Tennent Group Pty Ltd v Veritec Pty Ltd [2025] ACTSC 313

1. This is an application for preliminary discovery pursuant to r 651 of the Court Procedures Rules 2006 (ACT) (the CPR). The applicant company was established with a view to it being the vehicle for the provision of a range of professional services to the Department of Defence.

2. It is not a matter of controversy that the applicant company was first registered on 13 April 2023, and that its directors were, both before and after the date of registration, in negotiations with persons having a connection with the first and second potential defendant entities. Those negotiations concerned, at least, the contemplation of some joint provision of services to the Commonwealth, or more particularly, the Department of Defence.

3. It is also not a matter of controversy that, in the course of the negotiations, the applicant entered into an agreement described as a “teaming agreement” with the first potential defendant, Veritec Pty Ltd.

4. The fact of this application may be enough to demonstrate that those negotiations did not end in a way that the directors of the applicant envisaged or intended.

5. It is in respect of the legal import of those negotiations that the applicant is considering bringing proceedings against either or both of the potential defendant entities. The applicant considers that it may have a cause of action against either or both of the potential defendants, and asserts that after making reasonable inquiries, it cannot obtain sufficient information to decide whether to start a proceeding in the court.

6. The applicant asserts three potential causes of action: (a) A claim pursuant to s 18 of the Australian Consumer Law (contained in sch 2 of the Competition and Consumer Act 2010 (Cth)) on the basis of misleading or deceptive conduct in trade or commerce. (b) A claim in the nature of a promissory estoppel action. (c) A claim for breach of contract with damages sought on a quantum meruit basis.

7. The applicant relies upon two affidavits of Christopher James O'Shea, a director of the applicant, sworn on 13 March 2025 and 23 June 2025, and an affidavit of Kunal Agrawal, solicitor for the applicant, affirmed on 13 March 2025.

8. The potential defendants rely upon an affidavit of Petar Bielovich, sworn on 7 May 2025. Mr Bielovich is a Director of Atturra Limited (Atturra), the ultimate holding company for both of the potential defendant companies.

9. The potential defendant companies are legally represented and the application for preliminary discovery is not opposed. The position of those entities is that a number of documents have been voluntarily produced, subject to an agreement being entered into by the parties placing restrictions on the use of the documents produced. The balance of the documents that are sought by the applicant are documents that cannot be produced without an order of the court.

Order for preliminary discovery

10. Rule 651 of the CPR provides: 651 Discovery to identify right to claim relief (1) This rule applies if— (a) a person (the applicant) has, or may have, a cause of action against someone (the potential defendant); and (b) either— (i) the applicant, after making reasonable inquiries, cannot obtain sufficient information to decide whether to start a proceeding in the court against the potential defendant for the cause of action; … … [and] (c) the applicant has reasonable grounds for believing that the potential defendant has or has had possession of a document or thing that can assist in deciding whether to start the proceeding, or make the claim for relief, against the potential defendant; and (d) inspection of the document or thing by the applicant would help in making the decision. (2) If subrule (1) (b) (i) applies, the applicant may apply to the court by originating application for an order under this rule (and, if relevant, an order under rule 715 (Inspection, detention, custody and preservation of property—orders etc)) against the potential defendant. … (4) The application must be supported by an affidavit stating the facts on which the applicant relies, and stating the kinds of documents or things in relation to which the application is made. Note 1 For an application mentioned in r (2), div 2.2.3 (Originating applications) contains provisions about the content of originating applications, the filing and service of originating applications, etc. Note 2 For an application mentioned in r (3), r 6008 (Application in proceeding— filing and service) deals with service of the application and supporting affidavit. (5) The court may order the potential defendant to produce the document or thing to the applicant. (6) An order under this rule in relation to any document or thing held by a corporation may be addressed to any appropriate officer or former officer of the corporation.

