David William Pallas & Julie Ann Pallas as trustees for the Pallas Family Superannuation Fund v Lendlease Corporation Limited (No 2)

This is an application by the defendants, Lendlease Corporation Limited (an international property and infrastructure company listed on the Australian Securities Exchange (ASX)) and Lendlease Responsible Entity Ltd as responsible entity for Lendlease Trust (LRE), to set aside a notice to produce dated 24 June 2024 (Original NtP) issued by the plaintiffs, David William Pallas & Julie Ann Pallas as trustees for the Pallas Family Superannuation Fund (first plaintiff) and Martin John Fletcher (second plaintiff), in these proceedings.

The application came before me for hearing on 23 August 2024, during which the plaintiffs indicated that they would recast the Original NtP to seek to overcome many of the objections raised by the defendants to the Original NtP. The plaintiffs then reformulated the Original NtP in two proposed alternative forms which were submitted to the defendants on 30 August 2024 (Alternative NtPs): a very detailed alternative version (Detailed NtP) and a summarised alternative version (Summary NtP).

In submissions and evidence provided to me across September and October 2024, the defendants maintained their objections to the Original NtP and also objected to the Alternative NtPs, saying that they fail to cure the deficiencies in the Original NtP, and that the court should not order the production of documents under any form of the notice to produce. The defendants also say that if production is ordered pursuant to any part of the Original NtP or the Alternative NtPs, the plaintiffs should be ordered to pay the defendants’ substantial costs of compliance and also pay the defendants’ costs of this application.

The plaintiffs press for production of the documents under the Original NtP, saying that the defendants’ costs and time to produce documents in accordance with it would be lower than under either of the Alternative NtPs.

In summary, for the reasons set out below, I have concluded that the Original NtP should be set aside and that it is not necessary to deal with the issue of any production of documents under either of the Alternative NtPs.

To understand the arguments made in relation to the application to set aside the Original NtP and the defendants’ continued objections to the Alternative NtPs, it is necessary to set out the procedural history and the relevant factual background of the proceedings.

On 18 April 2019, the first plaintiff filed the summons commencing the proceedings against the defendants. The first plaintiff brought the proceedings as a class action on behalf of persons who acquired an interest in stapled securities in the defendants during the period 17 October 2017 to 8 November 2018 (Relevant Period). The first plaintiff was represented by Maurice Blackburn Lawyers (MBL).

On 6 August 2019, the second plaintiff filed the summons also commencing class action proceedings against the defendants. The second plaintiff was represented by Phi Finney McDonald (PFM).

On 21 November 2019, the two proceedings were consolidated pursuant to orders made by Hammerschlag CJ in Eq, including that there would be only one solicitor on the record, and that until agreement as to who that would be was reached, the solicitor then on the record in the proceedings commenced by the first plaintiff (MBL) would assume that role. I understand that PFM later acted for the plaintiffs (from August 2021 to December 2023), following which MBL resumed being the solicitors on the record for the plaintiffs.

On 24 December 2019, the plaintiffs filed a Consolidated Commercial List Statement (CLS) and Amended Summons.

On 28 February 2020, the defendants filed their Consolidated Commercial List Response (CLR).

In short, the allegations in the proceedings concern pre-tax provisions the plaintiffs allege Lendlease should have taken and certain reductions in after-tax profits they allege Lendlease should have made with respect to three construction projects that Lendlease was undertaking as part of its engineering and services business (Engineering Business) within the Relevant Period.

During the Relevant Period, the Engineering Business was undertaking the design and/or construction of the following major infrastructure projects (collectively, the Projects):

The plaintiffs, on behalf of group members, claim that they suffered loss after purchasing securities in the defendants (each representing one ordinary share in Lendlease, stapled to one unit in the Lendlease Trust) at an artificially inflated price when the price of the defendants’ securities dropped following an announcement to the ASX on 9 November 2018.

In the latest form of the allegations made (which I will deal with in more detail below), the plaintiffs contend that the defendants breached their continuous disclosure obligations and engaged in misleading or deceptive conduct during the Relevant Period. In particular, the plaintiffs allege that in the Relevant Period, the defendants breached:

The Engineering Business was sold by Lendlease in 2020.

