Hayden Leigh White as joint and several receiver and manager of East Rockingham RRF Hold Co Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) v Acciona Construction Australia Pty Ltd [No 2]
[2024] WASC 507
•2 JANUARY 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: HAYDEN LEIGH WHITE as joint and several receiver and manager of EAST ROCKINGHAM RRF HOLD CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) -v- ACCIONA CONSTRUCTION AUSTRALIA PTY LTD [No 2] [2024] WASC 507
CORAM: HILL J
HEARD: 16 DECEMBER 2024
DELIVERED : 17 DECEMBER 2024
PUBLISHED : 2 JANUARY 2025
FILE NO/S: CIV 2390 of 2024
BETWEEN: HAYDEN LEIGH WHITE as joint and several receiver and manager of EAST ROCKINGHAM RRF HOLD CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
HAYDEN LEIGH WHITE as joint and several receiver and manager of EAST ROCKINGHAM RRF PROJECT CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
DANIEL HILLSTON WOODHOUSE as joint and several receivers and managers of EAST ROCKINGHAM RRF PROJECT CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
DANIEL HILLSTON WOODHOUSE as joint and several receiver and manager of EAST ROCKINGHAM RRF HOLD CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
HAYDEN LEIGH WHITE as joint and several receiver and manager of EAST ROCKINGHAM RRF FINANCE CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
CHRISTOPHER CLARKE HILL as joint and several receivers and managers of EAST ROCKINGHAM RRF HOLD CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
CHRISTOPHER CLARKE HILL as joint and several receiver and manager of EAST ROCKINGHAM RRF FINANCE CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
DANIEL HILLSTON WOODHOUSE as joint and several receiver and manager of EAST ROCKINGHAM RRF FINANCE CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
CHRISTOPHER CLARKE HILL as joint and several receiver and manager of EAST ROCKINGHAM RRF PROJECT CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
First Plaintiffs
EAST ROCKINGHAM RRF PROJECT CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) as trustee of the THE EAST ROCKINGHAM RRF PROJECT TRUST
Second Plaintiff
EAST ROCKINGHAM RRF FINANCE CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
Third Plaintiff
EAST ROCKINGHAM RRF HOLD CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) as trustee for EAST ROCKINGHAM RRF HOLD TRUST
Fourth Plaintiff
AND
ACCIONA CONSTRUCTION AUSTRALIA PTY LTD
First Defendant
ACCIONA INDUSTRIAL AUSTRALIA PTY LTD
Second Defendant
ACCIONA M&E PTY LTD (FORMERLY JOHN BEEVER (AUST) PTY LTD)
Third Defendant
HITACHI ZOSEN INOVA AG
Fourth Defendant
HITACHI ZOSEN INOVA AUSTRALIA
Fifth Defendant
Catchwords:
Practice and procedure - Application for inspection of physical items and documents and electronic documents - Whether disputed items and documents may be relevant to issue in proceedings - Whether orders for inspection or discovery should be made - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA) O 28 r 2, O 52 r 2
Result:
Application for inspection of physical items and documents allowed
Limited order for inspection of electronic documents
Orders made for discovery of electronic documents
Category: B
Representation:
Counsel:
| First Plaintiffs | : | S K Dharmananda SC, L N Firios & N L Pham |
| Second Plaintiff | : | S K Dharmananda SC, L N Firios & N L Pham |
| Third Plaintiff | : | S K Dharmananda SC, L N Firios & N L Pham |
| Fourth Plaintiff | : | S K Dharmananda SC, L N Firios & N L Pham |
| First Defendant | : | C Young KC & P Tydde |
| Second Defendant | : | C Young KC & P Tydde |
| Third Defendant | : | C Young KC & P Tydde |
| Fourth Defendant | : | A-M K Wholley & R Edwards |
| Fifth Defendant | : | A-M K Wholley & R Edwards |
Solicitors:
| First Plaintiffs | : | King & Wood Mallesons |
| Second Plaintiff | : | King & Wood Mallesons |
| Third Plaintiff | : | King & Wood Mallesons |
| Fourth Plaintiff | : | King & Wood Mallesons |
| First Defendant | : | Gilbert + Tobin |
| Second Defendant | : | Gilbert + Tobin |
| Third Defendant | : | Gilbert + Tobin |
| Fourth Defendant | : | DLA Piper |
| Fifth Defendant | : | DLA Piper |
Case(s) referred to in decision(s):
Atwell v Roberts [2006] WASC 269
British Xylonite Co Ltd v Fibrenyle Ltd [1959] RPC 252
Crossley v English [2020] WASC 118
HILL J:
(This judgment was delivered extemporaneously and has been edited from the transcript to include references, headings and to correct matters of grammar and expression.)