11. With reference to the rule, the matters of which the court must be satisfied that are relevant in this application are: (a) That the applicant has or may have a potential cause of action; (b) That reasonable inquiry has been made and that on the basis of that inquiry the applicant does not have sufficient information to decide whether to start a proceeding against the potential defendants; (c) That the applicant has reasonable grounds for believing that the potential defendants either have, or previously had, possession of a document or thing that can assist in deciding whether to start the proceeding or to claim relief from the potential defendants; (d) That inspection of the documents would help in deciding whether to commence proceedings.

Principles

12. In establishing these matters to the satisfaction of the court the onus rests on the applicant to establish that, having made reasonable inquiries, they are unable to secure sufficient information to decide whether or not proceedings should be commenced: Morton v Nylex Ltd [2007] NSWSC 562 at [33]; Hall v Commonwealth [2018] ACTSC 79 at [22]. Preliminary discovery cannot be used to bolster or strengthen a case that the applicant has already decided to bring, or where they are already in a position to make that decision: iSAM Securities (UK) Ltd v Press [2024] NSWSC 1036 at [66]. 13 ․ The nature of the relief that is sought against a third party not yet involved in litigation is extraordinary. It is therefore to be approached by the court with caution, and with due consideration that the effect of an order under the rule is to compel one party not involved in litigation to release documents to another party, itself not involved in substantive litigation: Elmaraazey v The Law Society of the Australian Capital Territory [2006] ACTSC 124; 205 FLR 445 at [18]-[19]; Matuska v Ali (1987) 71 ACTR 23 at 7.

Does the applicant have a potential cause of action?

14. In respect of the prospective causes of action relied upon, it is not sufficient to simply state those upon which reliance is placed. The court must satisfy itself that there is some proper foundation for the asserted rights such that something more than an allegation is presented. The court must be satisfied on the basis of the material before it that, viewed objectively, there is sufficient evidence to establish that the applicant may have a cause of action: Waller v Waller [2009] WASCA 61 at [75].

15. In this case reliance is placed upon a teaming agreement entered into between the applicant and Veritec on 25 July 2023.

16. The fact of the agreement and its express terms are not a matter of dispute. The applicant concedes that there are discretionary elements in the agreement but asserts that it created positive obligations on the parties to work collaboratively, with a view to the sharing of work and profits, in relation to upcoming opportunities. In particular, this included an opportunity that presented through a tender process anticipated to be initiated by the Department of Defence. It is asserted that on the basis of the obligations arising under the teaming agreement, the applicant performed work, provided services, and acted to its detriment in reliance upon what it understood to be the obligations of the parties under the agreement.

17. The prospective defendants make no submissions in respect of the potential causes of action identified by the applicant.

18. I am satisfied on the basis of the terms of the teaming agreement, in concert with the evidence of Mr O'Shea as to the conduct of the parties prior to the entry into the teaming agreement, and following its commencement, that there is an objective foundation for concluding that the facts asserted by Mr O'Shea, if proven, may give rise to a cause of action against the prospective defendants. There is a proper basis for concluding that the applicant acted to its detriment in expending effort and incurring cost in reliance on its understanding that the parties were working co-operatively towards securing a contract with the Department of Defence, with at least implicit fiduciary duties owed to each other pursuant to the teaming agreement.

19. What remains unclear is whether either or both of the prospective defendants acted in breach of the agreement between the parties, in entering into a contract for the provision of services to the Department of Defence independently of the applicant. It is also yet to be established whether the prospective defendants knew, or ought to have known, that the applicant was acting to its detriment in reliance upon the agreement, and whether the applicant’s reliance was reasonably placed.

20. For those reasons I accept that the applicant is not yet in a position to commence proceedings against either of the prospective defendants, or to determine that they are in a position to commence proceedings.

Has reasonable inquiry been made?

