BHP Iron Ore Pty Ltd v Motherwell Systems Pty Ltd - [2001] WASC 207

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: BHP IRON ORE PTY LTD -v- MOTHERWELL SYSTEMS PTY LTD [2001] WASC 207

CORAM: MASTER SANDERSON

HEARD: 22 JUNE 2001

DELIVERED : 9 AUGUST 2001

FILE NO/S: CIV 1786 of 2000

BETWEEN: BHP IRON ORE PTY LTD (ACN 008 700 981)
Plaintiff
AND
MOTHERWELL SYSTEMS PTY LTD (ACN 001 651 949)
Defendant

Catchwords:

Practice and procedure - Application to strike out statement of claim - Turns on own facts

Legislation:

Nil

Result:

Application successful to limited extent

Category: B

Representation:

Counsel:

Plaintiff: Mr C L Zelestis QC & Mr C G Colvin
Defendant: Mr W S Martin QC & Mr G I Anstee-Brook

Solicitors:

Plaintiff: Hollingdales
Defendant: Minter Ellison

Case(s) referred to in judgment(s):

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1981) 149 CLR 337
Monarch Petroleum NL v Citco Australia Petroleum Ltd [1986] WAR 310

Case(s) also cited:

Abcos v Jones (1997) 150 ALR 488
ANZ v Westpac (1988) 164 CLR 662
Campomar Sociedad, Limitada v Nike International Ltd (2000) 169 ALR 677
City of Box Hill v E W Tauschke Pty Ltd [1974] VR 39
Demagoge v Ramensky (1992) 110 ALR 608
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
State of Queensland v Pioneer Concrete (Qld) Pty Ltd (1999) ATPR 41-691
Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177