Since 2020, the defendants have provided extensive discovery to the plaintiffs at considerable cost as follows:

Between 22 July 2022 and 2 September 2022, the parties engaged in lengthy correspondence regarding the plaintiffs’ assertions that the defendants’ discovery was deficient because there were no documents showing on a monthly, quarterly or other basis, how the projected losses on each of the Projects were accounted for in the defendants’ accounts as between provisions in the Projects and provisions held outside the Projects. The plaintiffs sought these further documents from the defendants to assist the plaintiffs’ experts. The defendants rejected the suggestion that they had not complied with their discovery obligations and provided guidance on the location of relevant documents within the discovery. Some of this correspondence is referred to further below.

The unchallenged evidence of the defendants is that over 4.6 million documents were collated and processed into the defendants’ solicitors’ discovery database (known as Relativity) to enable the defendants to comply with the Original Discovery Orders and the Further Discovery Orders.

On 22 February 2022, following completion of discovery in accordance with the Original Discovery Orders and the Further Discovery Orders, the solicitors for the defendants, Herbert Smith Freehills (HSF), wrote to the then solicitors on the record for the plaintiffs, PFM. In that letter, HSF raised concerns they held regarding the CLS, including as to the articulation of the plaintiffs’ case, identifying what it considered to be deficiencies (principally, lack of specificity and precision) in the plaintiffs’ allegations as formulated, and expressing their view that these deficiencies rendered parts of the CLS — in particular, paragraphs 22, 50 and 51 — liable to be struck out. Objection was taken mainly to “imprecision” in the definitions of the alleged “Project Information” and “Unreliable Performance Information” in paragraphs 50 and 51, by reason of which, HSF said, the defendants were unable to identify what information the plaintiffs allege should have been disclosed to the ASX and when.

HSF’s letter of 22 February 2022 concluded by stating that given that extensive discovery had been given by the defendants to date, the plaintiffs could reasonably be expected to be in a position to clearly articulate their case. HSF sought confirmation by 7 March 2022 that a proposed amended commercial list statement addressing the identified deficiencies would be provided by a date not later than the next directions hearing (which was fixed for 18 March 2022), and noted that the defendants reserved their rights to file and serve a notice of motion to strike out the defective aspects of the CLS.

On 14 March 2022, PFM sent a letter to HSF responding to correspondence from HSF (including its letter of 22 February 2022) and enclosing draft proposed orders, including provision for the plaintiffs to serve their lay and expert evidence by 14 July 2022 and, subsequent to that, for the plaintiffs to serve a proposed amended commercial list statement by 4 August 2022.

On 16 March 2022, Hammerschlag J (as the Chief Judge in Equity then was) made orders in the proceedings by consent directing the plaintiffs to serve any lay and expert evidence by 4 August 2022 and to serve a proposed amended commercial list statement by 25 August 2022, with the defendants to confirm in writing to the plaintiffs whether they consented to or opposed leave being granted to the plaintiffs to file it by 15 September 2022 (March 2022 orders).

In the lead-up to and following the dates fixed by the March 2022 orders, the parties exchanged correspondence as follows:

The plaintiffs failed to serve their evidence by 4 August 2022 in accordance with the March 2022 orders.

On 8 August 2022, PFM wrote to HSF in response to HSF’s letter of 2 August 2022. PFM observed that the plaintiffs had accommodated similar delays in connection with the defendants’ production of documents and provision of further discovery (including between December 2020 and June 2021), and that this was important background to consider in any debate about the orderly and efficient conduct and progress of the proceedings. PFM then referred to the following matters by way of explanation for the delays encountered by the plaintiffs in the preparation of their evidence:

On 17 August 2022, HSF wrote to PFM, stating that the defendants did not oppose the proposed orders attached to PFM’s letter of 31 July 2022, on the basis that the defendants be afforded a commensurate period (towards which any holiday or court recess period would not count) within which to prepare their lay and expert evidence.

On 19 August 2022, PFM sent an email to HSF noting, among other things, the plaintiffs’ acceptance that the entitlement of the defendants to a commensurate period of time to prepare their evidence would be a relevant consideration when it came time to formulate timetabling orders in respect of the same.

