SMEC Australia Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd (No 2)

[2011] VSC 492

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION

TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

No. 352 of 2011

SMEC AUSTRALIA PTY LTD

(ABN 47 065 475 149)

First Plaintiff

and

HATCH ASSOCIATES PTY LTD (ABN 59 008 630 500)

Second Plaintiff

v

McCONNELL DOWELL CONSTRUCTORS (AUST) PTY LTD & OTHERS (according to the attached schedule of parties)

(ACN 002 929 017)

Defendants

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JUDGE:	VICKERY J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	20 SEPTEMBER 2011
DATE OF JUDGMENT:	30 SEPTEMBER 2011
CASE MAY BE CITED AS:	SMEC AUSTRALIA PTY LTD v McCONNELL DOWELL CONSTRUCTORS  (AUST) PTY LTD [No. 2]
MEDIUM NEUTRAL CITATION:	[2011] VSC 492

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PRACTICE AND PROCEDURE – Application to strike out Amended Statement of Claim – Rule 23.02 of the Supreme Court (General Civil Procedure) Rules 2005 – Application granted – Plaintiffs ordered to re-plead the statement of claim – Proceeding to be conducted pursuant to a List of Issues once pleadings closed – Practice Note No. 2 of 2009 (TEC List) paragraph 40(g) (List of Issues) applied.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr G.J. Digby QC and Mr D. McAndrew	Baker & McKenzie
For the First and Second Defendants	Mr C.M. Caleo SC and Mr N. Hopkins	Clayton Utz
For the Third Defendant	Mr M. Whitten	Thomson Lawyers

HIS HONOUR:

Introduction

1. The First and Second Defendants make application for the Amended Statement of Claim filed by the Plaintiffs in the proceeding on 20 July 2011 (the “Amended Statement of Claim”) to be struck out pursuant to r 23.02 of the Supreme Court (General Civil Procedure) Rules 2005 (the “Court Rules”).

1. The application raises an important issue as to the role of pleadings in complex cases conducted in the Technology, Construction and Engineering List of the Court (the “TEC List”).

1. Matthew E. May wrote in his book The Elegant Solution: Toyota’s Formula for Mastering Innovation: [1]

In a mathematical proof, elegance is the minimum number of steps to achieve the solution with greatest clarity. In dance or the martial arts, elegance is minimum motion with maximum effect. In filmmaking, elegance is a simple message with complex meaning. The most challenging games have the fewest rules, as do the most dynamic societies and organisations. An elegant solution is quite often a single tiny idea that changes everything.

… Elegance is the simplicity found on the far side of complexity.

[1]Matthew E. May The Elegant Solution: Toyota’s Formula for Mastering Innovation, Free Press, 2007.

1. While elegance in a pleading is not a precondition to its legitimacy, it is an aspiration which, if achieved, can only but advance the interests of justice.  A poorly drawn pleading, on the other hand, which does not tell a coherent story in a well ordered structure, will fail to achieve the central purpose of the exercise, namely communication of the essence of case which is sought to be advanced.

1. Pleading should not be dismissed as a lost art.  It has an important part to play in civil litigation conducted within the adversarial system.  Crafting a good pleading calls for precision in drafting, diligence in the identification of the material facts marshalled in support of each allegation, an understanding of the legal principles which are necessary to formulate complete causes of action and the judgment and courage to shed what is unnecessary. 

1. Although a primary function of a pleading is to tell the defending party what claim it has to meet, an equally important function is to inform the Court or tribunal of fact precisely what issues are before it for determination.

1. Harper J in Downer Connect Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd[2] described the function of pleadings in the following way:

[1]Litigation is sometimes conducted to judgment with barely a glance at the pleadings. It remains generally true that good pleadings are an important, and often crucial, element in the civil justice system. When well drawn, as they always should be, they form the touchstone by which the issues are identified and the relevance of the evidence assessed.

[2]Consistently with this, one of their primary purposes is to reveal to the opposite party how the party pleading puts its case. On reading a well-drawn statement of claim, the defendant to whom it is directed will be able to say: "These are the material facts that will be the subject of the plaintiff's evidence. They tell a coherent, comprehensible story; and, to the extent that any additional evidence is to be called that might cause me to be taken by surprise, here is that evidence outlined in the particulars."

[3]A complaint that the pleadings do not achieve this end is often met with the response that the opposite party knows very well, from documents and perhaps other sources, what the case against it is. This is no answer at all, at least unless the relevant documents are properly incorporated into the pleading. It is, as a general proposition, true to say that each pleading should be sufficient in itself. And although an element in an adversarial process, pleadings are themselves intended to be the opposite of adversarial, at least to the extent that they must, if they are to perform one of their proper functions, inform the opposite party of the case that party will have to meet at trial.

