Ipex ITG Pty Ltd v Melbourne Water Corporation
[2005] VSC 78
•24 March 2005
changes
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
LONG CASES LIST
No. 5249 of 2003
| IPEX ITG PTY LTD (ACN 007 433 623) | Plaintiff |
| v | |
| MELBOURNE WATER CORPORATION | Defendant |
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JUDGE: | Byrne J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 7 March 2005 | |
DATE OF JUDGMENT: | 24 March 2005 | |
CASE MAY BE CITED AS: | Ipex ITG Pty Ltd v Melbourne Water Corporation | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 78 | |
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Practice and procedure – pleading – whether sufficient in form – whether sufficient particulars.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P J O’Callaghan QC with Mr A W Sandbach | AJH Lawyers |
| For the Defendant | Mr G H Garde QC with Mr M G Roberts | Allens Arthur Robinson |
HIS HONOUR:
In this proceeding the plaintiff, Ipex ITG Pty Ltd (“Ipex”), brings claims to enforce or for damages for breach of a contract entered into between it and the defendant, Melbourne Water Corporation (“MWC”), dated 27 July 2000 (“the Services Agreement”). The application before the Court is made by Ipex by notice under summons for directions for leave to file a fourth amended statement of claim. This is opposed by MWC on the ground that the proposed pleading is bad in form and does not set out the material facts which give rise to the claims.
This case has had a chequered history. Much of the last 12 months has been occupied by Ipex seeking to put its claim in proper form. For this reason, and because of the complexity of the claims, I assumed on 11 June 2004 the management of the case through its interlocutory stages. This imposes upon me a general obligation to ensure, as far as possible, that the case is made fit for trial. I have for this reason reserved my decision in this application so that I can undertake an analysis of the claims which Ipex is having such difficulty in formulating. Strictly speaking, however, the matter for my decision is a pleading dispute. I will therefore allow the amendment if it is in proper form, accepting as I must for present purposes, that the assertions of fact will be made out. Nor am I concerned with any argument that the proposed claim or any part of it is futile in the sense that this is understood in General Steel Industries Inc v Commissioner for Railways (NSW)[1].
[1](1964) 112 CLR 125 at 129, per Barwick CJ
The Contract
The Services Agreement between Ipex and MWC is Contract No 6038 whereby Ipex agreed to provide to MWC information technology infrastructure Services for three years commencing 1 August 2000. The Services Agreement is in writing and comprises 471 pages of considerable complexity, 34 of which comprise the articles of agreement which are in a fairly conventional form.
Central to the Services Agreement is the obligation of MWC to pay a Services Fee for the Services agreed to be provided[2]. The Services Fee is defined in cl. 1.1 by reference to Schedule 3, Item 1. This Item simply identifies the fees as those “set out in Schedule C, Fees and Charges of the Service Provider’s[3] correspondence”. Schedule C comprises 23 pages of figures broken up in different ways, including monthly and annual summary costs for different teams of personnel to be provided by Ipex or for activities to be performed by them. The total cost shown in that schedule is $4,639,217. It does not appear on the face of the document that the component parts of the total cost are made up by reference to any given volume of Helpdesk calls.
[2]Clause 4
[3]In much of the contract documentation Ipex is referred to as the “Service Provider”.
In a letter dated 24 May 2000, which is incorporated in the Services Agreement[4], Ipex provided to MWC a number of written responses to questions on a number of contractual matters including this question 6:
Question:It is not possible to pre-empt every event that may arise in an IT operations area. It is [MWC] expectation that regardless of the event/circumstances you will do what has to be done to provide Services to the level of our SLA without extra cost to [MWC]. Can you please confirm or outline any exceptions?
Answer:Confirmed.
[4]Schedule 2, Section B
Also incorporated in the Services Agreement[5] is a letter from Ipex dated 5 June 2000 which states:
“Ipex confirms that your calculation of $5,218,204 is the total fixed contract price. No variation to the price will occur due to salary increase or CPI increase. Where WMC significantly increases/decreases the number of users or changes the scope of the contract an increase/decrease may occur.”
