FEDERAL COURT OF AUSTRALIA

Rivercity Motorway Finance Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) v AECOM Australia Pty Ltd [2012] FCA 1304

THE COURT ORDERS THAT:

1.    The applicants are to provide further and better particulars in accordance with the rulings in paras [15]-[29] of these reasons for judgment.

2.    The respondent is to provide further and better particulars in accordance with the rulings in paras [31]-[39] of these reasons for judgment.

3.    The respondent is to provide discovery of the following documents and things:

(a)    all traffic models used by the respondent to produce the traffic forecasts in respect of the North South Bypass Tunnel (NSBT) contained in reports dated December 2005 and May 2006 and traffic forecast supplements and reports dated March 2006 and April 2006;

(b)    the respondent’s traffic forecast reports and the traffic models used by the respondent to produce such reports for and in connection with Brisbane City Council’s:

    (i)    NSBT Feasibility Study; and/or

    (ii)    Environmental Impact Statement in respect of the NSBT.

4.    The traffic models referred to in order 3 above are to be discovered in native format, and if designed to be used on non-standard or proprietary software, the software, or the name and version details of the software together with the contact details of the software vendor or licensor, should also be discovered.

5.    The respondent is to notify the applicants of any traffic models referred to in order 3 above that no longer exist in which event the respondent must use reasonable endeavours to provide to the applicants such other documents and things as are required by the applicants to enable them to ascertain the state of any such traffic model (including the assumptions) used to produce any of the traffic forecasts, traffic forecast supplements or reports referred to in order 3 above.

6.    The applicants are to provide discovery of the following documents:

(a)    all board packs, papers and minutes of board meetings of each of the applicants from the date of their incorporation to 31 August 2006;

(b)    all documents tabled or considered at board meetings of each of the applicants from the date of their incorporation to 31 August 2006;

(c)    all documents being, requesting, reviewing, assessing or commenting upon:

    (i)    traffic forecasts for the NSBT or any other possible tunnel at or around the same place;

    (ii)    economic and demographic projections, including population growth, economic growth and land use projections within or including the Brisbane metropolitan area;

    (iii)    the forecast or projected revenue from the NSBT;

    (iv)    the forecast or projected costs of the NSBT;

    (v)    the business considerations related to the operation or possible operation of the NSBT;

    written or dated between 1 March 2005 and 31 August 2006 including communications between the applicants, or any of them, or any person on their behalf, and any third party, and including a copy of the NSBT financial model;

(d)     all documents made or dated prior to 31 August 2006 which record or refer to the terms of employment, scope of authority or terms of engagement of Peter Hicks as:

    (i)    a director or chief executive officer of any of the applicants or the “RCM Group”;

    (ii)    bid leader, project director or chief executive officer of “RiverCity Motorway” or “RCM”;

    (iii)    representative or agent of the Consortium (being the Consortium comprising Leighton Contractors Pty Ltd, Baulderstone Hornibrook Pty Ltd and A.W. Baulderstone Holdings Pty Ltd, Bilfinger Berger Concessions Pty Ltd and ABN AMRO Australia Ltd) or the applicants in any dealing with respect to the NSBT;

(e)    all papers distributed from 1 April 2006 to 31 August 2006 to the Traffic Due Diligence Sub-Committee formed in relation to the Product Disclosure Statement for the offer of stapled units in RiverCity Motorway Investment Trust and RiverCity Motorway Holdings Trust (Traffic Due Diligence Sub-Committee);

(f)    all documents tabled or considered at meetings of the Traffic Due Diligence Sub-Committee from 1 April 2006 to 31 August 2006.

(g)    all minutes and other records of the proceedings of and resolutions carried by the Traffic Due Diligence Sub-Committee from 1 April 2006 to 31 August 2006;

(h)    all reports of the Traffic Due Diligence Sub-Committee or any of its members made or dated between 1 April 2006 and 31 August 2006.

7.    The respondent is to provide discovery of all documents received, sent or created by the respondent between 1 January 2005 and 31 August 2006:

(a)    relating to traffic forecasts produced or to be produced in respect of the NSBT including without limitation any inputs relating to those traffic forecasts;

(b)    in connection with, as part of, or relating to its retainer, or proposed retainer, under the Consultancy Agreement between the respondent, Leighton Contractors Pty Limited, ABN Amro Australia Limited, Baulderstone Hornibrook Pty Limited and Bilfinger Berger Concessions Pty Limited dated 4 April 2005; or

(c)    in connection with, or relating to, the bid by the applicants to finance, design, construct and operate the NSBT;

excluding documents that relate only to design and engineering.