MASTER SANDERSON: This is the defendant's application to strike out all, or parts, of the plaintiff's amended statement of claim. The defendant's attack on the amended statement of claim focuses on three separate, but interrelated, aspects of the pleading. Before dealing specifically with the defendant's complaints I should say something generally about the facts of the case and the approach to the pleading adopted by the plaintiff.
For the purposes of this application, it is only necessary to provide a short summary of the issues between the parties. The plaintiff is a producer of iron ore and for this purpose it has a handling facility in Port Hedland. The handling facility is multi‑faceted and its capability is pleaded by the plaintiff in this way (par 4):
"Ore received at the facility can, and at all material times could, take one of a number of alternative routes within the facility, including routes involving interconnected conveyors, blending and processing equipment, stockpiles and reclaiming and loading equipment, before being loaded onto a ship for transportation from the facility."
The defendant is engaged in the development and sale of software computer systems. The routing system at the plaintiff's Port Hedland facility was computer controlled. In 1996 the plaintiff decided to expand the capacity of its Port Hedland facility which necessarily involved a reworking of the computerised control system. It is alleged by the plaintiff that the defendant represented that it had a software program styled "EasyFlo" which, with some modification, could satisfactorily operate the routing system. The plaintiff now says that the defendant's system proved not to be satisfactory and did not live up to representations made by the defendant to the plaintiff about the capacity of the system. The plaintiff claims against the defendant for breach of contract, for damages for misleading and deceptive conduct under the provisions of the Trade Practices Act and seeks equitable compensation for unjust enrichment.
The brief summary I have provided in the preceding paragraph belies the complexity of this claim. Much of the difficulty arises from the way in which the plaintiff and the defendant went about their business dealings. It is clear from the statement of claim that the contract negotiations between the parties and the eventual conclusion of a contract was something of a moveable feast. It may be that in the provision of software, which is being developed as the project proceeds, this is inevitable. But it makes pleading a claim difficult. This is not a case where there is an easily identifiable offer and an equally easily identifiable acceptance, resulting in a contract whose terms are relatively certain. That being so, the statement of claim will inevitably be a complex document and in approaching a strike‑out application some allowance must be made to accommodate that fact. This was a point made by senior counsel for the plaintiff in opening his submissions and, in my view, it is a point well made.
The approach adopted by the plaintiff to pleading the statement of claim is slightly unusual. The pleading is divided into two parts. The first part is headed "The Claim". The second part is headed "The Conduct". The first part, which runs to 46 paragraphs and 17 pages, pleads such matters as the identification of the parties, the nature of the project undertaken, the involvement of the defendant in the project, the terms and conditions of the contract, the representations allegedly made by the defendant to the plaintiff, the alleged misleading and deceptive conduct, the alleged reliance by the plaintiff on that conduct, other matters related to a claim under the Trade Practices Act and termination of the contract. There is, of course, a claim for damages for breach of contract. The second part of the pleading which runs to 34 paragraphs and nine pages sets out, in narrative form, the interaction between the plaintiff and its representatives and the defendant and its representatives. A reading of this part of the statement of claim provides a coherent and chronologically consistent outline of what the plaintiff says was the interaction between its representatives and the defendant's representatives. During the course of his submissions, counsel for the defendant criticised certain paragraphs in Pt 2 as being irrelevant because they amounted to a pleading of evidence, not material facts or particulars. I will deal with this complaint in more detail below. But, by way of general comment, it seems to me that the pleading approach adopted by the plaintiff has much to recommend it. A reading of Pt 2 of the statement of claim allows for an understanding of the way in which the plaintiff says the parties to the dispute interacted. Part 1 of the pleading provides the legal framework or the template within which the plaintiff says the dispute is to be resolved. This approach does still result in some complexity and necessitates some cross‑referencing throughout the document but the pleading is relatively easy to read and comprehend. To be fair to the defendant, counsel did not criticise the approach adopted by the plaintiff directly but, rather, suggested that in three respects it did not meet the requirements of a proper pleading. In other words, the criticism was specific rather than general and the defendant's application is to be approached in that way.
The defendant's first complaint related to the way in which the contract between the plaintiff and the defendant is pleaded. This involved a criticism of par 17 to par 23 of the amended statement of claim. These paragraphs are in the following terms:
"17.In June 1997, the defendant was invited by the plaintiff to submit a tender to supply, inter alia, software to the plaintiff to manage the route sequencing decisions required at the expanded facility, on the basis of the revised version of the FUSP.
18.In response to that invitation, on 2 July 1997, the defendant submitted to the plaintiff a revised render which provided that:
(a)the tender was based on EasyFlo which had been designed specifically for the control and management of materials handling plants;
(b)EasyFlo was a generic software product for the operation and management of materials handling facilities incorporating multiple flowpaths with a variety of different equipment types;
(c)EasyFlo handled complex control systems for materials handling easily;
(d)of the tender price of $1,047,625, only $46,080 related to additions to the standard EasyFlo functionality;
(e)core EasyFlo functionality would be completed by 15 July 1997 and would require no software engineering man‑hours;