[4]But pleadings have another important audience: the Judge or Magistrate. In most cases, the opposite party will have the assistance of some knowledge of the factual background -- some knowledge, in other words, of the facts against which the pleadings can be assessed. The tribunal of fact will never be in that position. The pleadings must therefore be drawn so as to allow the impartial and uninformed reader to know what the case is about. This end cannot be achieved unless the pleadings form a coherent narrative, of material fact, with the necessary detail included as particulars. They must be drawn with a careful eye to the evidence that will necessarily be called if the case is to be made out. If the party pleading does not have that evidence, then the case ought not go to trial. Indeed, it is generally true to say that it ought not to proceed beyond the point at which the party pleading appreciates, perhaps because the very act of pleading reveals it, that there is and will remain a gap in the evidence upon which the cause of action or defence is based and without which that cause of action or defence will fail.

[2][2008] VSC 77 [1-4].

1. The fact that a proceeding arises from a complex factual matrix, as is common in the TEC List of this Court, does not detract from these requirements. Indeed, they become more poignant. The challenge of sifting through the maize may be greater, but the pursuit of order, simplicity and elegance “on the far side of complexity” assumes even greater importance if the structure of the case is to be effectively communicated to its intended audience.

1. Pleadings, when well drawn, also serve to further the overarching purpose of the Civil Procedure Act 2010 (Vic)[3] consistently with the obligations imposed on legal practitioners under the Act.[4]  Allsop J in White v Overland[5] had this to say on the role of pleadings in advancing case management principles:

However, by way of general principle I would simply like to make perfectly plain my view that in the efficient and proper conduct of civil litigation, even civil litigation hard fought between parties, it should always be recognised that in the propounding of issues for trial the parties should take steps to ensure that all relevant parties to the dispute are cognisant of what the issues are. Any practice of quietly leaving footprints in correspondence or directions hearings to be uncovered some time later in an attempt to reveal that a matter was always in issue should be discouraged firmly. Even if something has been said, where it is evident, or indeed suspected, that the other side is proceeding on the basis of a misconception or has not appreciated something, as a general rule, efficiency, common sense and an appreciation of the costs and resources (both public and private) likely to be wasted by confusion in litigation will mandate that a party through his or her representative ensure that the other is not proceeding on a misconception or that the other does appreciate something that has been said. Litigation is not a game. It is a costly and stressful, though necessary, evil. To paraphrase Roscoe Pound from "The Causes of Popular Dissatisfaction with the Administration of Justice" (1906) 29 ABA Rep 395, 404-406, the "sporting theory of justice" and any behavioural manifestation of it should be seen as a survival, or better, a relic, of the days when a lawsuit was a fight between two clans ...

In the long run, the only consequence of keeping issues hidden or not clearly identifying them is to disrupt the business of the court leading to the waste of valuable public resources and to lead to the incurring of unnecessary costs by the parties, costs which ultimately have to be borne by someone.

[3] Civil Procedure Act 2010 (Vic) ss 7-9, 10–15.

[4]Supra ss 16-27.

[5][2001] FCA 1333 at [4].

1. The First and Second Defendants in making this application relied upon Rule 23.02 of the Court Rules, which provides:

23.02   Striking out pleading

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.

1. The application was principally grounded in sub-paragraph 23.02(c).

Background

1. The dispute which is the subject of this proceeding was recently summarised in SMEC Australia Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd.[6] For completeness, I will repeat the principal observations in these reasons.

   [6][2011] VSC 213 at [1–11].

1. The proceeding arises out of the construction of the Adelaide Desalination Plant, which is situated near Adelaide, South Australia (the “Project”).  The Project is continuing. However, it was agreed by the relevant parties to be due for Practical Completion in February 2012.  The Project is located in Port Stanvac in South Australia, 25 kilometres southwest of Adelaide.

1. The Plaintiffs, SMEC Australia Pty Ltd and Hatch Associates Pty Ltd (“SMEC” and “Hatch” respectively), together operate under a joint venture on the Project called the Design Joint Venture (“DJV”).

1. The First Defendant is McConnell Dowell Constructors (Aust) Pty Ltd (“McConnell Dowell”) and the Second Defendant is Abigroup Contractors Pty Ltd (“Abigroup”). Together they operate under an unincorporated joint venture on the Project called the  “MAJV”.  The MAJV was formed for the purpose of carrying out certain works on the Project.

1. The Third Defendant is Acciona Agua Australia Pty Ltd (“Acciona Agua”). It neither consented nor opposed the application of the First and Second Defendants.

1. The MAJV and a company associated with Acciona Agua are members of an unincorporated joint venture (“Contractor JV”) for the purpose of carrying out the design, construction and commissioning of the Project.

1. The principal of the Project is the South Australian Water Corporation (“SA Water”).  SA Water is a South Australian State Government instrumentality established pursuant to the South Australian Water Corporation Act 1994 (SA). It is a "business enterprise with the principal responsibility of providing water and sewerage services for the benefit of the people and economy of the State".[7]

   [7]Sections 3 and 7 of the SA Water Act.

1. The Contractor JV and SA Water are parties to a contract dated 16 February 2009 for the design, construction and commissioning of the Project.