8.    The time for compliance with the above orders is as follows:

    22 February 2013 for orders 1-2;

    21 December 2012 for orders 3-6;

    22 March 2013 for order 7.

9.    Costs are reserved.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

THE COURT ORDERS THAT:

1.    The applicant is to provide further and better particulars in accordance with the rulings in paras [15]-[30] of these reasons for judgment.

2.    The respondent is to provide further and better particulars in accordance with the rulings in paras [31]- [40] of these reasons for judgment.

3.    The respondent is to provide discovery of the following documents and things:

(a)    all traffic models used by the respondent to produce the traffic forecasts in respect of the North South Bypass Tunnel (NSBT) contained in reports dated December 2005 and May 2006 and traffic forecast supplements and reports dated March 2006 and April 2006;

(b)    the respondent’s traffic forecast reports and the traffic models used by the respondent to produce such reports for and in connection with Brisbane City Council’s:

    (i)    NSBT Feasibility Study; and/or

    (ii)    Environmental Impact Statement in respect of the NSBT.

4.    The traffic models referred to in order 3 above are to be discovered in native format, and if designed to be used on non-standard or proprietary software, the software, or the name and version details of the software together with the contact details of the software vendor or licensor, should also be discovered.

5.    The respondent is to notify the applicant of any traffic models referred to in order 3 above that no longer exist in which event the respondent must use reasonable endeavours to provide to the applicant such other documents and things as are required by the applicant to enable it to ascertain the state of any such traffic model (including the assumptions) used to produce any of the traffic forecasts, traffic forecast supplements or reports referred to in order 3 above.

6.    The applicant is to provide discovery of the following documents:

(a)    all documents being or recording:

    (i)    any retainer or other agreement between the applicant and; or

    (ii)    the scope of any advice sought by the applicant from; or

    (iii)    any advice received from;

any third party concerning traffic forecasting or financial advice with respect to the North South Bypass Tunnel in Brisbane or any other possible tunnel at or around the same place (NSBT) made or dated between 1 January 2005 and 31 August 2006;

(b)    all meeting packs, papers and minutes of meetings of the Board of Directors or any investment or credit committees or any Board Sub-Committee from 31 March 2005 to 31 August 2006 concerning the NSBT;

(c)    all documents tabled or considered at board meetings of the applicant or meetings of any investment committee or Board Sub-Committee of the applicant from 1 March 2005 to 31 August 2006 concerning the NSBT;

(d)    all minutes of board meetings, investment committee meetings and Board Sub-Committee meetings of the applicant from 1 March 2005 to 31 August 2006 concerning the NSBT;

(e)    all documents being, requesting, reviewing, assessing or commenting upon:

    (i)    traffic forecasts for the NSBT;

    (ii)    economic and demographic projections, including population growth, economic growth and land use projections within or including the Brisbane metropolitan area;

    (iii)    the forecast or projected revenue from the NSBT;

    (iv)    the forecast or projected costs of the NSBT;

    (v)    the business considerations related to the operation or possible operation of the NSBT;

    (vi)    the entry or proposed or contemplated entry by the applicant of the Loan Note Subscription Agreement with RiverCity Motorway Finance Pty Limited (RCM Finance) and other parties; and

    (vii)    the entry or proposed or contemplated entry by the applicant of the ISDA Master Agreement with RCM Finance;

    written or dated between 1 March 2005 and 31 August 2006 including communications between the applicant, or any person on its behalf, and any third party.

7.    The respondent is to provide discovery of all documents received, sent or created by the respondent between 1 January 2005 and 31 August 2006:

(a)    relating to traffic forecasts produced or to be produced in respect of the NSBT including without limitation any inputs relating to those traffic forecasts;

(b)    in connection with, as part of, or relating to its retainer, or proposed retainer, under the Consultancy Agreement between the respondent, Leighton Contractors Pty Limited, ABN Amro Australia Limited, Baulderstone Hornibrook Pty Limited and Bilfinger Berger Concessions Pty Limited dated 4 April 2005; or

(c)    in connection with, or relating to, the bid by the RiverCity Motorway Group to finance, design, construct and operate the NSBT;

excluding documents that relate only to design and engineering.

8.    The time for compliance with the above orders is as follows:

    22 February 2013 for orders 1-2;

    21 December 2012 for orders 3-5;

    22 March 2013 for orders 6-7.

9.    Costs are reserved.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

REASONS FOR JUDGMENT

Introduction

1    Before me are a number of interlocutory applications. Minor aspects of these applications have been resolved by agreement between the parties. What remains is a series of related disputes between the parties in relation to pleadings, particulars and discovery.