On 21 November 2024, the plaintiffs filed a writ of summons, together with a chamber summons seeking urgent relief from the court. Since that time, the plaintiffs have filed a number of minutes of orders amending the specific orders sought. Essentially, by the minute of orders dated 13 December 2024 (Minute), the Receivers seek:
(a)orders requiring the parties to issue a joint letter of instruction to an independent solicitor and independent computer expert to undertake an inspection of physical items and documents, as well as electronic documents; and
(b)orders authorising access to certain locations set out in Schedule 2 of the Minute for the inspection by the independent solicitor and independent computer expert, in the presence of a representative and solicitor of the first to third defendants, and separately for the fourth and fifth defendants, of the physical items and documents set out in order 2 of the Minute.
When the matter initially came on for hearing, the plaintiffs had not filed a statement of claim nor had the defendants filed defences. It was my view that, in order to identify the issues in dispute between the parties, it was necessary for this to occur. Orders were made for the filing and service of both a statement of claim and a defence and any counter-claim by the first to third defendants (Acciona parties) and the application was adjourned for hearing until yesterday, 16 December 2024.
The Minute includes a process for the identification of privileged and confidential items, which can be identified prior to the inspection or during the inspection, as well as the provision of a report by the independent computer expert to the independent solicitor by 3 January 2025 and an independent solicitor's report on or before 8 January 2025. It is proposed that any search of the computers will only be done by the Independent Computer Expert.
The application is opposed by the Acciona parties. They say that the plaintiffs have not established a basis on which the court can or should make the orders sought under O 52 r 2, nor are the orders reasonable and necessary. In their submission, the more appropriate course is for orders for discovery to be made and for the matter to proceed in the usual manner; although, they accept that it should be heard on an expedited basis. In addition, a number of objections were raised by the Acciona parties as to the form of the orders including that the obligations contained in the orders are vague and uncertain, and will require intensive supervision by the court.
The fourth and fifth defendants (the KVI parties) agree to the orders proposed by the plaintiffs. In their submission, the plaintiffs' proposal is a practical way to identify the property which is the subject of the dispute, and to commence the process of ascertaining which party owns it, if ownership is not agreed. In relation to the electronic documents, these parties do not wish the Receivers or any party to have unrestricted access to their document management systems, but do not wish to be involved in a lengthy and expensive dispute about ownership. These parties have agreed with the plaintiffs, a process by which the documents over which the first plaintiffs and East Rockingham RRF Project Co Pty Ltd (Project Co) claim ownership to be identified and for these claims to be resolved.
Evidence on the application
In support of the application, the plaintiff read seven affidavits: three affidavits of Christopher Hill filed 22 and 28 November, and 13 December 2024; as well as three affidavits of Zachary Sharp filed 25 and 28 November 2024, and 13 December 2024; and an affidavit of Antonetta Carroll filed 22 November 2024.
In opposing the application, the Acciona parties read three affidavits of Mr Sorto filed 26 and 27 November, and 3 December 2024, as well as two affidavits of Mr Taylor filed 4 December and 16 December 2024. The KVI parties read an affidavit of Richard Edwards, which was filed on 3 December 2024.
Factual background
The relevant factual background to the application can be briefly summarised as follows.
The plaintiffs are the Receivers and Managers of three companies: East Rockingham RRF Hold Co Pty Ltd, Project Co, and East Rockingham RRF Finance Co Pty Ltd (Companies), having been appointed on 28 October 2024.
These Companies are developing a waste-to-energy recovery facility (Project) in East Rockingham, Western Australia (Site). The construction of the Project is governed by an EPC Contract dated 20 December 2019 between Project Co, and an unincorporated joint venture between the three Acciona parties and the KVI parties.
The Site is currently under the control of the first plaintiffs. On 28 October 2024, the Receivers gave notice suspending all works (with immediate effect) and terminating the EPC Contract for convenience as from 5.00 pm on 18 November 2024 (Notice). The Notice purported to give directions to the Acciona parties:
(a)pursuant to cl 33.14, to identify any goods or materials located off Site and for immediate steps to be taken to return them to Site; and
(b)pursuant to cl 18.7(b)(ii), to provide Project Co with a list of all equipment warranties and for these warranties to be transferred to Project Co.
