Complete Power Solutions Pty Ltd v UGL Engineering Pty Limited
[2021] WASC 350
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION: COMPLETE POWER SOLUTIONS PTY LTD -v- UGL ENGINEERING PTY LIMITED [2021] WASC 350
CORAM: ALLANSON J
HEARD: ON THE PAPERS
DELIVERED : 14 OCTOBER 2021
PUBLISHED : 14 OCTOBER 2021
FILE NO/S: CIV 2476 of 2015
BETWEEN: COMPLETE POWER SOLUTIONS PTY LTD
Plaintiff
AND
UGL ENGINEERING PTY LIMITED
Defendant
Catchwords:
Practice and procedure - Application for discovery - Whether cost of providing discovery substantial and disproportionate - Delay to matter
Legislation:
N/A
Result:
Application granted
Category: B
Representation:
Counsel:
| Plaintiff | : | No Appearance |
| Defendant | : | No Appearance |
Solicitors:
| Plaintiff | : | Pinsent Masons (Australia) - Perth |
| Defendant | : | Jackson McDonald |
Case(s) referred to in decision(s):
Roe v The State of Western Australia [2013] WASC 130
Singh v Friedman [2013] WASC 78
ALLANSON J:
Introduction
The parties in this action have been able to resolve most issues regarding discovery by agreement. These reasons consider those issues that remain.
The background to the dispute can be briefly outlined.
The plaintiff, Complete Power Solutions Pty Ltd (CPS), and the defendant, UGL Engineering Pty Limited (UGL), are companies that provide services to the mining and construction industry.
From about late 2011, UGL was appointed as a contractor for a Fortescue Metal Group Project (FMG Project) in the Pilbara area of Western Australia.
CPS quoted to provide works and services on the FMG Project, and commenced works in or about April 2012. One of the fundamental disputes between the parties regards whether CPS and UGL entered a contract under which CPS provided the relevant works and services. CPS claims that it provided works and services for which it had quoted, and also makes an Additional Works Claim for freight and civil works. UGL contends that those works and services were provided pursuant to, and were governed by, the terms of a contract or contracts between them, including terms that would bar any claim that was not brought in accordance with UGL's standard terms.
If CPS's claims are not governed by contract, UGL puts CPS to the proof of the nature and extent of the alleged works performed by CPS and the reasonable value of the supply alleged.
The number of potentially relevant documents, including electronic communications, is large. Discovery is being given by categories for which the parties agreed category description, project filter, date range, and applicable search terms. The parties agreed 12 categories, most of which have sub-categories. As at 13 May 2021, the defendant had provided its solicitors with 490,890 documents, most of them emails. Key word searches in accordance with the agreed discovery categories captured over 73,000 documents, 20,043 being potentially discoverable (after removing duplications).[1] The task of reviewing documents is, understandably, long and expensive.
[1] Affidavit of Anthony David Bereyne sworn 13 May 2021 [8], [13] - [14]; affidavit of Anthony David Bereyne sworn 23 June 2021 [11].
CPS seeks discovery of certain third party documents, including emails sent to or from FMG or Calibre.[2] The two categories in dispute are identified as categories 1.14(c) and 6 (the disputed parts are in italics):
[2] Calibre Global Pty Ltd - referred to as an agent of FMG.
Category 1 - Requests for works
As to UGL's requests for work from/by CPS in respect of works to be undertaken on the Fortescue Metals Group 'FMG' Project, all documentation in the possession, custody or power of CPS and or UGL:
…
1.14 whether the quotes provided by CPS (i.e. the First CPS Quote, Second CPS Quote, Third CPS Quote and Fourth CPS Quote) provided for and included freight only to UGL's metropolitan assembly area, and excluded trenching and rock drilling, including:
…
c) all communications between CPS or UGL and third parties, including FMG (and its related bodies, associates, agents and the Superintendent on site), in respect of freight, trenching, rock drilling and ground disturbance works.
Category 6 - Communications with FMG
All documentation [or alternatively Site Reporting Materials (undefined)] in the possession, custody or power of CPS and or UGL in respect of communications between UGL and FMG (and its related bodies, associates, agents and the Superintendent on site) relating to
a)the works undertaken by CPS on the FMG Project, including invoices, notices and/or claims issued to FMG in respect of such works; and
b)payments by FMG in respect of the works undertaken by CPS on the FMG Project.
The approach to discovery under the Rules of the Supreme Court 1971 (WA), and the objects set out in O 1 r 4A and r 4B, is conveniently set out by Martin CJ in Roe v State of Western Australia.[3] It is unnecessary to restate the principles.
[3] Roe v The State of Western Australia [2013] WASC 130 [10] - [13]; see also Singh v Friedman [2013] WASC 78 [3] - [4] to which his Honour referred.
The relevant categories
Freight
CPS pleads that, in or around August 2012, and by ongoing requests for assistance to perform works, UGL requested CPS to proceed with certain works that were not included in quotes that CPS had earlier given (the Additional Works Request).[4]
[4] Statement of claim [28].
CPS pleads that, pursuant to an Additional Works Request, it supplied UGL with freight to the FMG Project at a cost to it of $35,427.69.[5] CPS pleads that UGL has accepted the benefit of the works performed and claims the reasonable value of that supply.[6]
[5] Statement of claim [32(f)].
[6] Statement of claim [40].
UGL does not admit the alleged requests;[7] it pleads that all supplies, works and services performed or supplied by CPS in relation to the FMG Project were performed or supplied pursuant to contracts.[8]
[7] Defence [28].
[8] Defence [29A], [32(g)].
As to the claim by CPS for the reasonable value of its works or supplies, UGL puts CPS to the proof of the nature and extent of the alleged works performed and the reasonable value of the supplies alleged.[9]
[9] Defence [32(a)].
CPS submits that the extent to which UGL provided freight to the FMG Project, either itself or through third parties, is relevant to the proof of its case where, CPS claims, freight was part of the work CPS was requested to provide and which it did provide. The documents sought in Category 1.14(c) with respect to freight are relevant to that claim. Further, documents relating to the payment UGL sought from FMG may be evidence relevant to the reasonable value of the work and services it supplied.
UGL submits that the relevant issues between the parties are whether UGL requested CPS to provide freight of items to the FMG Project site, what freight was provided, and what the costs to CPS of that freight were.
UGL further submits, that on its defence, if freight was provided pursuant to the Additional Works Request, as pleaded in [28] of the statement of claim, then those requests fall within the variation of works power in the contract between the parties, and are regulated by its terms.
UGL submits that what it sought from FMG is a false issue and there would be no forensic benefit from providing such material as exists relating to that issue. It submits the amounts it charged (if they could be isolated on a 'like-for-like' basis) would not give rise to a meaningful comparison because of the status of UGL as head contractor and the commercial terms of its engagement with FMG.
Finally, UGL submits that the cost of reviewing the documents in order to discover them would be disproportionate when there is little or no forensic benefit.
Trenching and rock drilling
Similar issues arise with respect to the civil works.
CPS pleads that, pursuant to the Additional Works Request, it provided civil works, including trenching and rock drilling, at the cost to CPS of $1,026,579.66.[10]
[10] Statement of claim [32(a)].
UGL does not admit the Additional Works Request.[11] It pleads that the trenching and ground disturbance works referred to at [32(a)] of the statement of claim were work to be performed under the contract or contracts pleaded in [30(a) - (e)]. UGL further pleads that it and other contractors performed trenching and ground disturbance works.[12]
[11] Defence [28].
[12] Defence [32(a) - (f)].
CPS submits that it is in issue on the pleadings whether UGL requested CPS to perform the civil works, and whether such civil works were included in the scope of an alleged contract. As a result, it is relevant and material whether third parties such as Calibre/FMG initially took responsibility for civil works, but in the end UGL itself performed, or requested others to perform those works. The documents are relevant to those issues.
UGL submits that whether the 'civil works' were included in the scope of the contracts is a question of construction; and whether UGL, Calibre, or FMG performed some works of that nature does not inform the proper construction of the contract.
UGL further submits that communications with Calibre and FMG will not include material relevant to whether the trenching and rock drilling were excluded in the quotes by CPS.