21. The particular documents now sought by the applicant are: (a) Documents forming attachments to a response to tender submitted by Atturra to the Department of Defence in December 2023; (b) The contract awarded pursuant to that tender; (c) Documents produced by the first potential defendant relating to an initial project plan submitted to the Department of Defence as part of the first phase response to tender; (d) Correspondence between the first potential defendant and the Department of Defence in relation to the tender process and the contract; (e) Documents in the same categories, but relating to communications between the second potential defendant and the Department of Defence.

22. The applicant contends that the documents they now seek are exclusively in the possession of either of the prospective defendants, and the Department of Defence. It is a matter of significance that the potential defendants have already disclosed a number of documents that deal with the subject matter of the request, including a redacted copy of the contract. The redactions extend to the entirety of the substance of the contract. The potential defendants contend that in the absence of a court order, they are constrained from providing further disclosure at this time.

23. It is conceded that another avenue of inquiry available to the applicant would be to make a Freedom of Information (FOI) application. The question is whether, having undertaken the lines of inquiry demonstrated by the applicant to date, it may be concluded that they have made all reasonable inquiries, notwithstanding that they have elected to pursue an order for preliminary discovery as an alternative to the pursuit of a FOI application.

24. The issue was considered by Davies J in Hughes Aircraft Systems International v Civil Aviation Authority (1995) 217 ALR 303 (Hughes Aircraft) at 307. The potential defendant in that case argued that an FOI request would in many cases be the first step to be taken as part of a reasonable line of inquiry. His Honour accepted that the nature of the information sought was such that an FOI request was likely to involve many exemptions and a lengthy process. He concluded: An application to this court under O 15A r 6 [of the Federal Court Rules 2011] provides a speedier and more appropriate remedy. I accept that [the applicant] has made all inquiries which it was reasonable for it to make before instituting this application.

25. That approach was followed by the NSW Court of Appeal in Roads & Traffic Authority of NSW v Australian National Car Parks Pty Ltd [2007] NSWCA 114 at [14], where the Court noted that the availability of other means of ascertainment does not make it unreasonable to claim an alternative remedy under the rule. In that case the Court noted the “cost, delay and uncertainty of alternative measures” was relevant to whether alternative measures constituted reasonable enquiries.

26. Not unlike the situation that existed in Hughes Aircraft, I consider it likely that an FOI request in this matter would involve a lengthy process with an uncertain outcome. Notwithstanding that an FOI request has not been pursued I am satisfied in the circumstances that the actions taken by the applicant to date to secure the requisite information constitute reasonable inquiry.

Are there reasonable grounds for believing that a potential defendant has, or had, possession of a relevant document?

27. A copy of a contract has been produced in heavily redacted form. The removal of the substance of the contract from production does not of itself demonstrate that the redacted content of the document can assist in deciding whether to start a proceeding or to claim relief against the potential defendants. However, the existence of the contract, its timing and its production as responsive to the inquiry made by the applicant, are sufficient matters to demonstrate that there are reasonable grounds for believing that the document may assist in deciding whether to start a proceeding or claim relief from a potential defendant.

28. That view is fortified by the evidence of Mr Bielovich in an affidavit sworn on behalf of the potential defendants on 7 May 2025. He attests to the fact that the Commonwealth and the second potential defendant were already parties to a contract dated 12 January 2023 that had been entered into pursuant to an earlier tender process. He says the subject contract was entered into in December 2024, superseding the earlier contract of January 2023. The interactions between the applicant and the potential defendants that are relied upon as prospectively giving rise to a cause of action were interactions that principally occurred in the intervening period between the dates of the two contracts. The applicant submits therefore, that the manner in which the earlier contract was superseded is a critical issue in their analysis of prospective causes of action. I accept that submission.

29. On the basis of the existence of the subject contract and the known circumstances in which it was brought into existence, I am also satisfied that the related classes of document that are pursued fall into the same category.

Would inspection of the documents help in making a decision about commencing proceedings?

