Trans Tasman Energy Group Pty Ltd ACN 102 199 164 v The State of South Australia

[2025] SASC 134

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

TRANS TASMAN ENERGY GROUP PTY LTD ACN 102 199 164 v THE STATE OF SOUTH AUSTRALIA & ORS

[2025] SASC 134

Judgment of the Honourable Justice Stanley  

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS - DISCOVERY OF DOCUMENTS - APPLICATION AND ORDER FOR FURTHER AND BETTER DISCOVERY

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS - PRODUCTION AND INSPECTION OF DOCUMENTS - GROUNDS FOR RESISTING PRODUCTION - IRRELEVANCE

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS - PRODUCTION AND INSPECTION OF DOCUMENTS - GROUNDS FOR RESISTING PRODUCTION - PRIVILEGE - CLIENT LEGAL PRIVILEGE - WAIVER OF PRIVILEGE

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PROCEDURAL ASPECTS OF EVIDENCE - EXPERT REPORTS AND EXPERT EVIDENCE - OTHER MATTERS

The applicant, Trans Tasman Energy Group Pty Ltd (TTEG), seeks further and better discovery through a revised interlocutory application concerning documents prepared and sent in relation to reports produced by HoustonKemp for the State of South Australia and 61 local councils who are members of the Local Government Association (LGA) (the respondents).

These proceedings concern TTEG’s claim for payment under two agreements, a deed with the State and a consultancy agreement with the councils and the LGA. The Objective of the agreements was to achieve savings for the respondents by reducing the amounts paid by them to SA Power Networks for the provision of street and public lighting services.  Under these agreements, TTEG was to be paid a contingency-based performance fee of 20% of savings achieved by the respondents as a result of TTEG’s services during the term of the agreements. After the expiry of the agreements with TTEG, the respondents retained HoustonKemp, another consultancy firm, and re-initiated an arbitration before the Australian Energy Regulator (AER).

TTEG contends that it was the continuation of the initial AER arbitration that led to savings for the respondents and that HoustonKemp relied, utilised or at least referred to TTEG’s work product in achieving that outcome. In seeking further and better discovery, TTEG contends the materials are directly relevant to whether it “advised” the respondents.

The respondents contend that TTEG is not entitled to a performance payment and resist the application for further and better discovery on the grounds that the documents sought are neither directly relevant to the issues in the proceedings, are subject to privilege in circumstances where privilege has not been waived, and are not expert reports within the meaning of Chapter 7, Part 14 of the UCR. They dispute TTEG’s claim for payment on the basis that the cost savings identified in the re-initiated AER arbitration were the result of work performed by HoustonKemp and were neither achieved during the Term nor attributable to any services provided by TTEG. Relevantly, they deny that TTEG advised on the preparation of the HoustonKemp reports and any submissions or modelling relied upon in the AER arbitration. 

There are three substantive issues before the Court that arise on the interlocutory application, namely: 

1.Whether the materials are directly relevant to an issue raised on the pleadings, or whether the respondent pleaded the materials into relevance through their Defence (relevance);

2.While the question of privilege and waiver arise only if the Court finds the HoustonKemp materials to be directly relevant to TTEG’s claim, can production of the materials be resisted on the grounds of legal professional privilege or has privilege impliedly been waived by the respondents’ pleas in defence (waiver); and

3.Are the reports “expert reports” to which Chapter 7, Part 14 of the UCR applies (expert reports) with the intended result that the respondents are required to produce copies of the HoustonKemp materials to TTEG upon request pursuant to UCR 74.4, to the extent that the materials fall within any of the categories prescribed in UCR 74.4(1).

In determining the above, consideration was given the failure of TTEG to plead an entitlement to a performance payment on the basis that HoustonKemp adopted its work in its reports by reason of any intellectual contribution it made prior to the AER determination. While TTEG argues that its “advice” should be interpreted as its ‘work product” being utilised or relied upon by the respondents, this was not pleaded.

Held:

1.The touchstone for discoverability remains direct relevance, and TTEG has failed to establish the direct relevance of the HoustonKemp materials, particularly in circumstances where the materials were not pleaded in the first instance, nor pleaded in to relevance.

2.Where the conduct of a privilege holder is inconsistent with maintaining confidentiality, a waiver of privilege may be implied. However, in these circumstances, the respondents have not engaged in any conduct that would make it unfair to uphold the privilege. Accordingly, they have not waived any claim to privilege by pleading into issue the contents of the HoustonKemp materials.

3.A report expressing an opinion based on the author’s expertise is not an expert opinion for the purposes of Chapter 7, Part 14 if the opinion is not relevant to the issues in the particular proceeding. The HoustonKemp reports at their highest are only relevant as factual evidence, accordingly, the HoustonKemp reports are not “expert reports” in this proceeding, to which Chapter 7, Part 14 of the UCR applies.

Ultimately, the Court found that an order for further and better discovery or production of the HoustonKemp materials should not be made, and TTEG’s interlocutory application should be dismissed. 

Uniform Civil Rules (2020) (SA), referred to.

Australian Securities and Investments Commission v Southcorp Ltd (2003) 46 ACSR 438; Mann v Carnell (1999) 201 CLR 1; Kurray v Brinkworth [2022] SASC 97; Rehn v Australian Football League & Ors (2003) 227 LSJS 378 at 381, applied.
Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341, distinguished.
Alstom Power Ltd v Yokogowa Australia Pty Ltd & Ors (No 2) [2008] SASC 356; Amaca Pty Ltd v Werfel (2019) 132 SASR 585; Bellara Aged Care Village Pty Ltd v Serafini & Ors [2024] SASC 101; Ceneavenue Pty Ltd v Martin [2008] SASC 332; DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499; Elders Forestry Ltd v Bosi Security Services Ltd & Ors (No. 2) [2010] SASC 226; Interchase Corp Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) [1999] 1 Qd R 141; Kadlunga Proprietors v Electricity Trust of South Australia (1985) 39 SASR 410; Lanzon v State Transport Authority (1985) 38 SASR 321; Liquorland (Australia) Pty Ltd v Anghie (2003) 7 VR 27; Mackay v Dick (1881) 6 App CAS 251; Mobis Parts Australia Pty Ltd v XL Insurance Company SE [2016] NSWSC 1599; Murphy Operator Pty Ltd v Gladstone Ports Corporation Ltd [2019] 3 Qd R 255; Quach v MLC Life Limited (No 5) [2020] FCA 1134; Ryan & Anor v Light Regional Council & Anor [2020] SAERDC 45, discussed.

Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd (2020) 137 SASR 117; Attorney-General (NT) v Maurice (1986) 161 CLR 475; AWB Ltd v Cole (No 5) (2006) 155 FCR 30; Betterway Health Care International Group Pty Ltd v Ferngrove Pharmaceuticals Pty Ltd [2023] SADC 107; Channel 7 Adelaide Pty Ltd v Lane and Hurley (2004) 234 LSJS 225; Council of the New South Wales Bar Association v Archer (2008) 72 NSWLR 236; Electricity Generation Corporation v Woodside Energy (2014) 251 CLR 640; Harris Scarfe Ltd v Ernst & Young (No 4) (2005) 93 SASR 300; Hickinbotham Pty Ltd v Australian Kidney Foundation [2017] SASC 108; Idoport Pty Ltd (in liq) (recs apptd); National Australia Bank Limited v Sheahan [2012] NSWSC 58; Lombe v Pollak [2004] FCA 264; Matthews v SPI Electricity Pty Ltd & Ors; SPI Electricity Pty Ltd v ACN 060 674 580 & Ors [2013] VSC 33; Salder v Director of Public Prosecutions (2021) 138 SASR 190; Slater v Smith [2021] SASC 135; Southern Equities Corporation Ltd (in liq) v Arthur Anderson & Co (No 5) [2001] SASC 335; Toskas v Waldron [2020] SADC 76; Viscariello v Macks (No 6) [2010] SASC 303, considered.

TRANS TASMAN ENERGY GROUP PTY LTD ACN 102 199 164 v THE STATE OF SOUTH AUSTRALIA & ORS
[2025] SASC 134

Civil

STANLEY J: 

Introduction

1. On 22 July 2022 by a revised interlocutory application the applicant, Trans Tasman Energy Group Pty Ltd (TTEG), seeks further and better discovery relating to documents prepared and sent in connection with expert reports obtained by the respondents from HoustonKemp in a dispute over TTEG’s claimed entitlement to recover a performance payment from the respondents. 

   Background

2. TTEG was a consultant to the State government and local councils.  The proceedings are a claim for payment by TTEG of a fee for work performed by it in relation to the provision of street and public lighting services throughout South Australia.  TTEG alleges the fee for work performed was causally connected to a recovery by the State and the councils from SA Power Networks (SAPN), formerly ETSA Utilities, South Australia’s sole electricity distribution network service provider. 

3. TTEG’s claim is for payment by the State of South Australia and 61 local councils who are members of the Local Government Association of South Australia (LGA) (the respondents).  The claim arises from two separate contractual agreements with the respondents.  First, a deed between TTEG and the State of South Australia, and second, a consultancy agreement between TTEG and the respondent local councils and the LGA (the agreements). 

4. SAPN at all material times charged and provided the respondents and other local governments in South Australia, that are not a party to the proceedings, with street and public lighting services (the public lighting customers).  

5. For the 2010 / 2015 and 2015 / 2020 regulatory periods, the public lighting services were classified by the Australian Energy Regulator (AER) as a negotiated distribution service, with the effect that SAPN was required to negotiate with the public lighting customers the price for the public lighting services.  If a negotiated outcome was not reached the matter could be referred to the AER for arbitration. 

6. While expressed in different terms, the Objective of the agreements was to achieve savings for the respondents by reducing the amounts paid by them to SAPN for the street and public lighting services. 

7. TTEG contends that it was entitled to receive payment under the agreements on a contingency basis.  If savings were realised by the respondents through the provision of TTEG's services in relation to the payments that they would otherwise have made to SAPN for the public lighting services, TTEG was entitled to a performance payment in accordance with the terms of the agreements.  This payment was to be 20 per cent of the savings the respondents achieved on the charges levied by SAPN for the provision of public lighting services throughout the State. 

8. TTEG alleges that during the term of the agreements it identified that SAPN’s public lighting charges, and a pricing offer put forward by SAPN in July 2012, were not regulatory compliant on three grounds namely, amongst other reasons:

   ·first, they included ongoing depreciation and interest costs for the initial assets, which had an economic life of 28 years and, as at 1 July 1999, a residual economic life of 18 years after they had reached the end of their economic life.  TTEG claims it identified that a step reduction in the public lighting charges was required to reflect this;

   ·second, SAPN’s change of the total asset life from 20 years to 28 years was applied by SAPN in its models, used to calculate the public lighting charges, back to 1998, resulting in SAPN double counting costs and over charging for those assets (asset cost overcharge); and

   ·third, SAPN’s inclusion of the elevation charge[1] was not regulatory compliant as SAPN did not incur any costs which it was entitled to recover.  