[5]Schedule 2, Section B
The Services Agreement is dated, as I have mentioned, 27 July 2000. Clause 15 of the articles of agreement makes provision for variations, an expression which is itself defined in cl. 1.1 to mean “any addition, reduction or other alteration to the Services”. Clause 15(a) obliges Ipex to comply with a direction for a Variation and cl. 15(c) deals with the impact of such a direction upon the Services Fee payable:
“If the nature, extent or content of the Services is increased or decreased in accordance with cl. 15(a), the service fee may be increased or decreased by a reasonable amount as determined by the MWC representative. If the Service Provider is dissatisfied with any direction or determination made by the MWC representatives in accordance with this clause, the Service Provider may give notice of dispute in accordance with cl. 22.”
The obligation of Ipex is to perform the “Services”, an expression which is defined in cl. 1.1 as meaning “the work to be carried out by the personnel on behalf of the Service Provider as described in Item 1 of Schedule 2”. This Item 1 is one which is pregnant with difficulty. Instead of setting out with some particularity what work is encompassed by the obligation of Ipex, the Services Agreement merely brings into Item 1 a vast mass of material which is referred to in Sections A and B of that Item. Section A refers to the Services more particularly described in a 128 page document issued by MWC as part of the tender documentation, entitled “Information Technology – Infrastructure Services –Requirements Specification”. I shall refer to this document as “the Requirements Specification”. Section B refers to a volume of material comprising 306 pages which was provided by Ipex as part of its tender and also its post-tender negotiations including the two letters set out above. It is not surprising that these pages contain much material which is of assistance to each party to take up contradictory positions in this litigation.
I include this brief summary of the contractual documentation, not in order to resolve the complexities and inconsistencies which it contains, but to set out the background for the disputes between the parties which Ipex has endeavoured to formulate in its statement of claim which is under challenge. I do this because, since the proceeding was commenced on 17 February 2003, a good deal of criticism has been directed to the Ipex pleading. Ipex responds that this is merely nit picking and that its claim is clear on a fair reading of the pleading. My concern as the judge managing this case is to extract from the document what precisely is the claim of Ipex so that the issues so exposed might be addressed in the interlocutory stages and ultimately at trial in a manageable way. It will also enable me to identify which of the complaints of MWC may be properly put to one side as of no real consequence and to focus on those criticisms which are directed to the core of the Ipex claims.
I should add, too, that Ipex has had abundant opportunity to remedy the deficiencies and conceptual flaws exposed in its pleading over the past months. I regret that these same deficiencies appear very often to recur with each amendment. The inference which I am inclined to draw from this is that the problem lies. not in any or lack of skill on the part of its legal advisers, but rather in inherent weaknesses in its case. The time has now come to deal with the pleading with some severity.
The Ipex Claims
I should record at the outset one matter which I was told underlay all but one of the Ipex claims. It is that the Services provided by Ipex under the Services Agreement were, for the most part, provided in response to Helpdesk calls. Accordingly, the number of Helpdesk calls in any given month is a good indicator of the amount of work performed. I must say that my examination of the Services Agreement far from confirms this assertion, but it is made in paragraph 5 of the statement of claim and I must, for present purposes proceed on that basis. Even so, it is necessary to bear in mind, as the pleaders appear not to, that Helpdesk calls do not constitute Services or work,[6] nor are they the equivalent of Services; it is just that “the great bulk of the Services”[7] are provided in response to them. Moreover there may be many reasons why the number of Helpdesk calls increased. For example, it may be that there is an increase in the number of calls because the Service Provider was not performing the Services adequately. Experience shows that when an inadequate response is made to a call for technical help, it may be necessary to make a further call for the technician to return to complete or properly perform the work. This is a matter which the claim must address, for Ipex cannot expect to obtain extra payment simply because it has failed to perform its work adequately.