Following the termination of the EPC Contract as at 5.00 pm on 18 November 2024, there have been ongoing disputes between the Receivers and the Acciona parties as to the Receivers' access to certain documents, laptops and other equipment.
There are a number of demountables at the Site which have been locked by the Acciona parties. These parties say that these demountables contain items which they own and to which the plaintiffs have no interest. They have provided the plaintiffs with a series of schedules which they say adequately summarise the relevant items. The plaintiffs do not accept this and have highlighted a number of items in the schedules provided. It is these disputed items that form part of the plaintiffs' application.
Under s 8.1 of sch 2 of the EPC Contract, the EPCC was required to use Aconex for all document transmittal to Project Co.
The evidence before the court is that each of the parties has their own domain with Aconex and the parties do not have access to anyone else's domain. Each of the KVI parties and the Acciona parties have used separate databases for their internal purposes for the Project.[1] Project Co does not have access to these databases. I note that under the EPC Contract, there was no requirement for this to occur.
[1] Affidavit of Jose Sorto filed 3 December 2024 [6] - [10]; Affidavit of Richards Fairley Frederick Edwards filed 3 December 2024 [27].
Should an order for inspection be made by the Court?
In support of the orders that they seek, the plaintiffs rely on O 52 r 2, alternatively, O 28 r 2 of the Rules of the Supreme Court 1971 (WA) (Rules) as the basis for the orders that they seek.
These Rules relevantly empower the court:
(a)to make an order for the inspection of any property which is the subject matter of a cause or matter, or as to which any question may arise therein (under O 52 r 2); or
(b)where it is alleged that a party has in its possession or control some physical object, not in the nature of a document, to order inspection if the physical object is material for the proper presentation of the party's case (under O 28 r 2).
Order 28 is concerned with the inspection of moveable physical objects and, on its express terms, does not enable the inspection of documents.
In Atwell v Roberts, Master Newnes (as he then was) discussed the purpose of O 52 r 2(1) and some of its limits. Relevantly, he stated that:[2]
It is, of course, plainly the case that the fact a document is discoverable does not preclude an order being made under O 52 r 2(1) for inspection of that document. But O 52 is not an alternative to discovery and inspection under O 26, nor does it, in effect, provide, by another means, discovery and inspection of a more general scope. If it were otherwise it would simply be an avenue by which the requirements and limitations set out in O 26 might be avoided, notwithstanding that those requirements and limitations exist for good reason, including to limit the ambit of the documents required to be produced by a party so as to facilitate the timely disposal of the action and to save costs.
While the words of O 52 r 2(1) should be given a liberal construction, obviously there must be limitations upon their application. It is neither necessary nor appropriate on this application to attempt to define the precise ambit of O 52 r 2(1). Suffice it to say that O 52 r 2(1) is directed to the inspection of physical objects, including, where appropriate, documents. It will generally apply to a document where what is in issue is the form of the document or by whom it was made, such as whether the document is a forgery; but not where what is in issue is the content of the document, where the application for inspection is governed by the rules as to discovery of documents (citations omitted).
[2] Atwell v Roberts [2006] WASC 269 [14] - [15].
In seeking an order for inspection, it is not necessary for a plaintiff make out a prima facie case of infringement before a court will order inspection. Provided a defendants' interests are properly safeguarded, courts will order inspection if they are satisfied there is a substantial and genuine issue to be tried.[3]
[3] British Xylonite Co Ltd v Fibrenyle Ltd [1959] RPC 252, 263 (Romer LJ).
In Crossley v English, Smith J at [34] of her reasons for decision summarised the relevant questions for the court on an application such as the one before me. These questions were summarised as:[4]
(a)whether inspection and/or sampling will assist in determining the plaintiffs' claim, or whether there is some evidence that the plaintiffs' rights are being infringed and that an inspection will facilitate proof of the claim; and
(b)whether an inspection is likely to save time and costs in the long run.
What are the issues between the parties?
[4] Crossley v English [2020] WASC 118 [34].
It is trite that the issues between parties are defined by the pleadings.
At [11] of the plaintiffs' statement of claim, the plaintiffs set out the relevant definitions in terms of the EPC Contract on which they rely. Senior counsel for the plaintiffs emphasised the breadth of the definitions of 'Work', 'Documentation' and 'Design Documentation'. Relevantly, 'Works' is defined to mean, among other things, all activities that must be undertaken and completed by the EPCC in accordance with the Agreement in order to design, construct, commission and rectify Defects in the RRF. 'Documentation' and 'Design Documentation' specifically include computer-readable documents.