The plaintiffs did not serve a proposed amended commercial list statement by the 25 August 2022 deadline prescribed by the March 2022 orders.

On 29 August 2022, Ball J made orders by consent vacating the March 2022 orders in part and directing the plaintiffs to serve any lay and expert evidence by 30 September 2022 and to serve a proposed amended commercial list statement by 21 October 2022, with the defendants to confirm in writing to the plaintiffs whether they consented to or opposed leave being granted to the plaintiffs to file it by 11 November 2022 (August 2022 orders).

On 29 September 2022 (the day before the deadline fixed by the August 2022 orders for service of the plaintiffs’ evidence), PFM wrote to HSF enclosing draft proposed orders and requesting, among other things, a further four-week extension to that deadline. PFM again cited the involved nature of the task to be undertaken by the plaintiffs’ main liability expert, and the fact that his opinions would furnish the assumptions to be provided to the plaintiffs’ other experts. PFM raised, once more, the matter of the provisioning documents, stating that, “in the absence of clear documentation of the reconciliation of such provisions in your clients’ accounts on a monthly, quarterly or other basis, the expert has been required to consider a large volume of material and make assumptions on the provisions being allocated, applied and raised during the Relevant Period” and noting that that process was taking longer than anticipated. Finally, PFM pointed to the engagement of two senior members of the plaintiffs’ counsel team in long-running trials at various times throughout August and September 2022 as a source of additional delay in completing the plaintiffs’ evidence. The enclosed draft proposed orders made provision for the plaintiffs’ to serve their evidence by 28 October 2022 and a proposed amended commercial list statement by 18 November 2022 (proposed September 2022 orders).

The plaintiffs did not serve their evidence by the 30 September 2022 deadline fixed by the August 2022 orders.

On 13 October 2022, having sought (and PFM having refused to provide) further information regarding the plaintiffs’ delay to enable the defendants to consider the plaintiffs’ proposed four-week extension, HSF sent a letter to PFM enclosing proposed amended draft orders. In material respects, those proposed amended orders retained the form of the proposed September 2022 orders.

On 25 October 2022, PFM sent an email to HSF stating that while the plaintiffs’ lay and expert evidence was substantially advanced, due to expert unavailability that week and the following week, the plaintiffs now anticipated being in a position to serve their lay and expert evidence by 9 November 2022. Attached to that email were draft proposed orders extending the time for service of the plaintiffs’ lay and expert evidence to 9 November 2022 and service of a proposed amended commercial list statement to 30 November 2022. PFM emailed HSF with a further draft set of orders in substantially identical form on 26 October 2022.

The plaintiffs did not serve their evidence by the 28 October 2022 deadline proposed in accordance with the proposed September 2022 orders.

On 28 October 2022, HSF wrote to PFM responding to PFM’s previous correspondence, including their letter of 25 October 2022, noting that the plaintiffs now sought (cumulatively) a 13.5-week extension to the original deadline for service of their evidence of 4 August 2022, and stating that PFM had failed to address HSF’s questions and concerns regarding the reasons for these delays. HSF stated that in order to ensure the defendants were not further disadvantaged by having less time to review the plaintiffs’ evidence and proposed amended commercial list statement, they agreed to the draft form of orders attached to PFM’s email dated 26 October 2022.

On 3 November 2022, Ball J made orders by consent vacating the August 2022 orders in part and directing the plaintiffs to serve any lay and expert evidence by 9 November 2022 and to serve a proposed amended commercial list statement by 30 November 2022, with the defendants to confirm in writing to the plaintiffs whether they consented to or opposed leave being granted to the plaintiffs to file it by 24 February 2023 (November 2022 orders).

The plaintiffs did not serve their evidence by the 9 November 2022 deadline fixed by the November 2022 orders.

On 10 November 2022 at 1:51pm, PFM served the expert report of Peter Badala via email to HSF. That email advised that the balance of the plaintiffs’ expert and lay evidence was currently being finalised and would be served upon its completion.