2    The interlocutory applications to which these reasons relate are made in two proceedings which are likely to be heard together. The issues that arise out of the interlocutory applications in both matters are essentially the same.

THE PROCEEDINGS

3    The applicants in the first proceeding (the Rivercity proceeding) were companies involved in the financing, design, construction and operation of the North South Bypass Tunnel in Brisbane (the NSBT). There are eight applicants in the Rivercity proceeding. It is alleged they suffered substantial financial loss and damage, worth hundreds of millions of dollars, as a result of their reliance upon various representations made by the respondent. These representations are said to arise out of traffic forecasts prepared by the respondent. Similar allegations are made against the respondent by the applicant in the second proceeding (the WestLB proceeding). The applicant in the WestLB proceeding claims to have suffered substantial financial loss and damage, also worth tens of millions of dollars, as a result of it having entered into (inter alia) a loan note subscription agreement in reliance upon representations said to arise out of the respondent’s traffic forecasts.

4    The following summary of relevant parts of the applicants’ pleaded case in the Rivercity proceeding is derived from the Statement of Claim filed 14 May 2012.

5    In 2004, various entities (the Sponsors) formed a consortium with a view to lodging a bid to Brisbane City Council for the finance, design, construction and operation of the NSBT (the NSBT Project). On or about 4 April 2005 they engaged the respondent to provide a traffic forecast report in relation to the NSBT Project pursuant to a written consultancy agreement (the Consultancy Agreement).

6    The Consultancy Agreement included various express terms. One of these was that the respondent must exercise the degree of skill, care and diligence normally exercised by members of the relevant profession performing services of a similar nature and in accordance with the code of ethics of the “institution body” (sic) which governs the relevant profession. Another express term involved an acknowledgement by the respondent that it had devoted normal professional efforts to its work on the NSBT Project, and that its findings represent the best judgments in the context of the respondent’s commission and utilising the information available to it at the time.

7    The first series of representations relied upon by the applicants in the Rivercity proceeding is said to have been made by the respondent to all applicants except the eighth applicant between November 2005 and December 2005. These representations (the Pre-bid Representations) are said (at para 26) to be as follows:

(a)    that the NSBT would, in future years, have approximately the annual average weekday traffic (AWDT) volumes (or vehicles per weekday) in both directions as AECOM forecast in its “low” (or bank) and “base” scenarios (together, referred to as AECOM’s Traffic Forecasts);

(b)    that AECOM’s Traffic Forecasts in respect of the “low” (or bank) scenario were conservative and/or were based on conservative assumptions (the Conservative Forecasts Representations);

(c)    that AECOM had applied due skill and care in formulating AECOM’s Traffic Forecasts (the Due Skill and Care Representations);

(d)    that AECOM had reasonable grounds for making AECOM’s Traffic Forecasts (the Reasonable Grounds Representations);

(e)    that AECOM’s traffic methodology used to make AECOM’s Traffic Forecasts adequately accommodated all relevant risks that might affect the accuracy of AECOM’s Traffic Forecasts, other than those expressly identified and excluded by AECOM (the Risk Representations); and

(f)    that, except where and to the extent expressly qualified, AECOM’s Traffic Forecasts could be relied upon by the Applicants (the Reliability Representations).

8    The traffic forecasts referred to are said to have been contained in reports prepared by the respondent in December 2005 as part of proposals to Brisbane City Council in respect of the NSBT Project. The relevant figures are said by the applicants to have been materially similar to those contained in the respondent’s Final Report entitled “Traffic Forecasts: North-South Bypass Tunnel, Final Tolling Strategy and Project Configuration” dated 22 May 2006 (the Final Report).

9    It is alleged (at paras 29-30) that in March and April 2006 the respondent made representations (the Pre-revise and confirm Representations) in materially similar terms to each of the Pre-bid Representations to the first to seventh applicants, or alternatively, that the respondent authorised the Sponsors to communicate such representations made to the first to seventh applicants, and then to the eighth applicant once it was incorporated. It is further alleged that at the time of making each of the representations the respondent knew or ought to have known that the Sponsors would communicate such representations to the applicants.

10    The traffic forecasts the subject of the Pre-revise and confirm Representations are alleged by the applicants to be contained in “Traffic Forecasts Supplements” prepared by the respondent in March and April 2006 which were amalgamated into a single “Traffic Forecasts Supplement”.

