McConnell Dowell Constructors (Aust) Pty Ltd v Santam Ltd (No 1) - [2016] VSC 734

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

TECHNOLOGY ENGINEERING AND CONSTRUCTION LIST

S ECI 2014 000497

McCONNELL DOWELL CONSTRUCTORS (AUST) PTY LTD (ACN: 002 929 017)	Plaintiff
v
SANTAM LTD (REGISTRATION NUMBER 1918/001680/06) AND OTHERS (ACCORDING TO THE SCHEDULE)	Defendant

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JUDGE:	VICKERY J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 November 2016
DATE OF JUDGMENT:	2 December 2016
CASE MAY BE CITED AS:	McConnell Dowell Constructors (Aust) Pty Ltd v Santam Ltd & Ors (No 1)
MEDIUM NEUTRAL CITATION:	[2016] VSC 734

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PRACTICE & PROCEDURE – Appointment of Special Referee – Questions as to discovery of documents and inspection of documents in a large document case referred to Special Referee – Reference conducted as a facilitation process rather than an adversarial process - Adoption of Special Referees’ Report –Supreme Court (General Civil Procedure) Rules 2015 (Vic) O 50.

PRACTICE & PROCEDURE – Discovery in a large document case– Use of predictive coding technology (TAR or Technology Assisted Review) – Orders for TAR made in accordance with the recommendations of the Special Referee following a facilitation process conducted with the parties in a reference conducted under O 50 Supreme Court (General Civil Procedure) Rules 2015 (Vic).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T Margetts QC with Ms A Golding	Baker & McKenzie
For the First Defendant	Mr C M Caleo QC with Dr C G Button	Holding Redlich
For the Second and Third Defendants	Mr J Delaney QC	Clyde & Co

HIS HONOUR:

Introduction

In 2014 the Plaintiff (‘McConnell Dowell’) issued proceedings against the First Defendant (‘Santam’), the Second Defendant QBE Underwriting Ltd as managing agent for QBE Syndicate 386 and QBE Syndicate 1886 (‘QBE’) and the Third Defendant Liberty Mutual Insurance Company (‘Liberty’). The proceedings were issued in the Technology Engineering and Construction List.

This proceeding involves a large claim involving tens of millions if not hundreds of millions of dollars arising from the design and construction of a natural gas pipeline in Queensland.

The Construction Contract at the centre of this case and an associated arbitration have generated approximately 4 million electronic or PDF documents. These have been scanned and are available in a searchable format. McConnell Dowell has reduced the number of documents said to be relevant to the present proceeding from approximately 4 million to approximately 1,400,000. The use of predictive coding technology (TAR or Technology Assisted Review) is likely to dramatically reduce this volume and contain it further within reasonable and manageable bounds.

The central issue for the Court is this: given the enormous number of documents generated by the proceeding, how discovery should be managed, consistently with the principles of proportionality and s 9 of the Civil Procedure Act 2010 (Vic.) (the ‘CPA’) which requires the Court to further the Overarching Purpose of the CPA when making orders or giving directions. Section 7 of the CPA provides as to the Overarching Purpose:

Overarching purpose
(1)The overarching purpose of this Act and the rules…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] VSC 734
Decision Date: 2 December 2016

CaseChat Overview and Summary

The case McConnell Dowell Constructors (Aust) Pty Ltd v Santam Ltd (No 1) involved the parties McConnell Dowell Constructors (Aust) Pty Ltd, the plaintiff, and Santam Ltd, the defendant. The nature of the dispute was centred around the discovery of documents and the inspection of documents in a case that involved a large volume of data. This matter was heard in the Supreme Court of Victoria. The dispute arose from a complex construction project where the plaintiff sought damages for alleged breaches of contract by the defendant.

The legal issues that the court needed to decide revolved around the appropriate use of predictive coding technology, also known as Technology Assisted Review (TAR), in managing the discovery and inspection process for large volumes of documents. The court had to determine whether the orders made for TAR were in accordance with the recommendations of the Special Referee following a facilitation process conducted with the parties. This facilitation process was carried out under Order 50 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic).

The court considered the role of the Special Referee in facilitating the process rather than conducting it as an adversarial proceeding. It was held that the Special Referee's role was to assist the parties in reaching an agreement on the discovery and inspection of documents. The court adopted the Special Referee's report and found that the use of TAR was appropriate given the circumstances of the case. The orders for TAR were seen as consistent with the recommendations made by the Special Referee after a collaborative process with the parties.

Orders