the very fact that ss 82 and 87 may be applied to widely differing contraventions of the Act, some of which can be seen as inviting analogies with torts such as deceit (eg, s 52) or with equity (eg, s 51AA) but others of which find no ready analogies in the common law or equity, shows that it is wrong to limit the apparently clear words of the Act by reference to one or other of these analogies. [9]

57. The Plaintiffs in their submissions also relied upon Henville v Walker where McHugh J re-stated the principle in the following terms:

Indeed, general principles for assessing damages may have to give way altogether in particular cases to solutions best adapted to give the injured claimant an amount which will most fairly compensate for the wrong suffered.[10]

58. In Murphy v Overton Investments Pty Ltd ("Murphy"), another case cited by the Plaintiffs, both in their primary and reply submissions, the High Court emphasised that damages assessed under the TPA were not confined by analogies drawn from claims made under the general law and that the reference to "loss or damage" in s 82 and s 87 could not be given a narrow meaning.[11] The Court pointed out that s 87 provides for a wide range of orders that, relevantly, might be made to compensate for the loss or damage suffered or to reduce the loss or damage.[12] The Court said as to remedies claimed for contraventions of the TPA:

This Court has now said more than once [13] that it is wrong to approach the operation of those provisions of Pt VI of the Act which deal with remedies for contravention of the Act by beginning the inquiry with an attempt to draw some analogy with any particular form of claim under the general law. No doubt analogies may be helpful, but it would be wrong to argue from the content of the general law that has developed in connection, for example, with the tort of deceit, to a conclusion about the construction or application of provisions of Pt VI of the Act. To do so distracts attention from the primary task of construing the relevant provisions of the Act. [14]

59. In Murphy the High Court pointed out the variety of possible losses or items of damage, whether loss on capital account or as a loss on revenue account, for which recovery may be possible. The Court said:

It should not be assumed that the loss or damage which a person suffers as a result of a contravention of Pt V is necessarily singular. Nor should it be assumed that loss or damage is incurred either as a loss on capital account, or as a loss on revenue account which, if to be compensated by an award of damages, must be translated into a single capital sum. These assumptions find no support in the language of the relevant provisions.

Loss or damage may be a loss of capital. But there may also be a loss on revenue account which, unless some other remedy is granted which will prevent it continuing into the future, will, or may, continue into the future. And the losses on capital account may be sustained at a time different from any loss on revenue account. The latter form of loss may, in many cases, be sustained after the loss on capital account has been suffered. In some cases the loss on capital account may overlap with a loss on revenue account. If that is so, it is necessary to mould relief in a way which will avoid double compensation.

A loss on revenue account, whether past or future, can be reduced to a single capital sum. Courts often undertake that exercise, and in doing so may acknowledge that it is difficult and that the result is imperfect. But the frequency with which the courts have had to grapple with the problem of translating a continuing stream of future losses (sometimes of uncertain amounts, over an indefinite and uncertain time) into a single capital sum does not mean that the only kind of loss which a person may sustain as a result of conduct of the kind now in issue is the loss of a capital sum. Nor does it mean that remedies other than an award of damages may not be made under the Act to compensate for, prevent or reduce those future losses. [15]

60. The High Court concluded in Murphy on this issue that a determination as to what should be the appropriate remedy can be reached only after identifying the loss or damage which has been or will likely be suffered. This was made plain by the Court in the following passage:

It would be wrong, therefore, to assume that, where a person is induced by misleading or deceptive conduct to undertake a continuing future obligation, the remedy to be awarded for a contravention of Pt V of the Act must be, or even ordinarily will be, a lump sum award of damages. There will be cases in which that will be the appropriate remedy. But that is a conclusion to be reached only after identifying the loss or damage which has been or will likely be suffered. That loss or damage may take several forms. It may be incurred at different times. Whether damages are to be awarded in compensation may depend upon what other forms of relief are to be awarded. In particular it will be much affected by what orders to prevent or reduce the loss or damage are made under s 87. [16]

61. Identification of the loss and damage claimed therefore assumes importance in the pleadings.

62. The differences in approach to an assessment of damages under the TPA are also fostered by the text of the governing provisions where concepts of causation and damages are closely linked. In Elna Gummow J referred to the

... apparent telescoping of what to the common law would be issues of causation, remoteness and measure of damages.[17]

63. Differences in approach are also called for because claims involving contravention of s 52 cover a wide range of situations. Claims which are analogous to a common law cause of action, say in deceit, may invite consideration of compensation determined on tortious principles, whereas claims analogous to a breach of warranty may be considered for the purposes of damages under principles derived from contract.