   [1]    Being a charge payable to SAPN for SAPN attaching its own assets to its own distribution infrastructure.

9. TTEG asserts that it advised the respondents that if negotiations between SAPN and the public lighting customers could not arrive at an agreement, the dispute would have to be referred to the AER for determination. 

10. TTEG claims that as a result, on 9 December 2013, during the term of the agreements, the respondents commenced the access dispute by writing to the AER seeking a determination in respect of the dispute between SAPN, the State and the LGA concerning the Street Lighting Use of System (SLUOS) charges (access dispute).   The respondents submit that, relevantly, in May 2017, after the deed and consultancy agreements had expired, and were not renewed, they reinstituted the AER arbitration of the access dispute. 

11. However, TTEG submits that on 5 June 2014, during the term of the agreements, the respondents provided their submissions on the access dispute to the AER with the technical analysis prepared by TTEG directly relevant to the access dispute.  The respondents did not renew the agreements when they last expired on 2 November 2015 and 31 March 2016.  TTEG claims that the failure to renew was unreasonable and in breach of contract. 

12. On 26 September 2019 the AER delivered its determination of the access dispute.  It found that SAPN had over-recovered during the period 2010-2015 in the amount of $13,008,154.01 and that SAPN was required to repay or credit that amount to the respondents. The AER reached that determination by reference to its findings on disputes raised by the respondents. It found that SAPN was not entitled to include an elevation charge in the public lighting charges for the 2010 / 2015 regulatory period and that SAPN no longer maintained its right to recover an elevation charge and the asset base of the public lighting charges needed to be adjusted to remove the asset cost overcharge.

13. TTEG claims that the AER determination savings constituted a saving in the amount paid by the respondents for street lighting services measured against what they would have otherwise paid.  TTEG claims this entitled it to a performance payment for that saving.  TTEG further claims that the State breached its duty of cooperation by failing to extend the term of the deed for the duration of the AER process, being the access dispute, and that breach caused TTEG loss in the form of denial of its performance payment for the AER determination savings. 

14. TTEG also claims that the councils breached the duty of cooperation and clause 3 of the consultancy agreement by failing to extend the term of the consultancy agreement for the duration of the AER process, and by failing to enter into a new contract to compensate TTEG for the AER process.  TTEG alleges that those breaches caused TTEG loss in the form of denial of its performance payment for the AER determination savings. 

15. The respondents dispute TTEG’s claim for payment on a number of bases including, that the AER determination savings were not achieved during the Term or as a consequence of services provided by TTEG but were due to the work of HoustonKemp, who was retained by the respondents after the term of the agreements had expired.  The respondents deny that the AER determination savings were a saving achieved, either during the term of the agreements or afterwards, through the provision of services by TTEG, and deny that, as a result, TTEG is entitled to a performance payment.  The respondents allege that TTEG did not advise them in relation to the preparation of the report of Mr Greg Houston of HoustonKemp dated 6 February 2017 (first Houston report) or any submissions or modelling relied on by the respondents in the arbitration of the access dispute by the AER.  They also deny that the technical analysis in the AER submissions was prepared by TTEG. 

16. The respondents resist the application for further and better discovery on the basis that the documents sought are not directly relevant to the issues in the proceedings, and in any event are privileged and privilege has not been waived by the respondents either expressly or impliedly.  However, questions of privilege and waiver only arise if the Court finds that the HoustonKemp materials are directly relevant to TTEG’s claim. 

17. The respondents have discovered and produced the HoustonKemp reports.  They deny that the supporting materials provided to Mr Houston for the AER access dispute determination are directly relevant to these proceedings.  Accordingly, those documents have not been produced.  Those documents are what the interlocutory application is all about. 

18. The application is brought pursuant to UCR 73.15(1) and 102.1.

19. The applicant relied on the third and fourth affidavits of Scott Bruce Foreman.  The respondent relied on the seventh affidavit of Kate Lauren Brandon. 

    Orders sought

20. TTEG seeks the following orders:

    1.The respondents make specific discovery of the following documents prepared and sent in connection with the expert reports prepared by HoustonKemp for the access dispute commenced by the respondents on 9 December 2013 before the AER (reports):

    (a)    The correspondence and documents referred to in the letter dated 21 November 2016 from HWL Ebsworth to HoustonKemp;

    (b)    All other letters of instructions, briefing notes and other materials provided by the respondents, or their representatives, solicitors or agents, to HoustonKemp in connection with the reports;

    (c)    Any final reports, draft reports or other working notes prepared by HoustonKemp; and

    (d)    Communications, notes, records or other documents relating to communications between HoustonKemp and the respondents, or the respondents’ representatives, solicitors or agents, that relate to the content of the reports.

    2.The respondents are to file and serve on TTEG a revised list of documents containing the documents referred to in order 1 above within 28 days of the determination of this application.

    3.The respondents produce to TTEG the documents discovered in accordance with order 2 above within seven days of service of the revised list of documents.

    4.[no longer pressed].

    5.Within 28 days of the determination of this application, the respondents are to provide TTEG with:

    (a)    a copy of written communications and records of communications between the respondents or a representative of the respondents and Mr Houston of HoustonKemp, or between Mr Houston and another expert, relevant to the contents of the reports (relevant communications);

    (b)    details (date, parties and substantive content) of the relevant communications if they were oral and not recorded;

    (c)    a copy of documentary material on which Mr Houston relied in making the report; and

    (d)    details of any fee or benefit that Mr Houston has received for preparation of the report.

    6.The respondents pay TTEG’s costs of this application.

    7.Any further orders the Court sees fit. 

21. In essence TTEG seeks discovery and production of the briefing materials, internal working documents and correspondence connected to the reports prepared by HoustonKemp for the access dispute (the HoustonKemp materials), and an order that the respondents, which have filed lists of documents in the proceedings, are to each file a revised list of documents that complies with UCR 73.3(2). 

    The issues

1. Accordingly, there are three substantive issues that arise on the interlocutory application, namely: 

   (i)are the HoustonKemp materials directly relevant to an issue raised on the pleadings (relevance);

   (ii)if so, may production of the HoustonKemp materials be resisted on the grounds of legal professional privilege or has privilege impliedly been waived by the respondents’ pleas in defence (waiver); and

   (iii)are the reports prepared by Mr Houston dated 6 February 2017, 20 September 2017, 11 March 2019 and 15 April 2019 (together, the HoustonKemp reports), for the purposes of the access dispute commenced before the AER, copies of which have previously been discovered by the respondents in these proceedings, expert reports to which Chapter 7, Part 14 of the UCR applies (expert reports).

2. The respondents submit that the waiver issue does not arise if the Court finds against TTEG on the relevance issue.  If the Court were to hold that the HoustonKemp materials are relevant, then the waiver question is premature, as the occasion for the respondents to consider whether to resist production on the grounds of legal professional privilege, or whether they may be content to voluntarily waive privilege, has not yet arisen.  The respondents submit they are entitled to consider whether to waive privilege voluntarily after the Court has made an order requiring discovery to be given. 

   Applications for further and better discovery

3. The Uniform Civil Rules 2020 (UCR) impose upon a party to proceedings a requirement to make general discovery unless the Court orders otherwise or the parties unanimously otherwise agree.[2]  The parties have undertaken discovery by way of general discovery.[3] General discovery is defined to mean discovery of directly relevant documents in a person’s possession, custody or power.[4]  A document is a discoverable document for the purposes of UCR 73 if it is directly relevant to an issue raised in the proceedings and, if pleadings have been filed, the issues for this purpose are defined by the pleadings.[5] UCR 73.7 governs general discovery and assumes that a party can determine its obligation to make discovery by reference to the pleadings. Without limiting the generality of the definition of discoverable document, UCR 73.3(5) and UCR 73.3(6) provides that a document is directly relevant in the context of discovery made by a party to the proceedings if it is intended to be relied on at trial by that party or it supports or adversely affects a party’s case.[6] 

   [2]    UCR 73.7(1).

   [3]    Affidavit of Daniel Murray Copley sworn 8 September 2023 (FDN 189), pp 8 and 12.

   [4]    UCR 73.1.

   [5]    UCR 73.7(5).

   [6]    UCR 73.7(6). 

4. UCR 73 narrows the old obligation to discover documents laid down by the Peruvian Guano test.  In Rehn v Australian Football League & Ors[7] Doyle CJ said that the test of direct relevance in the predecessor rules gave the test a narrow meaning.  That remains the correct approach to identifying the nature and extent of the discovery obligation under the UCR.  It can be seen that the obligation of parties to the proceedings is to discover documents that are directly relevant to an issue raised on the pleadings.[8]  I will come back to this. 

   [7] (2003) 227 LSJS 378 at 381; [2003] SASC 159 at [21]-[26].

   [8]    UCR 73.7(5).

5. The authorities in relation to an application of the requirements of UCR 73.15 are well settled.[9]   UCR 73.15(1) provides that if there is reason to doubt whether a person has fully complied with an obligation to discover, produce for inspection or copy a document, the Court may make such orders as it thinks fit to determine whether there has been full compliance or to ensure or enforce full compliance. The previous rule was expressed in similar but not identical terms.[10] Nevertheless there is no substantive difference between UCR 73.15 and 6SCR 145.[11] 

   [9]     Betterway Health Care International Group Pty Ltd v Ferngrove Pharmaceuticals Pty Ltd [2023] SADC 107 at [47]-[50] (Slattery J).

   [10] 6SCR 145(1) provided that “[i]f there is reason to doubt whether a party has fully complied with the party’s obligations to disclose and produce documents under this Part, the Court may make orders the Court considers appropriate to ensure that the obligations have been fully complied with and, if necessary, to enforce those obligations.”

   [11]  Toskas v Waldron [2020] SADC 76 at [13]. While this statement was made in the context of comparing UCR 73.15 and DCR 145, DCR 145 was in identical terms to 6SCR 145.

6. It is generally accepted that the proper approach to an application under 6SCR 145 was identified by White J in Ceneavenue Pty Ltd v Martin,[12] in a passage subsequently approved by Nicholson J in Amaca Pty Ltd v Werfel, as follows:[13]

   I consider that the expression “reason to doubt whether a party has fully complied with the party’s obligations to disclose and produce documents” in r 145 implies a presumption that there has been compliance with a party’s disclosure obligations. Hence, it will be incumbent upon an applicant for further and better disclosure to point to matters which indicate that the Court should not give effect to that presumption. It is not necessary for the Court to be convinced that the plaintiffs’ disclosure is inadequate, or to be satisfied on the balance of probabilities that it is inadequate. It is sufficient if the Court is satisfied that there is a reasonable basis for doubting that the disclosure made is adequate. This will require a degree of satisfaction going beyond the mere possibility that the plaintiffs’ disclosure is inadequate.

   [12] [2008] SASC 332 at [8]-[13].

   [13] Amaca Pty Ltd v Werfel (2019) 132 SASR 585 at [14].

7. This may be established by demonstrating that the party making discovery has proceeded under a misconception, whether as to the nature of the issues arising on the pleadings, or as to the documents which may be directly relevant to those issues.[14]  

   [14] Ceneavenue Pty Ltd v Martin [2008] SASC 332 at [12].

8. An example of the type of order that may be made by the Court is for a person to make specific discovery of specified documents, or categories of documents, in their possession, custody or power.[15]

   [15] UCR 73.15(2)(b).

9. An application for further and better discovery requires an identification of the particular relevant documents, and a belief that the party may have, or have had them.[16]

   [16] Viscariello v Macks (No 6) [2010] SASC 303 at [33] (Lunn J).

10. Documents that are held by a person’s solicitor are within that person’s power for the purposes of discovery.[17]

    [17] Slater v Smith [2021] SASC 135 at [81] (Blue J).

11. A convenient starting point for the test of direct relevance is the reasons of Doyle CJ in Rehn v Australian Football League & Ors.[18] The earlier rule 58A.03 adopted the test of directly relevant.  It provided:

    The parties must discover in their list of documents, but discover only, the documents which are or have been in their possession, custody or power which are directly relevant to any issue arising on the pleadings. 

    [18] (2003) 225 LSJS 378 at 381; [2003] SASC 159 at [21]-[26].

12. Doyle CJ identified the purpose of the rule as limiting the scope of discovery.  The Chief Justice said that the intention in rule 58A.03 was to apply the requirement of direct relevance firmly and to give it a relatively narrow meaning.  The rule assumed that a party was able to decide, from the pleadings, what documents were to be discovered.  The Chief Justice said this suggested a narrow meaning for the test of “directly relevant”. 

13. The test of direct relevance in UCR 73 was explained in Ryan & Anor v Light Regional Council & Anor[19] by Judge Burnett.  His Honour’s reasons were subsequently adopted by McIntyre J in Bellara Aged Care Village Pty Ltd v Serafini & Ors.[20]  McIntyre J said:[21] 

    The question of whether documents are directly relevant has been considered by the Full Court of the Supreme Court in Channel 7 Adelaide Pty Ltd v Lane and Hurley in which the court summarised the relevant principles (referring to earlier cases such as Southern Equities Corporation Ltd (in liq) v Arthur Anderson & Co (No 5) and Rehn v Australian Football League & Ors and Harris Scarfe Ltd v Ernst & Young (No 4) as follows:

    1.   The test of direct relevance significantly narrows the obligation to provide disclosure from the previous requirements to provide discovery ‘relating to any matters in question in this action’;

    2.   The requirement of direct relevance must be applied firmly and given the relatively narrow meaning;

    3.   The issue of direct relevance is to be determined by reference to the pleadings and the issues which arise thereon and assumes that a party can determine that party’s obligation to make discovery by reference to the pleadings;

    4.   A document will be directly relevant if it tends to prove or disprove a matter which is in issue;

    5.   The rule does not mean that, if the document is not itself proof of a fact in issue but is merely a piece of circumstantial evidence tending, along with other evidence, to prove the fact in issue, it is not discoverable;

    A document will not be directly relevant if it merely tends to prove or disprove something that may be relevant to a matter in issue or there is merely a chance that the document will prove or disprove a matter in issue.

    [citations omitted].

    [19] [2020] SAERDC 45.

    [20] [2024] SASC 101.

    [21] [2024] SASC 101 at [5].

14. The parties disagree over the obligation and purpose of the rules.  TTEG submits that it did not plead further in relation to any of the allegations in its reply and therefore those allegations are taken to be denied, relying on UCR 67.7(4).  However, I accept the submission of the respondents that TTEG’s submission disregards UCR 67.7(2) which emphasises that pleadings are used to identify clearly the real matters in dispute between the parties.  Accordingly, UCR 67.7(2) provides that it does not derogate from the obligation to comply with UCR 67.2(2) which, in turn, provides that a pleading must set out the affirmative facts relied on by the party to establish its claim and give fair notice of the party’s case to the opposing party so as to avoid the opposing party being taken by surprise at or in preparation for trial.

15. It is in that context that the question of whether the HoustonKemp materials are directly relevant is to be decided. 

    Each party’s pleaded case

16. TTEG’s claim to payment arising from savings realised from the AER’s  determination of the access dispute relies on work it performed in the period from 2011 to 2016 when it was retained as a consultant to the respondents.  It was a term of the contracts that it was only in the event that the savings Objective was achieved during the terms of the agreements that TTEG was entitled to payment.  The possibility that the savings Objective would not be achieved during that period was foreseen by the parties and they agreed that in that event TTEG was not entitled to payment.  Payment of the performance fee was contingent on savings being achieved by reason of TTEG’s work within the Term of each agreement.  The mere achievement of savings was not enough. 

17. The respondents’ case relies on those terms of the contracts, in that TTEG only had an entitlement to payment of the performance fee if savings were achieved by TTEG during the term of the agreements.  On the respondents’ case, TTEG was not entitled to payment of the performance fee because savings were not achieved during the term of the agreements as a result of work undertaken by TTEG. 

18. In fact, savings were achieved as a result of the AER determination in September 2019.  The respondents realised savings for their public lighting tariffs for the period 2010-2015.  TTEG had been retained to provide consultancy services to the respondents in the period from 2011 to 2016.  By 2016 the savings Objective had not been achieved despite a number of extensions of the agreements. On 2 November 2015 the councils elected not to renew the consultancy agreement.  On 31 March 2016 the State elected not to renew the deed.  TTEG alleges that the respondents unreasonably refused to renew the agreements,[22] or were estopped from denying that the consultancy agreement was extended until 14 October 2016 and the deed was extended to 13 February 2017.[23]  Nonetheless, TTEG pleads that by the end of the agreements it had performed the services specified in the contracts.[24]  HoustonKemp was retained by the councils in August 2016 and by the state in February 2017 to provide consultancy services in lieu of those which had been provided by TTEG.[25]   In February 2017 HoustonKemp prepared a report and supporting modelling and submissions which the respondents submitted to the AER for the purpose of achieving the savings Objective.  The respondents’ case is that it was the work undertaken by HoustonKemp which resulted in the achievement of the savings Objective.  They plead that TTEG did not advise them in relation to the preparation of the HoustonKemp reports or any submissions or modelling that the respondents relied on in the AER arbitration of the access dispute.[26] 

    [22] Revised Statement of Claim (FDN 116) at [73], [74.4.1], [75] and [76].

    [23] Revised Statement of Claim (FDN 116) at [69] and [71].

    [24] Revised Statement of Claim (FDN 116) at [72].

    [25] Defence (FDN 122) at [75A].

    [26] Defence (FDN 122) at [75F.1] and [75F.4].

19. The HoustonKemp materials of which TTEG now seeks discovery comprises the material described in paragraph 1 of the orders sought, being the materials the respondents provided to HoustonKemp by way of a brief, and communications between the respondents and their solicitors and HoustonKemp. 

20. TTEG’s revised statement of claim (RSoC) identifies the AER determination and the savings of approximately $13 million that the respondents are alleged to have realised in respect of the public lighting tariffs for 2010-2015.  TTEG then pleads an alleged crystallisation of its entitlement to payment of the performance fee pursuant to the AER determination of 26 September 2019.[27] 

    [27] Revised Statement of Claim (FDN 116) at [80], [81] and [82].

21. TTEG pleads that the respondents realised various alleged savings in their outlays for street lighting services and that as a result, in accordance with the terms of the agreements, the savings Objective was thereby “achieved”.[28]   TTEG then pleads its alleged right to payment of the performance fee pursuant to the agreements.[29] 

    [28] Revised Statement of Claim (FDN 116) at [81] and [82].

    [29] Revised Statement of Claim (FDN 116) at [83] and [86]-[87].

22. In their defence the respondents plead that while the AER determined that SAPN had over-recovered approximately $13 million and was required to repay that amount to the respondents, they deny that the realisation of that repayment amounted to TTEG achieving the Objective or resulted in any entitlement to contractual payments pursuant to the agreements.[30] 

    [30] Defence (FDN 122) at [80.5(a)].

23. The respondents plead their retention of HoustonKemp by the councils in August 2016 and by the State in February 2017.[31]  They plead Mr Houston’s preparation of the first HoustonKemp report in February 2017;[32] an offer by the respondents to SAPN on 27 February 2017 based on the first HoustonKemp report;[33] and the AER arbitration in May 2017, initiated by the respondents, by reference to the first HoustonKemp report after the rejection of their offer by SAPN.[34] 

    [31] Defence (FDN 122) at [75A].

    [32] Defence (FDN 122) at [75B].

    [33] Defence (FDN 122) at [75C].

    [34] Defence (FDN 122) at [75D].

24. Following this referral the access dispute proceeded as an arbitration and the AER made its determination by reference to the expert opinions and modelling of HoustonKemp and other experts retained by SAPN and the AER.[35]

    [35] Defence (FDN 122) at [75E].

25. TTEG did not advise the respondents in relation to the preparation of the HoustonKemp reports; the offer that the respondents made to SAPN on 27 February 2017; the request to the AER on 2 May 2017 to determine the access dispute; and any submissions or modelling relied on by the respondents in the arbitration of the access dispute by AER.[36]

    [36] Defence (FDN 122) at [75].

26. The respondents plead that the alleged savings or credit resulting from the AER determination was not “savings achieved” either during the term of the agreements, or subsequently through the provision of services by TTEG.[37] 

    [37] Defence (FDN 122) at [81.2] and [82], [83.3(b)], [86.3(b)] and [87.1(d)].

    Relevance

27. TTEG submits that in these proceedings there are three questions raised on the respondents’ pleadings, the answers to which establish the relevance of the HoustonKemp materials, namely:

    (i)whether TTEG advised the respondents in relation to the preparation of the first HoustonKemp report and any submissions or modelling relied upon by the respondents before the AER;

    (ii)whether the AER determination savings were achieved, during the term of the agreements or afterwards, through the provision of services by TTEG; and

    (iii)whether it was unreasonable for the respondents to refuse to extend the agreements.