(f)the configuration of the EasyFlo database to suit the equipment at the facility would be completed by 24 August 1997 and would require 80 software engineering man‑hours;
(g)extensions to, and customisation of, EasyFlo to suit the plaintiff would be completed by 7 September 1997 and would require 150 software engineering man‑hours; and
(h)performance of all the work the subject of the tender including installation of the software at site and training of the plaintiff's staff in using the EasyFlo software would be completed by May 1998.
18A.By the terms of the revised tender, the defendant offered and, bound itself, to supply on the terms and conditions for the supply of the EasyFlo software to the plaintiff set out in a deed of agreement dated 18 June 1997 signed by the defendant and delivered to the plaintiff as part of the revised tender ('the Deed').
19.By June 1997, the defendant had commenced work in anticipation of the parties entering into an agreement for the defendant to supply the EasyFlo software to the plaintiff on the terms offered by the defendant in the revised tender.
20.On 23 July 1997 SKM, on behalf of the plaintiff, advised the defendant of the intention of the plaintiff to accept the revised tender and authorised the defendant to proceed with the work as set out in that tender until execution of a formal contract by the parties.
21.On 20 August 1998, the plaintiff and the defendant entered into a deed of contract ('the Deed of Contract') for the supply by the defendant to the plaintiff of a route sequencing system incorporating EasyFlo to operate at the expanded facility, for all relevant purposes, in the same terms as the terms of the Deed.
22.In the premises pleaded in paragraphs 18 to 21, with effect from June 1997 until its termination as pleaded herein, there was an agreement between the plaintiff and the defendant pursuant to which the defendant was to supply software to make the route sequencing decisions at the expanded facility upon the terms contained in the Deed of Contract ('the Contract').
23.The following were express written terms of the Contract in that they were express written terms of the Deed and the Deed of Contract:
(a)the defendant would produce, and would perform the work under the Contract according to, a detailed design specification based upon the revised FUSP and approved by the plaintiff;
Particulars
The term was one on the proper construction of the Contract in cl.5.1.1, 10 and 12 of the Scope of Works and cl.11 of the General Conditions.
(b)EasyFlo would be operating in a Windows‑NT environment by 15 July 1997;
Particulars
The term was one on the proper construction of the Contract in cl.12 of the Scope of Works which is to be construed having regard to the term of the revised tender pleaded in paragraph 18(e), cl.5.4 of s.4 of the revised tender and item 58 of the Gantt chart in s.5 of the revised tender by reason that at all material times it was the fact, as the plaintiff and the defendant well knew, that the programme was a summary of key milestone events prepared on the basis of the details set out in the revised tender;
(c)the defendant would perform the Contract by supplying existing generic software which would be extended and customised to fulfil the plaintiff's requirements as set out in the revised version of the FUSP by 150 software engineering man hours and which would be complete by 1 October 1997;
Particulars
The term is an express written term in line 122.1 of the manning schedule in s.C4.0 of the schedules to the Contract and cl.5.1.2 and cl.12 of the Scope of Works which are to be construed having regard to the meaning of the descriptive phrases 'Core EasyFlo Server' and 'Software Configuration' which were used by the parties to refer to EasyFlo as an existing generic software package and the process of extension and customisation of that software respectively.
(d)the defendant would prepare and implement a quality system covering all aspects of the work under the Contract in accordance with the requirements of ISO 9001;
Particulars
The term is an express written term contained in cl.9 of the Special Conditions of Contract and cl.9 of the Scope of Works;
(e)the defendant would exercise proper professional skill, care and due diligence in the superintendence, administration, supply, installation, testing and commissioning of the work under the Contract so as to ensure that the works were in accordance with the Contract and fit for their intended purpose; and
Particulars
The term is an express written term contained in cl.11.2 of the General Conditions incorporated in the Contract;
(f)the defendant would exercise proper professional skill, care and due diligence in all design work, design development and documentation to ensure that the works comply with all of the requirements of the Contract and are fit for their intended purpose.
Particulars
The term is an expressed written term contained in cl.11.1 of the General Conditions."
(I have omitted those parts of the paragraphs which have been deleted by amendment and I have not marked up those paragraphs or parts of paragraphs added by amendment. For the purposes of this application, nothing turns on the terms of the amendments.)
The FUSP referred to par 17 is defined in par 15 of the amended statement of claim as "a functional specification for the route sequencing software". This document was drafted jointly by employees of the plaintiff and defendant in March and April of 1997. A revised version was prepared by the parties in May 1997. Against that background, it is helpful to set out a chronology of what the plaintiff says occurred in relation to the tender and contract. The events can be summarised in this way:
1.The FUSP was drafted in March/April 1997 and revised in May 1997.
2.The defendant was invited by the plaintiff to submit tender for software based on the revised FUSP in June 1997. A revised tender was supplied by the defendant to the plaintiff on 2 July 1997.
3.The defendant signed a deed of agreement which was dated 18 June 1997 and was delivered to the plaintiff as part of the revised tender. This document is referred to in the pleading (par 18A) as "the Deed".
4.By June 1997 the defendant had commenced work on the software application in anticipation that the tender would be accepted.
5.The tender was accepted on 23 July 1997.
6.On 20 August 1998 the plaintiff and the defendant entered into a Deed of Contract for supply of the software, this document being "for all relevant purposes in the same terms as the Deed".