11    It is also alleged (at para 32) that the respondent made a further series of representations to the first to seventh applicants (the Pre-transaction Representations) in April and May 2006. The traffic forecasts the subject of the Pre-transaction Representations are said to be contained in the Final Report dated 22 May 2006 and drafts of it provided to the applicants from time to time. It is said that by the Pre-transaction Representations, the respondent (inter alia) represented that the NSBT would have approximate average weekday traffic (AWDT) volumes and approximate annual average daily traffic (AADT) volumes in specified amounts. These annual AWDT volumes and AADT volumes are at the core of the applicants’ case against the respondent. The Pre-transaction Representations, as pleaded in para 32, specify AWDT and AADT forecasts for each of the years 2010, 2011, 2012, 2016, 2021 and 2026, first, on a “low” or “bank” scenario and, second, on a “base” or “equity” scenario. In each instance the AWDT and AADT “low” or “bank” forecast is below that of the “base” or “equity” forecast. Each of the Due Skill and Care Representations, the Reasonable Grounds Representations, the Risk Representations and the Reliability Representations (ie. representations to the same effect as those pleaded in para 26(c)-(e) as set out in para 7 above) is alleged to have been made by the respondent with respect to the traffic forecasts contained in the Final Report. The Conservative Forecasts Representations (ie. representations to the same effect as that pleaded in para 26(b) as set out in para 7 above) are alleged to have been made in relation to the “low” or “bank” scenario traffic forecasts contained in the Final Report.

12    The applicants allege (at para 35) that the actual AWDT volumes using the NSBT have been significantly below those forecast by the respondent since the NSBT opened in March 2010. They allege that by March 2012, the actual traffic volumes using the NSBT were approximately 25% or less of the traffic volumes forecast by the respondent.

13    Unlike the Rivercity proceeding, there is only one set of representations pleaded by the applicant in the WestLB proceeding. These representations are precisely the same as the Pre-transaction Representations pleaded in the Rivercity proceeding. They are alleged to have been false or misleading for precisely the same reasons as the Pre-transaction Representations are alleged to have been false or misleading in the Rivercity proceeding.

14    The applicants in both proceedings allege that the respondent’s traffic forecasts for the NSBT were representations as to future matters for which the respondent had no reasonable grounds, and rely upon s 51A of the Trade Practices Act 1974 (Cth) (the TPA). The applicants in both proceedings also allege negligent misstatement against the respondent.

Paragraph 37 of the RIVERCITY Statement of Claim

15    Each of the representations alleged to have been made by the respondent are alleged at para 37 of the Rivercity Statement of Claim to have been (inter alia) false or misleading because:

(a)    AECOM did not have reasonable grounds for making AECOM’s Traffic Forecasts, the Conservative Representations, the Risk Representations and the Reliability Representations;

(b)    AECOM’s Traffic Forecasts, the Conservative Forecasts and the Risk Forecasts were not the product of the exercise of due skill and care;

(c)    AECOM’s traffic methodology did not adequately accommodate all relevant risks that might affect the accuracy of AECOM’s Traffic Forecasts; and

(d)    AECOM’s Traffic Forecasts could not be relied upon.

16    Various particulars have been given by the applicants in respect of para 37 of the Rivercity Statement of Claim. The same particulars are given in respect of the corresponding paragraph (para 16) in the WestLB Statement of Claim. The respondent contends that the particulars provided to date are deficient.

17    The particulars to para 37 included in the Rivercity Statement of Claim are as follows:

Particulars

(i)    The methodology utilised by AECOM to forecast future traffic volumes on the NSBT could not reliably form the basis of a traffic forecast for the NSBT Project at least because:

    (A)    it relied on survey data which was deficient because it failed to ask critical questions of participants as to route choices in the context of alternate tolled and untolled routes, and further, because it failed to provide participants with relevant information concerning comparative journey times on tolled and untolled routes;

    (B)    it relied on unreasonable assumptions, including that drivers would choose to use the tolled NSBT even where such a route would be more expensive and take longer than an untolled route, or where the relevant journey destination was the CBD or south west suburbs of Brisbane (which the NSBT bypassed);

    (C)    it relied on unreasonable predictions of traffic growth in Brisbane after 2005;

    (D)    it did not model predicted traffic use for 22 hours of the day, or on weekends;

    (E)    it predicted future demand by reference to a one hour demand forecast derived from a 2-hour week-day peak-hour period;