28. TTEG submits that to the extent that HoustonKemp were provided with or relied on analysis or other materials prepared by TTEG, those materials are directly relevant to whether TTEG advised the respondents in relation to the preparation of the first HoustonKemp report and any submissions or modelling the respondents relied upon before the AER.  TTEG also submits these materials are directly relevant to the causal connection TTEG alleges exists between its work and the AER determination savings.  Further, to the extent that the respondents continued to rely on analysis, modelling, and advice prepared by TTEG, or documents obtained through the strategy recommended by TTEG, while at the same time refusing to extend the terms of the agreements to enable TTEG to be remunerated for that advice, that conduct is directly relevant to TTEG’s plea that the refusal to extend the agreements was unreasonable. 

29. As to the first issue, TTEG submits that the respondents have taken an unduly narrow position with respect to whether TTEG “advised” them in relation to the submissions and modelling they relied upon before the AER.  TTEG submits that it is not in dispute that it was no longer engaged by the respondents when they wrote to the AER in May 2017 to request the alternative dispute resolution (ADR) process to determine the access dispute.  Nevertheless, it submits that the issue of whether it “advised” the respondents ought properly be considered on the basis of whether the respondents relied upon TTEG’s work product or utilised that product in the AER arbitration.  TTEG submits that at the very least the respondent referred to the TTEG work product in the course of the access dispute arbitration when, in an email to a representative of the AER dated 17 June 2019, the respondents’ solicitors said:[38]

    … We note that the TTEG report concluded that:

    (i)      a 28-year asset life should be applied for future charges and

    (ii)     TTEG did not support an [sic] recalculation of the asset base prior to 1 July 2005:  see pages 1 and 8 of Addendum C (“Asset Charges”) to the TTEG report. 

    In that respect, there is no inconsistency between TTEG’s recommendations and the approach propounded by the PLC’s and HoustonKemp in this access determination. 

    [38] Second affidavit of Scipio John Lipman sworn on 5 august 2024 (FDN 242), page 4.

30. TTEG submits the “TTEG report”, being a submission prepared by TTEG on behalf of the respondents to the Essential Services Commission of South Australia (ESCOSA) in September 2009, was referred to and cited in the AER determination.[39]  However, TTEG has not pleaded reliance upon the TTEG report. 

    [39] Applicants written submissions (FDN 243) at [12].

31. As I have explained earlier, the test of whether a document is discoverable is whether the document is directly relevant to an issue raised in the proceedings by reference to the pleadings.[40]  UCR 73.7(6) provides that a document is directly relevant if it is intended to be relied on at trial by a party to the proceedings or it supports or adversely affects a party’s case.  Accordingly, the touchstone for discoverability remains direct relevance. 

    [40] UCR 73.7(5).

1. The TTEG report was not the product of work performed by TTEG during the term of the agreements.  It is not directly relevant within the meaning of UCR 73. 

2. In respect of the second and third issues, TTEG submits that if the respondents or HoustonKemp relied on or utilised TTEG’s work product for the purposes of the AER arbitration, that fact is directly relevant to those issues. 

3. TTEG contends that the respondents accept a similarity between the first HoustonKemp report and the overwhelming volume of work product prepared by TTEG in carrying out its work.  TTEG submits that this is inconsistent with the claim that TTEG’s work product had no causative contribution to the outcome of the AER determination because Mr Houston would have, or did, arrive at the same opinions and conclusions independently of TTEG’s provision of the services.  TTEG submits that the respondents claim in this regard should not be accepted without scrutiny, including by reference to the content of the HoustonKemp material. 

4. TTEG submits that it is telling the respondents say that the materials provided to HoustonKemp did not include any work product produced by TTEG, in circumstances where the respondents have not put forward any evidence that they reviewed what was provided to HoustonKemp.

5. TTEG submits that a causal connection existed between the financial benefit the respondents receive from the AER determination and the services provided by TTEG.  TTEG contends that the access dispute was not initiated by HWL Ebsworth’s letter of 2 May 2017 to the AER.  Rather, the submission is that, as is apparent from the letter of 2 May 2017 and the AER determination itself, the determination was simply the continuation of the access dispute that had been previously referred in December 2013, rather than a fresh dispute.  TTEG submits that by the terms of their Defence, the respondents have pleaded the HoustonKemp materials into relevance. 

6. TTEG submits that to be discoverable, a document need not be directly relevant to an issue raised on the pleadings.  It submits that UCR 73.7(6) provides that a document is also directly relevant if “it supports or adversely affects a party’s case”.  TTEG submits it would plainly be adverse to the respondents’ case that the AER determination savings were not achieved during or after the term of the agreements through the provision of services by TTEG if they, or HoustonKemp, relied on TTEG’s work product in the course of AER’s determination of the access dispute. 

7. I do not accept TTEG’s submissions. 

8. The so-called “expert material”, distinct from the actual HoustonKemp reports, being documents used in preparation of the reports, are not directly relevant to any pleaded issue.  The reports prepared by HoustonKemp for the purposes of the determination of the access dispute are not directly relevant to TTEG’s claim for payment in accordance with the terms of the agreements.  While the documents sought by way of further discovery might be relevant to the anterior question that was decided in the access dispute determination, the opinions set out in the HoustonKemp reports are not in issue.  There is no challenge to the determination of the access dispute by the AER.  What is in issue is the work that was undertaken by TTEG and whether or not that ultimately led to the making of the AER determination.  The plea in the defence that the work performed by TTEG had no causal relationship with the recovery achieved by the AER determination does not plead into relevance the underlying HoustonKemp materials. 

9. TTEG submits that the HoustonKemp materials are directly relevant to the respondents’ plea that TTEG did not advise them in relation to the preparation of the first HoustonKemp report in 2017, or submissions and modelling they relied on in the AER arbitration.[41]  TTEG submits that documents directly relevant to the allegation would be documents that show TTEG giving advice to the respondents about the first HoustonKemp report or the submissions and modelling the respondents submitted in the AER access dispute determination.  There is no dispute that documents fitting that description are in the possession of both TTEG and the respondents. TTEG does not complain that the respondents have not given discovery of documents recording advice that TTEG provided. 

   [41] Defence (FDN 122) at [75F.1] and [75F.4].

10. The respondents have discovered documents relevant to the achievement of the savings Objective.  They are the HoustonKemp reports and the modelling and submissions that lay behind them.  The savings Objective was achieved by the finding of the AER that SAPN had over recovered from the respondents about $13 million.  Documents that were not provided to the AER for the purposes of its determination of the access dispute cannot be directly relevant. 

11. The issues raised by the defence[42] are the evidence of the materials relied on by the AER in making the access dispute determination and whether TTEG advised the respondents in relation to the preparation of the first HoustonKemp report, or any submissions or modelling that the respondents submitted to the AER arbitration. 

    [42] Defence (FDN 122) at [75E] and [75F].

12. TTEG submits that the respondents have raised an issue about the causal connection between TTEG’s earlier work in the period from 2012 to 2014[43] and the savings achieved by the respondents from the AER determination in 2019.  However, that is not an issue raised on either the RSoC or the defence. 

    [43] See the materials referred to in the third affidavit of Scott Bruce Foreman, sworn on 30 May 2024, (FDN 217) at [21]-[23] and [24]-[26], referring to the initial assessment in October 2012, the revised assessment in July 2013 and the respondents’ prior submissions to the AER in June 2014. 

13. The respondents’ defence to TTEG’s claim is that TTEG was not involved in the work that culminated in the AER determination, accordingly, no further discovery is required. 

14. The respondents deny TTEG’s claim to have achieved the Objective.  They do so on the basis that the AER determination was made as a result of the evidence of the expert opinions and modelling of HoustonKemp, and SAPN’s and AER’s other experts.[44] 

    [44] Defence (FDN 122) at [81.2], [83.3(b)], [86.3(b)] and [75A]-[75F].

15. TTEG did not advise in relation to the preparation of the first HoustonKemp report or any submissions or modelling that the respondents relied on in the AER arbitration.  Consequently, the savings that were achieved as a result of the AER determination were not savings achieved through the provision of services by TTEG. 

16. TTEG has not pleaded that although it did not advise the respondents in relation to the preparation of those reports, submissions or modelling, TTEG nonetheless achieved the Objective because the respondents and/or HoustonKemp made use of the analysis previously undertaken by TTEG.  Neither has TTEG pleaded that the respondents were not entitled to refer to analysis or submissions that TTEG had previously prepared for or provided to the respondents.  I accept that the respondents have not made a rejoinder to any such case, because no such case has been pleaded by TTEG, contrary to the obligation imposed by UCR 67.7(2), if in fact that is the case it proposes to run at trial.[45]

    [45] Rehn v Australian Football League & Ors (2003) 227 LSJS 378 at [26]; [2003] SASC 159.

17. Rather than expressly pleading a causal connection case, TTEG now seeks to rely on the implied joinder of issue.  In my view, it does so contrary to the requirements of the rules.[46] 

    [46] UCR 67.2(2) and 67.7(2).

18. It is not in dispute that TTEG seeks discovery of the HoustonKemp materials in order to embark on a “train of enquiry” to ascertain whether Mr Houston, in preparing the HoustonKemp report, referred to or relied on TTEG’s work whether materially or at all; and, if so, in what respects and/or to what extent.

19. It is insufficient to allege that TTEG previously had undertaken analysis and contributed to submissions that covered the same broad topics as were later addressed in the first HoustonKemp report, namely, the depreciation / asset cost overcharge and elevation charges.  This does not prove that TTEG’s prior work made some materially causative contribution to the outcome of the access dispute determination.  Likewise, given the size of TTEG’s written reports, isolated examples of similarities between the contents of those reports and the first HoustonKemp report, confined to discrete aspects of work undertaken by TTEG concerning subtopics of allocation of overheads and the tax treatment of gifted assets, fails to establish how TTEG would have a proper basis to allege that its prior analyses made any material causal contribution to the outcome of the AER arbitration.  The result is that the application has about it more than a whiff of fishing.[47] 

    [47] Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd (2020) 137 SASR 117 at [19] and [143].

20. TTEG submits that the HoustonKemp materials are directly relevant to its claims that the respondents unreasonably failed to extend their agreements with TTEG in around April 2016.[48]  However, the alleged failures to extend the agreements in around April 2016, occurred before any of the respondents had engaged HoustonKemp, and even longer before the AER arbitration was initiated and the relevant savings were achieved.  TTEG does not allege that the respondents unreasonably failed to extend the agreements in order to make illicit or improper use of TTEG’s work product. 

    [48] Revised Statement of Claim (FDN 116) at [85] and [90].

21. The respondents’ defence[49] does not plead any issue concerning the contents of the respondents’ brief to HoustonKemp.  At most, the defence raises the question whether TTEG advised the respondents in relation to the preparation of the first HoustonKemp report, and any submissions or modelling that they relied on in the AER arbitration. 

    [49] Defence (FDN 122) at [75E] and [75F].

22. By their defence,[50] the respondents deny that the savings realised from the AER determination in 2019 were savings achieved through the provision of services by TTEG, in circumstances where TTEG had not advised in relation to the HoustonKemp report, any submissions or modelling the respondents relied on in the AER arbitration.  Rather, they plead[51] that the Objective of the agreements were achieved by the fact that savings resulted from the AER determination.

    [50] Defence (FDN 122) at [81.2] and [83.1(b)].

    [51] Defence (FDN 122) at [82].

23. I accept that TTEG has sought to reframe the issues identified in the pleadings.  In its written submissions, TTEG suggests that the HoustonKemp materials are relevant “to the issue of what caused the AER determination savings”.[52]  But the critical question that arises on the terms of the agreements entitling TTEG to payment of the performance fee is whether TTEG achieved the Objective during the terms of the agreements (or at all), not some wider issue of whether any analysis done by TTEG years earlier, while the agreements were on foot, can be said to have made some discernible causal contribution to the determination that the AER eventually made in 2019. 

    [52] Applicants written submissions (FDN 224) [69.2]. 

24. I accept the respondents’ submission that the HoustonKemp materials are not directly relevant to the issue of whether TTEG advised the respondents in relation to the preparation of the HoustonKemp reports, and any submissions or modelling relied on by the respondents. 

25. What is conspicuously absent from TTEG’s case is a plea that the savings Objective was achieved as a result of work undertaken by TTEG during the term of the agreements.  The absence of such a plea is critical to the claim by TTEG that its entitlement to payment was agreed on a contingency basis.  TTEG was only entitled to be paid if the contingency, namely the achievement of savings through the provision of TTEG's services by way of reductions in Public Lighting Charges for the respondents, was achieved during the term of the agreements.  Importantly, pursuant to the deed, TTEG granted the Minister an exclusive transferrable royalty-free perpetual licence to hold, use or copy all things produced by TTEG in the course of its performance of the work for any purpose including the making of submissions to the AER.  The deed expressly contemplates that the State could, after the expiry of the deed, take any workings, analysis or report that TTEG had prepared in the course of providing the services while the deed was in force and then resubmit that work to the AER or incorporate it into some other submission to the AER. 

26. The agreements were executed in 2011, albeit not at the same time.  The term of the agreements was 12 months with rights of renewal for further periods of six months.  Having not achieved the savings Objective within the initial term, the agreements were renewed on successive occasions for further periods of six months each until the respondents elected not to renew the agreements beyond 2016.

27. Clearly, the terms of the agreements expressly contemplated and authorised the use by the respondents of TTEG’s work for the purposes of making any subsequent submission to the AER.  These terms are inconsistent with TTEG’s case that, if the respondents achieved the savings Objective subsequent to the expiry of the agreements, TTEG would have the right to claim the contingency payment.

28. Any other construction of the agreements would have produced a commercial nonsense.[53]  It would be a commercial nonsense to construe the agreements as entitling TTEG to the performance payment after the TTEG contract had not been renewed; a new consultant had been retained; the respondents had provided the new consultant’s submissions to the AER and the AER had found on the basis of those submissions and other submissions provided by SAPN and HoustonKemp, that the respondents were entitled to recover savings from SAPN by a reduction in the amount paid by the respondents for street and public lighting services.   

    [53] Electricity Generation Corporation v Woodside Energy [2014] HCA 7 at [35], (2014) 251 CLR 640.

29. It would have been uncommercial for TTEG to have been paid a performance fee if savings did not result from TTEG’s performance of the agreements.  That was a recognised commercial risk that the parties had agreed was to fall on TTEG in the event that it did not achieve the savings Objective.  That had an obvious commercial purpose.  

30. The deed expired on 31 March 2016.  It was not renewed.  The last extension of the consultancy agreement with the councils expired on 2 November 2015.  It was not renewed.  HoustonKemp was not retained by the respondents until subsequent to the non-renewal of the agreements.  Once the HoustonKemp report was completed, the respondents provided it to SAPN in the hope of reaching a compromise.  When this did not succeed, they initiated the access dispute arbitration before the AER in May 2017, relying on the first HoustonKemp report. 

31. This followed an earlier reference of the access dispute to the AER in December 2013.  I accept that the material referred to the AER for that purpose in December 2013 was based on work done by TTEG.  However, at that time the AER did not determine the access dispute but referred it to a without prejudice ADR process pursuant to s 129 of the National Electricity Law.  That process involved a review of the materials by an expert review panel between November 2014 and September 2015, followed by a mediation between September 2015 and early 2016.  Unfortunately, the savings Objective was not achieved by the conclusion of this process.  It was in those circumstances that the respondents elected not to further renew the agreements. 

32. It was at that stage that the respondents retained HoustonKemp for the purposes of making a further application to the AER for the resolution of the access dispute.  To that end, in May 2017 the respondents wrote to the AER advising that the ADR processes had not resolved the dispute and asking the AER to do so.  The AER delivered its decision in September 2019.  All in all, the respondents relied on the four reports of HoustonKemp, submitted on 6 February 2017, 20 September 2017, 11 March 2019 and 15 April 2019; the SAPN reports; the submissions made in relation to those reports; all of the supporting modelling; all correspondence with the AER, and all transcripts.  There is no issue this material is discoverable and as I understand it, all of this documentary material has been discovered by the respondents.[54] 

    [54] Seventh affidavit of Kate Lauren Brandon, sworn on 28 July 2024, (FDN 240).

33. TTEG pleads that there were implied extensions of the agreements by which the councils are estopped from denying that the consultancy agreement was extended until 14 October 2016 and the State is estopped from denying that the deed was extended until 30 February 2017.[55]  TTEG pleads that as at the dates when the agreements expired, or the dates to which the estoppels ran, it had performed the services.[56]  It is significant that all those dates precede the commencement of the AER arbitration. 

    [55] Revised Statement of Claim (FDN 116) at [69] and [71].

    [56] Revised Statement of Claim (FDN 116) at [64]-[71].

34. TTEG pleads that as a consequence of the determination of the access dispute by the AER on 26 September 2019 it was found that SAPN had over recovered during the 2010-2015 period an amount of around $13 million and was required to repay or credit this amount to the respondents.  TTEG further pleads that the savings and / or credits constitute a saving in the amount paid by the respondents for street lighting services measured against what the respondents would have otherwise paid, and that as a result, the Objective of the agreements were achieved.[57] 

    [57] Revised Statement of Claim (FDN 116) at [81]-[82].

35. The respondents’ defence to the contractual claim is that the agreements expired in November 2015 and March 2016 and were not renewed.  A new consultant was retained and an application made to the AER to conduct the access dispute arbitration in reliance on the HoustonKemp report.  AER determined the dispute relying on the four HoustonKemp reports and other reports by expert economists retained by SAPN.  TTEG did not advise in relation to any of those matters.  It follows that as TTEG was not involved in advising the respondents when this work was undertaken, the savings that resulted from the AER determination were not achieved through the provision of TTEG’s services. 

36. Further, there is no plea by TTEG that claims an entitlement to payment of the performance fee as a result of the outcome of the AER determination on the basis that TTEG had somehow made some intellectual contribution to the submissions put on behalf of the respondents at the hearing of the AER determination.  TTEG submits that the issue of whether it “advised” the respondents ought to be understood as a plea that TTEG’s work product was relied on or utilised by the respondents in the AER determination of the access dispute.  I do not consider that to be directly relevant.    TTEG seeks to rely upon a reference in an email from the respondents to a representative of the AER on 17 June 2019 referred to earlier in these reasons.  That email referred to a TTEG report, being a submission prepared by TTEG on behalf of the respondents in September 2009 to the ESCOSA which was referred to in the AER determination.[58] 

    [58] Applicants written submissions (FDN 243) at [12].

37. I do not accept this submission.  No basis has been established to impose on the respondents an obligation to provide further discovery in reliance upon that submission referred to earlier prepared by TTEG dated September 2009.  That was a submission put before the agreements commenced under the previous regulatory process presided over by ESCOSA. 

38. I accept the submission of the respondents that the evidence does not establish that they made any use of the 2009 TTEG report.  There is nothing in this to support a claim that further discovery should be made of materials that have not been shown on the face of the pleadings to have influenced the content of the HoustonKemp report.  Accordingly, direct relevance has not been established.  The 2009 TTEG report does not form part of the services for which payment is sought by TTEG.   The parties’ discovery obligations are to be determined by reference to the pleadings.  In any event, this report was written before the relevant contractual period which commenced in 2010.   In addition, TTEG has not pleaded reliance on the 2009 TTEG report. 

1. There is no pleading that TTEG is entitled to the performance payment on the basis that HoustonKemp adopted or incorporated its work in Mr Houston’s report.  It is not open to TTEG to rely on some implication to be derived from the pleadings that is said to raise this unpleaded claim of an entitlement as a result of some causal contribution TTEG made before the AER determination. 

2. In the end, the obligation to provide further discovery is to be determined by reference to the pleaded case.  It is not to be determined by reference to a submission about implications to be drawn from discovered documents which TTEG has not pleaded.

3. TTEG relies upon four matters that are said to evidence that work performed by TTEG made a material contribution to the achievement of the savings Objective.  These matters are identified in the third affidavit of Scott Burce Foreman.[59] They are:

   (i)A reference in a footnote to the first HoustonKemp report that SAPN had advised the public lighting customers that its elevation costs were close to zero and not material.  This is a reference to a letter from SAPN sent in 2006, five years before entry into the agreements. 

   (ii)A footnote reference in the first HoustonKemp report to accounting advice which substantiated an assumption that the tax asset life of certain assets is 15 years.

   (iii)A statement in the first HoustonKemp report noting that SAPN allocates its corporate overhead costs to various services on the basis of their share of revenue.  This is a non-contentious proposition. 

   (iv)HoustonKemp’s rejection of a view previously put forward by TTEG about the tax treatment of gifted assets.

   [59] Third affidavit of Scott Bruce Foreman, sworn on 30 May 2024, (FDN 217).

4. I do not accept this submission.  Three of those matters are insubstantial and points of minor detail, and the fourth is said to arise from HoustonKemp’s rejection of a view previously articulated by TTEG about the issue of tax treatment of gifted assets.  However, any submission that the work of TTEG made some contribution to the ultimate success of achieving the savings Objective in the final determination is untenable given that HoustonKemp, having considered the position taken by TTEG, rejected it.    

5. Insofar as the causal contribution claim made by TTEG is not raised expressly on the pleadings, TTEG submits that by inference or implication within the defence, and perhaps an implied joinder of issue, that this gives rise to an issue about which the respondents are required to give further discovery.  I do not accept the TTEG submission. 

6. I accept the submission of the respondents that the correct analysis to be adopted in these circumstances is that identified by Doyle CJ in Rehn’s case, that the purpose for imposing a test of direct relevance to issues raised on the pleadings is to ensure that the parties are clear as to their discovery obligations.  In this case, the causal contribution claim is not an issue that arises on the pleadings.  On the HoustonKemp materials, which are not the HoustonKemp report, which has been discovered, TTEG has all the submissions from all the relevant parties to the AER but it does not impose an obligation to discover the contents of the HoustonKemp brief which is not directly relevant and is, in any event, privileged.

7. In the alternative to the contractual claim, TTEG pleads that the respondents were under an implied obligation to extend the term of the agreements until such time as the AER determination was complete, and by not extending, the respondents contravened that implied duty of cooperation. 

8. I do not accept that submission. 

9. The respondents did not breach the duty of cooperation by failing to renew the agreements until the making of the AER determination.  TTEG invokes the principle in Mackay v Dick.[60]  I do not accept this submission.  The duty of cooperation is a duty to cooperate in the performance of a contract.  The terms of the contract contradict the existence of a duty of cooperation where the requisite cooperation is the renewal of the contract.  Once the contract came to an end in accordance with its terms, there was no room for the operation of a duty to cooperate that required entry into a further contract or a renewal of the existing contract. 

   [60] (1881) 6 App CAS 251; which has been adopted by the High Court in Nullagine Investments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635 at 659; Commissioner of Taxation v Sara Lee Household & Body Care (Aust) Pty Ltd (2000) 201 CLR 520 at 547; Commonwealth Bank of Australia v Barker [2014] HCA 32, (2014) 253 CLR 169.

10. In any event, the allegation appears to be that the respondents declined to further extend the agreements for the purpose of making illicit or improper use of the TTEG material.  However, that is not an allegation that has been pleaded.  If reliance was to be placed on it, it should have been pleaded having regard to the UCR regarding pleadings in reply but also the principles relevant to particularising any allegation in the nature of fraud or improper purpose. 

11. The contractual framework is inconsistent with there being any basis for a claim to payment of the performance fee many years after TTEG had ceased to provide the services and its contracts having expired; and after the respondents had achieved the savings Objective with the assistance of a new expert consultant who was able to achieve what TTEG could not. 

12. Any suggestion that it was unreasonable in these circumstances for the respondents not to further extend the period of the agreements until the AER determination was made cannot be accepted.  The respondents had made a decision to avail themselves of the services of another expert given the failure of TTEG’s work to have achieved the savings Objective.  The period within which the AER determination might be made was indeterminate.  There was nothing unreasonable in the respondents declining to renew the agreements in circumstances where they were retaining an alternative expert.   Further, to do so in the circumstances where if the respondents were successful in achieving the savings Objective in reliance upon the HoustonKemp report, they would have been exposed to payment of two performance fees in circumstances where TTEG had not been involved in the successful AER determination process.

13. For these reasons, I am satisfied that the HoustonKemp materials are not directly relevant. 

    Materials relied upon by an expert in preparing an expert report

14. Documents used by an expert to form an opinion, whether or not they emanated from the party claiming privilege, are not the subject of privilege.[61] Privilege will be waived over documents and information which were taken into account or which otherwise underpinned or influenced the content of a document that a party has chosen to deploy to advance its own interests.[62]

    [61] Cross on Evidence, [25235] citing, amongst other cases, Interchase Corp Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) [1999] 1 Qd R 141 and Australian Securities and Investments Commission v Southcorp Ltd (2003) 46 ACSR 438; [2003] FCA 804.

    [62] AWB Ltd v Cole (No 5) [2006] FCA 1234 at [198], [200]-[205], (2006) 155 FCR 30 (Young J).

15. The principles regarding privilege in the context of an expert report and associated material waiver are well established and were summarised by Lindgren J in Australian Securities & Investments Commission v Southcorp Ltd[63] as follows:[64]

    (1) Ordinarily the confidential briefing or instructing by a prospective litigant's lawyers of an expert to provide a report of his or her opinion to be used in the anticipated litigation attracts client legal privilege.

    (2) Copies of documents, whether the originals are privileged or not, where the copies were made for the purpose of forming part of confidential communications between the client’s lawyers and the expert witness, ordinarily attract the privilege.

    (3) Documents generated unilaterally by the expert witness, such as working notes, field notes, and the witness’s own drafts of his or her report, do not attract privilege because they are not in the nature of, and would not expose, communications.

    (4) Ordinarily disclosure of the expert’s report for the purpose of reliance on it in the litigation will result in an implied waiver of the privilege in respect of the brief or instructions or documents referred to in (1) and (2) above, at least if the appropriate inference to be drawn is that they were used in a way that could be said to influence the content of the report, because, in these circumstances, it would be unfair for the client to rely on the report without disclosure of the brief, instructions or documents.

    (5) Similarly, privilege cannot be maintained in respect of documents used by an expert to form an opinion or write a report, regardless of how the expert came by the documents.

    (6) It may be difficult to establish at an early stage whether documents which were before an expert witness influenced the content of his or her report, in the absence of any reference to them in the report.

    [citations omitted].

    [63] (2003) 46 ACSR 438; [2003] FCA 804 at [21].

    [64] Notwithstanding the use of client legal privilege, Lindgren J was speaking of common law principles of legal professional privilege: Matthews v SPI Electricity Pty Ltd & Ors; SPI Electricity Pty Ltd v ACN 060 674 580 & Ors [2013] VSC 33 at [44].

16. In Interchase Corp Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1),[65]  Thomas J held:[66]

    I would hold that in general, when an expert is engaged by a solicitor for the purpose of giving evidence in a case, documents generated by the expert and information recorded in one form or another by the expert in the course of forming an opinion are not a proper subject for a claim of legal professional privilege. Privilege may however be claimed in relation to communications between the expert and the solicitor (both ways) when such communication is made for the purpose of confidential use in the litigation. Beyond this there is no sufficient reason why any material relevant to the formation of the expert’s opinion should be subject to a claim of legal professional privilege. It is as well to add that an expert or solicitor may not artificially manufacture privilege by, for example, the expert sending in his or her file to the solicitor. Documents of this kind simply are not confidential.

    [65] [1999] 1 Qd R 141, cited by Lindgren J in ASIC v Southcorp Ltd in support of principles 1 to 3 and 5.

    [66] [1999] 1 Qd R 141 at 162.

17. In Murphy Operator Pty Ltd v Gladstone Ports Corp Ltd,[67] Crow J set out the following principles that operate at common law with respect to expert reports and privileged documents:[68]

    [67] [2019] QSC 012, [2019] 3 Qd R 255.

    [68] [2019] QSC 012 at 69, [2019] 3 Qd R 255.

    (a) communications between a lawyer and any third party for the dominant purpose of anticipated or actual litigation are subject to legal professional privilege (since this is the only privilege present in issue, we will refer to it simply as “privilege”);

    (b) the reason for the privilege is that it is in the interests of justice that each party be free to prepare its case as fully as possible, without the risk that its opponent will be able to recover the material generated in the course of those preparations;

    (c) it follows that, ordinarily, the confidential briefings to a potential expert witness are privileged;

    (d) while the privilege is attached to communications and not to documents per se, copies of non-privileged documents will be privilege if made for the purposes of communications between lawyers and clients or third parties (including relevantly potentially expert witnesses) for the purposes of giving or obtaining legal advice or use in preparation for actual or anticipation litigation [sic];

    (e) documents generated unilaterally by the expert, including his working notes and own drafts, do not attract privilege because generally they are not communications (although where draft reports do comprise or evidence communications, they are privileged – see “h” below);

    (f) ordinarily reliance on the expert’s report will result in implied waiver of the document in (c) and (d) above, at least where the inference arises that the documents were used in a way that influenced the content of the report. This is because it would be unfair to compromise the examination and cross-examination of the expert by refusing access to all assumptions and facts on which the opinion was based, and the process by which it was arrived at;

    (g) because of the considerations in either (e) or (f), privilege cannot be maintained in respect of documents actually used by the expert to form the opinion, regardless of how the expert came by the documents;

    (h) the consideration in (f) requires further qualification, namely that the “influencing” must have been such as to make it unfair that the influencing material not be disclosed. This additional requirement of unfairness explains why proper communications with the lawyers, directed at ensuring a draft report is in admissible form, will retain privilege, which communications directed at influencing the substance of the expert’s opinions would forfeit privilege upon disclosure of the report; and

    (i) any implied waiver in (g) occurs at the time the expert’s report is first deployed to the advantage of the party who commissioned it. Where there are directions for pre-trial exchange of expert reports, that waiver occurs at the time of exchange.

    [citations omitted].

18. It is also the position that the deployment of an expert’s evidence in earlier proceedings waives privilege over the materials underlying the expert’s opinions for the purpose of subsequent proceedings.  In Quach v MLC Life Limited (No 5),[69] the applicant had sought the dismissal of nine subpoenae issued to third parties on the basis that the subpoenae related to documents which had been previously prepared for expert reports that were tendered in earlier regulatory proceedings against the applicant.[70]  One of the subpoenae was issued to the medical practitioner that the applicant had engaged to give evidence and prepare a report for the purpose of the regulatory proceedings. In dismissing the applicant’s contention that the documents were subject to legal professional privilege, after quoting the reasons of Lindgren J in ASIC v Southcorp Ltd,[71] Rares J stated:[72]

    Mr Quach attended on the relevant practitioners, following which they prepared reports about him. Those reports were used in evidence in the regulatory proceedings. There is no possible basis to support a claim that Mr Quach has legal professional privilege over the doctors’ records or reports created and tendered in any of those proceedings. Privilege no longer attached to any such reports once the reports themselves were deployed in evidence. Moreover, the material underlying the expert opinions expressed and statements of fact in those reports would also appear to be relevant to the issues in this proceeding and not privileged.

    [emphasis added].

    [69] [2020] FCA 1134.

    [70] Third affidavit of Scott Bruce Foreman, sworn on 30 May 2024, (FDN 217) at [7]; Respondents List of Documents, FDN 187, 192 to 207 and 210 to 214.

    [71] [2003] FCA 804 at [21], (2003) 46 ACSR 438 at 442.

    [72] [2020] FCA 1134 at [15], citing Lindgren J in ASIC v Southcorp Ltd [2003] FCA 804 at [21], (2003) 46 ACSR 438 at 442.

19. In the circumstances of that case, Rares J held that privilege in the experts reports, and the substratum on which they were based, was lost by no later than when the reports were tendered by Mr Quach’s lawyers.[73] 

    [73] Quach v MLC Life Limited (No 5) [2020] FCA 1134 at [22].

20. No question of waiver arises as a result of the provision. 

    Discovery of privileged documents

21. UCR 73.3(2)(b) provides that each discoverable document over which privilege from production is claimed must be individually itemised and described:

    (2)     A list of documents must, subject to subrules (3), (4) and (5)—

    …

    (b)     list each discoverable document in the person’s possession, custody or power in respect of which a claim of privilege is made, identifying the nature of the privilege and ground on which it is claimed and describing the document in sufficient detail that it can be identified and the fact that it is privileged is apparent from its description;

22. The relevant exception to UCR 73.3(2)(b) is UCR 73.3(5) which provides the circumstances in which documents over which privilege is claimed do not need to be individually listed:

    (5) A privileged document need not be discovered separately if it is encompassed by a generic description of—

    (a)     communications and records of communications between a person and the person’s lawyer for the dominant purpose of legal advice or representation in the proceeding;

    (b)     drafts of documents prepared for the dominant purpose of legal advice or representation in the proceeding; or

    (c)     opinions or advices of counsel.

23. It is well accepted that to the extent privileged documents are not covered by a permitted generic description, the documents over which privilege is claimed by a party must be individually itemised and described in sufficient detail to enable the Court to make an order for the production of the document should it be appropriate.[74]  In Lanzon, Olsson J stated:[75] 

    The basic principle is that all documents adverted to in a party’s list of documents must be described with sufficient particularity to identify them, in case the Court should think fit to order any of them to be produced (Taylor v Batten [(1878) 4 QBD 85]). … If a document is material, the fact that a party intends to object to its production for examination is not ground for failing to disclose and sufficiently identify it. If this were not the situation then any attempt on the part of another party to test the validity of the claim to privilege (as, for example, in Grant v Downs) would plainly be abortive.

    [74] Lanzon v State Transport Authority (1985) 38 SASR 321.

    [75] (1985) 38 SASR 321 at 322 (Olsson J).

24. White J held in Kadlunga Proprietors v Electricity Trust of South Australia that:[76]

    … it is both necessary and desirable that the description of a particular document for which protection is claimed should be sufficient to disclose quite readily (without disclosing contents) whether or not it is in fact a document to which the head of privilege relied upon can extend.

    [76] (1985) 39 SASR 410 at 414 (with whom King CJ and Millhouse J agreed).

25. What is required to ensure that each particular document is properly described varies depending on the nature of the document and the particular ground of privilege claimed.[77]

    [77] Kadlunga Proprietors v Electricity Trust of South Australia (1985) 39 SASR 410 at 415.

26. In Alstom Power Ltd v Yokogawa Australia Pty Ltd & Ors (No 2),[78] Anderson J referred to Kadlunga and stated that:[79]

    [t]he basis of a Kadlunga list of documents is that there should be a sufficient description of the documents, without disclosing the contents of the documents, so as to enable the court to decide if the privilege claimed is maintainable…

    [78] [2008] SASC 356 at [42].

    [79] Kadlunga Proprietors v Electricity Trust of South Australia (1985) 39 SASR 410 at 414.

    Waiver of privilege

27. An implied waiver occurs where the Court, informed by considerations of fairness, considers that an act of the privilege holders is inconsistent with the maintenance of the confidentiality preserved by the privilege, despite any subjective intention of the individual performing the act.[80]  Waiver will be implied when, by reason of some conduct of the privilege holder, it becomes unfair to maintain the privilege.[81]  In the context of implied waiver, the High Court in Mann v Carnell said:[82]

    What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.

    [80] Salder v Director of Public Prosecutions [2021] SASCA 20 at [90], (2021) 138 SASR 190 (Bleby J).

    [81] Attorney-General (NT) v Maurice (1986) 161 CLR 475, 487 (Mason and Brennan JJ).

    [82] [1999] HCA 66 at [29], (1999) 201 CLR 1.

1. The consideration of fairness or unfairness which the Court will have regard to is typically characterised as an inconsistency between the position of one party seeking a finding as to an issue upon which the privileged communication has a bearing and, at the same time, withholding the content of that communication.  This involves consideration of what the precise issue is and how the privileged communications impacts upon that issue.[83]  

   [83] Liquorland (Australia) Pty Ltd v Anghie [2003] VSC 73 at [32], (2003) 7 VR 27 (Byrne J).

2. As to issue waiver, whereby a party otherwise entitled to claim privilege pleads into issue the content of a privileged communication, the same principle with respect to implied waiver and inconsistency in Mann v Carnell is applicable.[84]

   [84] Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86 at [54], (2006) 151 FCR 341.

3. Waiver by pleading privileged communications into issue can only occur where the issue is raised by the party that otherwise has the benefit of the privilege.[85]

   [85] Lombe v Pollak [2004] FCA 264 at [36] (Jacobson J); Hickinbotham Pty Ltd v Australian Kidney Foundation [2017] SASC 108 at [15] (Roder J).

4. What brings about the waiver is the making of express or implied assertions about the content of privileged communications, while at the same time seeking to maintain the privilege.[86] A fact-based inquiry is required as to whether the privilege holder has directly or indirectly put the contents of an otherwise privileged communication in issue.[87]

   [86] Council of theNew South Wales Bar Association v Archer [2008] NSWCA 164 at [48], (2008) 72 NSWLR 236 (Hodgson JA).

   [87] Commissioner of Taxation v Rio Tinto Ltd at [2006] FCAFC 86 at [61], (2006) 151 FCR 341.

5. In DSE (Holdings) Pty Ltd v Intertan Inc,[88] Allsop J stated that a waiver occurs where:[89]

   … the party entitled to the privilege makes an assertion (express or implied), or brings a case, which is either about the contents of the confidential communication or which necessarily lays open the confidential communication to scrutiny and, by such conduct, an inconsistency arises between the act and the maintenance of the confidence, informed partly by the forensic unfairness of allowing the claim to proceed without disclosure of the communication.

   [88] [2003] FCA 384, (2003) 127 FCR 499.

   [89] [2003] FCA 384 at [58], (2003) 127 FCR 499.

6. Where a party raises a positive case in which that party’s state of mind is in issue, such as to establish reliance on a representation or state of affairs, it is more likely to be considered inconsistent with maintaining privilege.[90]

   [90] Idoport Pty Ltd (in liq) (recs apptd); National Australia Bank Limited v Sheahan [2012] NSWSC 58 at [67] (Ward J).

7. In Mobis Parts Australia Pty Ltd v XL Insurance Company SE[91] Beech-Jones J considered the question of waiver in the following terms:[92]

   The question of waiver is not resolved by simply asking whether the holder of the privilege puts their state of mind in issue. Instead it requires consideration as to whether they have put the contents of the otherwise privileged information in issue … it is only the conduct of the holder that is relevant and a waiver cannot be forced upon them by a mere assertion of their state of mind.

   [91] [2016] NSWSC 1599.

   [92] [2016] NSWSC 1599 at [41]-[42].

8. Similarly, in Elders Forestry Ltd v Bosi Security Services Ltd & Ors (No. 2)[93] Kourakis J (as he then was) considered a case of a plea of an assumption in the context of a claim that legal advice had been, by that plea, waived.  Kourakis J said:[94]

   I am not satisfied that the pleadings in this case implicate the legal advice received by BOSI to the extent which is necessary to constitute a waiver.  The advice may well be relevant to the question of whether BOSI did in fact make the assumption pleaded in [26] of its defence.  However, the plea does not expressly or impliedly assert that its assumption was based on that advice.  Nor in all of the circumstances does the pleading of the assumption impugn, or raise as an issue, the content or nature of that advice.

   [93] [2010] SASC 226.

   [94] [2010] SASC 226 at [23].

9. In this case, I do not accept that the respondents have waived any claim for privilege by pleading into issue the contents of the HoustonKemp materials.  Contrary to the submission of TTEG, it is relevant that the respondents rely on the HoustonKemp reports only as factual evidence rather than expert evidence.  The distinction between the HoustonKemp reports and the HoutonKemp materials is important.  In the course of the AER determination the respondents relied on, inter alia, the HoustonKemp reports but not on the HoustonKemp materials.  Accordingly, TTEG’s claim that privilege in the HoustonKemp materials, which is not in dispute, has been waived, cannot be accepted.  The privileged communications are the contents of the brief provided to Mr Houston, and the communications between the respondents and him that preceded the provision of the brief.  A waiver only arises if the respondents bring a case which is either about the contents of the HoustonKemp materials or necessarily lays the contents of those materials open to scrutiny.[95]  It is this distinction between the HoustonKemp reports and the HoustonKemp materials which underpins the relevance of why the reliance by the respondents on the HoustonKemp reports only as factual evidence rather than as evidence of Mr Houston’s expert opinions, is important.  It follows that there is no relevant inconsistency or unfairness giving rise to an implied waiver by the respondents’ pleading that the AER determination was made by reference to, inter alia, the HoustonKemp reports; that TTEG did not advise the respondents in relation to the submissions and modelling they relied upon before the AER; and that the AER determination savings were not achieved by the provision of services by TTEG, during the term of the agreements or afterwards. The respondents’ pleaded case does not concern the HoustonKemp materials, i.e., the contents of the privileged communications.  There is nothing in the defence that necessarily lays open to scrutiny the HoustonKemp materials. 

   [95] Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86, (2006) 151 FCR 341.

10. TTEG seeks support in the judgment of the Full Federal Court in Commissioner of Taxation v Rio Tinto Ltd.[96]  However, that case is readily distinguishable.   In Rio Tinto the Commissioner of Taxation said he had referred to or taken account of the contents of documents over which privilege was claimed.  It was this inconsistency which meant that privilege was waived, notwithstanding the Commissioner expressly disavowing any intention to do so.  Accordingly, the Court held that privilege had been impliedly waived.  By contrast, in this case the respondents do not plead that they placed any reliance upon the contents of the HoustonKemp materials.  There is nothing that necessarily lays open to scrutiny the contents of the brief provided to Mr Houston.  There is nothing in the respondents’ pleadings concerning the contents of the HoustonKemp materials.  The defence pleaded is only concerned with the state of mind of the AER, not the respondents.  Accordingly, there is no inconsistency or unfairness of the kind which was crucial in Rio Tinto.  This is underlined by the observation of Byrne J in Liquorland (Australia) Pty Ltd v Anghie[97] that in assessing whether there is a requisite unfairness justifying a waiver of privilege, what will usually be required is identification of the precise issue in the pleadings and how it is said that the privileged communication impacts upon that issue.  That necessarily involves application of the narrow test of direct relevance.

    [96] [2006] FCAFC 86, (2006) 151 FCR 341.

    [97] [2003] VSC 73 at [32], (2003) 7 VR 27.

    UCR 74.4

11. TTEG also seeks disclosure of the HoustonKemp materials on the basis that the HoustonKemp reports are “expert reports” for the purposes of Chapter 7, Part 14 of the UCR, with the intended result that the respondents are required to produce copies of the HoustonKemp materials to TTEG upon request pursuant to UCR 74.4, to the extent that the materials fall within any of the categories prescribed in UCR 74.4(1). 

12. TTEG submits that the HoustonKemp reports are clearly “expert reports” within the meaning of UCR 74.1. 

13. For the purposes of UCR 74.4, UCR 74.1 defines an expert report to mean a written report by an expert relevant to issues in the proceeding in question including a summary expert report but excluding a report by a shadow expert.

14. UCR 74.4 provides:

    74.4—Provision of information and documents

    (1)A party may request another party who has discovered an expert report to provide—

    (a)     a copy of written communications and records of communications between the party or a representative of the party and the expert or between the expert and another expert relevant to the content of the report (relevant communications);

    (b)     details (date, parties and substantive content) of relevant communications if they were oral and not recorded;

    (c)     a copy of documentary material on which the expert relied in making the report; or

    (d)     details of any fee or benefit that the expert has received, or is or will become entitled to receive, for preparation of the report or giving evidence.

    (2)A party who receives a request under subrule (1) must comply with it as soon as practicable.

15. The respondents deny that the HoustonKemp reports are “expert reports” to which UCR 74.4 applies, within the meaning of Chapter 7, Part 14 of the UCR.  As a result, they deny the existence of any duty to provide the HoustonKemp materials to TTEG, and ultimately are not required to do so pursuant to the operation of UCR 74.4.[98]

    [98] Chapter 7 Part 14 consists of UCR 74 which concerns expert reports. 

16. The respondents submit that Chapter 7, Part 14 establishes a regime for the production and use of expert reports for the purpose of facilitating expert evidence in litigation.

17. They submit that pursuant to UCR 74.2, a party who requests an expert to provide an expert report must, within seven says, send a letter of instruction to the expert addressing the matters set out in UCR 74.2(1)(a)-(e) and then serve a copy of it on the other parties within seven days thereafter.[99] 

    [99] UCR 74.2(2).

18. UCR 74.2(1) provides:

    (1)A party who requests an expert to provide an expert report must, within 7 days of arranging for the expert to provide an expert report, send a letter to the expert—

    (a)     setting out the assumptions the expert is requested to make for the purpose of expressing an opinion;

    (b)     setting out any investigations the expert is requested to make for the purpose of expressing an opinion;

    (c)     setting out the materials provided to the expert for the purpose of expressing an opinion;

    (d)     setting out the questions on which the expert is asked to express an opinion; and

    (e)     attaching a copy of Divisions 3 and 4 of this Part.

19. UCR 74.3 requires that a party must serve on each other party a copy of each expert report in its possession, custody or power within the timeframes prescribed after the close of pleadings, or such other date as may be ordered (whether or not the party intends to rely on such a report at trial). 

20. The respondents submit that the purpose of that provision is to ensure that fair notice is given of any expert evidence that it to be adduced at trial, by way of written reports served well in advance, and thereby to advance the fair and just resolution of differences between expert opinions in the proceedings.[100] 

    [100] Kurray v Brinkworth [2022] SASC 97 at [4] per Kourakis CJ.

21. Finally, the respondents submit that UCR 74.4 provides that a party who has discovered an expert report is required to disclose, on request, copies of certain materials relevant to the report, as set out in UCR 74.4(1)(a)-(d). 

22. The respondents rely upon the reasons of Kourakis CJ in Kurray v Brinkworth.[101]In that case two letters of a forensic bushfire consultant had previously been obtained in support of a pre-action application for access to property.  Kourakis CJ held that the letters were not expert reports to which Part 14 applied. 

    [101] [2022] SASC 97.

23. In considering UCR 74.4 the Chief Justice said:[102]

    Before going to these reports, I make these observations about the rules.  First, the definition of an expert report is a written report by an expert relevant to the issues in the proceeding in question and includes a summary expert report.  By necessary implication, the definition means a report which contains an expert opinion.  An expert who reports on matters of empirical fact of which a lay person may testify does not provide a report within the meaning of the definition… 

    … Rule 74.4 applies to any report which has been discovered by one party to another, allowing the party to whom it was discovered to request the background information.  A discovered expert report, in context, means an expert report which has been served pursuant to 74.3(1) or (2).

    [102] Kurray v Brinkworth [2022] SASC 97 at [2], [22].

24. By contrast, TTEG submits that it is of no consequence that the respondents rely on the HoustonKemp reports only as factual evidence at this time.  It submits that for the reasons set out in UCR 74.4, the HoustonKemp reports are clearly “expert reports” within the meaning of UCR 74.1.  TTEG submits that no distinction is made, either in the UCR or in the case law to any expert reports that are relied upon as opinion evidence and expert reports relied upon as factual evidence.  TTEG submits that Kurray v Brinkworth did not turn on this distinction.  Rather, Kurray v Brinkworth was concerned with whether certain documents were properly expert reports in that they contained “expert opinion” rather than “matters of empirical fact of which a lay person may testify”[103] or merely a “hypothesis.”[104]  TTEG submits that the HoustonKemp reports are self-evidently reports containing an expert opinion.  TTEG relies upon the title “Expert report of Greg Houston” and “Expert review of Balchin report”, “Supplementary expert report of Greg Houston” and “Further report of Greg Houston, on SAPN’s submission to the AER’s draft decision”.[105] Reliance is also placed on the 21 November 2016 letter of instruction from HWL Ebsworth, the solicitors for the respondents, to Mr Houston asking that he provide a report which set out his “opinion” on various matters,[106] and the 20 September 2017 and 1 March 2019 letters of instruction from HWL Ebsworth to Mr Houston requesting that he provide his “expert opinion”[107] and in each of the HoustonKemp reports, Mr Houston acknowledged that his task was to set out his “opinion”.[108]

    [103] [2022] SASC 97 at [2].

    [104] [2022] SASC 97 at [18].

    [105] Third affidavit of Scott Bruce Foreman, sworn on 30 May 2024, (FDN 217), pages 29, 86, 105 and 120.

    [106] Third affidavit of Scott Bruce Foreman, sworn on 30 May 2024, (FDN 217), pages 59-60.

    [107] Third affidavit of Scott Bruce Foreman, sworn on 30 May 2024, (FDN 217), pages 101, 117.

    [108] Third affidavit of Scott Bruce Foreman, sworn on 30 May 2024, (FDN 217), pages 33, 89, 108 and 123.

25. TTEG submits that the distinction between an expert report and expert reports relied upon as factual evidence is an impermissible basis for distinction given the requirement in UCR 74.3 for a party to serve expert reports relevant to the subject matter of the proceeding that they may not intend to rely on.  Contrary to the respondents’ submission, the purpose for which the HoustonKemp reports were obtained and prepared is of no substance in relation to whether they ought to be considered “expert reports” within the meaning of UCR 74.1.  TTEG submits the rule is clear in stating that an “expert report” is a written report by an expert relevant to issues in the proceeding in question i.e. these proceedings.  The HoustonKemp reports are relevant to issues in this proceeding, otherwise the respondent would not have discovered them. 

26. I do not accept TTEG’s submissions.

27. Chapter 7, Part 14 establishes a self-contained code.  It governs the procedures to be followed in the preparation, production and use of expert reports.  As Kourakis CJ said in Kurray v Brinkworth, the purpose of Chapter 7, Part 14, Division 2 of the UCR is to ensure that fair notice is given of any expert evidence that is to be adduced at trial, by way of written reports served well in advance, and thereby to advance the fair and just resolution of differences between expert opinions in the proceeding.[109] 

    [109] Kurray v Brinkworth [2022] SASC 97 at [4] per Kourakis CJ.

28. I accept the respondents’ submission that on its proper construction, the definition of an “expert report” in UCR 74.1 means an expert report relevant as opinion evidence to the issues in the proceeding in question.  Central to the scheme of Chapter 7, Part 14 of the UCR is that the regime established by the rules is intended to regulate expert reports relevant to issues in the proceeding in question.  A written report prepared by a person who meets the definition of expert in UCR 74.1 is not subject to the operation of Chapter 7, Part 14 if the written report is not relevant to an issue or issues in the particular proceeding, even if it is relevant to issues in another different, even related proceeding.  The purpose of that limitation is obvious.  The purpose of the rules is understandably and necessarily confined to a particular proceeding.  The application of the rules are to be construed by reference to the touchstone of relevance.  Whether a party to a proceeding is under an obligation to comply with the regime established by Chapter 7, Part 14 depends on whether the expert report is relevant to issues in the particular proceeding in question.  If it is not, the regime established by the rules relating to expert reports does not apply. 

29. In this case that is not the issue that the AER was deciding.  An “expert report” as defined in UCR 74.1 means an expert report relevant as opinion evidence to the issues in the proceeding in question.  These proceedings are not concerned with the determination of the access dispute.  That issue was decided by the AER by reference to the expert opinions and modelling of HoustonKemp and other expert economists retained by SAPN and the AER.  The HoustonKemp reports are relevant to the issue in the proceedings determined by the AER, namely, the appropriateness of the tariffs that were being applied from the period 2010-2015.  That issue is not an issue in these proceedings.  That question is not being relitigated in these proceedings.  The HoustonKemp reports at their highest are only relevant as factual evidence of what in fact occurred during the AER arbitration and whether TTEG’s earlier work may have been material to the determination made by the AEC in that earlier proceeding.

30. The HoustonKemp reports are not “expert reports” in this proceeding.  The opinions contained in those reports are not relevant to any matter in issue in this proceeding.  As a result, UCR 74.3 does not apply, the respondents are under no obligation to serve them pursuant to UCR 74.3, and the disclosure obligations under UCR 74.4 are not enlivened.

    Conclusion

31. In the circumstances an order for further and better discovery or production of the HoustonKemp materials should not be made.  TTEG’s interlocutory application should be dismissed.  I would hear the parties as to costs.