[6]Cf paras 14(a) and 14(b)
[7]Paragraph 5.
The statement of claim is itself a formidable document. It comprises 33 paragraphs over 17 pages and also more than two large folders of schedules. The plaintiff puts its claims for extra payment under seven causes of action:
(1) A breach of a term of the Services Agreement that the likely number of Helpdesk calls to be received by Ipex throughout the contract would be of the order of 433 per month.[8] The term[9] is said to be partly in writing and partly to be implied. Insofar as it was written it was contained in Part B, Section 6 of the Requirements Specification. This is a summary of Helpdesk calls received before the Services Agreement was entered into, in the six months from October 1999 to March 2000, broken up by call category. The document shows an average of 433 calls per calendar month. The breach alleged is that the average number of Helpdesk calls actually received during the three year term of the contract exceeded 433[10]. It is said in Schedule 4 that the average monthly number of calls was in fact 795, that is, 183.65% of the number mentioned in the Requirements Specification[11]. The pleaders then allege, not that their client suffered loss and damage by reason of the breach, but rather that, as a consequence, Ipex incurred the extra cost of providing extra staff to satisfy these enquiries[12]. It may be that this should be read as an allegation of loss and damage, but the concepts might be very different. The amount claimed is approximately $9.4M which is particularised in Schedule 4 to the pleading. I shall return to the quantification of this loss and damage later.
[8]Paragraphs 9, 12 and 13
[9]Paragraph 9
[10]Paragraph 14(a)
[11]Schedule 4
[12]Paragraph 13, Schedule 4
(2) A breach of a term of the Services Agreement that Ipex would apply an average of 12.06 Full Time Equivalent employees (FTEs) per annum during the term of the contract.[13] The term[14] alleged is said to be contained in identified pages of schedule C. These show how Ipex arrived at this number of FTEs as part of its tender. The breach alleged in paragraph 11 does not quite match the term pleaded, for it is said that there was a requirement (presumably by MWC) that Ipex provide an additional 10.09 FTEs per annum. No particulars of this requirement are given and no consequence of this breach is pleaded, so that these allegations go nowhere. I shall say nothing further of this cause of action except that paragraphs 10 and 11 should be deleted as otiose.
[13]Paragraphs 10 and 11
[14]Paragraph 10
(3) An entitlement to an adjustment of the Services Fee pursuant to a term of the Services Agreement which permitted this where there was “a significant change in the workload required to provide the Services”.[15] Much of the difficulty caused by the allegations in support of this claim arises from the fact that the allegations do not follow a conventional logical sequence. It is worth identifying how these matters are sought to be dealt with in the pleading –
[15]Paragraphs 14(a), 15, and 16
Paragraph 15: A term is alleged that the Services Fee will be modified in the event of a significant change in the workload. The term is particularised in the paragraph as being that contained in cl. C2.1 of Schedule C to the Services Agreement and in cl. A2.15.1 of the Requirements Specification which was provided to tenderers. In each case, the tenderer provided details of its charges so that the service fee could be modified up or down “as facilities and Services are added or discontinued, workloads change significantly and new developments are brought into operation”.
Paragraph 14(a) The additional Helpdesk calls over 433 per month constituted a significant change in the workload.
Paragraph 16 As a consequence, the “contract price” should be modified by a fair and reasonable amount.
Schedule 4It is here that the fair and reasonable amount is calculated.
I shall refer later[16] to this claim in a little more detail. Alternatively, it is alleged in paragraph 19 that this term is to be implied.
[16]At [36] and [38] below
(4) An entitlement to an increase in the service fee pursuant to a term of the Services Agreement[17] that this will occur if there is a change in the scope of the Services agreement. This claim, too, may be analysed as follows –
[17]Paragraphs 14(b), 17 and 18
Paragraph 17 A term is alleged that the contract price may be increased in the event of a change in the scope of the Services Agreement. This term is particularised as arising from the letter dated 5 June 2000 which is set out at [6] above.