64. However, the cause of action provided by s 82 TPA is distinctly different from that which may arise from the breach of a contractual warranty. A representation can give rise to a claim for a lost benefit only where there is an obligation to perform the representation, as provided for in a contract. However, s 52 of the TPA is directed against the making of a misleading or deceptive representation, as opposed to the failure to perform what is represented. A representation is not elevated to the status of a contractual warranty by the operation of s 52. The wrong which s 52 prohibits is the making of, not the failure to honour, the false representation.[18]

65. In Kabwand Pty Ltd v National Australia Bank Ltd Lockhart J said:

For present purposes it is sufficient to say that a person claiming damages must show either that he has been induced to do something or to refrain from doing something which gives rise to damage or has been influenced to do or refrain from doing something giving rise to damage by the conduct contravening s 52. [19]

66. For the purposes of determining a claim for loss or damage under s 82, the question is whether there is sufficient cause linking the alleged contravening conduct with recoverable loss or damage, and not what loss or damage was caused by the failure to do what was promised considered as if it were a contractual term. In proving the chain of causation it is not necessary to establish by direct evidence the part which the relevant representation played. It is open to determine the effect which the representation is found to have had.[20]

67. In the case of contravening conduct under s 52 arising from a misleading or deceptive representation, alteration of position on the part of the representee in reliance upon the representation is the well accepted means to establish the necessary causal link. In Sellars v Adelaide Petroleum NL, in passages also cited by the Plaintiffs, Brennan J observed that:

... where the making of a false representation induces a person to act in a certain manner, loss or damage may flow directly from the act and only indirectly from the making of the representation; but in such a case the act 'is a link - not a break - in the chain of causation'. [21]

68. Where the making of a misleading or deceptive representation is made in the context of negotiating a contract, a party acting in reliance upon and induced by the representation may alter its position by entering the contract in question. Loss or damage may then be suffered by the making of the representation depending upon whether or not the party was induced to enter the contract on the basis of the representation and would not have done so but for the representation (the "no contract case") or alternatively the representation induced the party to enter into a contract on certain terms which would not have been agreed to had the representation not been made (the "alternative contract case"). If either chain of causation is established, and the outcome for the claimant proves to be to the claimant's detriment and loss or damage is sustained, damages may be measured either on a "no contract basis" or on an "alternative contract basis", as the case may be.[22]

69. However, the "but for" test applied in this way may not be the appropriate test for causation to link the claimant's loss with the contravening conduct in all cases where a contract has been entered into, ie. by analysing what would the representee party have done "but for" the representation. That test necessarily involves excising the contravening conduct in a way which, in some cases, is inappropriate. In some cases, what has to be done is to ascertain what would have occurred if the representor had not engaged in conduct which was misleading or deceptive - for example, analysing what would have occurred had the representor not remained silent but had told the truth and made proper disclosure. Abigroup Contractors Pty Ltd v Sydney Catchment Authority (No 3) ("Abigroup v SCA") was such a case. [23] This case was relied upon by the Plaintiffs in support of the proposition that there is not a single immutable test for causation for the purposes of s 82.

70. In Abigroup v SCA following a tender process, the claimant ("Abigroup"), which was the contractor, entered into a contract with a principal ("Sydney Catchment Authority") for the construction of a spillway for a dam.

71. Beazley JA explained the facts in the following way:

The claimant Abigroup, was the successful contractor for the construction of a spillway at Warragamba Dam. The contract was a lump sum contract under which the claimant bore all risks, including the cost of work not included in the contract but which was necessary to be done to bring the project to completion. It was within the scope of the contract "risk" clause that additional work might need to be carried out because of site conditions.