On 10 November 2022 at 2:47pm, HSF sent an email to PFM which confirmed receipt of Mr Badala’s report and requested that PFM advise when the remaining evidence would be served. No response to this request was provided.

On 17 November 2022, HSF sent an email to PFM requesting an explanation for the further delay in serving the remainder of the plaintiff’s evidence and confirmation that the plaintiffs would serve their proposed amended commercial list statement by 30 November 2022 in accordance with the November 2022 orders.

On 18 November 2022, PFM sent an email to HSF serving two further expert reports of Owain Stone and Professor Mark Zmijewski respectively and stating that the plaintiffs had one remaining piece of lay witness evidence to serve which would occur as soon as possible the following week.

On 22 November 2022, PFM sent an email to HSF stating that they expected to serve the plaintiffs’ final lay witness statement by 25 November 2022 and were working towards serving the proposed amended commercial list statement by 30 November 2022.

On 25 November 2022, PFM sent an email to HSF attaching by way of service one lay witness affidavit of Martin Fletcher.

On 28 November 2022, HSF sent an email to PFM requesting confirmation that all of the plaintiffs’ evidence in chief had been served and that the plaintiffs would serve the proposed commercial list statement by 30 November 2022.

On 30 November 2022, PFM sent an email to HSF which indicated that the plaintiffs had served the totality of their evidence in chief but regrettably would not be able serve the proposed amended commercial list statement until 21 December 2022, due in part to counsel availability.

On 1 December 2022, HSF sent a letter by email to PFM stating that it was the defendants’ view that the court should be made aware of the status of the matter and the plaintiffs’ repeated failure to meet court-ordered deadlines. HSF also said that the defendants would exercise their liberty to apply and seek to relist the matter for directions on 9 December 2022.

On 2 December 2022, HSF sent an email to the court requesting that the matter be listed for directions on 9 December 2022.

On 9 December 2022, on the application of the plaintiffs, Ball J made an order extending the time for the plaintiffs to serve a proposed amended commercial list statement to 21 December 2022 (December 2022 orders). During that hearing, Ball J informed counsel for the plaintiffs:

The plaintiffs did not serve a complete version of the proposed amended commercial list statement by the 21 December 2022 deadline fixed by the December 2022 orders. Instead, PFM sent an email to HSF which attached an incomplete version of the proposed amended commercial list statement (first proposed ACLS). The first proposed ACLS did not include a document identified as annexure A which was repeatedly referred to in it. In the email, PFM stated that they expected to be able to provide the document identified as annexure A in the week commencing 9 January 2023.

On 22 December 2022, HSF sent a letter by email to PFM noting that the first proposed ACLS appeared to be materially incomplete and reserving the defendants’ rights, including their right to oppose leave being granted to the plaintiffs to file the first proposed ACLS.

The plaintiffs did not provide the defendants with a copy of annexure A to the first proposed ACLS in the week commencing 9 January 2023.

On 17 January 2023, HSF sent an email to PFM requesting that a complete copy of the first proposed ACLS, including annexure A, be provided immediately and reserving the defendants’ rights, including to relist the matter and oppose leave being granted to the plaintiffs to file an amended pleading.

On 18 January 2023, PFM sent an email to HSF which attached a revised copy of the first proposed ACLS and a proposed amended summons. The revised first proposed ACLS included annexure A and further additional amendments within it, said by PFM to be entirely non-substantive in nature (second proposed ACLS). Annexure A was a 280-page document comprising over 350 paragraphs.

On 26 January 2023, HSF sent a letter dated 25 January 2023 by email to PFM which enclosed proposed draft orders. In the letter, HSF requested an explanation for the delay in providing the second proposed ACLS and sought an extension to the time for the defendants to indicate whether they consented to or opposed leave being granted to the plaintiffs to file the second proposed ACLS.

On 1 February 2023, PFM sent a letter to HSF stating that the plaintiffs consented to the orders proposed in HSF’s letter of 25 January 2023.

On 2 February 2023, HSF sent an email to the court in agreed terms with a copy of proposed consent orders.