1. It appears to be alleged in the Amended Statement of Claim that between 6 February and 7 November 2009, a consortium called Adelaide Aqua Consortium (“Adelaide Aqua”), comprising McConnell Dowell, Abigroup and Acciona Australia, together with another company called United Utilities Australia Pty Ltd, entered into a series of Tender Services Agreements (“TSA 1-10” and “TSA”) with the Plaintiffs’ joint venture DJV, as project designers for the initial tender and design services to be provided in relation to the Project.

1. It further appears to be alleged that on or about 22 August 2009 Adelaide Aqua and/or MAJV entered into a further agreement pursuant to which DJV was to carry out detailed design and associated sub-consultancy works for the Project (the “22 August Agreement”).

1. It further appears to be alleged that on or around 9 October 2009, the MAJV entered into a Professional Services Contract (“PSC”) with the DJV for the provision of design services for the Project.

1. In this proceeding the Plaintiffs make claims for additional costs, extensions of time and damages pursuant to both the TSA and PSC, including:

(a)$6,704,048 for alleged variations to the services carried out under the TSA and PSC;

(b)$16,011,262 for alleged additional project support services provided under the TSA and PSC;

(c)unspecified extensions of time for completion of the services under the TSA and PSC together with consequential delay costs of $3,714,688; and

(d)damages pursuant to the Trade Practices Act 1974 (Cth) (“TPA”) for alleged misrepresentations made by the MAJV about the contractor's construction programme.

1. At this point, the Defendants have not filed defences or counterclaims. MAJV says that it intends to pursue counterclaims against the Plaintiffs in respect of the services provided by them under the TSA and the PSC.

The Amended Statement of Claim

1. Regrettably, I am driven to the conclusion that the Amended Statement of Claim should be struck out and redrawn.

1. It contains allegations which do not give rise to complete causes of action; allegations which are not properly particularised; and allegations which, as pleaded, are internally disconnected.

1. I will deal with the principal concerns with the Amended Statement of Claim       in turn.

Background Matrix

1. The Amended Statement of Claim contains a body of material which does not lead to making out any defined cause of action.  This was said to be part of the background “matrix” or narrative of the case against which the issues would need to be considered.

1. However, pleading background “matrix” or narrative material is rarely necessary. Further, in a complex case, it is likely to make the task of discerning the essential structure of the issues for determination, even more difficult, both for the defending party and for the Court. Pleading to allegations of this kind can also give rise to additional professional work, delay and expenditure at an early stage in the proceeding. This may prove to be wasted if the matter settles at mediation before trial. In the usual case, matters of background “matrix” or narrative, if they are relevant, are the subject of evidence to be called at the trial supported by addresses made by or on behalf of the parties. Pleadings which serve to introduce the relevant actors who participated in the events in question or which describe the nature of the subject matter of the proceeding aside, background “matrix” or narrative should not be introduced into a pleading if the effect is to obscure, rather than to clarify, the essential allegations sought to be advanced.

1. In the present proceeding, paragraphs 23A and 23B (the “14 July agreement”) fall into the category I have described. They do not serve to define the issues, but rather tend to obfuscate. I will strike out both paragraphs under r 23.02(c).

1. A number of other paragraphs in the Amended Statement of Claim also fall into the category of unnecessary pleading of a background factual matrix, which does not lead to establishing any defined cause of action.

Internal Inconsistencies -TSA

1. Paragraphs 9A to 12A contain internal inconsistencies which make the allegations that are difficult to comprehend.  These all relate, it seems, to what is said to be the “TSA agreement”.

1. Paragraph 9A pleads an agreement entered into “on or about 7 November 2009”.  It is pleaded by paragraph 10 that: “During the period September 2008 to December 2008, DJV provided tender services to Adelaide Aqua pursuant to the agreement referred to in paragraph 9A hereof.”  It is not explained how services could have been provided pursuant to an agreement which did not exist at the relevant time.

1. A further element of confusion is introduced. It is pleaded in paragraph 11 that “On or about 16 February 2009” a written agreement was entered into “in respect of inter alia the earlier provision of engineering tender design services “ …”during the period September 2008 to December 2008”.  A question arises as to whether the earlier provision of engineering tender design services during the period September 2008 to December 2008 is alleged to have been governed by the 7 November 2009 agreement or the 16 February 2009 agreement.

1. I will strike out paragraphs 9A to 12A (inclusive) under r 23.02(c). This step effectively deletes the TSA from the pleading, with the consequence that all further pleadings founded on the TSA agreement must also fall.

1. Paragraph 43D also pleads that the TSA “as varied” was breached in various respects.  However, no prior pleading alleged any variation of the TSA agreement.

1. I will strike out paragraph 43D and the various claims for relief made under the TSA (including the claims made under paragraphs 43D and 44), and I do so under r 23.02(c).

Internal Inconsistencies -Trade Practices Act (now the Competition and Consumer Act 2010)

1. Paragraphs 54 to 62 seek to plead claims for misleading and deceptive conduct contrary to s 52 of the former Trade Practices Act 1974 (now called the Competition and Consumer Act 2010 “CCA” [8]).

