Modeus Pty Ltd (ACN 106 986 056) v Secretary, Ministry of Health

The plaintiff, Modeus Pty Ltd, seeks a separate determination, pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), of the question of whether the Procurement (Enforceable Procurement Provisions) Direction 2019 (NSW) (“the Direction”) made pursuant to s 175 of the Public Works and Procurement Act 1912 (NSW) (“the Act”) has been, in the circumstances of this case, engaged.

Modeus accepts that if the correct conclusion is that the Direction has not been engaged, the proceedings should be dismissed, thus avoiding what Modeus contends would otherwise be a trial lasting several weeks.

Modeus contends that the question may be decided having regard only to legislative instruments and documents and that it is a “predominantly” legal question.

The particular question sought to be determined separately from, and before all other issues, is:

I am not persuaded that this question is apt for separate determination.

Modeus was a respondent to a procurement activity (“the Procurement”) the object of which was to select and obtain a single state-wide electronic controlled drugs registry, to be called “eCDR”.

Modeus contends that the Procurement was undertaken by the Ministry of Health [3] “through” the second defendant, Health Administration Corporation.

Modeus has also named the State of New South Wales as third defendant.

Health Administration Corporation contends that the Procurement was in fact undertaken by one of its administrative divisions, known as “HealthShare NSW”. Health Administration Corporation contends that the team operating the Procurement has now moved from HealthShare NSW to another of its administrative divisions, “eHealth NSW”.

The Procurement was conducted by way of open market tender which included a “Request for Interest” phase and a “Request for Proposal” phase.

Mr Green SC, who appeared with Dr Sapienza for Modeus, said that:

Modeus contends that:

Clause 6 of the Direction provides, relevantly:

As the chapeau to cl 6(1) shows, the Direction applies only to a procurement by a government agency listed in Schedule 1. The Ministry of Health, but not Health Administration Corporation, is listed in Schedule 1.

The Direction also only applies if “the procurement is effected by any form of contract”. [4]

The Direction does not apply to any procurement specified in Schedule 2 including, relevantly, “the procurement of health and welfare services”.

Clause 10 of the Direction provides:

During argument, it emerged that Mr Green was prepared to have any separate question decided on the basis of the following allegations which are presently set out in par 15 of Modeus’ proposed “Points of Claim”. [5] I have substituted the defined terms in these reasons as appropriate:

Arising out of those matters, Mr Cheshire SC, who appeared with Mr Condylis for the defendants, submitted, and Mr Green did not dispute, that the following issues will arise on the proposed separate question:

Mr Green accepted that, if there were to be a separate question, Modeus would need to make out those contentions, and the matters particularised purely by reference to documents, including legislative instruments.

Mr Cheshire submitted that, nonetheless, the defendants would seek to put on evidence in relation to those matters. That evidence is likely to be extensive and to take a considerable time to prepare.

According to the defendants’ solicitor, Mr Wilford, that evidence will be adduced in relation to:

It is thus likely that the defendants will seek to adduce a vast body of evidence on the proposed separate question.

Mr Green agreed that, for the purposes of any separate question, Modeus would not seek to contest any evidence adduced by the defendants, otherwise than as to relevance.

He submitted, however, that there may be a contest about inferences to be drawn from the evidence.

As the defendants propose to adduce evidence as to how the procurement was in fact conducted, presumably so as to establish its contentions as to who conducted the Procurement, it is likely if not certain that this evidence, or at least a significant part of it, will also be deployed on behalf of the defendants in the final hearing in the event that the separate question was answered favourably to Modeus.

That is because, in that event, there will be a final hearing concerning Modeus’ claims that there has been a breach by one or other of the defendants of the enforceable procurement provisions in the Direction and its claims for injunctive or compensatory relief.

While Modeus agrees that this evidence will not be challenged, otherwise than as to relevance, on the hearing of the separate question, there is no reason as to why Modeus could not challenge it at final hearing, thus raising the spectre of inconsistent findings about the same facts or evidence. [7] That, alone, is a reason to refuse to order a separate question.

A further potential problem arises if the separate question is answered favourably to Modeus. In order to avoid the lengthy trial the subject of Modeus’ apprehension, the defendants may seek to challenge the determination of the separate question on appeal.

In that regard, Mr Green did submit, in passing, that this might be an appropriate case in which to order that any separate question be removed to the Court of Appeal under UCPR r 1.21. That submission was not developed, and no such application has been made. In any event, the evidence that the defendants have foreshadowed they would adduce on the separate question points to the probability that its resolution would, at least to some extent, depend on the facts peculiar to this case, thus rendering this case not suitable for removal.

For those reasons, my conclusion is that there should not be an order for determination of the proposed separate question. I propose to dismiss that part of Modeus’ Notice of Motion filed 11 August 2023 seeking this relief.