On 3 February 2023, the court sent an email to the parties confirming that the proposed orders had been made in chambers. Those orders vacated the November 2022 orders in part and ordered the defendants to confirm in writing to the plaintiffs whether they consented to or opposed leave being granted to the plaintiffs to file the second proposed ACLS by 31 March 2023 (February 2023 orders).

On 13 March 2023, HSF sent a letter by email to PFM raising particular issues, including seeking clarification of a number of matters in the second proposed ACLS.

By letter dated 17 March 2023, PFM provided responses to a number of the defendants’ requests for clarification, including an indication that the plaintiffs could provide by 29 March 2023 an amended proposed ACLS which identified the paragraphs of annexure A relied upon.

On 23 March 2023, HSF sent an email to PFM stating that any further suggested amendments to the second proposed ACLS be made after 31 March 2023, being the date by which the defendants were required to confirm their position in accordance with the February 2023 orders.

On 29 March 2023, PFM sent an email to HSF attaching a further revised version of the second proposed ACLS (third proposed ACLS) which addressed a number of matters that had been raised in HSF’s letter of 13 March 2023.

On 31 March 2023, in accordance with the February 2023 orders, HSF sent a letter by email to PFM in which it stated that the defendants opposed leave being granted to the plaintiffs to file the second proposed ACLS or the third proposed ACLS and set out in detail the deficiencies in those documents.

On 11 April 2023, PFM sent a letter by email to HSF stating that the plaintiffs would be prepared to draft a further revised pleading and proposed a timetable for the hearing of the plaintiffs’ application for leave to amend the CLS.

On 12 April 2023, HSF sent an email to PFM with attached proposed consent orders making amendments to the plaintiffs’ proposed timetable for the hearing of their application for leave to amend the CLS.

On 13 April 2023, by consent, the court made orders fixing a timetable for the hearing of the plaintiff’s application for leave to amend the CLS.

On 26 April 2023, PFM sent an email to HSF attaching the notice of motion (which had been filed that day) and a supporting affidavit to which was annexed a proposed amended consolidated summons and a further revised version of the third proposed ACLS (fourth proposed ACLS) that the plaintiffs were seeking leave to file. The fourth proposed ACLS contained a significant number of substantive changes additional to those which were contained in the third proposed ACLS.

On 2 May 2023, PFM sent a letter by email to HSF referring to the fourth proposed ACLS which they stated had been prepared to address at least some of the defendants’ criticisms of previous iterations of its list statement. The letter also stated that its purpose was to summarise the main changes that had been made in the fourth proposed ACLS.

On 26 May 2023, the plaintiffs’ application for leave to amend the CLS came before Stevenson J for its first return. Stevenson J made orders listing the application for hearing on 14 June 2023 and requiring the parties to confer and agree on a timetable for the production of a Redfern Schedule of objections and responses.

On 30 May 2023, PFM and HSF agreed on a timetable for the exchange and filing of the Redfern Schedule.

On 2 June 2023, HSF provided PFM with the defendants’ objections for the Redfern Schedule.

On 9 June 2023, HSF received an email from PFM which attached the Redfern Schedule with the plaintiffs’ responses to the defendants’ objections and a further proposed amended commercial list statement (fifth proposed ACLS).

Following correspondence between the parties on 13 June 2023, the hearing of the plaintiffs’ application for leave to amend the CLS was adjourned to 21 June 2023 to allow time for the defendants to consider the fifth proposed ACLS.

The parties’ counsel then conferred in relation to the fifth proposed ACLS.

On 19 June 2023, PFM sent an email to HSF which attached a further proposed amended commercial list statement (sixth proposed ACLS), said to contain a further set of amendments to address the defendants’ concerns in full, and proposed orders in relation to the filing of the sixth proposed ACLS and the filing of the parties’ evidence.

On 20 June 2023, PFM wrote to the Associate to Stevenson J with the consent of the defendants indicating that the parties had resolved the matters the subject of the Redfern Schedule and attaching proposed consent orders.

On 21 June 2023, Stevenson J made orders vacating the 21 June 2023 listing and granting leave to the plaintiffs to file and serve the amended summons in the form proposed on 26 April 2023 and the sixth proposed ACLS.

On 26 June 2023, PFM provided HSF with the amended summons and amended commercial list statement (ACLS).