    (F)    it used a “peak to daily expansion factor” to predict, on the basis of the one-hour demand forecast, average weekday demand;

    (G)    it calculated an expansion factor solely on traffic profiles of un-tolled roads, such roads having a higher peak to daily expansion factor than toll roads;

    (H)    the “peak to daily expansion factor” calculated was higher than all (or alternatively, substantially all) other toll roads in Australia;

    (I)    it used a “weekday to year expansion factor” to further convert average weekday demand as calculated into annual demand;

    (J)    it calculated the “weekday to year expansion factor” based solely on traffic profiles of un-tolled roads, which also have higher weekday to year expansion factors than toll-roads;

    (K)    the model made no allowance for seasonal adjustments, including for school holidays;

    (L)    the model assumed, in favour of the NSBT, that some users prefer toll roads without also assuming that some users prefer untolled routes; and

    (M)    AECOM’s methodology did not include, as a check on the reasonableness and/or accuracy of AECOM’s Traffic Forecasts, a comparison of AECOM’s Traffic Forecasts generated by its model with actual traffic volumes on comparable toll-roads in Australia and elsewhere.

(ii)    AECOM used modelling which was not sufficiently rigorous and failed to give any or adequate consideration to at least the following factors:

    (A)    the reasonableness of its forecasts having regard to other toll roads in Australia and overseas;

    (B)    the reasonableness of its route predictions, having regard to origin and destination of routes modelled;

    (C)    the variability of demand at different times of the day;

    (D)    the variability of demand at different times of the week;

    (E)    the variability of demand at different times of the year;

    (F)    the capacity of the NSBT;

    (G)    the correlation between speed of travel and volume of traffic at any point in time;

    (H)    the correlation of route choice and tolling disincentives; and

    (I)    the correlation between capacity and likely volumes of traffic use on opening.

(iii)    Further particulars may be provided after service of an expert’s report.

18    During the course of oral argument the respondent confined its complaints about the sufficiency of the particulars to para (i), sub-paras (B), (C), (G), (H) and (J), and para (ii) in its entirety.

19    In relation to para (i), sub-paras (B) and (C), the respondent’s first point is that the applicants should be required to identify all the unreasonable assumptions and traffic growth predictions upon which the applicants will rely at trial. The respondent’s second point is that the particulars given do not specify on what basis such assumptions and predictions are said to have been unreasonable.

20    In my opinion, the respondent’s complaints concerning para (i), sub-paras (B) and (C) are well founded. As to sub-para (B), I will require the applicants to specify each assumption which they contend was unreasonable. They will also be required to specify on what basis the applicants contend each such assumption was unreasonable. As to sub-para (C), I will require the applicants to identify each of the traffic growth predictions said to be unreasonable and to specify on what basis the applicants contend it was unreasonable.

21    I should add that I do not think the applicants should be required (at least not prior to the filing of their expert evidence in chief) to state “what would have been reasonable assumptions or the basis or parameters of a set of assumptions that would not have been unreasonable” as they were requested to do by the respondent’s solicitors. There is an assumption underlying the respondent’s request for this information that the applicants could not establish that a particular assumption used to make the respondent’s traffic forecasts was unreasonable without also establishing what would have been a reasonable assumption or range of assumptions that the respondent should have used. I am not persuaded that this is necessarily correct. It is often possible to prove that a particular assumption was unreasonable without proving what would have been a reasonable assumption or range of assumptions to make. An assumption may be unreasonable simply because there is no sufficient basis to make it.

22    I consider sub-paras (G), (H) and (J) to be in a different category. They do not suffer from the same lack of specificity evident in sub-paras (B) and (C). Sub-para (G) makes clear that the applicants contend that it was unreasonable for the respondent to use an expansion factor based upon traffic profiles of un-tolled roads and also indicates why the applicants contend that the use of such an expansion factor was unreasonable. What I have said about sub-para (G) also applies to sub-para (J). Sub-para (H), which is closely related to sub-para (G), simply makes the point that one of the “peak to daily” expansion factors used by the respondent was higher than that for all other toll roads in Australia.

23    I will not require the applicants to provide further particulars of these sub-paras at this time, but I will consider doing so at some later stage of the proceeding once the applicants’ expert reports have been served if the respondent satisfies me at that point that it does not know what case it is required to meet.

24    Turning to para (ii) of the particulars, it was submitted on behalf of the respondent that these suffer from two problems. First, it was said that the particulars do not indicate which of the matters specified in para (ii), sub-paras (A)-(I) were given no consideration as opposed to no adequate consideration. Secondly, it was said that the particulars do not explain what “adequate” consideration means.