30. It is well established that the scope of preliminary discovery is intended to be narrower than the process of discovery in a court proceeding. It is limited to those documents considered likely to be relevant to the process of making a decision about commencing the proceedings, and necessary to overcome the insufficiency of information that is presently hampering the decision-making process: Pesec v Consolidated Builders Ltd [2019] ACTSC 142 at [53]; Kusa v Vong (trading as Allen Vong & Associates) [2018] ACTSC 103 at [83].

31. For the reasons stated previously I consider it reasonably likely that the categories of documents sought are likely to assist the applicant in determining whether or not there is a proper basis upon which to pursue an action against one or both of the potential defendants.

Conclusion and orders

32. There is a proper basis for the making of an order for preliminary discovery pursuant to r 651 of the CPR.

33. At hearing the applicant presented a draft form of order including proposed categories of documents for preliminary discovery. Noting the narrow scope of the production that is proposed and the absence of any objection from the potential defendants, I accept that discovery of the categories of documents identified in the draft order is reasonable and necessary.

34. The draft orders in respect of costs were not resisted by the potential defendants and I propose to order accordingly.

Orders

35. The orders of the Court are: (1) On or before 4pm on Friday, 29 August 2025, and pursuant to r 651 of the Court Procedures Rules 2006 (ACT), the first potential defendant give preliminary discovery and produce for inspection to the solicitors for the applicant copies of all documents falling into the following categories: (a) Attachments A to E of the document titled ‘RFQTS PREP 02/24 eDPMS Attura Response December 2023’ (Atturra response), as submitted by the first potential defendant to the Department of Defence for ‘RFQTS 2/24 – Enhanced Defence Preparedness Management System’ (RFQTS 2/24) in or about December 2023; (b) The awarded contract for the RFQTS 2/24 works; (c) The awarded contract for the RFQTS 2/24 works as described as the December 2024 Contract in the affidavit of Petar Bielovich dated 7 May 2025 at [9] and a redacted copy of which is exhibited at 111 to 117 of the exhibit book PB1; (d) Any documents produced by the first potential defendant further to the work product stated to be ‘Initial Project Plan’ and ‘Solution Roadmap’, as submitted by the first potential defendant to the Department of Defence as part of the phase 1 of RFQTS 2/24 works in the Atturra Response at page 38; (e) Any correspondence as between representatives of the first potential defendant and the Department of Defence, from 1 July 2023 to 30 June 2024, with respect to: (i) The tendering of RFQTS 2/24; (ii) The first potential defendant being awarded a contract for the RFQTS 2/24 works; (iii) The first potential defendant nominating and advancing the applicant as the or a partner it would work with for the RFQTS 2/24 works; (iv) Any requested variations to the awarded contract for the RFQTS 2/24 works; (v) The Initial Project Plan and Solution Roadmap, as submitted by the first potential defendant to the Department of Defence as part of the early scope of RFQTS 2/24 works and detailed in order 1(d); and (vi) All subsequent deliverables under the contract, including (if applicable) as varied, for the RFQTS 2/24 works. (f) Any invoices issued by the potential defendant to the Department of Defence in relation to the RFQTS 2/24 works. (2) Pursuant to r 651 of the Court Procedures Rules 2006 (ACT), the second potential defendant give preliminary discovery and produce for inspection to the solicitors for the applicant copies of all documents falling into the following categories: (a) Any documents falling under the categories in orders 1(a) to 1(e), as though applicable to the second potential defendant; and (b) Any documents received by the second potential defendant, from the applicant, that were provided to, shared with, or otherwise disclosed by the second potential defendant to the Commonwealth from 27 April 2023 to 12 January 2024. (3) No costs on the originating application filed 14 March 2025. (4) The applicant is to pay the first potential defendant and second potential defendants’ reasonable costs as agreed or assessed with respect to production of documents in compliance with these orders, which will include the costs of professional legal services related to the preliminary discovery if applicable.

I certify that the preceding thirty-five [35] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Muller. Associate: Date: