FEDERAL COURT OF AUSTRALIA

Oswal v Apache Corporation (No 4) [2014] FCA 1291

THE COURT ORDERS THAT:

1.    The trial listed to commence on 8 December 2014 be vacated.

2.    The parties confer with a view to bringing in a minute of consent orders to reflect these reasons by 4.00 pm on 5 December 2014.

3.    If agreement as to the orders cannot be reached by the time provided for in the previous paragraph the parties are each to file and serve a minute of proposed orders by 12 December 2014.

4.    The parties each file and serve a minute of further proposed orders concerning further pre-trial directions by 12 December 2014.

5.    The matter be listed for further directions on 18 December 2014 at 10.15 am.

6.    Costs in relation to this interlocutory application be reserved.

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

REASONS FOR JUDGMENT

1    The Court ordered on 24 June 2014 that the trial of this matter proceed on all issues other than damages. The trial was listed to commence on 8 December 2014. The applicant has made an interlocutory application, amended at the hearing, for various orders concerning discovery pursuant to r 20.21 of the Federal Court Rules 2011 (Cth), alternatively r 20.15, and further or alternatively that the respondent and Apache Energy Limited (Apache Energy) give discovery in compliance with orders already made by the Court. The applicant also seeks an order vacating the trial.

2    The applicant also sought an order that Apache Energy and the respondent respectively produce for inspection by the applicant unredacted copies of documents listed in Annexure B, in the case of Apache Energy, and Annexure C, in the case of the respondent, to the interlocutory application. The respondent contends that the redacted parts of those documents are not relevant and additionally are commercially sensitive. However, the applicant’s legal representative gave an undertaking to the Court in the following terms:

The applicant’s legal representatives will undertake not to show previously redacted parts of the documents or convey the content of those parts to the applicant Pankaj Oswal and will otherwise deal with the documents in accordance with the undertaking implied by law.

3    I indicated to counsel for the applicant that any wider distribution of these documents or their content to anyone else, including any expert witness, would require either the written consent of the respondent or an order of the Court.

4    The respondent is prepared, subject to the undertaking (including its application to any expert witness), to provide unredacted copies of those documents to the applicant’s solicitors. Upon that undertaking I will stand over paras 4 and 4A of the amended interlocutory application.

5    The applicant read the following affidavits:

(b)    Affidavit of Tanya Harris-Roxas affirmed on 13 November 2014;

(c)    Two further affidavits of Tanya Harris-Roxas each affirmed on 18 November 2014;

(d)    Affidavit of Antony Corrie-Keilig affirmed on 18 November 2014.

6    The respondent read affidavits by Larry Janecka, sworn on 18 November 2014, and Gaetano Marchesani, sworn on 19 November 2014.

7    As to the discovery orders sought there is a threshold question, namely whether documents which post-date the last dates when it is alleged that the several representations were made are discoverable.

8    The applicant relied upon the Full Court judgment in North East Equity Pty Ltd v Proud Nominees Pty Ltd (2012) 285 ALR 217. There, evidence of the actual performance of a new line of equipment which sorted and graded carrots was held to be relevant to the question of whether earlier representations as to future matters (the equipment’s capacity) had been misleading as not being based on reasonable grounds.

9    The Court stated:

[34]    Two further things can be said about a case (in part at least) based on reliance upon representations as to future matters which are found to have come to pass (and thus found not to be false) or not shown not to have come to pass (and thus not shown to be false). First, such findings concerning the later events might give rise to an inference (if properly addressed in the reasons in the context of the evidence) that the representor had reasonable grounds at the time of making the representations, for making them.

. . .

[53]    Fourth, in circumstances where the future matter is shown to have come to pass or the applicant has failed to satisfy the court that the representation has not come to pass, the passage of the later events is relevant, taken in context in determining whether, on the balance of probabilities, having regard to all the evidence, the representor, when making the representations, had reasonable grounds for making them.

…

[55]    In doing so, the primary judge rightly regarded the actual performance of the new line (which was found to be a function of the successful deployment of the respondents’ knowledge, skill and experience), in a manner consistent with the representations as to its future performance, as found, as a matter that suggested the respondents had reasonable grounds for making the representations. The “outcome” was not treated as a self-executing answer to the question of whether the respondents had discharged the evidential burden or whether, dispositively, on the ultimate question, the appellant had shown that the respondents did not have reasonable grounds for making the representations at the time. The outcome was rightly taken into account in examining the source and basis for the predicted outcome.

…

[60]    A representation shown to have come true concerning the performance capacities of an integrated $3M carrot processing plant (with the particular complexities described in the evidence), logically suggests (absent a coincidence) that making the representation as to those future working capacities was soundly based, that is to say, based on reasonable grounds. A representation not shown not to be true concerning such capacities (that is, not shown to be incorrect) also logically suggests that making the representation as to those future working capacities was soundly based ...

10    The applicant submits, referring to [60] in North East Equity, that:

22.    The inverse of that proposition must also be true: a representation shown not to have come true logically suggests (absent unforeseen circumstances) that there were not reasonable grounds for making the representations. As the Full Court held in North East Equity, the outcome is rightly taken into account in examining the source and basis for the predicted outcome.

23.    The state of the uncontracted proven and probable reserves of the HJV gas fields in the years after the representations were made is therefore relevant to whether there were reasonable grounds for the representations as to the levels of uncontracted proven and probable reserves. The status of the uncontracted proven and probable reserves consists of two elements: the proven and probable reserves and the extent to which those reserves are contracted to third parties (ie to persons other than BFPL).

(Footnotes omitted.)

11    The applicant also relied upon Bill Acceptance Corporation Ltd v GWA Ltd (1983) 78 FLR 171. Justice Lockhart said at 178-179:

Whether statements or representations of this type are misleading or deceptive must be determined at the time they were made, although this may be determined by reference to later events. For example, what a person does tomorrow may have a real bearing on whether he held a particular belief today.

12    These cases, in my opinion, are authority for the proposition that evidence of events, including conduct, occurring after representations as to future matters have been made may be relevant. However, such evidence will not always be relevant. It will depend on the content and character of the alleged misrepresentations.

13    It was accepted in North East Equity that the outcome of the equipment’s later performance could be relevant to representations made earlier concerning its future performance. It is not difficult to discern the obvious relevance of those matters.

14    In Bill Acceptance, again, by reference to the particular misrepresentations alleged, the later conduct of the respondent was relevant.

15    Accordingly, it is necessary to consider the content and character of the allegations made against the present respondent.

The statement of claim

16    The applicant was for a time the managing director of a company known as Burrup Fertilisers Pty Ltd (BFPL). There is a dispute as to the period or periods that this was the case. BFPL is now known as Yara Pilbara Fertilisers Pty Ltd. However, I will continue to use its former name as that is how it is identified in the pleadings. The respondent is a United States corporation. The applicant alleges that the respondent carried on business in Australia by its subsidiary Apache Energy.

17    It is convenient to set out the following paragraphs from the statement of claim:

5.    On or about 18 December 2000, Australian subsidiaries of the respondent and others (the Sellers) and Oswal Projects Limited (Oswal Projects) executed a memorandum of understanding (the MOU) in which the parties recorded their intentions with respect to the conclusion of an agreement (the Agreement) for the sale by the Sellers and the purchase by Oswal Projects of natural gas for an ammonia plant which Oswal Projects, or its assignee, proposed to construct and operate on the Burrup Peninsular in the north west of Western Australia.

Particulars

(a)    The MOU was in writing.

(b)     The Sellers were Apache Northwest Pty Ltd, Apache Harriet Pty Ltd, Apache Lowendal Pty Ltd, Apache Miladin Pty Ltd, Apache Nasmah Pty Ltd, Tap (Harriet) Pty Ltd and Kufpec Australia Pty Ltd.

(c)     The MOU was executed by the applicant, on behalf of Oswal Projects, and by James K Bass, of Apache Energy, on behalf of the Sellers.

6.    The MOU provided, inter alia, that:

6.1    the term for the supply and purchase of gas under the Agreement would be for 25 years from 1 October 2004;

6.2     the maximum quantity of gas the Sellers would be obliged to supply over the 25 year supply period was 552 petajoules;

6.3     at any time, the Sellers would have sufficient uncommitted proven reserves available to Oswal Projects for the lesser of 20 years and the remaining term of the 25 year supply period;

6.4     the Sellers reserved the right to deliver gas from any source, including, but not limited to, Production Licences No. TL/1, 5, 6 and 8, other Production Licences derived from Exploration Permits TP/8, WA-192, EP 307, EP 358 or other permit areas in which all or any of the Sellers had an interest or other sources of gas as contracted by the Sellers from time to time.

7.     On or about 21 February 2001, the respondent represented to the applicant that:

7.1     the Apache Sellers had adequate reserve of gas to supply the proposed ammonia plant in Western Australia with gas for 25 years, at a fixed price, from a gas field in Western Australia, referred to as the Harriet Joint Venture (HJV);

7.2     the Apache Sellers would supply gas to the proposed ammonia plant in Western Australia at the fixed price provided for in the MOU even after the end of the supply period of 25 years; and

7.3     the Apache Sellers would supply gas from other sources at the same price as they provided gas from the Harriet Joint Venture gas field, if the Harriet Joint Venture gas field reserves proved to be inadequate.

(The representations pleaded at 7.1 to 7.3 above are collectively referred to herein as the Representations)

Particulars

(a)     The Representations were made orally.

(b)     The Representations were made in Houston.

(c)     The Representations were made on behalf of the respondent by John Crum, George Stephen Farris and Neil McHarrie.

(d)     At the same time as the Representations were made, John Crum, on behalf of the respondent, informed the applicant that:

(i)     the respondent had approved of the terms of the MOU; and

(ii)     the respondent had approved of its Australian subsidiaries entering into the MOU.

18    The applicant alleges that he relied on these representations and was thereby induced to pay approximately $478 million to companies involved in the construction of BFPL’s ammonia plant located on the Burrup Peninsula in Western Australia as well as making payments to BFPL and third parties, including alleged payments under the alleged “Cost Overruns Agreement”.

19    The representations are alleged to be with respect to future matters as to which it is alleged that the respondent did not have reasonable grounds for making them, alternatively that they were misleading or deceptive as follows:

10.    Alternatively to 9 above, to the extent that the Court finds that the Representations were not representations with respect to future matters, the Representations were misleading or deceptive, or likely to mislead or deceive, in that:

10.1    in relation to 7.1 above, neither the Apache Sellers nor the Sellers had, as at 21 February 2001, adequate reserves of gas to supply the proposed ammonia plant in Western Australia with gas for 25 years from the Harriet Joint Venture gas field;

10.2    in relation to 7.2 above, the Apache Sellers did not, as at 21 February 2001, intend to supply gas to the proposed ammonia plant in Western Australia, at the price fixed in the MOU, even after the end of the supply period of 25 years, irrespective of the cost or price of such gas at that time; and

10.3     in relation to 7.3 above, the Apache Sellers did not intend, at 21 February 2001, to supply gas for 25 years, as provided for in the MOU, from sources, other than the Harriet Joint Venture gas field, at the same price as they provided gas from the Harriet Joint Venture gas field, if the Harriet Joint Venture gas field reserves proved to be inadequate, irrespective of the cost or price of such gas at that time.

20    The applicant then pleaded at [11] that the future matters did not come about:

11.     The future matters the subject of the Representations did not come about in that:

    11.1     in relation to 7.1 above, on or about 23 November 2006, the Apache Sellers informed BFPL that they did not have adequate reserves of gas to supply BFPL's ammonia plant in Western Australia with gas from the Harriet Joint Venture gas field for the balance of the supply period under the agreement entered into pursuant to the MOU (the GSA);

    11.2     in relation to 7.2 above, on or about 23 November 2006, the Apache Sellers informed BFPL that they did not intend to supply gas to BFPL's ammonia plant in Western Australia at the price fixed in the GSA even for the balance of the supply period under the GSA;

    11.3     in relation to 7.3 above, on or about 23 November 2006, the Apache Sellers informed BFPL that the Harriet Joint Venture gas field reserves were not adequate to supply gas to BFPL for the balance of the supply period under the GSA; and

    11.4     in relation to 7.3 above, on or about 23 November 2006, the Apache Sellers informed BFPL that, although the Harriet Joint Venture gas field reserves were not adequate to supply gas to BFPL for the balance of the supply period under the GSA, they would not supply gas for that period from sources, other than the Harriet Joint Venture gas field, at the same price as provided for in the GSA.

21    The pleading against the respondent as to representations of future matters is in the barest of terms. It provides no particulars as to why it is alleged that the respondent did not have reasonable grounds for making them. There is merely expressed reliance on s 51A of the Trade Practices Act 1974 (Cth). The applicant, as I have set out, does allege that the matters represented did not eventuate but upon analysis of the documents relied upon by the applicant to support these pleas what is pleaded does not relate directly to those representations. I will return to this later.

22    There has been a division of opinion as to just how it is that s 51A operates. It appears to be accepted that there is at least a shift of the evidential burden to the respondent rather than an absolute reversal of the burden of proof, by deeming a corporation which makes such representations not to have had reasonable grounds for making them unless the corporation adduces some evidence to the contrary: McGrath v Australian Naturalcare Products Pty Ltd (2008) 165 FCR 230. That view has been followed by a significant number of judges of this Court: see eg Fubilan Catering Services Limited v Compass Group (Australia) Pty Ltd [2007] FCA 1205. Other judges of the Court have taken the view that the representor can only avoid the deeming provision by establishing on the usual balance of probabilities that there were reasonable grounds for making the representation: see eg Lewarne v Momentum Productions Pty Ltd [2007] FCA 1136.

23    To the extent that s 51A has application, and there is some dispute as to this, it seems that the respondent proposes to acquit its evidentiary obligation, upon whichever basis is the correct one, by adducing evidence of detailed reserve reports both in-house and from consultants. Upon the issue of whether the respondent had reasonable grounds the documents to which I have referred are directly relevant to that issue but the underlying data are not. This is not a case where the applicant pleaded reliance on those reports and alleges they were in particular respects misleading or deceptive. Absent any positive allegation by the applicant, which withstands scrutiny, that what was represented, by reference to objective facts, did not occur or eventuate, the demand for such additional documents amounts to no more than a fishing expedition.

24    As to the alternative that, as a matter of fact, such reserves did not exist as at 21 February 2001, the burden lies on the applicant to prove this allegation. No facts are pleaded to support the bald allegation. In my opinion, there is no obligation upon the respondent to discover underlying data for its reserve reports to meet that unparticularised assertion.

25    That the future matters did not come about is pleaded, as against the respondent directly, at para [11] of the statement of claim (SOC) set out above. This pleading is a reference to a force majeure notice (the Notice) provided by Apache Northwest Pty Ltd, the Harriet Joint Venture (HJV) operator, to BFPL, not to the applicant, dated 23 November 2006. The references to “Apache” in the Notice are to Apache Northwest. Paragraphs 7-12 of the Notice are in the following terms:

7.    Apache notifies Burrup that due to adverse developments at a number of exploration and development wells in the Harriet Joint Venture permits or production licences which were beyond the reasonable control of Apache and which could not have been reasonably anticipated and prevented by Apache acting as a Reasonable and Prudent Operator (Force Majeure Events), including:

•    the failure of exploration wells resulting in a failure to add Proven Reserves including:

•    wells targeting gas prospects: Ginger- I, Dawn-1, Highgrove-1, Little Sandy-1, Selene-1, Denver-1, Errol-1, Dylan-1 and Marley-1; and

•    other wells that had some prospect of encountering gas: South Plato-1; Gibson-1; West Cycad-1; Greater Victoria-1; Karangi- 1; Kew-1; and Simpson-1.

•    the failure of development wells and/or failure of reserves predominantly in the Linda, Wonnich and Rose fields resulting in total write-down of approximately 210PJ of Proven Reserves net of reserve additions.

(a)    the uncommitted Proven Reserves of the Harriet Joint Venture, including the share of those Reserves to which Apache is entitled:

(i)    were at the Commencement Date below those required by clause 5 of the GSPA (First Force Majeure); and/or

(ii)     have, since the Commencement Date, fallen below and/or further below those required by clause 5.2 of the GSPA (Second Force Majeure); and

(b)    due to the Force Majeure Events, under clause 14.1 of the GSPA Apache anticipates being unable to sell or deliver all of its Percentage Interest of Gas under the GSPA such that the fundamental purpose of the GSPA is unlikely to be implemented for an extended period commencing sometime between January 2007 and August 2009 (depending on the success or otherwise of the Harriet Joint Venture's development drilling programme) (Third Force Majeure).

More precise details will be provided after a detailed assessment has been completed.

8.     If the Force Majeure Events result in Apache being unable to meet its Supply Obligation during the Supply Period Apache intends, if necessary, to again claim Force Majeure pursuant to clause 13 of the GSPA in relation to its Supply Obligation (Fourth Force Majeure).

9.     The likely duration of the Second Force Majeure is currently uncertain but will cease if the Harriet Joint Venture's further exploration and development programmes produce results that cause a reassessment to the effect that uncommitted Proven Reserves are above those required by clause 5.2.

10.    The likely duration of the Third Force Majeure is currently uncertain but will cease if further Proven Reserves are discovered and/or brought into production such that Apache is able to sell or deliver all of its Percentage Interest of Gas under the GSPA and thereby perform its Supply Obligation.

11.    If it is claimed, the likely duration of the Fourth Force Majeure will be stated in the relevant notice.

12.     Apache will keep Burrup informed as to those matters.

26    This Notice does not, on its face, support the allegations in SOC [11]. The Notice, as its title and content make clear, is directed to matters constituting adverse developments in a number of exploration and development wells in the HJV permits or production licences and which were beyond the reasonable control of the operator of the HJV and which could not have been reasonably anticipated and prevented by it acting as a reasonable and prudent operator.

27    The Notice does not support the plea in the SOC that the future matters pleaded did not come about. The allegations as to future matters were not to the effect that no force majeure events would occur which might interrupt supply.

28    Moreover, the Notice does not state any more than that, as a result of these several events, Apache Northwest “anticipates” not being able to sell or deliver all of its “Percentage Interest of Gas” under the gas sale and purchase agreement (GSPA).

29    However, the Notice proceeds at para 8 to deal with what will be the situation if, in fact, Apache Northwest is unable to meet such supply commitments.

30    It is not alleged that supplies were in fact interrupted. Indeed, senior counsel for the respondent stated that such had not occurred. Counsel for the applicant did not contend otherwise nor disavow what had been said as to this on behalf of the respondent.

31    This same analysis holds good in respect to the pleading against Apache Energy that the representations as allegedly made did not come about (SOC [20]). Again reliance in the pleading is placed, without specifying the document, upon a notice of force majeure in similar vein.

32    Additional allegations of misrepresentations are made against Apache Energy, although it is not a party, and the respondent is alleged to have been involved in the alleged contravening conduct.

33    The allegations are similar to those involving the respondent. They include that Apache Energy represented that the “Apache Sellers” would supply gas from other sources than the HJV gas field should supply from the latter not suffice to satisfy the Apache Sellers’ obligations under the GSPA.

34    It also pleaded that Apache Energy represented that the HJV would not enter into contracts to sell either proven or probable reserves from the HJV gas field which, in any way, jeopardised the security of the supply of gas under the GSPA.

35    As to these allegations the applicant pleads similar allegations as to what occurred on or about 23 November 2006 as is the case of the respondent.

36    It adds that the HJV entered into contracts to sell proven and probable reserves from the HJV gas field which jeopardised the security of the supply of gas under the GSPA. No particulars of these whatsoever were provided.

37    There is also a plea concerning an alleged representation that Apache Energy would use all reasonable endeavours to procure that the arrangements with the East Spar Joint Venture amongst others would continue. It is pleaded that Apache Energy did not do this.

The width of discovery sought

38    The applicant submits it is entitled to discovery from the respondent and Apache Energy of:

(a)    documents recording the gas reserves or discussion of the gas reserves for the years 2000 to 2007;

(b)    documents evidencing other commitments of gas from the HJV gas fields for the years 2004 to 2007, which inform the assessment of how much of the reserves remained uncontracted.

Consideration

39    The representations alleged to have been made by the respondent are pleaded as having been made on or about 21 February 2001. Those against Apache Energy are alleged to have been made between November 2000 and December 2001.

40    The applicant nonetheless seeks discovery of documents, which fall into various categories, for the period 2000 to 2007. The particular documents sought from the respondent and Apache Energy are annexed to the amended interlocutory application.

41    I will deal with the various categories.

42    I do not consider that documents referrable to the determination of proven or probable gas reserves of the HJV gas fields or any of them which post-date December 2001 are discoverable. They are not, in my opinion, directly relevant to the issues raised in the pleadings (r 20.14 of the Federal Court Rules).

43    Whether the representations as to proven or probable reserves, if made, were misleading or deceptive falls to be judged at the time any such representations were made. This is so whether the applicant’s case rests on representations as to future matters or alternatively of existing fact. Data which did not exist when the representations were allegedly made cannot inform the question whether there were no reasonable grounds for making the alleged representations.

44    The circumstances of this case are distinguishable from those found in North East Equity and Bill Acceptance.

45    To the extent that the applicant pleads as against the respondent the intention of “the Apache Sellers” as at 21 February 2001 and in relation to Apache Energy the intentions of the “Apache companies in Australia”, the Apache Sellers, the HJV and Apache Energy as at November 2000, December 2000, January 2001, June 2001 and December 2001 I consider that, absent a plea that gas was not in fact supplied as agreed under the terms of the GSPA, or some other particulars provided to sustain this bald plea, the pleading of lack of intention is barren and nebulous. Apart from other considerations the expressions “Apache companies in Australia” and “the Apache Sellers” are not defined in the SOC. “HJV” is defined as a gas field in Western Australia (SOC [7.1]). The concept of the intention is in these circumstances elusive. Neither the respondent nor Apache Energy will be required to provide discovery of documents concerning the pleaded intentions.

46    Documents such as notice to BFPL declaring or foreshadowing the declaration of a force majeure in 2006 should be discovered having regard to the applicant’s pleaded case but not otherwise.

47    I am not, presently, prepared to put the respondent or Apache Energy to what would likely be a very onerous and expensive task of providing any documents concerning what is pleaded at SOC 7.3, 17.6.5, 17.6.6, 17.6.7, 20.7 and 20.8. This is so because there is no suggestion, and it has not been pleaded, that gas supplies were not made to BFPL as provided for under the GSPA. Indeed, as I mentioned, the Court was informed that apart from a period following the well-publicised Varanus Island gas plant explosion, there has been no shortfall in supplies to BFPL. The same point emerges from the pleading by the applicant that supplies to other customers, in some unspecified way, “jeopardized the security of supply of gas under the GSA” (SOC [20.7]) as well as the pleading concerning Apache Energy allegedly not endeavouring to procure that the arrangements with East Spar Joint Venture and others would ensure the security of supply of gas to BFPL under the GSPA.

48    These allegations are bare assertions without any particulars and they lead nowhere in the overall context of the SOC.

49    To the extent that there has not been discovery in relation to the documents numbered 16 (concerning the respondent) and 28 (concerning Apache Energy) in Annexure A to the amended interlocutory application such discovery should be given.

50    The respondent, without acknowledging any liability to do so, has indicated that it will not oppose an order in terms of para 5 of the amended interlocutory application.

Vacation of trial

51    The Court on 24 June 2014 ordered (order 2) that this matter proceed to trial on all issues other than damages. This order stands. According to its terms, the issue of reliance is one of the issues to be tried. The construction of an order is a matter of law: Universal Music Australia Pty Ltd v Sharman Networks Ltd (2006) 150 FCR 110 at [19]. Orders made by a court, even where apparently unambiguous, may permissibly be read together with the reasons for those orders to give context: Yates Property Corporation Pty Ltd v Boland (1998) 89 FCR 78; Siminton v Australian Prudential Regulation Authority [2008] FCAFC 90 at [23].

52    The reasons disclose no discussion of the division drawn between proof of damage (reliance) and proof of damages (quantum). The issue of damage is distinct from proof of the quantum of damages: Tag Pacific Limited v McSweeney (1992) 34 FCR 438 at 439. See also Dockpride Pty Ltd v Subiaco Redevelopment Authority [2005] WASC 211 at [1]-[2], [259]-[267].

53    However, following the making of that order, during a hearing on 4 August 2014 the question of whether order 2 embraced the issue of reliance was raised. Counsel for the applicant, correctly I think, observed that evidence as to reliance might be relevant to credit generally and potentially inform the issue of whether the alleged representations (if made) were misleading.

54    Senior counsel then appearing for the respondent disavowed this view and advised the Court that causation was a separate issue which was linked to damages.

55    In one sense this is undoubtedly correct. However, causation embraces both reliance causing damage as well as damages. I accept that evidence going to reliance may very well go to the issue of credit and in turn be relevant to the issue of whether the alleged misrepresentations were made, and if made, whether they were misleading. In fairness to senior counsel then appearing he had not been and is not now the counsel briefed generally in this matter for the respondent. Mr Anderson SC, who is so briefed, takes the same view as did counsel for the applicant as to the likely relevance of reliance evidence to credit and he proposes to cross-examine the applicant at trial upon the matter of reliance, indeed, to seek to establish that the alleged “Cost Overruns Agreement” is a sham.

56    Accordingly, the issue of reliance, in that context, should form part of the trial.

57    I accept that the applicant and those who advise him were entitled to draw from what senior counsel, then appearing for the respondent, had said on 4 August 2014 to the effect that reliance would not be an issue at the trial in December. I have been informed that the applicant’s witness statement has been drawn in a way which reflects that understanding. I infer from what I have been told by senior counsel for the respondent that the issue of reliance is not insignificant in its evidentiary scope.

58    I am persuaded, somewhat reluctantly, that the ends of justice would not be served were the trial to proceed in December. The applicant and quite probably the respondent would be prejudiced thereby in respect to the proper preparation of their respective cases.

59    There will be an order that the trial listed to commence on 8 December 2014 be vacated. Otherwise I will direct the parties to confer with a view to bringing in a minute of orders to reflect these reasons by 5 December 2014, failing which the parties will be required to file and serve minutes of proposed orders respectively. In that case final orders will be made at the next directions hearing.

60    Correspondence from the respondent’s solicitors to the applicant’s solicitors raises other issues which have still not been dealt with including whether allegations made by the applicant involving several former employees of the respondent are still being maintained; the number and identity of witnesses to be called by the applicant and further discovery by the applicant upon the issue of reliance, including the Cost Overruns Agreement, as well as a revised witness statement from the applicant which also covers the issue of reliance. I propose to deal with those issues and any other pre-trial directions on 18 December 2014. I will direct the parties to file and serve minutes of orders they seek in those additional respects by 12 December 2014.

61    The matter will be listed for further directions at 10.15 am on 18 December 2014.

62    I will reserve the question of costs on the interlocutory application.

Associate:

Dated:    27 November 2014