   [8] On 19 April 2011 the Trade Practices Act 1974 was renamed the Competition and Consumer Act 2010 by

1. The representations pleaded in paragraph 55 are:

(a)the effects of preceding Adelaide Aqua/MAJV delays referred to in DJV’s correspondence of 2 October 2009 and their impact on program and cost would be negotiated in good faith; and

(b)the deficiencies in the Rev 6 Program referred to in DJV’s correspondence of 2 October 2009 and their impact on program and cost would be negotiated in good faith.

[Emphasis by underlining added]

1. However, it is alleged in paragraph 56 that:

56.The MAJV representation was false and untrue on the date or dates on which it was made as MAJV did not have regard to whether following entry into the PSC referred to in paragraph 63 hereof, it had the means or intention to address the program and cost implications of:

(a)the effects of proceeding Adelaide Aqua/MAJV delays referred to in DJV’s correspondence of 2 October 2009;

(b)the deficiencies in the Rev 6 Program referred to in DJV’s correspondence of 2 October 2009;

(c)variations undertaken by DJV at the request of Adelaide Aqua/MAJV during the period 12 June 2009 until entry into the PSC.

1. The falsity and untruthfulness of the representations pleaded in paragraph 56 do not follow from the representations which are alleged in paragraph 55.  A clear disconnection arises.

1. Furthermore, even if the representations alleged were false and misleading, it is not pleaded how any loss and damage was suffered by any and which of the Plaintiffs arising from representations that they would negotiate the matters in question “in good faith”.

1. I will strike out paragraphs 54 to 62 (inclusive) under r 23.02(c).

Pleading of TSA Agreements 1 – 10 (Inclusive)

1. Paragraphs 13-22 and 24–33 (inclusive) seek to plead various agreements which were apparently entered into during 2009, variously described as “TSA 1” to “TSA 10”, with the last agreement in the series, TSA 10, being alleged to have been entered into on 14 August 2009, according to paragraph 32.

1. However, each of the agreements TSA 1 to TSA 10, sought to incorporate the terms of the TSA agreement. 

1. Given the findings I have made as to the TSA agreement, and the ruling that the paragraphs which seek to plead this agreement should be struck out, it follows that I should also strike out the paragraphs which plead each of the agreements TSA 1 to TSA 10.

1. For these reasons I will strike out paragraphs 13-22 and 24–33 (inclusive) under r 23.02(c).

Failure to Adequately Particularise Delay Claims

1. Paragraphs 45-47 allege that “Adelaide Aqua, further and in the alternative the MAJV (and or those for whom they were legally responsible), delayed DJV’s works”.  Then follows the pleading of a number of instances which are alleged to have given rise to delay. These culminate in a plea in paragraph 47 that the Plaintiffs are entitled to a declaration that the dates for completion “if any (which are denied) were set at large, the “Date for Completion of the Works under the TSA cannot be determined or lawfully or appropriately varied or fixed and is discharged” and therefore “DJV is not obliged to pay liquidated damages under the TSA in connection with any delay in the completion thereof”, and DJV is entitled to a declaration in relation to these matters.

1. These delay claims are founded in part upon an allegation that the delays alleged were in breach of the TSA agreement and the TSA 3-10 agreements. Insofar as the delay claims are put on this basis, they must also fall by reason of the elimination of the TSA agreement and the TSA 3-10 agreements from the pleading, as earlier ruled.

1. Paragraphs 77 to 80 (by reference to paragraph 69 in paragraph 78) also plead delays in breach of an agreement called the “PSC agreement”.

1. There is a fundamental defect in the pleading which infects all of the delay claims, whether made under the TSA or the PSC agreement. No causal connection is pleaded between the conduct said to give rise to the delays alleged and the consequential delay to the actual Date for Completion.

1. There is well established authority for the proposition that in a “global cost claim” for delay, which I apprehend is the basis upon which the delay claims are put, requires either a substantive pleading or at least particulars as to the causal nexus between the conduct alleged to give rise to the delay and the delay said to arise from that conduct on the one hand, and the effect on the date for practical completion on the other.

1. In this regard, the decision of Byrne J in John Holland v Kvaerner RJ Brown,[9] although relating to total cost claims, is relevant. His Honour observed:

In my opinion, the court should approach a total cost claim with a great deal of caution, even distrust. I would not, however, elevate this suspicion to a level of concluding that such a claim should be treated as prima facie bad ... Nevertheless, the point of logical weakness inherent in such claims, the causal nexus between the wrongful act or omission of the defendant and the loss of the plaintiff, must be addressed. I put to one side the straight forward case where each aspect of the nexus is apparent from the nature of the breach and loss as alleged. In such a case the objectives of the pleading may be achieved by a short statement of the facts giving rise to the causal nexus. If it is necessary for the given case for this to be supported by particulars, this should be done. But, in other cases, each aspect of the nexus must be fully set out in the pleading unless its probable existence is demonstrated by evidence or argument and further, it is demonstrated that it is impossible or impractical for it to be spelt out further in the pleadings. Moreover, the court is assiduous in pressing the plaintiff to set out this nexus with sufficient particularity to enable the defendant to know exactly what is the case it is required to meet and to enable the defendant to direct its discovery and its attention generally to that case. And it should not be overlooked that an important means of achieving the result that, once it starts, the trial should be conducted without undue prejudice, embarrassment and delay, is by ensuring that, when it begins, the issues between the plaintiff including this nexus are defined with sufficient particularity to enable the judge to address the issues, to rule on relevance and generally to contain the parties to those issues ... And if, in such a case, the plaintiff fails to demonstrate the causal nexus in sufficient detail because it is unable or unwilling to do so, then this may provide the occasion for the court to relieve the defendant of the unreasonable burden which the plaintiff would impose on it ...

[9](1996) 134 BCL 262.

1. In an annexure to their letter dated 11 August 2011to the First and Second Defendants’ solicitors, the solicitors for the Plaintiffs said:

We acknowledge that it will be necessary for our client to further particularise and refine its delay claim under paragraphs 45 to 47 as well as the delay claims under the PSC referred to in paragraphs 77 to 88 of the pleading. In this regard we note that our firm has briefed an independent expert to prepare a report in relation to the delays suffered by our Client on the project caused by Adelaide Aqua / MAJV. In our view at this early stage of the proceeding (and before the Project has been finalized with all critical delays yet to 'crystallise') it is not time or cost effective to conduct a debate in relation to the particularization of the DJV's delay claim. In our view, we suggest (with respect) that the most time and cost effective way forward would be for the provision of detailed particulars of delay to be provided by way of the provision of an expert report or perhaps the provision of the report in conjunction with revised particulars based on that report.

1. There may be some merit in taking the course suggested by the Plaintiffs’ solicitors. However, I am not satisfied that the delay claims advanced by the Plaintiffs have been sufficiently particularised to enable the Defendants to know exactly the case they are required to meet, to enable them to comply with their discovery obligations and to properly advance their case to a mediation or trial.

1. For these reasons I will strike out paragraphs 45-47 and 77-80 (inclusive) under r 23.02(c).

Rev. 6 Program Dated 15 June 2009

1. Paragraphs 48–53 (inclusive) centre upon the allegation made in paragraph 49 to the effect that MAJV or Adelaide Aqua breached an implied term pleaded in paragraph 12A that “Adelaide Aqua would not delay or disrupt DJV in the performance of services under then TSA.”

1. As I have ruled that paragraph 12A relating to the TSA agreement should be struck out, it follows that paragraphs 48–53 (inclusive) must follow the same fate.

1. Further, no relief is claimed in respect of the various breaches alleged under paragraphs 48–53 (inclusive).  If they are pleaded as background matrix, they have no proper place in the pleading, in accordance with my earlier discussion of the issue.

1. For these reasons I will strike out paragraphs 48-53 (inclusive) under r 23.02(c).

Conclusion

1. In Trade Practices Commission v Australian Iron & Steel Pty Ltd [10] Lockhart J made these observations:

[The amended statement of claim] fails to plead the material facts, it contains confusing and irrelevant material, it uses ambiguous terms, pleads particulars rather than material facts and asserts conclusions or opinions. Certain of the matters are perfectly well pleaded, but the defective parts are so inextricably intertwined with offending material that an oppressive burden is cast upon the respondents to spell out the alleged cause or causes of action.

[10](1990) 92 ALR 385 at 413.

1. Further, in Clarke v Great Southern Finance Pty Ltd[11] Croft J said:

[w]here there has been a failure to state all material facts, and not merely a failure to give sufficient particulars of material facts, the proper course is to strike out the offending pleading, with liberty to amend rather than order particulars.

[11][2010] VSC 473 at [12].

1. Finally, in Montclare v Metlife Insurance Limited[12] Harper J (as he then was), concluded:

If the absence of particulars, or their manifest inadequacy to support the material allegation in support of which they are put forward, is not corrected after proper opportunity for correction has been provided, then it may be entirely appropriate for the opposite party to bring that circumstance to the notice of the court; and the court may be of the opinion that such particulars as have been pleaded cannot sustain the material allegation they are intended to support, and for which particulars are necessary. In that state of affairs, it might be entirely appropriate for the court to intervene pursuant to r.23.02 so that further time and expense is avoided, and a hopeless pleading put to its final rest.

[12][2009] VSC 402 at [7].

1. All of these observations, in one way or another, are pertinent to the case at hand.

1. I have made rulings which strike out the principal allegations pleaded in the Amended Statement of Claim. What remains should also be struck out and re-pleaded in a complete and comprehensive document.

Orders

1. I readily accept the submission made on behalf of  the Plaintiffs that the subject matter of the proceeding is complex.  Given this position, it will be directed that, following the close of pleadings, the proceeding  thereafter be conducted in accordance with a List of Issues pursuant to paragraph 40(g) of Practice Note No. 2 of 2009 (TEC List).  A draft List of  Issues in relation to the claims of the Plaintiffs, as revealed in the present Amended Statement of Claim, as that document was explained in the course of submissions, is annexed as Annexure “A” to these Reasons.  For convenience, at this early stage of the proceeding, I have also noted in the draft the necessity for the provision of particulars, where appropriate.

1. It will be ordered that the Amended Statement of Claim be struck out.

1. It will be ordered that the Plaintiffs be at liberty to file a re-pleaded Further Amended Statement of Claim, taking into account, but not confined to, the observations made in these Reasons and the draft List of Issues in relation to the Plaintiffs’ case annexed as Annexure “A” to  these Reasons.

1. I will hear the parties on the question of the time within which the Plaintiffs should be directed to file a Further Amended Statement of Claim and on the question of the costs of the application.

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ANNEXURE “A”

IN THE SUPREME COURT OF VICTORIA
AT MELBOURNE
COMMERCIAL & EQUITY DIVISION
TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

No. S C1 2001 00352 of 2011

SMEC Australia Pty Ltd (ABN 47 065 475 149) and Hatch Associates Pty Ltd
(ABN 59 008 630 500)

Plaintiffs

v

McConnell Dowell Constructors (Aust) Pty Ltd (ACN 002 929 017) & Others
(according to attached Schedule of Parties)

Defendants

DRAFT LIST OF ISSUES

(Pursuant to the Orders of Vickery J dated 30 September 2011)

Dictionary

In this List of Issues:

SMEC is the First Plaintiff;

Hatch is the Second Plaintiff;

DJV is SMEC and Hatch together comprising  an unincorporated joint venture; 

MDC is the First Defendant;

Abigroup  is the Second Defendant;

Acciona Australia is the Third Defendant;

Adelaide Aqua is the Adelaide Aqua Consortium comprising MDC, Abigroup and Acciona Australia and a company called United Utilities Australia Pty Ltd;

MAJV is the joint venture formed between McConnell Dowell and Abigroup; 

SA Water is the South Australian Water Corporation;

The Project is the Adelaide Desalination Project;

The phrase “usual particulars” requires the providing party to set out in relation to any agreement, arrangement, instruction, direction, advice, request or other communication, reference to all relevant persons, dates, periods of time, places, accounts, documents, each and every act, fact, matter, circumstance or thing which is said to constitute the agreement, arrangement, instruction, direction, advice, or like communication or the substance thereof.
The phrase “detailed particulars” of or in relation to a matter requires the providing party to set out material details of each and every act, fact, circumstance, or thing said to constitute the same or by reason of which the same is made, specifying all relevant dates, periods of time, places, accounts, documents and all relevant persons.

The phrase “usual calculations” of or in relation to a matter requires the providing party to set out material details of each amount, sum or numerical figure in contention stating, where possible, how each amount, sum or numerical figure was calculated or arrived at.

Issues

1. Tender Services Agreement 1 (TSA 1)

1.1      On or about 6 March 2009 did Adelaide Aqua enter into any and what agreement with DJV (called the TSA 1 agreement)? And if so:

1.1.1    What comprised the TSA 1 agreement (usual particulars)?

1.1.2    What were its terms (usual particulars)?

1.2      Was the TSA1 agreement breached by any and which of the Defendants? [Here group all relevant breaches] And if so:

1.2.1    What conduct of which of the Defendants gave rise to what breach of what term?

1.2.2    What loss and damage (if any) was suffered by DJV caused by the breach or breaches and how is the same quantified (usual calculations)?

1.2.3    What other relief (if any) is DJV entitled to arising from the breach or breaches claimed?

1. Tender Services Agreement 2 (TSA 2)

2.1      On or about 17 March 2009 did Adelaide Aqua enter into any and what agreement with DJV (called the TSA 2 agreement)? And if so:

2.1.1    What comprised the TSA 2 agreement (usual particulars)?

2.1.2    What were its terms (usual particulars)?

2.2      Was the TSA2 agreement breached by any and which of the Defendants? [Here group all relevant breaches] And if so:

2.2.1    What conduct of which of the Defendants gave rise to what breach of what term?

2.2.2    What loss and damage (if any) was suffered by DJV caused by the breach or breaches and how is the same quantified (usual calculations)?

2.2.3    What other relief (if any) is DJV entitled to arising from the breach or breaches claimed?

1. Tender Services Agreement 3 (TSA 3)

3.1      On or about 15 April 2009 did Adelaide Aqua and/or MAJV enter into any and what agreement with DJV (called the TSA 3 agreement)? And if so:

3.1.1    What comprised the TSA 3 agreement (usual particulars)?

3.1.2    What were its terms (usual particulars)?

3.2      Was the TSA3 agreement breached by any and which of the Defendants? [Here group all relevant breaches] And if so:

3.2.1    What conduct of which of the Defendants gave rise to what breach of what term?

3.2.2    What loss and damage (if any) was suffered by DJV caused by the breach or breaches and how is the same quantified (usual calculations)?

3.2.3    What other relief (if any) is DJV entitled to arising from the breach or breaches claimed?

1. Tender Services Agreement 4 (TSA 4)

4.1      On or about 3 July 2009 did Adelaide Aqua and/or MAJV enter into any and what agreement with DJV (called the TSA 4 agreement)? And if so:

4.1.1    What comprised the TSA 4 agreement (usual particulars)?

4.1.2    What were its terms (usual particulars)?

4.2      Was the TSA4 agreement breached by any and which of the Defendants? [Here group all relevant breaches] And if so:

4.2.1    What conduct of which of the Defendants gave rise to what breach of what term?

4.2.2    What loss and damage (if any) was suffered by DJV caused by the breach or breaches and how is the same quantified (usual calculations)?

4.2.3    What other relief (if any) is DJV entitled to arising from the breach or breaches claimed?

1. Tender Services Agreement 5 (TSA 5)

5.1      On or about 10 July 2009 did Adelaide Aqua and/or MAJV enter into any and what agreement with DJV (called the TSA 5 agreement)? And if so:

5.1.1    What comprised the TSA 5 agreement (usual particulars)?

5.1.2    What were its terms (usual particulars)?

5.2      Was the TSA5 agreement breached by any and which of the Defendants? [Here group all relevant breaches] And if so:

5.2.1    What conduct of which of the Defendants gave rise to what breach of what term?

5.2.2    What loss and damage (if any) was suffered by DJV caused by the breach or breaches and how is the same quantified (usual calculations)?

5.2.3    What other relief (if any) is DJV entitled to arising from the breach or breaches claimed?

1. Tender Services Agreement 6 (TSA 6)

6.1      On or about 17 July 2009 did Adelaide Aqua and/or MAJV enter into any and what agreement with DJV (called the TSA 6 agreement)? And if so:

6.1.1    What comprised the TSA 6 agreement (usual particulars)?

6.1.2    What were its terms (usual particulars)?

6.2      Was the TSA6 agreement breached by any and which of the Defendants? [Here group all relevant breaches] And if so:

6.2.1    What conduct of which of the Defendants gave rise to what breach of what term?

6.2.2    What loss and damage (if any) was suffered by DJV caused by the breach or breaches and how is the same quantified (usual calculations)?

6.2.3    What other relief (if any) is DJV entitled to arising from the breach or breaches claimed?

1. Tender Services Agreement 7 (TSA 7)

7.1      On or about 24 July 2009 did Adelaide Aqua and/or MAJV enter into any and what agreement with DJV (called the TSA 7 agreement)? And if so:

7.1.1    What comprised the TSA 7 agreement (usual particulars)?

7.1.2    What were its terms (usual particulars)?

7.2      Was the TSA7 agreement breached by any and which of the Defendants? [Here group all relevant breaches] And if so:

7.2.1    What conduct of which of the Defendants gave rise to what breach of what term?

7.2.2    What loss and damage (if any) was suffered by DJV caused by the breach or breaches and how is the same quantified (usual calculations)?

7.2.3    What other relief (if any) is DJV entitled to arising from the breach or breaches claimed?

1. Tender Services Agreement 8 (TSA 8)

8.1      On or about 31 July 2009 did Adelaide Aqua and/or MAJV enter into any and what agreement with DJV (called the TSA 8 agreement)? And if so:

8.1.1    What comprised the TSA 8 agreement (usual particulars)?

8.1.2    What were its terms (usual particulars)?

8.2      Was the TSA8 agreement breached by any and which of the Defendants? [Here group all relevant breaches] And if so:

8.2.1    What conduct of which of the Defendants gave rise to what breach of what term?

8.2.2    What loss and damage (if any) was suffered by DJV caused by the breach or breaches and how is the same quantified (usual calculations)?

8.2.3    What other relief (if any) is DJV entitled to arising from the breach or breaches claimed?

1. Tender Services Agreement 9 (TSA 9)

9.1      On or about 7 August 2009 did Adelaide Aqua and/or MAJV enter into any and what agreement with DJV (called the TSA 9 agreement)? And if so:

9.1.1    What comprised the TSA 9 agreement (usual particulars)?

9.1.2    What were its terms (usual particulars)?

9.2      Was the TSA9 agreement breached by any and which of the Defendants? [Here group all relevant breaches] And if so:

9.2.1    What conduct of which of the Defendants gave rise to what breach of what term?

9.2.2    What loss and damage (if any) was suffered by DJV caused by the breach or breaches and how is the same quantified (usual calculations)?

9.2.3    What other relief (if any) is DJV entitled to arising from the breach or breaches claimed?

1. Tender Services Agreement 10 (TSA 10)

10.1     On or about 14 August 2009 did Adelaide Aqua and/or MAJV enter into any and what agreement with DJV (called the TSA 10 agreement)? And if so:

10.1.1  What comprised the TSA 10 agreement (usual particulars)?

10.1.2  What were its terms (usual particulars)?

10.2     Was the TSA10 agreement breached by any and which of the Defendants? [Here group all relevant breaches] And if so:

10.2.1  What conduct of which of the Defendants gave rise to what breach of what term?

10.2.2  What loss and damage (if any) was suffered by DJV caused by the breach or breaches and how is the same quantified (usual calculations)?

10.2.3  What other relief (if any) is DJV entitled to arising from the breach or breaches claimed?

1. 22 August Agreement

11.1     On or about 22 August 2009 did Adelaide Aqua and/or MAJV enter into any and what agreement with DJV (called the 22 August agreement)? And if so:

11.1.1  What comprised the 22 August agreement (usual particulars)?

11.1.2  What were its terms (usual particulars)?

11.2     Was the 22 August agreement breached by any and which of the Defendants? [Here group all relevant breaches] And if so:

11.2.1  What conduct of which of the Defendants gave rise to what breach of what term?

11.2.2  What loss and damage (if any) was suffered by DJV caused by the breach or breaches and how is the same quantified (usual calculations)?

11.2.3  What other relief (if any) is DJV entitled to arising from the breach or breaches claimed?

1. PSC Agreement

12.1     On or about 9 October 2009 did MAJV enter into any and what agreement with DJV in respect of the provision of any and what services (called the PSC agreement)? And if so:

12.1.1  What comprised the PSC agreement (usual particulars)?

12.1.2  What were its terms (usual particulars)?

12.2     Was the PSC agreement breached by any and which of the Defendants? [Here group all relevant breaches] And if so:

12.2.1  What conduct of which of the Defendants gave rise to what breach of what term?

12.2.2  What loss and damage (if any) was suffered by DJV caused by the breach or breaches and how is the same quantified (usual calculations)?

12.2.3  What other relief (if any) is DJV entitled to arising from the breach or breaches claimed?

1. TSA Agreement

13.1     On or about what date in 2009 did Adelaide Aqua enter into any and what agreement with DJV pursuant to which DJV agreed to undertake any and what design services for Adelaide Aqua (called the TSA agreement)? And if so:

13.1.1  What comprised the TSA agreement (usual particulars)?

13.1.2  What were its terms (usual particulars)?

13.2     Was the TSA agreement breached by any and which of the Defendants? [Here group all relevant breaches] And if so:

13.2.1  What conduct of which of the Defendants gave rise to what breach of what term?

13.2.2  What loss and damage (if any) was suffered by DJV caused by the breach or breaches and how is the same quantified (usual calculations)?

13.2.3  What other relief (if any) is DJV entitled to arising from the breach or breaches claimed?

1. Restitutionary Claim(s)

14.1     Was there or were there any and what request or requests to perform work made to DJV by Adelaide Aqua, alternatively MAJV during the period 6 February 2009 to 9 October 2009 (usual particulars)?

14.2     What services were provided and/or expenses incurred (if any) by DJV pursuant to any such request or requests (detailed particulars)?

14.3     Did either Adelaide Aqua and/or MAJV know or ought reasonably to have known that DJV was not providing any such services or incurring any such expenses gratuitously, and what was the basis of any such belief?

14.4     Did either Adelaide Aqua and/or MAJV receive any and what benefit from the provision of any and what services or the incurring of any and what expenses by DJV (detailed particulars)?

14.5     On what basis was it unconscionable for DJV not to be paid a reasonable sum for the provision of any and what services or the incurring of any and what expenses?

1. Variations under the PSC Agreement

15.1     Is DJV entitled to be paid for any and what variations made under the PSC Agreement (detailed particulars)?

15.2     What precisely were the variations (if any) undertaken (detailed particulars)?

15.3     Pursuant to what terms (if any) of the PSC Agreement is DJV entitled to be paid for the variations it claims?

15.4     Describe each item of work said to give rise to the entitlement to be paid for each unpaid variation claimed for (detailed particulars).

15.5     What is the amount claimed in respect of each unpaid variation claimed for?

1. Delay under the PSC Agreement

16.1     Is DJV entitled to be paid for any and what delay to the date for Practical Completion under the PSC Agreement (detailed particulars)?

16.2     What precisely was the actual delay or delays (if any) to the Date for Completion under the PSC Agreement (detailed particulars)?

16.3     How was each component of the delay or delays (if any) to the Date for Completion under the PSC Agreement caused by:

(a)       any and what conduct of any and which of the Defendants;

(b)      the breach of any and which terms of the PSC Agreement by any and which of the Defendants;

(detailed particulars of (a) & (b))?

16.4     Precisely what loss or damage is claimed by DJV for the delay or delays (if any) to the Date for Completion under the PSC Agreement (usual calculations)?

16.5     Describe in each case how the loss or damage claimed by DJV was caused by any and     what delay to the Date for Completion under the PSC Agreement?

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