On 27 June 2023, the plaintiffs filed the amended summons and the ACLS, which is the latest and current iteration of their claims against the defendants.

On 30 June 2023, Ball J made the following orders (June 2023 orders):

On 8 September 2023, in accordance with the June 2023 orders, HSF sent an email to PFM attaching by way of service the defendants’ amended commercial list response (ACLR).

On 12 December 2023, HSF sent an email to PFM advising that the defendants were not in a position to serve their lay evidence by 15 December 2023 in accordance with the June 2023 orders and stating that they required a short extension of one week to 22 December 2023. In the email, HSF noted that the defendants’ lay witnesses had overseas travel and/or work commitments which impacted the finalisation of their statements, that the majority of the defendants’ lay witnesses were no longer employed by the defendants and as such not within the defendants’ control, and that managing availability at that time of year was particularly difficult.

On 14 December 2023 at 10:20am, PFM sent an email to HSF noting that the reasons provided in the HSF email of 12 December 2023 did not appear to apply to the entirety of the defendants’ lay witness evidence, and the plaintiffs therefore considered it appropriate for the defendants to serve any lay witness statements which had been sworn/affirmed by 15 December 2023 by that day, with the balance of the defendants’ lay witness evidence to be provided by 22 December 2023. On that basis, the plaintiffs agreed not to seek variation orders in respect of the provision of the defendants’ lay evidence.

On 14 December 2023 at 6:20pm, HSF sent an email to PFM stating that the position in HSF’s email of 12 December 2023 applied to the entirety of the defendants’ lay evidence and that the defendants would not be in a position to file any lay witness statements by 15 December 2023. HSF also stated that the defendants were content to file and serve lay witness statements as they were finalised on or before 22 December 2023 and they anticipated that the majority of the evidence would be filed and served on 22 December 2023.

On 21 December 2023, HSF sent an email to MBL (who by that time had become the solicitors for the plaintiffs) serving the affidavits of Michelle Letton, Tarun Gupta, David Craig and Ashley Mason and confirming that the defendants anticipated completing service of their lay evidence on 22 December 2023.

On 22 December 2023, HSF emailed MBL serving the affidavits of Craig Laslett, Stephen McCann and Sylwia Rutkowska.

On 6 February 2024, HSF sent a letter by email to MBL stating that the defendants would not be in a position to serve their expert evidence by 16 February 2024 in accordance with the June 2023 orders and would require a short extension to 8 March 2024. HSF stated that greater time than was anticipated as being necessary at the time the June 2023 orders were made would be needed to progress all of the defendants’ expert evidence, noting that some experts had, and were continuing to have, availability issues. HSF also said that they were not in a position to identify the areas of expertise nor the experts to be advanced by the defendants and they did not anticipate being in a position to file expert evidence incrementally prior to 8 March 2024.

On 7 February 2024, MBL sent a letter by email to HSF requesting a more complete explanation for the cause of the delay in the service of the expert evidence so that the plaintiffs could properly consider the defendants’ request for the proposed extension.

On 13 February 2024, HSF sent an email to MBL stating that they anticipated leading evidence from each of: a construction expert in answer to Mr Badala’s evidence; an accounting expert in answer to Mr Stone’s evidence; and an economist in answer to Professor Zmijewski’s evidence. HSF also said that a final decision on whether that suite of evidence represented the totality of the defendants’ expert evidence had not yet been made.

On 8 March 2024, HSF sent an email to MBL serving the expert reports of Dawna Wright, Dr Sanjay Unni and Mozammel Ali and the second affidavit of Ashley Mason. HSF stated that the defendants intended to file one additional report to complete their expert evidence, being the report of a construction expert in response to Mr Badala’s report, which would be served no later than 15 March 2024. HSF concluded by saying that the defendants would support a commensurate extension of time for the plaintiffs’ reply evidence to cure any prejudice arising from the short delay.

On 13 March 2024, MBL sent a letter to HSF stating that they were disappointed regarding the ongoing delay in serving the entirety of the defendants’ expert evidence and that the plaintiffs reserved their position with respect to the delay and the timing for the provision of the plaintiffs’ evidence in reply. MBL requested copies of all documents relied upon or referenced in the defendants’ expert evidence, all underlying workings and calculations for the figures, tables and exhibits to each of the expert reports, and separate indices of all documents provided to each of the defendants’ expert witnesses.

On 13 March 2024 at 8:07pm, HSF sent an email to MBL confirming receipt of their letter, noting that they had already agreed to accommodate a commensurate extension of time for provision of any reply evidence by the plaintiffs (not due until 18 May 2024) and that the plaintiffs did not point to any prejudice in the delay in the service of defendants’ expert evidence.

On 13 March 2024 at 10:48pm, HSF sent a further email to MBL with a link to the expert report of David Gibson and the appendices to it, by way of service.

On 26 March 2024, HSF sent a letter by email to MBL responding to MBL’s email of 13 March 2024, including by stating that all documents relied on or referenced in Mr Gibson’s report:

The parties then engaged in further correspondence concerning the provision of further information by the defendants in relation to their experts’ reports.

As part of this correspondence, on 16 May 2024, HSF sent a letter by email to MBL which, amongst other things, noted that the plaintiffs’ reply evidence was due to be filed on 18 May 2024 and referred to the HSF letter of 8 March 2024 in which they had indicated that they would support an extension of the deadline for service of the plaintiffs’ reply expert evidence commensurate with the additional time taken by the defendants to complete their expert evidence, being three weeks and five days. HSF concluded by asking the plaintiffs to confirm whether they intended to take this additional time and, if so, that the plaintiffs’ reply expert evidence would be filed by 13 June 2024.

Attached to HSF’s email of 16 May 2024 was an addendum to the report of Dr Sanjay Unni dated 13 May 2024, which corrected a document referred to in a footnote in the earlier report of Dr Unni.

No response to HSF’s letter of 16 May 2024 was received by HSF.

The plaintiffs did not serve any lay or expert evidence in reply by the 18 May 2024 deadline fixed by the June 2023 orders.

On 22 May 2024, HSF sent an email to MBL referring to HSF’s letter of 16 May 2024, noting that they had not received any response to it and stating that HSF assumed that the plaintiffs intended to take additional time commensurate with the additional time taken by the defendants to complete their expert evidence. HSF sought confirmation that the plaintiffs’ reply evidence would be filed and served by 13 June 2024.

No response was received to HSF’s email of 22 May 2024.

On 29 May 2024, HSF sent an email to MBL noting that no response had been received to HSF’s letter of 16 May 2024 or HSF’s email of 22 May 2024 and stating that, absent a response, the defendants had organised their resources to receive the plaintiffs’ reply evidence, if any, by 13 June 2024.

On 13 June 2024, being the date that the defendants had indicated they expected to receive the plaintiffs’ reply evidence, MBL sent an email to HSF stating:

The plaintiffs have not provided any proposed timetable for the service of their reply evidence.

On 30 August 2023, the defendants made an application seeking that the Court of Appeal of this court determine as a separate question this court’s power to approve a notice to group members containing a notation that on settlement the parties would seek an order that any group members who have not registered by a specified date would not be permitted to participate in that settlement.

On 13 September 2023, Ball J referred the separate question to the Court of Appeal in the following form:

On 28 November 2023, a five-member bench of the Court of Appeal heard the defendants’ application, which was not opposed by the plaintiffs.

On 17 April 2024, the Court of Appeal delivered judgment answering the separate question in the negative: David William Pallas & Julie Ann Pallas as trustees for the Pallas Family Superannuation Fund v Lendlease Corporation Ltd (2023) 114 NSWLR 81; [2024] NSWCA 83.

On 14 May 2024, the defendants filed an application for special leave to appeal to the High Court of Australia, including that the application be progressed and determined with expedition.

On 28 May 2024, the plaintiffs filed a response to the application for special leave indicating that they agreed with the defendants’ position in relation to expedition and that they agreed special leave should be granted.

On 8 August 2024, the High Court granted special leave to appeal on the condition that the defendants be responsible for the appointment and costs of an appropriate contradictor: Lendlease Corporation Limited v David William Pallas and Julie Ann Pallas as trustees for the Pallas Family Superannuation Fund [2024] HCASL 191.