Where the EPC Contract is terminated for convenience, the EPCC is required to take such action as directed in writing, or is otherwise reasonably necessary for the transfer, protection and preservation of any Works and any property in its possession which Project Co has, or may acquire an interest under the EPC Contract.
The plaintiffs say that, on the proper construction of the EPC Contract, the Works were divided into separable portions and Project Co is entitled to all goods, materials and Documentation for which it has paid.
In respect of the KVI parties, the plaintiffs say that Project Co has paid them almost $99 million for milestones 1 to 17 under the EPC Contract, and that there were only five milestones which were yet to be completed, including Practical Completion takeover. In respect of the Acciona parties, the plaintiffs say that Project Co has paid them more than $239 million for milestones 1 to 25. Ten milestones are yet to be completed, most of which are commissioning and Practical Completion.
The plaintiffs say that as a consequence of the payments it has made, the incorporation of goods and materials into the Work, the passage of time, including the passing of the Scheduled Date of Practical Completion, as well as the termination of the EPCC, title in the matters pleaded in [26(i)] to [26(ix)] of the statement of claim has passed to Project Co. These matters include Design and As Built Documentation, all draft and final manuals, all things intended to form part of or incorporated into the Works, as well as all Commissioning and Testing records.
The plaintiffs seek declarations to this effect and delivery up of all relevant material.
In their defence, the Acciona parties admit that many of the pleaded terms and definitions of the EPC Contract form part of the EPC Contract. However, they deny that there was any enforceable Scheduled Date of Practical Completion or that many of the terms relied upon by the plaintiffs survived termination. These parties deny that on the proper construction of the EPC Contract, the Works were divided into separable portions or that 'Documentation' includes 'Equipment' or 'Materials', as those terms are defined under the EPC Contract.
The Acciona parties admit that property has been locked in the Acciona Site offices, but deny the plaintiffs have any entitlement to access these offices or that there is any basis which requires the plaintiffs to access these offices to undertake the Works or entitles them to determine what is located in the offices. They deny that Project Co is entitled to any of the matters set out in [26] of the statement of claim for two primary reasons. First, any contractual rights to these matters did not survive termination of the EPC Contract. Second, any entitlement to these matters only arose on the Date of Practical Completion, which has not yet occurred.
In relation to the claim for delivery up of the Design and As Built Documentation, the Acciona parties say that cl 16.10 sets out their obligations for the provision of these matters which only arose on either the Date of Practical Completion or 60 days after Practical Completion had occurred, neither of which has happened.
Senior counsel for the plaintiffs denied that this is the proper construction of the EPC Contract, and said that on its proper construction, having paid $239 million to the Acciona parties, Project Co is entitled to all Documentation for all of the Milestones that have been paid.
I note that the defence filed by the Acciona parties includes a counterclaim which contends they are entitled to immediate possession of the Site offices as well as their contents, and also pleads that Project Co has acted unconscionably as the extension of time regime under the EPC Contract is inoperable and seek declarations pursuant to s 237 of the Australian Consumer Law to this effect.[5] They say that, as a consequence, there is no enforceable Scheduled Date of Practical Completion. In submissions, senior counsel for these parties accepted that leave is required to advance the counterclaim and that these matters overlap with the Federal Court Proceedings. At present, no application for leave is before this court and for this reason, I have disregarded the content of the counterclaim in determining this application.
What orders should be made?
[5] Competition and Consumer Act 2010 (Cth) sch 2, s 237.
It is clear on the terms of O 52 that the discretion conferred by this rule is wide. Given this, the court should not readily impose conditions or seek to limit the discretion in a manner which is not found in the text of the rule itself. The purpose of the rule is to promote the efficient and economic conduct of litigation. For this reason, if the outcome of an inspection tends to bring about a more efficient or economic conduct of the litigation, the court will ordinarily exercise its discretion in favour of there being an inspection unless there is a countervailing reason or circumstance. That said, an order for inspection should not be made unless, on the material before the court, it is proper to do so based on the issues in the proceedings, as defined by the pleadings.
In this case, it is clear from the pleadings that there is a very significant dispute between the parties as to whether the plaintiffs are entitled to the categories of goods, materials and documents set out in [26] of the statement of claim.
