Negri Pty Ltd v Technip Oceania Pty Ltd
[2009] VSC 543
•30 NOVEMBER 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
TECHNOLOGY ENGINEERING AND CONSTRUCTION LIST
No. 8281 of 2009
| E.A. NEGRI PTY LTD (ACN 006 251 127) | Plaintiff |
| And | |
| TECHNIP OCEANIA PTY LTD (ACN 062 878 719) | Defendant |
AND BETWEEN: | |
| TECHNIP OCEANIA PTY LTD (ACN 062 878 719) | Plaintiff by Counterclaim |
| And | |
| E.A. NEGRI PTY LTD (ACN 006 251 127) | First Defendant by Counterclaim |
| And | |
| AIBEL PTY LTD (ACN 106 317 793) | Second Defendant by Counterclaim |
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JUDGE: | VICKERY J | |
WHERE HELD: | MELBOURNE | |
DATES OF HEARING: | 27 OCTOBER and 27 NOVEMBER 2009 | |
DATE OF JUDGMENT: | 30 NOVEMBER 2009 | |
CASE MAY BE CITED AS: | NEGRI PTY LTD v TECHNIP OCEANIA PTY LTD | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 543 | |
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Practice and Procedure – Technology, Engineering and Construction List – Application for stay and summary judgment on counterclaim by plaintiff – Rule 23.01 Supreme Court (General Civil Procedure) Rules2005 – Stay and judgment refused - Preliminary question – Question of law – Utility of the preliminary question procedure under r. 47.04 – Whether preliminary question should be determined at an early stage in the proceeding - Whether trial of counterclaim should be split from trial of the claim – Whether part of the proceeding should be referred to a Special Referee to decide pursuant to Rule 50.01(1)(a)
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr G H Golvan QC and Mr J Shaw | Tisher Liner & Co |
| For the Defendant and Plaintiff by Counterclaim | Mr P W Almond QC and Ms P Neskovcin | Clayton Utz |
| For the Second Defendant by Counterclaim | Dr A P Trichardt | HWL Ebsworth Lawyers |
HIS HONOUR:
Background
The Woodside Otway Gas Plant Project (the “Project”) is a large engineering project involving the development of a gas plant at Port Campbell in Victoria.
The principal in the Project was Woodside Energy Ltd (“Woodside”).
The defendant on the proceeding, Technip Oceania Pty Ltd (“Technip”) was the main contractor engaged by Woodside to undertake the Project.
The second defendant by counterclaim, Aibel Pty Ltd, which was formerly known as Vetco Aibel Australia Pty Ltd (“Vetco”), was engaged by Technip as the general works sub-contractor on the Project.
The plaintiff E.A. Negri Pty Ltd (“Negri”) is a civil works and plant hire contractor.
The case pleaded by the plaintiff Negri against the defendant Technip in its amended statement of claim dated 26 October 2008 is a relatively simple claim. Essentially it is this:
(a) By an agreement in writing made 15 November 2004 Vetco engaged Negri to carry out civil works on the Project in the nature of earthworks and roadworks (the “C1 Contract”). Negri carried out these works, which were substantially completed by May 2005.
(b) By a further agreement in writing made 12 January 2005 Vetco engaged Negri to carry out further civil works on the Project in the nature of concrete works (the “C2 Contract”). Negri carried out these works, which were substantially completed by October 2005.
(c) By a further agreement, which was an oral agreement made on 20 June 2005, Technip engaged Negri directly, thus bypassing the involvement of Vetco, to carry out certain additional civil works as directed by Technip from time to time and to commit extra resources to the Project in the nature of more plant and equipment and tradespeople in order to expedite the completion of the Project (the “Additional Works Contract”). Negri under the Additional Works Contract was to be remunerated by Technip on the basis of the rates and prices charged by Negri to Vetco under the C1 Contract and the C2 Contract. The Additional Works Contract was subsequently varied to include Negri carrying out certain additional day works.
(d) Pursuant to the Additional Works Contract as varied, Technip instructed Negri, from time to time, to carry out the additional civil works and the additional day works as required for the Project, and instructed Negri as to the extra resources Technip required Negri to provide.
(e) Between about 21 June 2005 and October 2006 Negri carried out the additional civil works and the additional day works on the Project, as instructed form time to time by Technip, and at its request supplied labour, plant, equipment and materials to expedite the completion of the construction program.
(f) Negri claims that Technip has failed to pay it an outstanding balance of $9,830,833.24 (inclusive of GST) for the services, plant, equipment and materials it supplied under the Additional Works Contract.
By its defence and amended counterclaim dated 10 March 2009, the first group of claims made by Technip are simple enough. It alleges against Negri essentially that:
(a) By a series of agreements for different works and services, Technip engaged Negri between about 25 July 2005 to 11 January 2006 to undertake injection well site civil works; the development of artificial wetlands; the installation of pre-caste concrete drains; the provision of diesel fuel and certain other additional works (the “Other Works and Services”).
(b) Technip then says that, although Negri carried out and provided the Other Works and Services, Technip overpaid Negri for these items in the sum of $1,209,119 (the “Overpayment Claim”). It claims repayment from Negri in this sum.
The second group of claims made by Technip in its amended counterclaim are somewhat more complex. It says essentially that:
(a)By an agreement in writing made about 25 October 2004 Technip engaged Vetco to be the general works sub-contractor on the Project. This was amended by a written addendum dated 23 January 2006 with effect from 16 July 2004 (the “Vetco Sub-contract”).
(b)The Vetco Sub-contract had a number of express terms. Important among these express terms were terms which permitted Vetco to sub-contract works to third parties, such as Negri, in which event Technip would reimburse Vetco for the cost of such sub-contract works together with additional fees payable to Vetco based on a written formula. This is pleaded in paragraph 21 (j) and (k) of the amended counterclaim. The term assumes some importance in the way in which the amended counterclaim as a whole is pleaded.
(c)It is also pleaded by paragraph 22 of the amended counterclaim that there were implied, as a matter of law and in order to give business efficacy to the Vetco Sub-contract, terms as follows:
(a)Vetco will carry out its obligations with reasonable competence and economy; and
(b)Vetco’s entitlement to any costs associated with the Project is limited to such costs as are reasonably incurred.
This term also assumes significance in the way in which the amended counterclaim is pleaded. Indeed, it provides the foundation for substantially the whole of the claims made in the amended counterclaim.
(d)It is also pleaded that Vetco owed Technip a duty to exercise reasonable care, skill, diligence and competence in carrying out its obligations under the Vetco Sub-contract.
(e)It is then alleged that between October 2004 and October 2005, Negri carried out earthworks and roadworks on the Project as Vetco’s sub-contractor (which was the C1 Contract). Negri was paid for these works by Vetco and Technip reimbursed Vetco for these payments, together with the fees as prescribed, pursuant to the Vetco Sub-contract.
(f)It is alleged by Technip that the amounts charged by Negri for the earthworks and roadworks were excessive, with the consequence that it overpaid Vetco by reason of Vetco’s in breach of the express and implied terms of the Vetco Sub-contract, and in breach of the alleged duty of care owed by Vetco to Technip.
(g)Technip claims against both Negri and Vetco damages in the sum of $3,255,001.64 which it says was caused by the alleged overpayments made to Negri.
(h)Alternatively, it claims that the amounts received by Vetco (totalling $3,255,001.64) were paid under a mistake of fact. On this basis it claims the alleged overpayment of $3,255,001.64 was money which Vetco has had and received to the use of Technip (or Vetco has been unjustly enriched by this amount at Technip’s expense). It also claims that the amount of money paid to Negri (totalling $2,995,584.06) was money which Negri has had and received to the use of Technip (or Negri has been unjustly enriched by this amount at Technip’s expense).
(i)Technip also pleads breaches of s.52 Trade Practices Act 1974 and s.9 Fair Trading Act 1999 arising out of alleged representations on the part of both Vetco and Negri by allegedly misrepresenting the amounts to Technip for which Vetco and Negri were entitled to be paid.
(j)Pleas in similar terms are made in relation to the concrete works undertaken by Negri on behalf of Vetco (being the C2 Contract). Overpayments alleged to have been made by Technip for these works total $1,350,498.89 in respect of Vetco and $1,242,866.65 in respect of Negri.
(k)Technip also makes a claim against Vetco in respect of performance bonds to the value of $3,241,303 which purported to guarantee the performance by Vetco of the Vetco Sub-contract. Vetco disputes that Technip is entitled to make any demand under the performance bonds. Technip claims a declaration that it is entitled to make a demand under the performance bonds for payment of the amounts claimed by Vetco.
In these reasons I include my revised reasons for decision which I delivered on 29 October 2009, together with further reasons in respect of the directions hearing conducted on 27 October 2009 and my reasons following the further directions hearing conducted on 27 November 2009.
Rule 23 Applications
The plaintiff Negri, by is summons dated 2 October 2009 sought relief in respect of Technip’s amended counterclaim pursuant to Rule 23.01(1) of the Supreme Court (General Civil Procedure) Rules 2005, which provides for the stay or judgment in a proceeding in the following circumstances:
Rule 23.01
(1) Where a proceeding generally or any claim in a proceeding—
(a) does not disclose a cause of action;
(b) is scandalous, frivolous or vexatious; or
(c) is an abuse of the process of the Court—
the Court may stay the proceeding generally or in relation to any claim or give judgment in the proceeding generally or in relation to any claim.
In the course of submissions, Negri also sought to expand the relief specified in its summons by claiming relief pursuant to r. 23.02 founded upon alleged deficiencies in the pleading of the amended counterclaim. Rule 23.02 provides:
Rule 23.02
Where an indorsement of claim on a writ or originating motion or a pleading or any part of an indorsement of claim or pleading—
(a) does not disclose a cause of action or defence;
(b) is scandalous, frivolous or vexatious;
(c) may prejudice, embarrass or delay the fair trial of the proceeding; or
(d) is otherwise an abuse of the process of the Court—
the Court may order that the whole or part of the indorsement or pleading be struck out or amended.
As has been seen, Technip seeks to make a case in its amended counterclaim, amongst other bases for its claims, that it is entitled to recover moneys paid under a mistake if it is proven that the moneys paid by it were paid in the mistaken belief that it was under a legal obligation to make the payment.
Technip also relied on the proposition that, in order to obtain restitution in respect of moneys paid under a mistake, there is no necessity to prove a mutual mistake. A mistake made unilaterally by the payor is sufficient to found an action against the recipient of the moneys, in this case Negri, if it can be established that the payor, Technip, paid the money under a unilateral mistake.
Technip, in advancing this case, relied upon, amongst other cases, David Securities Pty Ltd v Commonwealth Bank of Australia,[1] where the majority of the High Court said at 378:
[1](1992) 175 CLR 353.
So the payer will be entitled prima facie to recover moneys paid under a mistake if it appears that the moneys were paid by the payer in the mistaken belief that he or she was under a legal obligation to pay the moneys or that the payee is legally entitled to payment of the moneys. Such a mistake would be causative of the payment.
Technip further relied upon two English decisions, the first being Weld Blundell v. Cygnet,[2] where Asquith J observed at 113:
Where what A owes B depends on what A is owed by C, and A, owing to a mistake as to the latter amount, automatically makes a mistake as to the former amount, there is, in my view, a mistake not only between A and C but as between A and B as well.
The second English case relied upon by Technip was Barclays Bank Limited v W.J. Simms & Son and Cook (Southern) Limited,[3] where Gough J stated the principle at 695 as:
If a person pays money under a mistake of fact which causes him to make the payment, he is prima facie entitled to recover it as money paid under a mistake of fact.
However, the plaintiff, Negri, submitted that the claim in restitution in such cases must be made against the payee to whom the moneys were paid in the first instance, and not to some third party recipient into whose hands the funds can be traced. It is submitted that Negri was not the payee to whom moneys were paid by Technip.
[2](1940) 2 KB 107.
[3](1981) QB 677.
Technip also relied upon claims of misleading and deceptive conduct contrary to s.52 of the Trade Practices Act in its amended counterclaim. It says that invoices rendered by Negri to Vetco were misleading and deceptive in that they overstated the amounts which were due and payable to Negri under the Vetco Sub-contract. It is said that this caused loss or damage to Technip because, in acting under the reimbursement clause in the Vetco Sub-contract, Technip paid the amounts claimed on the Negri invoices as it was obliged to do and on the assumption that the amounts claimed by Negri under its invoices were validly due and payable by Vetco to it.
The case law on what is necessary to be proven in order to succeed in an application under Rule 23.01 has recently been considered by this Court in Andeco Construction Group Pty Ltd v Greater Union Pty Ltd.[4] The tests to be applied in an application under Rule 23.01 has been variously expressed, however, in the words of Ormiston J in State Electricity Commission of Victoria v Rabel,[5] his Honour said in summarising the position:
Essentially, however, it has not mattered greatly which words have been used because the test to be applied has been universally expressed in terms that, in order to dismiss summarily an action at a preliminary stage, it must be "very clear indeed" that the action is "absolutely hopeless" or "so clearly untenable that it cannot possibly succeed".
Applying these tests to the impugned causes of action in the amended counterclaim, in my opinion, it has not been established that the cases pressed by the defendant, Technip, absolutely hopeless. At the very least, those cases are arguable.
[4][2009] VSC 470.
[5][1998] 1 VR 108 at 109.
It is undesirable in cases such as this to give detailed reasons for the rejection of an application for a claim to be dismissed or stayed, pursuant to Rule 23.01, just as it is in the case of granting leave to defend under Rule 22.14. In this regard, I refer to the observations of Hollingworth AJA in Ticco Pty Ltd v Complete Family Healthcare Services Pty Ltd,[6] a decision of the Court of Appeal of this Court, with which Charles JA agreed. Accordingly, for the reasons expressed, the applications made in the plaintiff's summons pursuant to Rule 23.01 are dismissed.
[6][2005] VSCA 221 at [34].
That is not to say that the claims as pleaded in the amended counterclaim should not be repleaded in order to satisfy the basic elements of a satisfactory pleading. In particular, the plaintiff in this matter, Negri, submitted that the claims seeking damages founded upon a breach of s.52 of the Trade Practices Act lacked specificity in pleading a causal link between the conduct alleged and the loss or damage alleged to have been suffered.
I accept that pursuant to s.82 of the Trade Practices Act 1974, in order to establish loss caused by a contravention of s.52, the claimant is obliged to prove that it suffered loss "caused by" the offending conduct of the person making the misleading statement or engaging in the relevant conduct in contravention of s.52.
In my opinion, this needs to be adequately particularised in due course in accordance with the principles stated by French J in Bond Corporation v Thiess Contractors Pty Ltd,[7] so as to properly plead the chain of causation which is relied upon in this particular case.
[7](1987) 71 ALR 615.
In this regard, I also refer to the observations of Weinberg J in McKellar v. Container Terminal Management Services Ltd.[8]
[8][1999] 165 ALR 409 at [26].
However, given that Negri’s application pursuant to Rule 23.02 was first raised in written submissions delivered after the conclusion of oral argument and was not claimed as relief in its summons date 2 October 2009, I decline to make any order under the Rule.
Whether the Trial of a Separate Question Should Proceed
During the course of the hearing of Negri’s summons dated 2 October 2009, it became clear that the claims of Technip as against Negri in its amended counterclaim, turn in large part upon the implication of the terms as pleaded by it in paragraph 22.
As has already been observed, paragraph 22 is in the following terms: There were implied terms of the Vetco Sub-contract as amended, as follows: (a) Vetco will carry out its obligations with reasonable confidence and economy, and (b) Vetco's entitlement to any costs associated with the project is limited to such costs as are reasonably incurred. The particulars provided plead the terms are implied as a matter of law and in order to give business efficacy to the Vetco Sub-contract as amended.
This is the foundation upon which the defendant, Technip, seeks to build the principal claims in its counterclaim against Negri in its amended counterclaim.
However, Negri submitted that the terms could not be or should not be implied as a matter of law into the contract in which agreed rates and quantities are fixed. It was submitted further that such terms could not be implied by application of the well known principles in BP Refinery v Codelfa.
Although the matter is likely to be controversial, I cannot say that the case of Technip is absolutely hopeless. Accordingly, Negri’s relief claimed pursuant to Rule 23.01 on this matter should be dismissed.
However, I did consider that, at least potentially, there appeared to be much utility in seeking to determine the question at a preliminary trial. The written terms of the Vetco Sub-contract were likely to be able to be agreed, leaving the question of the implication of the alleged implied term a matter of law.
Although the matter was canvassed by me during the hearing, I was not satisfied that the parties had adequate opportunity to consider or make submissions on the question as to whether the terms ought to be implied as a matter of law into the Vetco Sub-contract as pleaded in paragraph 22 of the amended counterclaim.
Further, Vetco had not been heard on the issue.
Accordingly, I proposed, in order to achieve maximum efficiency in the conduct of this case in accordance with the principles of the TEC List, to order that the matter be listed for directions at the next directions hearing on 27 November 2009, to hear argument upon and determine whether the matters pleaded in paragraph 22 of the amended counterclaim are appropriate to be determined in a separate trial pursuant to Rule 47.04. I also proposed to hearing argument on that occasion as to the formulation of the appropriate question to be determined if such a question was to be determined in a separate trial.
The application of Rule 47.04 was considered by the Appeal Division of this Court in Jacobson v Ross.[9] Brooking J observed[10] that an order for the trial of a preliminary issue may be made notwithstanding the opposition of a party. Indeed, in an appropriate case the Court may order the trial of a preliminary issue of its own motion and notwithstanding that no party desires it. Rule 1.14(2) was referred to, which provides that the Court may exercise any power under the Rules of its own motion or on the application of a party or of any person who has a sufficient interest. It was also noted by Brooking J[11] in Jacobson that:
It is a trial judge’s duty to see that the crucial issues are tried as expeditiously and inexpensively as possible, and the parties’ advisers should help him to carry out this duty: Asmore v Corporation of Lloyd’s [1992] 1 WLR 446 at 448 per Lord Roskill. Rule 47.04 provides a useful means to that end, and a means of combating the gargantuan trial, the modern behemoth now straining to breaking point the fabric of both civil and criminal justice.
... There is a need for a degree of innovation and flexibility if courts are to meet the legitimate expectations of litigants that come before it, particularly in long cases.
[9][1995] 1 VR 337.
[10]at 341.
[11]at 341 and 352.
In this case, the major obstacle facing the trial Judge in Jacobson is not likely to be present in this case, namely that of identifying the relevant facts and their manner of proof. The proposed question for preliminary trial in this case, if it was to proceed by way of a separate trial, would essentially be a question of law determined in relation to a written contract, the contents of which are likely to be uncontroversial. Further, I would not anticipate any difficulty in the formulation of the question for preliminary determination, a matter to which care needs to be applied in administering this procedure.
Nevertheless, I am persuaded that the making of an order for the trial of a preliminary question pursuant to Rule 47.04 would be premature at this stage. This is so, particularly because Vetco has not yet filed any defence to the amended counterclaim of Technip and the economy and efficiency which may be achieved by the making of such an order is not yet able to be fully assessed. In this regard reference may be made to the observations of Kirby and Callinan JJ in Tepco Pty Ltd v Water Board:[12]
[12][2001] HCA 19 at [168]–[170].
The attractions of trials of issues rather than of cases in their totality, are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory ....
Further:
Single–issue trials should, in our opinion, only be embarked upon when the utility, economy and fairness to the parties are beyond question.
See too: Dunstan v Simmie & Co. Pty Ltd[13]; and Idoport Pty Ltd v National Australia Bank[14] per Einstein J.
[13][1978] VR 669 at 671.
[14]NSWSC 1215 at [7(6)].
Accordingly, at least for the present, I decline to make any order for the trial of a preliminary question pursuant to Rule 47.04.
Whether the Trial of the Counterclaim Should be Conducted Separately
By its summons dated 2 October 2009, Negri also sought orders to enable its claims against Technip to proceed separately from the trial of Technip’s amended counterclaim.
Applications were made pursuant to Rule 9.02, Rule 10.03 and Rule 10.06. These Rules provide:
Rule 9.02:
Two or more persons may be joined as plaintiffs or defendants in any proceeding—
(a) where—
(i)if separate proceedings were brought by or against each of them, some common question of law or fact would arise in all the proceedings; and
(ii)all rights to relief claimed in the proceeding (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions; or
(b) where the Court, before or after the joinder, gives leave to do so.
Rule 9.02 may be read in conjunction with Rule 9.04 which provides:
Notwithstanding Rules 9.01 and 9.02, where any joinder of claims or of parties may embarrass or delay the trial of the proceeding or cause prejudice to any party or is otherwise inconvenient, the Court may order that—
(a) there be separate trials;
(b) any claim be excluded;
(c)any party be compensated by an award of costs or otherwise for being required to attend, or be relieved from attending, any part of a trial in which that party has no interest;
(d)any person made a party cease to be a party on condition that that party be bound by the determination of the questions in the proceeding or without any such condition.
Rule 10.03 provides:
A defendant may join with the plaintiff as defendant to the counterclaim any other person, whether a party to the proceeding or not, who, if the defendant were to bring a separate proceeding, could be properly joined with the plaintiff as a party in accordance with Rule 9.02.
Rule 10.03 may be read in conjunction with Rule 10.06 which provides:
Notwithstanding Rules 10.02 and 10.03, where a counterclaim may embarrass or delay the trial of the claim of the plaintiff or cause prejudice to any party or otherwise cannot conveniently be tried with that claim, the Court may—
(a)order separate trials of the counterclaim and the claim of the plaintiff;
(b) order that any claim included in the counterclaim be excluded;
(c)strike out the counterclaim without prejudice to the right of the defendant to assert the claim in a separate proceeding;
(d)order that any person joined as defendant to the counterclaim cease to be a party to the counterclaim.
In spite of an indication given at the directions hearing on 27 November 2009 that the parties should consider further directions on the basis of the separation of the trial of Negri’s proceeding from Technip’s amended counterclaim, on careful consideration of the matter, I am not satisfied that an order splitting the proceeding in this manner ought to be permitted under any of the Rules relied upon by the plaintiff.
The principal submission advanced by Negri was that the counterclaims raised by Technip significantly enlarge the issues before the Court and are in respect of separate and substantial claims. It was submitted, therefore, that it is inconvenient and unjust to Negri to permit the counterclaims to be heard in the same proceeding as the claims by Negri against Technip when they can and should be heard in a separate proceeding.
However, I accept the submissions advanced by Technip, that there is likely to be factual overlap between the facts which found Negri’s claim and the case proposed to be advanced by Technip in its amended counterclaim. This was described by senior counsel for Technip, Mr Almond QC, as “a complete and total overlap”. He said further that “the claims and the counterclaims are inherently intertwined”. Mr Almond also submitted that one of the issues in the case will be the extent to which the works performed under the C1 Contract and the C2 Contract overlapped with the works performed under the Additional Works Contract.
Although I am not yet in a position to determine the precise extent of the overlap, I am satisfied that there is a reasonable prospect of this occurring and there are likely to be common issues in the proceeding, particularly on the question as to what works were in fact done on the Project by Negri, and whether those works or any part of them were undertaken for Vetco or for Technip and under which contract. This becomes plain when the invoices referred to in argument are examined. They prima facie indicate a degree of temporal overlap between the work performed and services provided by Negri under the different contractual regimes.
Although these matters were put in issue by Mr Golvan QC who appeared for Negri, the finding that I have made drives me to the conclusion that, in the exercise of my discretion, I should decline to make orders permitting Negri’s claims against Technip to proceed separately from the trial of Technip’s amended counterclaim.
Whether Parts of the Proceeding Should be Conducted by a Special Referee
Pursuant to Rule 50.01(1):
(1)In any proceeding the Court may, subject to any right to a trial with a jury, refer any question to a special referee for the referee to—
(a) decide the question; or
(b) give the referee's opinion with respect to it.
Again, pursuant to Rule 1.14(2), in an appropriate case the Court may refer any question to a special referee of its own motion and notwithstanding that no party desires it.
It appears to me that the following questions may well be suitable for reference to a special referee for determination in due course, following a determination by the Court as to the terms of the relevant contracts:
1.In relation to Negri’s claims against Technip pleaded in its statement of claim, on the basis of the findings of the Court as to the existence of and the terms of the Additional Civil Works Contract as varied, in respect of the period 21 June 2005 until October 2006:
(a) What sum or sums were paid by Technip to Negri?; and
(b) What sum or sums ought to have been paid by Technip to Negri?
2.In relation to Technip’s claims against Negri and Vetco pleaded in its amended counterclaim, on the basis of the findings of the Court as to the existence of and the terms of the Vetco Sub-contract as varied and the terms of the C1 Contract and the C2 Contract:
(a) What sum or sums were paid by Technip to Vetco?;
(b) What sum or sums ought to have been paid by Vetco to Negri?; and
(c) What sum or sums ought to have been paid by Technip to Vetco?
These matters would be appropriate subject matter for reference to a special referee for determination pursuant to Rule 50.01(1)(a) to decide the questions. As was said by Rogers CJ Comm D in Telecommunicating PCS Pty Ltd v Bridge Wholesale Acceptance Corp. (Aust.) Ltd [15] in describing two common types of cases where it is appropriate to appoint a special referee:
[15] (1991) 24 NSWLR 513 at 517-518
First, where the question requires some technical expertise for its proper understanding and resolution. Building disputes, disputes as to the quality of goods, scientific and technical disputes are prime examples of this class of matter. The view has been taken that it is not cost effective and not an appropriate utilisation of the time of a judge, with presumed commercial expertise, to become acquainted to the
necessary degree with the intricacies of the particular science or trade.
Generally speaking, a report from a person expert in the subject should be
able to be produced more quickly and at less cost. It may also more closely
accord in details with the learning in the specialty. The other category of
matters is where there is detailed examination required of large numbers of
items of which perhaps accounts are a prime example. It is simply impossible
to make available a judicial officer with the time available to check hundreds,
possibly thousands, of disputed invoices, building items, or such like.
The present case would appear to fall into both of the categories of case referred to by Rogers CJ Comm D in Telecommunicating PCS, although this of course is not an exclusive list by any means.
Orders
In my opinion, the trial may conveniently be divided into three phases:
(a)A trial to determine what comprised the relevant contracts (the “Contractual Phase”);
(b)A special reference and report thereon to determine amounts properly due and payable under the relevant contracts by one party to another (the “Monetary Assessment Phase”); and
(c)A trial to determine on what or any basis in law any moneys should be payable by one party to another, and what relief, if any, should be granted (the “Relief Phase”).
I encourage the parties to co-operate in achieving agreement as to the mechanism which best reflects these objectives.
On the return of the summons for directions on 15 December 2009 I will hear the parties on directions which will achieve the following management structure for the proceeding, in the most cost efficient and expeditious manner possible:
The Contractual Phase
(a) Directions which will result in a trial to determine:
(i) the terms of the C1 Contract and the C2 Contract;
(ii) the existence of and the terms of the Additional Civil Works Contract as varied; and
(iii) the existence of and the terms of the Vetco Sub-contract as varied.
The Monetary Assessment Phase
(a)Directions, including the appointment of a special referee to determine and report to the Court on:
(i) What sum or sums were paid by Technip to Negri?; and
(ii) What sum or sums ought to have been paid by Technip to Negri?;
(iii) What sum or sums were paid by Technip to Vetco?;
(iv) What sum or sums ought to have been paid by Vetco to Negri?; and
(v) What sum or sums ought to have been paid by Technip to Vetco?
The Relief Phase
(c)Directions as to the further conduct and determination at trial of the remaining issues in the proceeding, including any payment, which ought to be made by Technip to Negri based on its claim and the legal basis for the same; any restitution, payment or damages which ought to me made to Technip, and by which party (whether by Negri or Vetco or both) and in what amount and the legal basis of the same; and any declaration sought by Technip as to its claimed entitlement to make a demand under the alleged performance bonds.
I make the following orders:
1. The plaintiff’s summons dated 2 October 2009 is dismissed.
2. The summons for directions is adjourned to 15 December 2009.
3. Costs are reserved.
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