As it turned out, the claimant was required to undertake additional excavation and refilling work because the rock level, in one area of the site known as Folly Creek, was substantially lower than indicated in the principal's concept design drawings and detailed specifications. Abigroup claimed that it suffered a loss as a result of having to do the extra work and that that loss was caused by the principal making a representation that it had no plans of an outlet pipe that drained water through an embankment over Folly Creek. There was in fact such a plan. Abigroup contended that if it had known of the existence of the plan, further enquiries would have revealed the rock levels, shown in the concept design drawings and detailed specifications, to be seriously flawed.

Abigroup brought proceedings claiming that the principal Sydney Catchment Authority had engaged in misleading and deceptive conduct contrary to s 52 of the TPA. It contended that having been induced to enter into the contract by the principal's misrepresentation which committed it to do significantly more work than was allowed in the lump sum contract, it was entitled to damages, being the cost of doing the additional work, pursuant to s 82 of the TPA. Claims for relief were also pleaded under s 87 of the TPA and for damages for breach of contract. [24]

72. In Abigroup v SCA the contractor incurred significant cost in undertaking the additional works. Under the terms of the contract as it had been agreed, the additional cost of undertaking this work was at the contractor's risk. The contractor contended that had it been aware of the existence of the plan, it would have factored into its tender, work of a different order and would not have entered into the contract into which it had entered. Abigroup claimed it was entitled to recover damages on the basis of the discrete loss it sustained in undertaking the additional contractual works.

73. The principal Sydney Catchment Authority contended, however, that that basis for claiming discrete damages under the TPA was not open to the contractor Abigroup as a matter of law and that it was only entitled to damages if it proved a loss on the whole of the contract. It submitted that the contractor Abigroup had failed to prove this case.

74. It was held by the Court of Appeal (NSWCA) that, for the purposes of s 82 of the TPA, the cost of doing the additional work was a loss caused by the principal's contravening conduct. It reasoned the chain of causation in the following way: in circumstances where the contractor had entered into the contract without having had an opportunity to undertake any geological or geotechnical investigation of its own, the question of causation, it was held, was not answered by the application of a but for test; that is, by asking what the contractor would have done had the representation not been made. Rather, what has to be done is to ascertain what would have occurred for the principal not to have engaged in conduct which was misleading. That would require that the existence of the plan be disclosed. In this way the cost of undertaking the additional works was reasoned by the Court of Appeal (NSW) to have been caused a loss sustained by the misleading conduct of the Principal and the necessary chain of causation was established.

75. Abigroup v SCA is authority for the proposition that in some cases the claiming party is not required to prove that it had suffered a loss on the whole contract. Provided the claimant is otherwise able to prove the necessary chain of causation between the contravening conduct and recoverable loss or damage, and subject to proper proof of such loss, it may be entitled to recover damages on the basis of a discrete loss, short of a loss on the whole contract.

76. Abigroup v SCA also illustrates the importance of the pleading of the chain of causation in a claim for relief under the TPA arising from a breach of s 52. The chain of causation may be framed and proved on different bases.

77. The decision of the Court of Appeal (NSW) in Abigroup v SCA was the subject of an application for special leave to appeal to the High Court which was refused.

78. Advancing a case on the basis that the representee in reliance on the representation and but for that representation entered into the contract in question and is entitled to damages if it proves a loss on the whole of the contract, gives rise to a chain of causation and a particular body of facts to be proved, if the claimant is to succeed.

79. On the other hand, if the representee puts its case on the basis that, for example, the appropriate measure of its loss is the actual cost of doing any extra work resulting from the representation and is entitled to damages on the basis of being entitled to a discrete loss on the additional work, a different chain of causation and a different body of facts need to be proved, if the claimant is to succeed.

80. In either event, the alleged representor party is entitled to know how the case on the chain of causation is put against it, so that it can, if so advised, put the question in issue, put the representee party to its proof or call evidence to rebut the claim.