In reality, all of these matters which are pleaded in par 17 through to par 21 (with the exception of facts related to the FUSP which are dealt with in pars 15 and 16) are by way of background. The contract, presumably meaning the legal relationship between the parties, is embodied in the Deed of Contract signed on 20 August 1998. In my view, it is apparent from the way in which the contractual position is pleaded that there are matters in the revised tender, the Deed and perhaps even in the FUSP which are relevant in interpreting the contract. It may well be the case that certain matters are not included in the contract because evidence of surrounding circumstances shows that they were specifically excluded: see Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1981) 149 CLR 337 per Mason J at 352.
Particular criticism was made by counsel for the defendant of par 18A of the amended statement of claim. It was said that there was no basis on which it could be said that the defendant bound itself to supply software on terms and conditions contained in the revised tender on the facts as pleaded. The plaintiff's answer was that what was signed by the defendant was a deed and once a deed is signed and delivered by a party then that party is bound to its terms: see Monarch Petroleum NL v Citco Australia Petroleum Ltd [1986] WAR 310 per Kennedy J at 352 ‑ 353. I am satisfied that the matter is arguable and that par 18A of the amended statement of claim should be allowed to stand.
Counsel for the defendant also pointed out that, pursuant to par 18(h) of the amended statement of claim, the work on developing the software was to be completed by May 1998. However, pursuant to par 21 of the amended statement of claim, the parties did not enter into the Deed of Contract until 20 August 1998. On this basis the defendant was in breach of the Contract on the date upon which it entered into the Deed of Contract. While this may be unusual, it is not inconceivable. It is often the case that parties enter into a contract sometime after work to be undertaken pursuant to the contract has commenced. It may then be the case that a breach of a contract actually occurred before the written contract is concluded. That is what is said to have happened in this case. In my view, the pleading is proper.
Counsel for the defendant also objected to par 23 of the amended statement of claim. First, it was said that some of the express terms of the contract pleaded in par 23 were inconsistent with the contractual position pleaded in par 18 through to par 22. Particular reference was made to par 23(b). It was said that it was inconsistent to plead that EasyFlo would be operating in a Windows‑NT environment by 15 July 1997 when the contract itself was not concluded until August 1998. I have dealt with that objection above. I need say nothing more on this issue.
Objection was also taken to the use of what might be called technical jargon in the particulars to par 23. For example, in the particulars to par 23(c), there is a reference to EasyFlo being "an existing generic software package". It was submitted that without a definition of this phrase the defendant was not in a position to know precisely what was being put against it. Counsel referred to the dictionary definition of "generic" and submitted that applying any of these dictionary definitions, the phrase was meaningless.
There are two answers to that submission. First, the software industry employs terminology which is rapidly developing and which may not have been picked up by even the latest editions of reputable dictionaries. But anyone having even a passing acquaintance with software will be well aware of what such terms mean. For instance, it is well known that the Microsoft Windows program is what is generally known as "generic software". It provides an operating system in which various other software programmes can be run. That does not mean to say that the Windows program is not the property of the Microsoft Corporation, but it is nonetheless generic in that it is broadly based and operates widely.
Secondly, as counsel for the plaintiff pointed out, the plaintiff in its pleading has adopted the language which was used by the defendant in discussions and negotiations. That is made plain by reference to Pt 2 of the pleadings and the conduct therein referred to. Moreover, if there is any doubt on this question, the defendant can always request particulars. That way any doubts which may arise through the use of technical terminology can be clarified.
The second area of complaint concerned the pleading of representations allegedly made by the defendant to the plaintiff. The paragraphs complained of are pars 27, 28 and 29. Each of these paragraphs incorporates, by a reference, other paragraphs of the statement of claim. To allow for ease of reference I will set out each of the paragraphs complained of and, immediately thereafter, the text of the paragraphs referred to in the paragraph attacked. This is done for ease of reference:
"27.By the conduct of the defendant pleaded in paragraphs 14 to 18, prior to the delivery of the Deed and prior to the making of the Contract, the defendant represented to the plaintiff, in effect, that:
(a)EasyFlo was a mature and generic product that had been fully developed such that it could manage the route sequencing decisions at a range of bulk materials handling facilities without further development of the software (the plaintiff relies in particular upon the conduct of the defendant pleaded in paragraphs 18(a), (b) and (c), 47(a), 53, 54, 56(a), 56(b), 58, 59(a), 61 and 66 and its context in the conduct pleaded in paragraphs 14 to 18);
18.In response to that invitation, on 2 July 1997, the defendant submitted to the plaintiff a revised tender which provided that:
(a)the tender was based on EasyFlo which had been designed specifically for the control and management of materials handling plants;
(b)EasyFlo was a generic software product for the operation and management of materials handling facilities incorporating multiple flowpaths with a variety of different equipment types;
(c)EasyFlo handled complex control systems for materials handling easily;
47.By facsimile dated 9 October 1996, Mark Hearne of the defendant informed Matha of BHPE that the defendant would meet with BHPE to explain the functionality of the package known as EasyFlo and provided a copy of a document entitled 'Australia Beats International Competition for Bulk Handling Automation Project in China' which stated, inter alia:
(a)the defendant had developed EasyFlo which was a software product that had functions that would enable effective and efficient operation and maintenance of a bulk materials handling facility;
53.By letter dated 21 November 1996 to BHPE, the defendant provided a written estimate (plus or minus 20%) of the cost of implementing as part of the expansion the EasyFlo system to make the route sequencing decisions and which stated that EasyFlo was an existing system that could be implemented at the facility in a basic or advanced form.