25    As to the first of these complaints, I think it lacks substance. The respondent has specifically denied in its Amended Defence (at para 39(g)(xxv)) that it failed to give any consideration, or any reasonable consideration, to each of the matters specified in para (ii), sub-paras (A)-(I) save, perhaps, for “tolling disincentives” referred to in (H), in answer to which the respondent has instead referred to “driver willingness to pay”.

26    The allegation that the respondent failed to give adequate consideration to the matters referred to in para (ii), sub-paras (A)-(I) is something I do not propose to require the applicants to further particularise. Assuming that consideration was given to each of the matters specified in para (ii), sub-paras (A)-(I) then the question whether the consideration given to these matters was adequate is a matter for evidence.

27    The respondent also submitted that the particulars to para 37 could not be related with any specificity to each of the specific allegations made in para 37(a)-(d) of the Rivercity Statement of Claim and that the whole of the paragraph should therefore be struck out. In particular, but by way of example only, it was said that few, if any, of the particulars could be related to the allegation made in para 37(c) to the effect that the respondent’s traffic methodology did not adequately accommodate all relevant risks that might affect the accuracy of the respondent’s traffic forecasts.

28    I do not think there is any substance to this complaint so far as para 37(a), (b) and (d) are concerned. It seems to me that the connection between the allegations pleaded in para 37(a), (b) and (d) and the particularised deficiencies in the methodology and modelling used by the respondent is directly apparent. The position in relation to para 37(c) is different. On the face of it, none of the particulars provided has a direct connection to the allegation made in para 37(c). In the circumstances, I will require the applicants to provide further particulars that specify in what respects the respondent’s traffic methodology failed to adequately accommodate all relevant risks that might affect the accuracy of the respondent’s traffic forecasts.

29    In the result, I do not propose to strike out para 37 of the Rivercity Statement of Claim. However, I am satisfied that the applicants should provide further particulars in accordance with the rulings set out above.

Paragraph 16 of the westlb statement of claim

30    The same submissions were made on behalf of the respondent in the WestLB proceeding in relation to para 16 of the WestLB Statement of Claim. What I have said concerning para 37 of the Rivercity Statement of Claim and the provision of further particulars in relation to that paragraph applies equally to para 16 of the WestLB Statement of Claim.

The RIVERCITY Defence

31    The applicants in the Rivercity proceeding have sought particulars of the respondent’s Defence. The paragraphs to which the applicants’ request for particulars was directed are repeated in precisely the same terms in the Amended Defence that was recently filed. I am satisfied that the respondent should provide further particulars of the Amended Defence in accordance with the rulings set out below. The particular requests referred to in these reasons are the requests set out in the table attached to the letter from Gilbert + Tobin to Baker & McKenzie dated 9 October 2012.

Request 1

32    Paragraph 21(h) of the Amended Defence includes an allegation that the applicants ratified the Consultancy Agreement with the consequence that each of the applicants became bound by it. It is not suggested that the Consultancy Agreement provided that the applicants were, or would become, parties. Against that background, I think the applicants are entitled to know what documents or conversations are said by the respondent to constitute the act or acts of ratification relied upon by the respondent. I will require the respondent to provide the best answer to Request 1 that it is presently able to provide.

Requests 2-3

33    In response to the allegation that the respondent represented that it had applied due care and skill in formulating its traffic forecasts, the respondent has alleged (eg. at paras 26(b)(v), 32(b)(v) and 39(d)(vi)), in substance, that the degree of skill and care referred to in this context was affected by (inter alia):

the explanations, disclosures, qualifications, exclusions, disclaimers and other limitations contained in the May 2006 NSBT Traffic Report or otherwise communicated by AECOM Australia to the Sponsor Clients and/or the Non-Tolling Applicants;

(emphasis added)

The “Sponsor Clients” referred to are the Sponsors referred to by me earlier in these reasons. The “Non-Tolling Applicants” are the first to seventh applicants.

34    The respondent has declined to provide any particulars of any matters “otherwise communicated” by the respondent to the Sponsors or the applicants. Since the relevant allegation forms part of a positive answer to the applicants’ s 52 case and is also said to be relevant, presumably, to the content of any duty of care owed to the applicants by the respondent, it seems to me that particulars should be given. I will require the respondent to provide the best particulars it is presently able to provide in response to Requests 2 and 3.