81. A pleading question which arises in the present case is whether the Second FASOC adequately pleads a sufficient cause linking the alleged contravening conduct with recoverable loss or damage and whether it sufficiently identifies the manner in which the chain of causation is advanced by the Plaintiffs.

82. This question was the subject of written submissions prepared and delivered by the parties at the request of the Court.

83. The starting point in the analysis of the chain of causation as pleaded in the Second FASOC are the MAJV representations relied upon which are set out in paragraph 28. This is because the conduct relied upon cannot be separated from the loss or damage claimed to arise for which compensation is said to be due. The two concepts are inter linked by the requirement that it is only loss or damage by the contravening conduct which is compensable through s. 82.

84. The MAJV representations as pleaded in paragraph 28 give rise to a number of difficulties, principally arising from the vagueness of the content of the alleged representations as they have been framed as submitted by MAJV.

85. Representations that MAJV would negotiate in good faith with DJV to ensure certain outcomes and that particular terms of the PSC, namely the terms giving effect to the Rev 6 Program, would not be applied, are so uncertain in definition that they give rise to a number of interpretations. For example, is the obligation assumed by the representations discharged if MAJV merely enters into negotiations with DJV in good faith, but no agreed outcome is achieved? Or, construing paragraph 28 in a manner most favourable to the Plaintiffs, is the essence of the representations to be taken to be that, in spite of the written terms of the PSC, the Rev 6 Program would not be applied to DJV, insofar as preceding Adelaide Aqua/MAJV conduct, delays and costs impacted on that program, and this outcome was to be achieved by negotiation, or if this could not be achieved by negotiation the Rev 6 Program would not be applied to the PSC in any event? Further, what is meant by "preceding Adelaide Aqua/MAJV conduct, delays and costs" and how is it put that these factors impacted on the Rev 6 Program?

86. Another difficulty with the MAJV representations as pleaded is this: the Second FASOC fails to plead what would have been the precise outcome of the alleged "bona fide negotiations" had they taken place. Further, in my opinion, it would not be likely to be possible to anticipate, let alone plead, what the precise outcome of "bona fide negotiations", which allegedly did not take place, would have been in terms of the form, content and text of the PSC had the negotiations in fact taken place, or whether the PSC would have been entered into at all, and if so on what terms. It follows that, it would not be likely to be possible to predict, with any certainty beyond speculation, what loss or damage flowed arising from the alleged contravening conduct relied upon to support the TPA Claims.

87. Nevertheless, the pleading seeks to identify a chain of causation to loss or damage arising from the MAJV representations.

88. By paragraph 32, it is alleged by the Plaintiffs that "but for the MAJV representations, DJV would not have entered into the PSC". On one view, this paragraph pleads a reliance chain of causation leading to loss and damage being assessed on a "no contract basis".

89. However, it is not clear by paragraph 32 whether what is advanced is a case that, but for the MAJV representations the PSC would not have been entered into at all, or whether the Plaintiffs' case is that but for the representations they would have entered into a contract on different terms and claim loss or damage on an "alternative contract basis". If the latter is intended there is no plea as to what those alternative terms would have been.

90. What is clear is that it is not pleaded that the Plaintiffs have suffered loss or damage on the whole contract on a "no contract basis" by entry into the PSC in reliance on the MAJV representations, such that it is claimed that a defined loss was suffered on the project undertaken under the PSC when considered under a full analysis of profit and loss. Nor is it pleaded that loss or damage arose from the absence of particular terms in the contract which otherwise would have been included in the PSC but for the making of the MAJV representations.

91. Rather, it is pleaded in paragraph 34 that as a result of MAJV's conduct in contravention of s 52 of the TPA, DJV has suffered loss or damage within the meaning of s 82 of the TPA, namely:

(a) by entering into the PSC, which MAJV now contends binds DJV to perform in accordance with the Rev 6 Program and the PSC provisions relating to delay and delay damages, and being thereby being exposed to liability for delay damages (which DJV expressly denies); and

(b) MAJV has refused to resolve and pay DJV for the costs of delays caused by the effects of delays referred to subparagraph 28(a) and the deficiencies in subparagraph 28(b).

92. Construing paragraph 34 in a manner most favourable to the Plaintiffs, it is claimed that they have suffered discrete losses, the essence of which appear to be that:

(a) being bound by the PSC in its written form, including the Rev 6 Program, exposes DJV to liability for delay damages; and

(b) DJV has failed to pay DJV for preceding Adelaide Aqua/MAJV conduct and delays insofar as they impacted on the Rev 6 Program. It is to be noted that although the alleged "preceding conduct and delays" have not been defined, it seems they are events claimed to have occurred prior to entry into the PSC.

93. The loss and damage claimed is then particularised by reference to what is pleaded in "paragraph 48 hereof".

94. DJV sought to explain the claim for loss or damage in the following terms in reply submissions:

The DJV submits that it is entitled to plead loss and damage being loss and damage being the costs of delays that it encountered during the period up to 2 October 2009. The relevant loss was suffered by DJV when the MAJV refused to grant extensions of time and pay delay costs following entry into the PSC and when MAJV applied the Rev 6 Program and the terms of the PSC without addressing the existing antecedent delays prior to 2 October 2009.

95. However, paragraph 48 does not describe this form of loss or damage. Even if it did, there is no pleaded chain of causation establishing how it is put that the loss or damage which now appears to be claimed, as reflected in the reply submissions, was caused by the alleged misrepresentations.

96. Further, as it stands, paragraph 48 does not address or seek to particularise the categories of discrete loss or damage pleaded in paragraph 34. Paragraph 48 does a very different thing.

97. Examination of paragraph 48 in some detail bears out these observations. It seeks to plead particulars of loss and damage suffered in the following form: "by reason of the delays and disruption referred to in paragraph 44 hereof, DJV is entitled to be paid incurred direct extra costs and expenses arising from, further or alternatively, associated with the said delays pursuant to clause 17 of the PSC". Paragraph 44 in turn follows from the pleading in paragraph 43 which alleges that "DJV was delayed by acts and omissions of the MAJV and/or others for whom MAJV was responsible under the PSC, which prevented the DJV from completing: ..." "the 'Deliverables' and services which it was contracted to provide under the PSC". The acts or omissions said to give rise to this consequence are described in paragraph 44 and the Annexures referred to therein.

98. Paragraph 49 then pleads that "in breach of the PSC, including GC 17 MAJV has failed, refused or neglected to pay DJV its delay costs and expenses referred to in paragraph 48 hereof, or at all and DJV has thereby suffered loss and damage". This loss and damage is alleged to be that described in the particulars sub-joined to paragraph 48.

99. Accordingly, paragraph 48 does not particularise any loss said to arise from DJV being exposed to liability for delay damages as claimed under paragraph 34(a). Paragraph 48 does the opposite. It seeks to particularise claims for delays and disruption and loss and damage arising as claimed by DJV against MAJV. It does not seek to particularise potential claims made by MAJV against DJV in the nature of delay damages.

100. Further, under paragraph 34(a) DJV pleads that it "expressly denies" being exposed to any liability for delay damages by the words: "(which DJV expressly denies) ..." If DJV denies the very foundation upon which it seeks to claim loss or damage, as it does, the plea contains an inherent contradiction and self-destructs.

101. Nor does paragraph 48 seek to particularise any loss said to arise from DJV not being paid in respect of preceding Adelaide Aqua/MAJV conduct and delays insofar as they impacted on the Rev 6 Program as pleaded in paragraph 34(b). The alleged preceding Adelaide Aqua/MAJV conduct and delays insofar as they impacted on the Rev 6 Program are not defined; the alleged impacts on the Rev 6 Program are not defined; nor is this translated into any money sum in respect of which the claim is made.

102. The essence of the claims under paragraph 48 are alleged entitlements to be paid "Delay costs" being "direct extra costs and expenses arising from, further or alternatively associated with the [said] delays pursuant to clause 17 of the PSC". The plaintiffs say that they were not paid their entitlement under clause 17 and seek reimbursement for those costs. In other words, the particulars under paragraph 48 relate to a claim for a money payment being made by DJV under the PSC in respect of delays and disruption which occurred on the Project after entry into the PSC.

103. For these reasons, there remains a disconnect between the two claims for loss or damage under paragraph 34 and the particulars supplied under paragraph 48. These particulars define delay costs for which it is said there is a contractual entitlement to be reimbursed under clause 17 of the PSC for delay and disruption. On their face, they cannot also constitute the discrete categories of loss or damage claimed under either paragraph 34(a) or (b).

104. Leaving aside for the moment questions as to whether the MAJV representations are sufficiently pleaded with appropriate certainty and precision, and whether the alleged misleading and deceptive conduct was capable of inducing error and in all the circumstances in fact led the Plaintiffs (or one of them) into error, with the result that they were induced to and did enter the written and executed PSC on terms which were apparently inconsistent with the representations said to give rise to the TPA Claim, as loss or damage is an essential element of a claim under s 82 under the TPA Claim, and none has been effectively pleaded, the TPA Claim made under s 82 is deficient.

105. Paragraph 35 of the Second FASOC pleads as follows:

In the alternative to paragraph 34 and further to paragraph 32 hereof:

(a) as a result of MAJV's contravention of s 52 of the TPA, following entry into the PSC on or about 9 October 2009, DJV has suffered and claims loss and damage within the meaning of s 82 of the TPA being its costs of delay and or disruption as set out in paragraphs 48 and 51 hereof which MAJV has failed to negotiate in good faith and pay on the basis that DJV is [not] bound by the Rev 6 Program and the Terms of the PSC in relation to delay costs;

(b) the DJV is entitled to and seeks a declaration pursuant to s 87 of the TPA to the effect that:

(i) the Rev 6 Program is null and void and time under the PSC is set at large; alternatively,

(ii) the SP1 Dates for Completion of the Services stipulated in Appendix D.1 and the Rev 6 Program are null and void, alternatively are adjusted to reflect the delays claimed in paragraph 45 hereof; and

(iii) the SP1 Dates for Completion of the Deliverables in Appendix D.2 are null and void, alternatively be adjusted to reflect the delays during the as claimed in paragraphs 45 hereof.

106. Again no loss or damage has been effectively pleaded, either as having actually been suffered or likely to be suffered, which are essential elements to be proven under s 87 before the discretion of the court to grant relief under the section is enlivened.

107. DJV now seeks leave to amend the particulars subjoined to paragraph 30 to read as follows by the addition of a new section "B" [underlined below]:

The MAJV refused to grant DJV extensions of time in relation to the periods of delay and disruption during the period 12 June 2009 until 9 October 2009 inter alia as follows:

(a) MAJV letters to DJV dated 13 May 2010; and

(b) MAJV letter dated 21 December 2010.

Further, the MAJV has failed to compensate the DJV for its costs of delay and disruption incurred by reason of MAJV's preceding conduct and delays during the period 12 June 2009 until 9 October 2009.

108. An initial problem with the proposed amendment to the particulars to paragraph 30 is that this paragraph appears to be confined to alleging future matters. However, the Plaintiffs in their written submissions expressly abandoned reliance on s. 51A of the TPA.

109. More fundamentally, the proposed amendment does nothing to confine the damages referred to in paragraph 34 and the particulars thereto to the period prior to 9 October 2009, which was the date when it is alleged in the Second FASOC that the PSC was entered into, nor has paragraph 34 been cured of the shortcomings earlier referred to.

110. The TPA Claim made under s 82 and s 87 should be struck out under Rule 23.02(a) and (c) of the Court Rules.

111. It would also follow that the claim under s 51A of the TPA made in paragraph 36 of the Second FASOC must also fall. In any event, in the course of submissions, the Plaintiffs abandoned reliance on s 51A of the TPA, as earlier observed.

112. Given the difficulties presented by the pleading of the MAJV representations and the deficiencies in pleading the chain of causation, the TPA claims in the Second FASOC, comprised in paragraphs 27 to 36 inclusive, are struck out under Rule 23.02(a) and (c) of the Court Rules.

113. The Second FAOC identifies eight different categories of claimed delay ("EOT Claims").

114. In my opinion, an examination of the many pages of Annexures to the Second FAOC, and by reference to the specific examples referred to by both the Plaintiffs and the Defendants in the course of submissions, reveals allegations which are particularised sufficiently to enable MAJV to understand the case it has to meet in order to adequately plead a defence. In summary, an adequate arguable causal connection is pleaded between a particularised act or omission and the delays alleged by DJV to arise.

115. Further, the EOT Claims pleaded by DJV, are founded upon clause 17 of the PSC. Clause 17 is not a typical extension of time clause found in construction contracts which usually regulate such claims by reference to a critical path to the defined "date of completion" which the time delay is said to have extended.

116. Rather, the way in which DJV presents its case under this head is by pleading a series of acts or omissions which it alleges prevented it from completing the numerous specific work packages by the milestone dates for completion set for each under the contract.

117. The pleading of the EOT Claims is founded in contract and sufficiently discloses a cause of action. The pleadings will not be struck out pursuant to rule 23.02 of the Court Rules.

118. MAJV also criticised the delay damages pleaded by DJV to arise under its extension of time claims (the "Delay Damages Claims").

119. In my opinion, the delay costs pleaded by DJV arguably do arise from clause 17 of the PSC, as claimed.

120. It is also arguable that the quantification of the delay damages pleaded, being a claim for daily overhead and profit, is an acceptable method of measurement of delay loss and associated loss calculated on a daily rate.

121. In my opinion, DJV's claim under this head as presently pleaded and particularised, is sufficient for MAJV to understand the pleaded case put against it so as to enable it to put on a defence.

122. The pleading of the Delay Damages Claims again is founded in contract and sufficiently discloses a cause of action. The pleadings will not be struck out pursuant to rule 23.02 of the Court Rules.

Disruption/Loss of Productivity (paragraphs 24-26 and 50-51)

123. The principal criticism made of the pleading of the disruption and loss of productivity claims is the absence of a sufficiently pleaded chain of causation to the loss and damage claimed (the "Disruption/Loss of Productivity Claims").

124. The Plaintiffs supplemented their submissions by reference to an expert report prepared by Hill International (Australia) Pty Ltd dated 13 April 2012. Although the report does not comprise part of the pleading, it serves to explain the way in which the Plaintiffs seek to advance their case.

125. The expert report explains that, in this particular case, it is not possible to undertake a critical path analysis of delay or to analyse the effects of the claimed disruption and loss of productivity on this basis.

126. Rather, the expert report proceeds on the basis of a "Measured Mile" analysis in accordance with the Society of Construction Law Delay and Disruption Protocol (October 2001). Broadly, the expert proceeds to analyse the chain of causation by showing that the contractual milestone applied in the contract to each of the many specific pieces of work to be done by DJV "slipped", and then analysing whether that slippage can be linked to a specific delaying event. If the relevant delaying event was not caused by or the responsibility of DJV, it is taken that DJV is entitled to an extension of time for that item of work correlated to the total impact of the delaying event.

127. Whether or not this analysis survives close scrutiny is not to the point for the purposes of this application.

128. In my opinion the pleading of the disruption and loss of productivity claims, when read alongside the expert report, is adequate for the purposes of pleading a defence to the allegations.

129. The pleading of the Disruption/Loss of Productivity Claims again is founded in contract and sufficiently discloses a cause of action. The pleadings will not be struck out pursuant to rule 23.02 of the Court Rules.

Services and Expenses Claims (paragraphs 10, 11, 12, 18, 29(b), 21(b) 22 and 52-64)

130. In my opinion DJV has provided sufficient details of the various activities the subject of this head of DJV's claims to enable MAJV to understand the case and plead to it (the "Services and Expenses Claims").

131. Insofar as details of every item of work are not yet included in the particulars supplied with the pleading, in the interests of cost control, it would be more economical and efficient to provide this material in witness statements which are yet to be prepared.

132. The pleading of the Services and Expenses Claims again is founded in contract and sufficiently discloses a cause of action. The pleadings will not be struck out pursuant to rule 23.02 of the Court Rules.

SMEC Australia Pty Ltd & Anor v McConnell Dowell Constructors

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