54.By letter dated 3 December 1996 to BHPE, the defendant impliedly described EasyFlo as an existing software product that could manage the route sequencing decisions at the expanded facility.
56.At a meeting between Gordon Whitelaw, Matha, Brian Greaves and Kim Law of BHPE, Jones and Bill Telfer of the plaintiff, Jack Rowley and Rod Douglas of SKM and Lieblich, Andrew Crocker and Mike Salinovich of the defendant on 16 December 1996, Crocker, Leiblich or Salinovich responded to the contents of the BHPE report by stating orally that:
(a)EasyFlo was an existing software product that would be licensed to the plaintiff and that this would not create maintenance or modification issues for the plaintiff because the database structure of EasyFlo was generic and when additional equipment was added at the facility the details of the equipment could be added to the database without any changes being required to the EasyFlo software;
(b)the basic route sequencing functions of EasyFlo had been fully developed and it was only site specific applications that would have to be engineered for the plaintiff;
58.At meetings between Whitelaw, Matha and Law of BHPE and Leiblich, Crocker and Salinovich of the defendant, on 18 December 1996 and Peter Rourke, Matha, Law, Greaves and Whitelaw of BHPE and Crocker of the defendant on 8 January 1997, Crocker on behalf of the defendant represented that EasyFlo software was an existing product that would be licensed to the plaintiff and that the First BHPE Report did not accurately reflect the existing functionality of EasyFlo.
59.By facsimile dated 20 December 1996 to BHPE, the defendant stated that:
(a)there was a current and mature VMS based version of EasyFlo able to be used as part of the expanded facility or any other project immediately;
61.By facsimile dated 24 December 1996 to BHPE, the defendant stated that the estimate included licence fees for EasyFlo, thereby implying that EasyFlo was a generic product that was capable of being licensed for use by the plaintiff in managing the route sequencing decisions at the facility.
66.By facsimile dated 7 March 1997 to the defendant, SKM described the deliverables that the defendant would supply to the plaintiff for the capacity expansion in accordance with a contract to be prepared as being the existing EasyFlo software and certain software to be designed and implemented specifically for the plaintiff.
(b)EasyFlo had been developed to a sufficiently generic capability such that the software engineering services required to change EasyFlo to operate in a Windows‑NT environment and conform to the revised FUSP were:
(i)approximately 150 manhours; and
(ii)limited to extensions to the existing software; and
(the plaintiff relies in particular upon the conduct of the defendant pleaded in paragraphs 18(d), (e), (f) and (g), 47(b) and (d), 49, 50, 51, 52, 56(b) and (d), 59(b), 65 and 66 and its context in the conduct pleaded in paragraphs 14 to 18)
18.In response to that invitation, on 2 July 1997, the defendant submitted to the plaintiff a revised tender which provided that:
(d)of the tender price of $1,047,625, only $46,080 related to additions to the standard EasyFlo functionality;
(e)core EasyFlo functionality would be completed by 15 July 1997 and would require no software engineering man‑hours;
(f)the configuration of the EasyFlo database to suit the equipment at the facility would be completed by 24 August 1997 and would require 80 software engineering man‑hours;
(g)extensions to, and customisation of, EasyFlo to suit the plaintiff would be completed by 7 September 1997 and would require 150 software engineering man‑hours; and
47.By facsimile dated 9 October 1996, Mark Hearne of the defendant informed Matha of BHPE that the defendant would meet with BHPE to explain the functionality of the package known as EasyFlo and provided a copy of a document entitled 'Australia Beats International Competition for Bulk Handling Automation Project in China' which stated, inter alia:
(b)EasyFlo was a suite of software that could operate under a Windows‑NT operating environment;
(d)EasyFlo was based on a standard relational database that supports SQL hosted on a standard computer and operating system;
49.By letter dated 4 November 1996 to BHPE, the defendant stated that using the information provided in the letters referred to in paragraph 48, it had generated a database of equipment at the facility and had been able to select and run routes between an item of equipment denoting a single source and an item of equipment denoting a single destination at the facility.
50.By letter dated 11 November 1996 to BHPE, the defendant stated that:
(a)it had successfully demonstrated that EasyFlo could calculate all possible routes based on the equipment database referred to in paragraph 48 without the need for special coding in either the PLCs or the operator interface system; and
(b)the defendant had successfully calculated and implemented multi‑destination flowpaths which were not a normal part of previous EasyFlo implementations and that this had been achieved by a slight modification to the EasyFlo user interface
51.By letter dated 18 November 1996 to BHPE, the defendant stated that as a result of a modification to the user interface, a triple source, double destination flowpath could be defined and located by a user of EasyFlo.
52.In November and December 1996, the defendant gave demonstrations to SKM, BHPE and the plaintiff of the existing features of EasyFlo which purported to show how EasyFlo could be readily customised to make the route sequencing decisions at the expanded facility.
56.At a meeting between Gordon Whitelaw, Matha, Brian Greaves and Kim Law of BHPE, Jones and Bill Telfer of the plaintiff, Jack Rowley and Rod Douglas of SKM and Lieblich, Andrew Crocker and Mike Salinovich of the defendant on 16 December 1996, Crocker, Leiblich or Salinovich responded to the contents of the BHPE report by stating orally that:
(b)the basic route sequencing functions of EasyFlo had been fully developed and it was only site specific applications that would have to be engineered for the plaintiff;
(d)EasyFlo would be supplied to the plaintiff by porting EasyFlo from a DEC/MS platform to a Windows/NT environment.
59.By facsimile dated 20 December 1996 to BHPE, the defendant stated that:
(b)porting of EasyFlo from DEC/VMS to Windows‑NT was scheduled for completion during the first half of 1997, but if the defendant was awarded a contract to supply EasyFlo to the plaintiff as part of the expansion of the facility the time schedule would be adjusted to meet the requirements of the expansion; and
65.On 10 February 1997, the defendant informed the plaintiff, BHPE and SKM that it was in the process of porting EasyFlo to Windows‑NT.
66.By facsimile dated 7 March 1997 to the defendant, SKM described the deliverables that the defendant would supply to the plaintiff for the capacity expansion in accordance with a contract to be prepared as being the existing EasyFlo software and certain software to be designed and implemented specifically for the plaintiff.
(c)using EasyFlo, the time required to deliver and install a fully tested route sequencing system for the expanded facility that could operate in a Windows‑NT environment and conform to the revised FUSP was 6 months (the plaintiff relies in particular upon the conduct of the defendant pleaded in paragraphs 18(e), (f), (g) and (h), 56(c) and 66B and its context in the conduct pleaded in paragraphs 14 to 18).
18.In response to that invitation, on 2 July 1997, the defendant submitted to the plaintiff a revised tender which provided that:
(e)core EasyFlo functionality would be completed by 15 July 1997 and would require no software engineering man‑hours;
(f)the configuration of the EasyFlo database to suit the equipment at the facility would be completed by 24 August 1997 and would require 80 software engineering man‑hours;
(g)extensions to, and customisation of, EasyFlo to suit the plaintiff would be completed by 7 September 1997 and would require 150 software engineering man‑hours; and
(h)performance of all the work the subject of the tender including installation of the software at site and training of the plaintiff's staff in using the EasyFlo software would be completed by May 1998.
56.At a meeting between Gordon Whitelaw, Matha, Brian Greaves and Kim Law of BHPE, Jones and Bill Telfer of the plaintiff, Jack Rowley and Rod Douglas of SKM and Lieblich, Andrew Crocker and Mike Salinovich of the defendant on 16 December 1996, Crocker, Leiblich or Salinovich responded to the contents of the BHPE report by stating orally that:
(c)the defendant estimated that the work to supply EasyFlo for use by the plaintiff at the facility would take 6 months; and
66B.At a meeting between Edsall and Douglas of SKM, Smith, Matha and Steer of BHPE and Whiton of the defendant on 9 June 1997, Motherwell reported to those present that the development work to change EasyFlo to operate in a Windows‑NT environment and conform to the revised FUSP would be completed by the end of June 1997.
28.By the conduct of the defendant pleaded in paragraph 26, after the execution of the Deed, the defendant represented to the plaintiff, in effect:
(a)during the period July 1997 to December 1998, that the work being done by the defendant, under the Contract, did not involve development or redevelopment of EasyFlo (the plaintiff relies in particular upon the conduct of the defendant pleaded in paragraphs 67(a), 68, 72 and 81 and its context in the conduct pleaded in paragraphs 14 to 18 and 26);
67.On or about 28 July 1997, the defendant provided to SKM a project execution plan for the Contract which stated, inter alia, that:
(a)it assumed that the nature of both the overall control philosophy and the requirements of individual items of equipment could be accommodated by a manageable number of extensions to EasyFlo (an existing software system) which extensions were specific to the facility and that if requirements were to emerge where substantial development efforts were needed, the plan would be invalidated; and
68.On or about 5 September 1997, the defendant produced a detailed design specification which stated, inter alia, that the route selection software to be supplied by the defendant under the Contract would be based on a generic package called EasyFlo which would be implemented at the facility by providing a site‑specific front end, site‑specific database configuration and initialisation and customisation and extension of EasyFlo data structures, processes and interfaces. The detailed design specification did not identify any significant change to the generic package.
72.On 13 May 1998, the defendant represented to the plaintiff that performance of the Contract was well advanced and confirmed that EasyFlo was a developed generic software product.
81.At no time between July 1997 and December 1998 did the defendant inform the plaintiff that it was undertaking development of EasyFlo.
(b)during the period August 1997 to October 1998, that performance of the work under the Contract was progressing well and that sufficient progress had been made to enable that work to be completed within two to three months (the plaintiff relies in particular upon the conduct of the defendant pleaded in paragraphs 67(b), 69(a), 70, 71, 72, 73, 74, 75, 76, 78 and 80 and its context in the conduct pleaded in paragraphs 14 to 18 and 26);
67.On or about 28 July 1997, the defendant provided to SKM a project execution plan for the Contract which stated, inter alia, that:
(b)due to the expansion of the facility, installation and testing of the software was required to be complete by November 1997 in time for installation at the facility.
69.In the period July 1997 to March 1998, the defendant provided regular reports to SKM and BHPE to the effect that:
(a)work under the Contract was proceeding and progressing well;
70.In March and April 1998, the defendant informed SKM, BHP and the plaintiff that Crocker, the defendant's project manager for the Contract, was leaving the defendant but his departure would not affect performance of the Contract because of the advanced state of the work by the defendant.
71.On 28 April 1998 the defendant reported to SKM that work on the software was essentially complete and system integration testing had commenced.
72.On 13 May 1998, the defendant represented to the plaintiff that performance of the Contract was well advanced and confirmed that EasyFlo was a developed generic software product.
73.On 21 May 1998, the defendant stated to SKM that the software to be supplied under the Contract would be complete by 16 July 1998.
74.In May and June 1998, the defendant provided regular reports to SKM and the plaintiff in which it stated that:
(a)outstanding items were progressing smoothly and that the defendant was working to improve the revised completion date for the Contract of 27 July 1998; and
(b)it was on target for completion of all software by the end of July 1998.
75.In July and early August 1998, the defendant reported difficulties with building a complete version of the software but did not advise the plaintiff of any consequent delays.
76.In a video conference on 14 August 1998 between David Barge, Stefano Georgini and John Hannah of the plaintiff and Bob Johnson, Leiblich, Paul Nicholson and Salinovich of the defendant, Johnson agreed to provide a realistic schedule for completion of all testing for the software to be provided under the Contract to which the defendant would adhere, which date the defendant subsequently set as 6 November 1998.
78.On or about 30 October 1998 the defendant's project manager for the Contract stated orally to Barge on behalf of the plaintiff that the software to be supplied under the Contract was only 4 to 7 days away from completion.
80.In the period November to 15 December 1998 the defendant represented that it was removing 'bugs' from the software to be supplied under the Contract which was otherwise complete.
(c)during the period October 1997 to October 1998, that EasyFlo was operating in a Windows‑NT environment and was ready for system and integration testing (the plaintiff relies in particular upon the conduct of the defendant pleaded in paragraphs 69(b), (d) and (e), 71, 78, 79 and 80 and its context in the conduct pleaded in paragraphs 14 to 18 and 26); and
69.In the period July 1997 to March 1998, the defendant provided regular reports to SKM and BHPE to the effect that:
(b)integration testing for core functionality had been completed by 31 October 1997;
(d)phase 1 of factory acceptance testing had been completed by 25 January 1998; and
(e)phase 2 of factory acceptance testing had been substantially completed by 28 February 1998.
71.On 28 April 1998 the defendant reported to SKM that work on the software was essentially complete and system integration testing had commenced.
78.On or about 30 October 1998 the defendant's project manager for the Contract stated orally to Barge on behalf of the plaintiff that the software to be supplied under the Contract was only 4 to 7 days away from completion.
79.On or about 31 October 1998 the defendant informed the plaintiff that some problems had been identified and testing would commence in 1 or 2 weeks.
80.In the period November to 15 December 1998 the defendant represented that it was removing 'bugs' from the software to be supplied under the Contract which was otherwise complete.
(d)during the period February 1998 to October 1998, that the software to be supplied under the Contract was ready for integration testing (the plaintiff relies in particular upon the conduct of the defendant pleaded in paragraphs 69(d) and (e), 71, 77, 79 and 80 and its context in the conduct pleaded in paragraphs 14 to 18 and 26).
69.In the period July 1997 to March 1998, the defendant provided regular reports to SKM and BHPE to the effect that:
(d)phase 1 of factory acceptance testing had been completed by 25 January 1998;
and
(e)phase 2 of factory acceptance testing had been substantially completed by 28 February 1998.
71.On 28 April 1998 the defendant reported to SKM that work on the software was essentially complete and system integration testing had commenced.
77.In the period from August to October 1998, the defendant presented schedules to the plaintiff which stated that it would commence system and integration testing of the software to be supplied under the Contract on particular future dates.
79.On or about 31 October 1998 the defendant informed the plaintiff that some problems had been identified and testing would commence in 1 or 2 weeks.
80.In the period November to 15 December 1998 the defendant represented that it was removing 'bugs' from the software to be supplied under the Contract which was otherwise complete.
29.The representations pleaded in paragraphs 27(a) and (b) were continuing representations operating until in or about October and December 1998 respectively, in that those representations were:
(a)not corrected prior to those times (the plaintiff relies in particular upon the conduct of the defendant pleaded in paragraphs 67(a), 68, 72 and 81 and its context in the conduct pleaded in paragraphs 14 to 18 and 26).
67.On or about 28 July 1997, the defendant provided to SKM a project execution plan for the Contract which stated, inter alia, that:
(a)it assumed that the nature of both the overall control philosophy and the requirements of individual items of equipment could be accommodated by a manageable number of extensions to EasyFlo (an existing software system) which extensions were specific to the facility and that if requirements were to emerge where substantial development efforts were needed, the plan would be invalidated; and
68.On or about 5 September 1997, the defendant produced a detailed design specification which stated, inter alia, that the route selection software to be supplied by the defendant under the Contract would be based on a generic package called EasyFlo which would be implemented at the facility by providing a site‑specific front end, site‑specific database configuration and initialisation and customisation and extension of EasyFlo data structures, processes and interfaces. The detailed design specification did not identify any significant change to the generic package.
72.On 13 May 1998, the defendant represented to the plaintiff that performance of the Contract was well advanced and confirmed that, EasyFlo was a developed generic software product.
81.At no time between July 1997 and December 1998 did the defendant inform the plaintiff that it was undertaking development of EasyFlo.
(b)repeated and continued by the defendant's conduct pleaded in paragraph 26 (the plaintiff relies upon the conduct of the defendant pleaded in paragraphs 29(a), 68, 72 and 81 and its context in the conduct pleaded in paragraphs 14 to 18 and 26).
29.The representations pleaded in paragraphs 27(a) and (b) were continuing representations operating until in or about October and December 1998 respectively, in that those representations were:
(a)not corrected prior to those times.
68.On or about 5 September 1997, the defendant produced a detailed design specification which stated, inter alia, that the route selection software to be supplied by the defendant under the Contract would be based on a generic package called EasyFlo which would be implemented at the facility by providing a site‑specific front end, site‑specific database configuration and initialisation and customisation and extension of EasyFlo data structures, processes and interfaces. The detailed design specification did not identify any significant change to the generic package.
72.On 13 May 1998, the defendant represented to the plaintiff that performance of the Contract was well advanced and confirmed that EasyFlo was a developed generic software product.
81.At no time between July 1997 and December 1998 did the defendant inform the plaintiff that it was undertaking development of EasyFlo."

The first criticism made of par 27 is that reference is made to the conduct pleaded in pars 14 to 18 and as par 14 refers to the conduct pleaded in pars 47 to 66B, all of those paragraphs are immediately included in par 27. With respect, that seems to me to be a misreading of the terms in which par 27 is couched. As I read the paragraph, the reference in the first line to pars 14 to 18 does nothing more than set the scene, or provide the background, against which the representations complained of are to be viewed. While I accept that there may be potential for confusion, I think the confusion is easily avoided. Paragraph 27 must be read in its entirety, particularly par 27(a) and its reference to certain paragraphs between pars 47 and 66B.
Particular criticism was made of pars 61 and 66 and their incorporation by reference in par 27(a). In relation to par 61, it was said that the reference to a licence fee for EasyFlo could not imply that EasyFlo was a generic product capable of being licensed for use by the plaintiff. In my view, such an implication could arise. I have referred above to Microsoft Corporation and its Windows program. That is a generic program and a licence fee is to be paid for its use. By saying that a product is subject to a licence fee, the informed listener would assume that the product was of wide application, or generic and was capable of being licensed. Paragraph 61 is unobjectionable.
In relation to par 66, it is said that it is inconsistent to say that what was to be supplied was existing EasyFlo software and certain software to be designed and implemented specifically for the plaintiff. If that is put alongside the representation in par 61 that EasyFlo was a generic product which was fully developed, there is nothing inconsistent in par 66. Clearly, what was anticipated was the use of the existing EasyFlo software, then said to be generic and well developed, as adapted for the specific needs of the plaintiff. Adaptation of existing software for client specific needs is hardly unusual. There is nothing inconsistent in what is pleaded in par 66.
In relation to par 27(b), it was said that none of the paragraphs relied upon said anything about the alleged representation that approximately 150 man‑hours would be needed to adapt. The reference to the 150 man‑hours is to be found in par 18(g) of the amended statement of claim. This was a representation made in the revised tender. While it is the case that none of the other paragraphs referred to in par 27(b) refer specifically to the 150 man‑hours, the paragraphs do refer to representations relating to adaptation of the existing software. It is clear from the paragraphs referred to that the plaintiff pleads there was no amendment to the representation of the 150 man‑hours required. The defendant has no cause for complaint about the terms of par 27(b).
The complaint about par 27(c) is temporal. It is said that the representations referred to in the various subparagraphs did not support a plea that the defendant represented that EasyFlo would be operational within six months. The first question is from when the six months was to be calculated. It must be said that that is not entirely clear. Paragraph 18(e) pleads that the core EasyFlo functionality would be completed by 15 July 1997. Paragraph 18(f) pleads that the database would be completed by 24 August 1997 but thereafter 80 software engineering man‑hours would be required to further adapt the system. Paragraph 18(g) refers to customisation of EasyFlo to be completed by 7 September 1997 and thereafter 150 software engineering man‑hours would be required. Paragraph 18(h) refers to completion of all work, including installation of the software, being completed by May 1998. In paragraph 56(c) it is said that during the course of a meeting on 16 December 1996 it was represented to the plaintiff that the work to supply EasyFlo for use by the plaintiff at the facility would take six months. But the FUSP was not prepared until May 1997. It is not clear how a representation made prior to the drafting of the FUSP could be relevant. Nor is any assistance gained from par 66B.
This is one aspect of the pleading which is confusing. It requires clarification. I think that the proper course is to strike out par 27(c) and to allow the plaintiff to replead.
A further complaint was made as to par 28(b). Again, the complaint is of a temporal nature. The pleaded representation relates to the period between August 1997 and October 1998. In particular, it was said that the representation pleaded in par 80, that between November and 15 December 1998 the defendant represented that it was removing "bugs" from the software, could not in any way relate to representations said to have been made between August 1997 and October 1998. I think that point is well made. The reference to par 80 in par 28(b) ought be deleted. Otherwise, par 28(b) can stand in its present form.
An objection of a similar nature is made to par 28(c). The period referred to in that paragraph is October 1997 to October 1998. The date referred to in par 69(b) is 31 October 1997. However, in this instance, the pleaded representation is contextual. It provides necessary background to understanding the remainder of the pleaded representations in relation to the period specified in par 28(c). For that reason, I would not strike out par 69(b). However par 80 does not appear to be relevant, largely for the reasons given above in relation to par 28(b). I would strike out that reference.
Complaint is made about pars 69(d) and (e) because, it is said, both paragraphs refer to representations which have no relevance to par 28(c). In my view, both paragraphs are relevant in that both deal with testing of the software at specified dates. Both these paragraphs can stand.
With respect to par 28(d), complaint is again made of the reference to par 80. As with pars 28(b) and (c), the complaint is well made and the reference to par 80 ought be deleted.
Complaint is made of pars 29(a) and (b). These two subparagraphs can be characterised by saying that par 29(a) pleads a continuing failure to correct misrepresentations made between October and December 1998 and par 29(b) pleads that the conduct pleaded in par 26 amounted to continuing representations. It is open to question what par 29 adds to the pleading. However, as the plaintiff submits, it does alert the defendant to the case being put against it. The defendant's complaint about this paragraph is that the representations relied upon do not go any way to support the pleaded material fact. Paragraph 67 refers to a representation made on or about 28 July 1997. The facts pleaded in par 67 and in pars 68 and 72 are all positive acts. The defendant says that the pleading of positive acts cannot possibly give rise to what is a plea of omission in par 29(a). The plaintiff says, what it has pleaded are the specific representations which it says were made and not corrected. In other words, it has alerted the defendant to precisely what it says were the representations which should have been corrected. In my view, the approach adopted is proper. It is true that par 81 offers nothing that is not contained in par 29(a) itself, but par 81(a) is not at odds with par 29(a) and no prejudice will be suffered if it is allowed to remain.
The complaint with respect to par 29(b) is that it is indistinguishable from the plea in par 29(a). The difference between the two paragraphs is that par 29(a) relies upon par 67(a) where par 29(b) does not and par 29(b) also incorporates par 29(a). While, at first instance, this may seem confusing, in fact what the plaintiff has done is alert the defendant to the material facts it relies upon to substantiate its plea that the pleaded representations were repeated and continued by the defendant's conduct. The form of the pleading is proper and should be allowed to stand.
The defendant then complains of pars 47 through to 81 of the amended statement of claim. Four separate, but interrelated, complaints are made about these paragraphs. First, it is said that a number of the paragraphs are not referred to in Pt 1 of the pleading. These are pars 47(c), 48, 55, 57, 59(c), 60, 62, 63, 64, 66A, 66B and 69(c). For this reason it is said that the paragraphs are superfluous and ought be deleted. The plaintiff says that these paragraphs are contextual and necessary to put the representations relied upon in perspective. The defendant counters by saying that to plead irrelevant matters is simply bad pleading practice and that the paragraphs ought to be struck out. There is no substance to the defendant's complaint. In a matter such as this where the facts are complex and where many representations have been made over a number of years, to plead just the representations relied upon can be misleading. As I have indicated above, I am satisfied that the form of pleading adopted by the plaintiff is proper and appropriate and I am not satisfied the general complaint made by the defendant is made out.
The second complaint is that some paragraphs plead a number of distinct representations, only one of which is relevant and relied upon. The defendant refers to par 53 as an example of this difficulty. Paragraph 53 is in the following terms:
"53.By letter dated 21 November 1996 to BHPE, the defendant provided a written estimate (plus or minus 20%) of the cost of implementing as part of the expansion the EasyFlo system to make the route sequencing decisions and which stated that EasyFlo was an existing system that could be implemented at the facility in a basic or advanced form."
The defendant says that the only relevant part of the letter in the context of the dispute between the parties is the reference to the route sequencing decisions. The reference to the cost of implementing the system is irrelevant. There is some substance to the defendant's complaint. It is difficult to see why the plaintiff should have referred to the cost of implementing the system when that issue is not even of peripheral relevance to the matters in dispute. But the form of par 53 is unlikely in practice to occasion the defendant any difficulty. The reference is to a letter which, in effect, will speak for itself. The defendant need only deal with the issues which are relevant by either admitting or denying the receipt of the letter and admitting or denying the representation as to the EasyFlo system. In my view, there is nothing in par 53 or elsewhere in pars 47 to 81 which would require paragraphs to be struck out.
Thirdly, complaint is made that par 61 is a non sequitur. Paragraph 61 reads as follows:
"61.By facsimile dated 24 December 1996 to BHPE, the defendant stated that the estimate included licence fees for EasyFlo, thereby implying that EasyFlo was a generic product that was capable of being licensed for use by the plaintiff in managing the route sequencing decisions at the facility."
As I have indicated above, I am not satisfied that par 61 does include a non‑sequitur. I have given the example of Microsoft Corporation and its generic Windows product. I need say nothing more on this issue.
Fourthly, complaint is made of par 69. It is said that the plea is rolled‑up and confusing. In my view the paragraph is in satisfactory form and can stand.
Finally, it is said that the plea of unjust enrichment which is to be found in pars 45 and 46 of the amended statement of claim is doomed to fail - it is said the paragraphs disclose no reasonable cause of action. I do have some doubts as to whether, on the pleaded facts, a claim for unjust enrichment can be maintained. However, pars 45 and 46 introduce no new facts, proof of which will in any way delay the conduct of the trial. What these paragraphs do is identify a cause of action. There may be some legal argument consequent upon the inclusion of these paragraphs in the amended statement of claim but it will be of narrow compass and is unlikely to be significant in the context of the trial as a whole. Nothing would be achieved by striking out these paragraphs and it may have the effect of limiting the grounds upon which the plaintiff puts its case. On that basis, I am satisfied that these two paragraphs ought not be struck out.
I will hear the parties as to the precise form of orders and as to costs.