Paragraph 14(b) The additional Helpdesk calls over 433 per month constituted a change in the scope of the Services Agreement.
Paragraph 18 As a consequence, the “contract price” should be increased by a fair and reasonable amount.
Schedule 4It is here that the fair and reasonable amount is calculated.
I shall return later[18] to this claim in more detail. In paragraph 19 it is said in the alternative that the term is to be implied.
[18]At [36] and [39] below
(5) In paragraphs 20 and 21, Ipex claims $151,382.19 being an unpaid monthly instalment of the service fee in November 2002.
(6) A further claim, in the alternative to claims (1), (3) and (4), is made for an increase in the service fee consequent upon a variation ordered in February 2002 pursuant to cl. 15 of the agreement.[19] The amount claimed is $6,661,853.42 as particularised in Schedule 8. I shall return also to the calculation of this amount in due course.[20]
[19]Paragraphs 22 - 27
[20]At [22] below
(7) The claim is next put as one for damages for misleading and deceptive conduct contrary to the Trade Practices Act 1974. [21] The MWC statement as to the number of Helpdesk calls in the six month period to March 2000 which is contained in the Requirements Specification is said to amount to a representation that Ipex could expect a similar volume of calls throughout the term of the contract[22]. Then follow allegations of reliance and falsity and of loss and damage. On this last point, the claim appears to be again the sum calculated under Schedule 4.
[21]Paragraphs 28 - 33
[22]Paragraph 19
Quantum
The measure of the increase in Services Fee or damages, as the case may be, which is set out in Schedules 4 and 8, in each case is pleaded as a theoretical claim. It is nowhere asserted that Ipex actually provided any specific extra or different services or incurred specific extra cost as a consequence of what is alleged. The calculation starts from the proposition that the contract price was based on an average number of 12.06 FTEs per annum. The reference in the pleading to parts of Schedule C to the Services Agreement suggests that this figure is arrived at as follows:
Personnel
Average FTE pa
Client Business Management Group
0.30
Project Administration Group
0.22
Technical Standards and Architecture Group
0.20
Management Administration and Training
0.16
Service Delivery Group
4.74
Desktop Support Group
5.44
Total
12.06
This Schedule C was provided by Ipex as part of its tender, breaking up its costs as required by MWC.
What is then put is that, in the case of the Schedule 4 claims, the number of Helpdesk calls received over the term of the contract averaged 183.65% of those expected. This meant that the 12.06 FTEs should also be increased by 83.65%, that is, by 10.09 FTEs per annum. This is converted into cost by calculating the number of working hours over the three years of the contract, namely 5,647.5 hours, and multiplying this by 10.09, being the number of extra FTEs, producing a total of 56,987.22 FTE hours. The cost per FTE hour including GST is then given as $165. The total claim under Schedule 4 is therefore $9,402,890.97.
The claim under Schedule 8 follows the same methodology. In this case the comparison is between the number of desk calls set out in the Requirement Specification, namely 433, and the average monthly calls after February 2002 when the variation was ordered. This average monthly figure is 946, that is, 218.53% of the number in the Requirements Specification. The same calculation is then applied to this excess of 118.53% in the FTEs required for the balance of the contract period, again at the rate of $165 per FTE hour, producing a claim of $6,661,853.42.
From the point of view of a judge managing this case, it is worth bringing to light that the facts that underlie this quantification methodology and which will have to be addressed in order to establish the quantum, include the following which appear to be implied in the pleading and in the particulars.
(1) The contract figure of 12.06 FTEs per annum was arrived at in the Ipex tender on the basis that 433 Helpdesk calls per month would be received.
(2) The number of Helpdesk calls encountered in the contract period was in truth a reflection of some change in the MWC requirements rather than the result of some deficiency on the part of Ipex. This may, however, be a matter of liability or causation rather than of quantification.
(3) The number of Helpdesk calls is directly related to the amount of Services provided so that an increase in the number of calls produces a like increase in Services.
(4) The increase in Services provided is reflected by a like increase in the FTEs required to provide those Services.
(5) The increase in FTEs required to provide the Services applies equally to all personnel involved. This means that the increase in Services is reflected in a like increase in FTEs in management and design as it is with technicians.
(6) The cost per FTE hours is a uniform $165 for all personnel and is reasonable.
The MWC Complaints
I turn now to the MWC complaints. I am concerned, for reasons previously outlined, that the pleading should clearly set out the facts which Ipex must assert to make good its claims and that it do so with sufficient particularity to enable the trial to be conducted fairly to both parties. I am concerned that vague allegations on very significant matters may conceal a claim which is merely speculative. If this be not the case, Ipex must put its allegations clearly. Finally, I am concerned that the trial judge have some firm basis for making rulings on relevance. I am conscious of the fact that this is a very substantial claim and that the trial will be a very complex one. It behoves me as managing judge, therefore, to ensure that the only claims which go to trial are those which Ipex is able to set out in a coherent and detailed form.
Paragraph 3
It is said, correctly in my view, that the pleading does not particularise the Services Agreement. I will order that the usual particulars be provided.
Paragraph 5
It is said that the expression “the great bulk of Services required to be provided by the plaintiff was consequent upon the making of a Helpdesk call" is uncertain and therefore embarrassing. As appears from my analysis of the Ipex claims, this assertion underlies all but one of them, both as to liability and quantum. As I have mentioned, it is not self-evident from an examination of the Services Agreement that the pleaded assertion is correct. For example, establishment, design and management work may not be undertaken following a Helpdesk call.
On behalf of Ipex, it was said that this is a matter of evidence. This may be so, but it provides no answer to the complaint. It is said that this paragraph leads into paragraph 6. Indeed, this is so. It is for this reason, as well, that Ipex must set out in detail what Services it was required to provide consequent upon a Helpdesk call and what it was required to provide otherwise.
It is said that the information is contained in Schedule 3. This is not correct. Schedule 3 records the calls in fact received and a classification of the type of call. It says nothing about what was required of Ipex under the Services Agreement. I will not accept paragraph 5 in its present form.
I add, too, that paragraph 6 suffers from an associated difficulty. In it Ipex alleges that the number of FTEs can be calculated by reference to the number of Helpdesk calls likely to be received. Given the importance of this assertion, it would be very helpful and conducive to the preparation of evidence for trial on both sides, that Ipex disclose how this is calculated.
Paragraph 7
Complaint is made of the expression “of the order of 433”. There is no substance in this. The figure is evidently the average of the six monthly totals in the summary contained in the Requirements Specification. The allegation as to the advice given by MWC as to the number of Helpdesk calls likely to be received is that it is to be inferred from the history recorded in this document. I will accept paragraph 7.
Paragraph 8
This paragraph refers to a calculation undertaken by Ipex at the time of tender. I suspect that it is as I have mentioned in paragraph [20] above. In any event, the particulars must be provided.
Paragraph 9
Three criticisms are addressed to this paragraph I agree that the words “inter alia” in Particular (i) cannot stand. Ipex must either abandon those words or exhaustively specify the conduct relied upon. I reject the other complaints. I will not accept paragraph 9 in its present form.
Paragraph 10
The criticism here is addressed that the allegation that the Services Agreement contained a term as to the number of FTEs per annum which Ipex would provide. It is said that the documents referred to in the particulars do not support the pleaded term. I am here concerned with the form of the plea, not whether it will succeed. In form, the content of the pages in Schedule C which is incorporated in the Services Agreement, sufficiently identify what is alleged. I will, nevertheless, not accept this paragraph or paragraph 11 as they go nowhere.
Paragraph 11
I agree that Ipex should have provided the usual particulars of the “requiring” here alleged, but the question no longer arises.
Paragraphs 12 and 13
I reject the complaint that the expressions “far in excess of” and “be of the level of” are vague and uncertain in the circumstances of this case. The particulars make sufficiently clear what is meant. I will accept paragraphs 12 and 13.