Again, UGL submits that the cost of providing discovery is substantial and disproportionate where the documents would provide little or no forensic benefit.
Category 6 - communications with FMG
CPS submits that FMG was the party which engaged UGL. FMG and UGL entered into a contract, part of the scope of which was the work performed by CPS at the request of UGL. It is therefore relevant and material to the action - in relation to the works CPS alleges it carried out - what FMG requested of UGL, what variations UGL sought and was granted, what work UGL claimed it had done (by itself or by third parties, including CPS), and what it was paid for that work.
CPS submits that it is been put to proof that the work that it says was requested was done,[13] and seeks access to material documentary evidence, being reports that UGL submitted to Calibre or FMG showing the percentage of work completed on a regular basis, and records provided to UGL documenting work completed.
[13] Defence [32(a)].
CPS also submits that the amounts claimed by UGL for the work are relevant to its value.
UGL proposes that it will discover Site Reporting Materials. It denies the relevance of invoices, notices and claims, and documents relating to payments it received.
UGL also submits that the payment UGL sought from FMG depends upon the commercial terms upon which it performed the FMG project as head contractor and the terms of that engagement. It submits that the material sought is of little or no forensic benefit and production of it would be disproportionately burdensome.
The evidence
UGL relies on affidavits of its solicitor, Anthony David Bereyne, in which he deposes to the volume of documents captured by searches under the agreed discovery protocol, and the time and costs likely to be incurred in reviewing the potentially discoverable documents, and the additional time and cost of reviewing the potentially discoverable documents that would be captured by the disputed categories.
The discovery burden is already great. Mr Bereyne estimates costs, at scale rates of between $87,000 and $102,000 for the discovery underway, with the third party documents now in dispute (that is, not including third party documents agreed to be discovered without review) requiring approximately 400 - 500 hours which, at junior practitioner and paralegal rates would incur costs estimated at around $120,000 to $150,000.[14]
[14] Affidavit of Anthony David Bereyne sworn 23 June 2021, [32] - [33].
Consideration
The burden of discovery cannot be overlooked. The value of the claim, as pleaded, is approximately $2.8 million, with interest at 6% from 2012 or 2013. I have no evidence about the financial resources of the parties, but the additional costs of discovery of the third party documents, on a claim greater than $4 million, is not so disproportionate as to itself be a reason to limit the discovery.
The additional delay is a concern, particularly where this matter was unable to make any significant progress in the years immediately following its commencement. Since the plaintiff has been represented by a better resourced firm of solicitors, progress has been more apparent.
Where the parties are disputing matters that occurred between 2011 and 2013, the documentary evidence is likely to be critical. The delay must be viewed in the context of the trial preparation as a whole. The parties have repeatedly, by agreement, pushed out the timetable for providing an agreed expert evidence schedule, and it is now due the end of October; an agreed statement of issues is now about a month late, despite repeated extensions. I do not say that to be critical of the parties, but to acknowledge the complexity of the action and to put the additional delay in discovery into context.
The decisive question, in my opinion, is whether the third party documents sought by CPS are sufficiently relevant to the pleaded issues, so that the forensic benefit is not outweighed by the cost and delay.
The defence that the works were subject to contract, and the claim subject to a contractual bar, may be put to the side. Unless UGL succeeds on that argument, the court will be required to make findings about whether CPS provided freight to the FMG Project site, and the extent to which it did so, and the reasonable value of that work or supply. Similarly, the court will be required to make findings about whether CPS provided civil works, and the nature and extent of those works, and their reasonable value.
The documents sought are potentially relevant where CPS has been put to proof of the nature and extent of the works it says it did at several sites which were part of the overall FMG Project, as well as the value of all of its work. Documents which show what works were done, within the areas in which CPS claims it was engaged, and who performed those works, are relevant to its case.
I am satisfied that discovery should be given in the terms sought. In relation to Category 6, I would not restrict discovery by the proposed alternative of confining the documents to Site Reporting Materials.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MG
Associate to the Honourable Justice Allanson
14 OCTOBER 2021
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