35    In submissions it was suggested by Senior Counsel for the respondent that the relevant sub-paragraph of the Amended Defence may have been more fully pleaded than was required in the sense that there may be nothing specific that is captured by the relevant words of the pleading beyond the notion that the meaning and effect of any representations conveyed, or the scope of any duty owed, must be considered against the background of all relevant facts and circumstances. If the words in question are, as suggested, mere surplusage, then they should either be withdrawn or struck out. On the other hand, if the respondent wishes to rely upon any specific statement in a document or conversation which is said to qualify or limit the degree of care and skill which was required of the respondent (apart from those contained in the Final Report) then the applicants are entitled to particulars of any such statement and these should be provided.

Requests 4-13

36    In various parts of the Amended Defence, reference is made to “instructions given on behalf of the Sponsor Clients and the Non-Tolling Applicants”. For example, it is alleged (at para 39(g)(xxi)) that the respondent’s traffic modelling was “sufficiently rigorous” having regard to (inter alia) the instructions given to the respondent. For the reasons previously stated in relation to Requests 2 and 3, the respondent will be required to provide the best particulars it is presently able to provide in answer to Requests 4-13.

Requests 14 and 15

37    In various parts of the Amended Defence (eg. para 39(h)(iv)) it is alleged that the applicants:

agreed and accepted that AECOM Australia only took those material risks into account to the extent to which it did in preparing AECOM Australia’s NSBT Traffic Forecasts;

and (eg. para 39(h)(v)):

agreed and accepted that AECOM Australia’s NSBT Traffic Forecasts and AECOM Australia’s NSBT Traffic Forecast Representations were made based upon AECOM Australia’s NSBT Traffic Forecasting Methodology, which only took into account those material risks to the extent to which they did.

For the reasons previously stated in relation to Requests 2 and 3 the respondent will be required to provide the best particulars it is presently able to provide in answer to Requests 14 and 15.

Request 18

38    Request 18 relates to paragraph 36(b) of the Amended Defence. In that paragraph it is alleged that actual traffic volumes using the NSBT were caused by the combined effect of “a number of subsequent, significant, adverse factors”. There are eleven factors identified. In my view, paragraph 36(b) is adequately particularised.

Requests 19 and 20

39    In para 50(b) of the Amended Defence it is alleged that any loss or damage suffered by the applicants was suffered not as a result of conduct of the respondent but by reason of subsequent events that were beyond the control or responsibility of the respondent. Paragraph 50(b) must be read in conjunction with paragraph 36(b) which refers to various factors that the respondent says explain why the actual AWDT volumes using the NSBT up to March 2012 were less than forecast. In my view para 50(b) is adequately particularised.

the westlb defence

40    Similar particulars are sought of the Defence filed in the WestLB proceeding. The Defence is relevantly in the same terms as the Amended Defence recently filed in the WestLB proceeding. The relevant requests are set out in the table attached to another letter from Gilbert + Tobin to Baker & McKenzie dated 9 October 2012. The requests which correspond to those which the respondent must answer in accordance with my previous rulings in the RiverCity proceeding are Requests 1, 2, 3, 4, 6, 7, 8, 10, 11, 12, 13, 14, 5, 17 and 18 respectively. The respondent is required to answer those requests in accordance with those previous rulings.

Discovery

41    The applicants in both proceedings seek discovery from the respondent. There are four categories of documents sought by them. The most significant of these are categories 1, 2 and 3 which are in the following terms:

1.    [A]ll traffic models used by the Respondent to produce the traffic forecasts contained in its reports dated December 2005 and May 2006 and its traffic forecast supplements and reports dated March 2006 and April 2006 in respect of the North South Bypass Tunnel, also known as the Clem 7 Tunnel. The models are to be produced in native format and if designed to be used on non-standard or proprietary software, the software or the name and version details of the software and the contact details of the software vendor or licensor must also be provided.

2.    (a)    [T]he Respondent’s traffic forecast reports for and in connection with Brisbane City Council’s:

        (i)    North South Bypass Tunnel Feasibility Study; and/or

        (ii)    Environmental Impact Statement in respect of the North South Bypass Tunnel; and

    (b)    [A]ll traffic models used by the Respondent to produce the traffic forecasts referred to in paragraph 2(a) above. The models are to be produced in native format and if designed to be used on non-standard or proprietary software, the software or the name and version details of the software and the contact details of the software vendor or licensor must also be provided.

3.    [A]ll documents received, sent or created by the respondent between 1 January 2005 and 31 August 2006:

    (a)    relating to traffic forecasts produced or to be produced in respect of the North South Bypass Tunnel including without limitation any inputs relating to those traffic forecasts;

    (b)    in connection with, as part of, or relating to its retainer, or proposed retainer, under the Consultancy Agreement between the respondent, Leighton Contractors Pty Limited, ABN Amro Australia Limited, Baulderstone Hornibrook Pty Limited and Bilfinger Berger Concessions Pty Limited dated 4 April 2005; or

    (c)    in connection with, or relating to, the bid by the applicants to finance, design, construct and operate the North South Bypass Tunnel;

    excluding documents that relate only to design and engineering.

42    The respondent’s principal submission was that no order for discovery of these or any other categories should be made against it until after the applicants’ expert evidence has been filed. The respondent argued that this reflects what is now the usual approach to discovery and that there is no reason why it should not be followed in this case. The respondent also emphasised that it had a concern that the applicants were engaged in “fishing” in the sense, presumably, that the applicants were seeking to use discovery to gain access to material which might then be used to justify the introduction of additional or more specific complaints about the adequacy of the traffic models used to produce the traffic forecasts. Significantly, it was not suggested that the applicants lacked a proper basis upon which to commence proceedings in the first place or that they were seeking discovery of documents to make a case about which they presently knew nothing: cf. WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175 (at 190-191); 30 ALR 559 (at 575) per Lockhart J (with whom Bowen CJ agreed). “Fishing”, in this sense, may be objectionable, but I do not think this is what the applicants are trying to do in this case.

43    It is common ground that the traffic models used to produce the traffic forecasts the subject of the proceedings are highly complex. The traffic models are run, I infer, using a complex set of interrelated assumptions relevant to demand at different times of the day, week and year including assumptions concerning travel time, travel cost, ability to pay, willingness to pay and other factors relevant to the estimation of future traffic volumes.

44    It is true that in many cases discovery is ordered before the filing of affidavit evidence. It is an approach that is often taken with the aim of reducing the scope and cost of discovery. However, I do not think it would be a sensible course to take in this matter. For one thing, the respondent has already committed itself, at least in a practical sense, to very extensive discovery as is apparent from various affidavits to which I have been taken by the respondent in another context. More importantly, however, I think it would be inefficient, wasteful, and perhaps also unfair, to require the applicants’ experts to set out their evidence in chief in stages, through a combination of affidavits or reports prepared and served prior to discovery of the traffic models and related materials, supplemented by affidavits or reports prepared and served after such discovery has taken place. This is what is likely to happen if I approach discovery in the manner suggested by the respondent.

45    I was informed by Senior Counsel for the respondent that not all the traffic models sought by the applicants still exist. This will be accommodated by my orders. They are intended to give the applicants early access to relevant iterations of the traffic models and, if a particular iteration no longer exists, to other documents or things from which any material differences between iterations may be identified.

46    The respondent did not raise any separate or additional objection to category 2 beyond those raised in relation to category 1. I therefore propose to make orders providing for discovery of documents within categories 1 and 2 coupled with an additional order along the lines I have foreshadowed that deals with the problem of iterations that no longer exist.

47    So far as category 3 is concerned, it was submitted that it would be oppressive to require the respondent to give discovery of this material at this stage of the proceeding. I am satisfied that it is appropriate to require the respondent to give discovery of those documents, though I propose to allow the respondent an extended period within which to do so.

48    I do not propose to require the respondent to give discovery of the documents referred to in category 4 (the terms of which broadly reflect the language of r 20.14(2) of the Federal Court Rules 2011) at this stage of the proceedings.

49    The respondent also sought discovery from the applicants in both proceedings. The principal justification advanced by the respondent was that it required such discovery to enable it to raise apportionment claims in accordance with Part VIA of the TPA, Pt 4 of the Civil Liability Act 2002 (NSW) and Pt 2 of the Civil Liability Act 2003 (Qld).

50    There was some argument in relation to the scope of discovery sought by the respondent but the difficulties raised by the applicants in relation to the terms of the respondent’s proposed orders were relatively few in number. The orders take account of most, if not all, issues raised by the applicants in relation to the discovery which the respondent seeks from them.

Further Progress

51    If the respondent proposes to amend its Amended Defences to raise any further apportionment claims then it should proceed on the basis that it is likely that it will be required to do so by no later than April 2013. The applicants should proceed on the basis that they will also be required to file and serve their experts’ affidavits or reports by no later than May 2013.

52    Orders accordingly.

Associate:

Dated:    23 November 2012