Paragraph 14
Certain of the criticisms directed to the claims made in this paragraph and those associated with it are concerned with matters of detail and I shall pass over them. A more significant criticism is that the pleaders treat as equivalent the excess of Helpdesk calls and a change in the workload required and such an access with a change in the scope of the Services Agreement. I am mindful of the allegation in paragraph 5 that the great bulk of services required to be provided was consequent upon the making of a Helpdesk call. Nevertheless, counsel for MWC are correct in drawing attention to the fact that a change in the number of Helpdesk calls does not constitute a change in the workload, nor does it constitute a change in the scope of the Services Agreement. Some thing or things must be alleged to tie these two concepts logically together. I gather from what I was told from the bar table that the case of Ipex in this part of its claim is that the increase in Helpdesk calls led to an increase in services which were required and that this increase constituted a significant change in the workload for the purposes of the claim made under paragraph 15(a). Likewise, this logic leads in paragraph 14(b) to the conclusion that the increased number of Helpdesk calls brought about a change in the scope of the Services Agreement. In each case a further allegation, sufficiently particularised, needs to be inserted to connect the extra calls with some change in the requirements of MWC. Ipex cannot, by omitting this step, be permitted to cast upon MWC the burden of demonstrating that this is not so. Furthermore, in the case of the paragraph 14(b) claim, the pleading must explain precisely how it is that the scope of the agreement was changed by a change in the work required to be performed under that agreement. I remind myself again that I am not here concerned with the prospect of success of these pleas but rather whether they, logically, provide a satisfactory basis for the relief sought. I will, however, not allow paragraph 14 and those dependent upon it.
Paragraph 15
The complaint here is that, properly construed, the documents referred to in the particulars do not support the term alleged. This is not a complaint as to form. I express no view as to whether the term will be made out at trial.
Paragraph 16
There is no substance in the complaint here. It is true that the paragraph does not contain any assertion as to what is a fair and reasonable amount. Perhaps it should. But the information is contained in Schedule 4. It is apparent from this Schedule that the case of Ipex is that the calculation of the increased workload is largely theoretical and will depend upon the matters I have identified in paragraph [23] above, rather than proof of any actual workload compared with some benchmark. I will accept this paragraph.
Paragraph 18
MWC makes the same complaint about this paragraph as it does about paragraph 16. I make the same reply. In the case of this paragraph, however, there is a further confusion between the concepts which appear throughout the pleading. Again, it might be helpful that I identify these concepts so that this confusion will cease at this point.
· changes in the number of Helpdesk calls received;
· changes in the volume of services provided by Ipex in response to Helpdesk calls;
· changes in the nature of services provided by Ipex in response to Helpdesk calls;
· changes in the scope of the contract;
· changes in the workload caused by changes to the scope of the contract;
· changes in the cost of performing the changed contract.
In the light of this and of my analysis of this claim in paragraph [16] above, I set out paragraph 18 in full.
“18.By reason of the matters alleged in paragraphs 14(b) and 17 the contract price should be increased for the significant change in the workload caused by the change in the scope of the Services Agreement by an amount which is fair and reasonable.
Particulars
Particulars are contained in Schedule 4 hereto.
It is apparent that this paragraph does not correspond to the term alleged in paragraph 17 which requires, as a precondition to an increase in the contract price, not a significant change in the workload, but a change in the scope of the Services Agreement. I will not allow paragraph 18 in its present form.
Paragraph 19
Accepting that the particulars given are the only matters relied upon as giving rise to the implication, this plea is good in form. I say nothing as to its validity as a matter of law.
Paragraph 23, 25, 26
In paragraph 23, Ipex alleges the directing of a variation for which it claims over $6.6M. The paragraph is in these terms:
“23.The Defendant directed a Variation on or about 1 February 2002 and a written copy of that Variation was provided in writing by the Defendant by letter dated 28 February 2002 (‘the Variation’).”