It is not necessary, nor is it appropriate, for the purposes of this application to determine this issue. This should await the trial of any action. It is sufficient, in my view, for the purposes of this application, to express the view that the plaintiffs' claims, including their construction of the EPC Contract, are open and that at trial, it is possible the plaintiffs will establish an entitlement to the documents and items set out in [26(i)] to [26(ix)] of the statement of claim.
Senior counsel for the Acciona parties submitted that a notice issued by the plaintiffs on 13 December 2024 under the EPC Contract was a 'white flag' and that the court should not order the inspection as there was a contractual entitlement which could be relied upon by the plaintiffs. In support of this submission, he referred to the statement of Master Newnes (as he then was) in Atwell v Roberts that:[6]
If, on the other hand, the plaintiffs simply seek to enforce rights to inspection which are separate to these proceedings, being contractual rights to inspect arising under the partnership agreement, then O 52 r 2(1) has no application. Such an application would have to be brought in separate proceedings to enforce those rights.
[6] Atwell v Roberts [2006] WASC 269 19].
In my view, this statement does not assist in the resolution of this application. This is because, in that case, the plaintiffs' claim concerned whether procedures to transfer units had been followed and whether certain payments were authorised. Quite separate to this claim, a representative of the plaintiffs had sought to inspect various books of accounts, which had been allowed in part. It is clear, in my view, from the reasons of Master Newnes (as he then was), that the documents sought to be inspected included documents which were not relevant to the issues in the proceedings.
That is not the position in this case. On the plaintiffs' case, the documents (both physical and electronic) which are the subject of the application for inspection are centrally relevant to the issues raised in the proceedings - namely, whether these documents are the property of Project Co or the Acciona parties.
Schedule 3 to the plaintiffs' minute of orders contains three separate documents, each of which has a number of items highlighted. The first is entitled 'Commissioning Tools and Equipment' and includes descriptions such as 'steel lockable cupboard and contents', 'steel lockable cupboards and contents including drawings, manuals, tools', as well as laptops and tablets. In this regard, I accept the plaintiffs' submission that the current listing or cataloguing of these items is plainly inadequate.
On this basis, I accept that there is some evidence that documents, to which the plaintiffs may be entitled to, have not been provided and may be located within the disputed items as well as on electronic databases.
Given the current impasse between the parties, for two primary reasons, it is my view that inspection of the highlighted items in Schedule 3 will facilitate proof of the plaintiffs' claim as to whether it is entitled to these items and that an inspection of these items is likely to save time and costs in the long run. First, these items are located on Site which is controlled by the plaintiffs and not the Acciona parties. Second, the Acciona parties have asserted that they have provided an adequate description of these items, which I do not accept.
However, in my view, the position in relation to the electronic documents can be distinguished. While I accept that it is arguable that there are documents on the Aconex database (as well as on any individual databases operated by the Acciona parties and the KVI parties) that may be the property of the plaintiffs, for the following reasons, I am not convinced that an order for inspection should be made in the terms sought by the plaintiffs.
First, in my view, this aspect of the chamber summons is more properly the subject of an order for discovery. From the limited information available to me, I consider that discovery is likely to be more timely and cost-effective.
Second, the primary issue in respect of these documents is the content of the document and not the form of the document or by whom it was made. Given this, the more appropriate order is that discovery be ordered.
Third, the detailed description of these documents that is likely to be required in order for submissions to be made as to the ownership of these documents should, in my view, be done by the parties to the litigation and not an independent party with only limited knowledge of the issues between the parties.
That said, it is my view that it would be appropriate to make a more limited order in respect of the inspection of the electronic documents of the Acciona parties. In my view, this should be limited to an inspection of these parties' domain in the Aconex database in order to export a list of the types of documents and numbers of these documents, consistent with the list that is at annexure 'RE-10' of the Edwards Affidavit. I consider that the inspection of the database to enable the production of this list is unlikely to be expensive or take any significant time period. In addition, production of a list of this nature will focus on the form of the document and authorship, consistent with the purpose of O 52 r 2.
In relation to the form of the orders proposed by the plaintiffs, it is my view that a number of amendments should be made to ensure that instructions given to the independent solicitor and independent computer expert are clear, that the task that each is required to do is adequately defined, and that all parties' interests are appropriately protected. However, I am not persuaded that these amendments should include any undertaking as to damages. This is not a precondition to the making of an order under O 52 r 2, nor have any authorities suggested that it should routinely be required.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KC
Associate to the Honourable Justice Hill
2 JANUARY 2025
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