The particulars refer to Schedule 5 which in essence states that the letter concerns “the Defendant’s relocation and migration project”. The substance od the letter nowhere appears. What was the precise direction is not disclosed and no details otherwise of the content of the letter are provided. The Schedule then goes on to set out what the direction involved, most, if not all, of which appears to be unrelated to the Services which Ipex says it was to provide under the Services Agreement, namely to respond to Helpdesk calls.
I have been shown a copy of the letter. It does not appear that Schedule 5 accurately represents the instruction contained in the letter. This means that the Schedule misrepresents the direction or the direction is to be found in whole or in part elsewhere. On an application of this kind, however, I must accept the pleaded assertions as being accurate.
On a formal level, I will not accept paragraph 23 which appears to draw a distinction, both in the paragraph and in the particulars, between the variation and the content of the letter.
Paragraph 24 alleges that Ipex provided Services “in compliance with the Variation” which are particularised in Schedule 6. This schedule shows that there were Services of an unspecified kind provided in response to Helpdesk calls. It would seem that Ipex was not required to give effect to the relocation and the migration. The particulars given must show what services were provided as a consequence of the variation. I will not accept the paragraph as particularised.
Paragraph 25 alleges that “the nature, extent and/or content of the Services provided by [Ipex] increased in accordance with the variation”. Schedule 7 is said to contain the particulars of this. The relevant information which this Schedule contains is only that the number of Helpdesk calls increased dramatically in February 2002 and following. The unstated assumption is that this was a consequence of the relocation and migration. This is surprising; the increase in February Helpdesk calls appears to pre-date the instruction of 28 February.
It is said on behalf of MWC that, since this is a claim under cl. 15(c) of the Services Agreement, the plea should set out in paragraph 25 the facts which are relied upon as amounting to an increase in “the nature, extent or content of the Services”, for this is a pre-condition to the asserted entitlement to the increase in the Service Fee. I agree. I will not accept the paragraph.
Paragraph 26 then makes a claim for $6.6M which is said to represent a reasonable amount by which to increase the service fee as a consequence of the variation. Schedule 8 sets out the calculation which is again a theoretical claim rather than a claim based on any evaluation of specific extra work which was brought about by the variation. This claim suffers from the difficulties which I have identified in paragraph [23] above and from a further difficulty. Although it is expressed to be in the alternative to the claims based on an excess of work caused by the increased number of Helpdesk calls over 433 per month, the claim uses this same rate of calls as a benchmark. No attempt is made to relate the amount of extra FTEs to the variation. I will not allow it.
Paragraph 29 and 30
The representation here alleged is that Ipex could expect 433 Helpdesk calls per month. It cannot, however, be said that the representation was in writing as the pleaders assert. The document referred to in the particulars speaks of the rate of calls in a period in the past. In order to transform this into a representation as to the future, something more must be alleged. I will not accept paragraph 29 in its present form.
Paragraph 31
The plea of inducement is sufficient in the circumstances.
Paragraph 32
The representation alleged is one as to the future. The pleaders, nonetheless, allege falsity in paragraph 32. In particular (a) it is said that the number of Helpdesk calls before the Services Agreement was more than 433 per month and that MWC knew this. I was told by counsel for Ipex that this allegation related to the calls received in the period from April to July 2000 inclusive. Particulars of the fact and of MWC’s knowledge of it must be given.
Paragraph 33
This paragraph alleges loss and damage. The particulars given are confusing and incomplete. I will direct that they be provided.
Conclusion
I will not accept the proposed statement of claim. I have identified serious formal flaws in paragraphs 5, 9, 10, 11, 14, 15, 16, 17, 18, 23, 24, 25, 26 and 29 and insufficient particulars are given under paragraphs 3, 8, 11, 32 and 33. It may be that other improvements are desirable and may be considered if the plea is to be revisited generally. The plaintiff’s application to amend in terms of the fourth amended statement of claim will be dismissed.
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