On 21 May 2024, MBL sent a letter by email to HSF stating that in the course of preparing their expert evidence in reply, the plaintiffs’ experts had identified a deficiency in the defendants’ discovery, referring to the fact that the defendants had discovered a number of PDF copies of programs for each of the Projects which lose key context held within the native versions of those programs. MBL stated that:

In the letter, MBL requested that the following program documents be produced in the native file format (e.g. as a .xer file or in any other native file format capable of being reviewed in a P6 platform), without delay:

An “.xer file” is a particular kind of file used to prepare programs for construction projects and is required to be opened using specialist software such as Primavera.

Attached to the letter was a schedule said to comprise a non-exhaustive list of the programs previously produced to the plaintiffs in PDF format. MBL stated that, for the avoidance of doubt, to the extent that any of the requested programs had not yet been discovered in PDF form, they requested the native files of those programs on the basis that the Requested Programs are relevant to a fact in issue in the proceedings and the plaintiffs’ experts are required to interrogate those programs to reply to the defendants’ expert evidence.

MBL concluded the letter by requesting that the Requested Programs be provided to them by 28 May 2024 and saying that any delay in the provision of the Requested Programs may result in a delay to the plaintiffs’ reply expert evidence.

On 28 May 2024, HSF sent a letter by email to MBL rejecting the assertion of a deficiency in the defendants’ discovery and setting out the background to the discovery given in accordance with requirements in the Original Discovery Orders and the Further Discovery Orders, including the documents listed in the schedule to the MBL letter of 21 May 2024. HSF also gave the following further responses:

On 28 May 2024 at 7:33pm, HSF sent a secure file transfer link to MBL which enclosed .xer documents as referred to in their letter of 28 May 2024.

On 7 June 2024, MBL sent a letter by email to HSF asserting that the Requested Programs were relevant to an issue in dispute in the proceedings and necessary for the plaintiffs’ experts to progress their expert evidence. MBL stated that the Requested Programs were required to enable them to address certain assertions made by the defendants’ construction expert, David Gibson, in response to the primary construction expert evidence prepared by Mr Badala that in respect of:

MBL observed that the Assertions went directly to the plaintiffs’ allegations in the ACLS, central to the proceedings and denied by the defendants, that the defendants were aware that additional provisions were required to be taken in respect of the Projects and a corresponding reduction in recorded profits was required.

In their letter of 7 June 2024, MBL said that the defendants’ evidence does not explain how the defendants:

MBL further stated that:

MBL concluded their letter by pressing for the production of the Requested Programs by 14 June 2024 to the extent those documents had not been provided to the plaintiffs to facilitate the efficient conduct of the proceedings, and indicating that if production was not forthcoming, the plaintiffs would issue a notice to produce.

On 14 June 2024, HSF sent an email to MBL stating that having regard to the issues raised in MBL’s letter of 7 June 2024 and the timing of the request relative to the status of the proceedings, they would not be able to provide a response within four business days as requested. HSF said that they would provide a response the following week.

On 21 June 2024, HSF sent a lengthy letter by email to MBL providing a substantive response to MBL’s letter of 7 June 2024, which HSF described as requesting that the defendants provide:

In summary, HSF made the following points:

HSF also noted that the defendants would resist any notice to produce issued by the plaintiffs and oppose any attempt by the plaintiffs to serve evidence exceeding evidence in reply. They attached to their letter draft consent orders giving effect to the proposed extension of the deadline for service of expert evidence in reply from Mr Badala to 31 July 2024.

On 24 June 2024, MBL sent an email to HSF attaching by way of service the Original NtP. The Original NtP required production of the following four categories of documents by 1 July 2024:

On 26 June 2024, HSF sent a letter by email to MBL concerning the Original NtP and referring to HSF’s letter of 21 June 2024 in which they had outlined the defendants’ concerns in relation to the request. HSF noted that the plaintiffs had failed to address these concerns. HSF also stated that the notice seeking production within seven days was unreasonable given the scope of the notice and that r 21.11(2)(b) of the UCPR stipulates that a party should be given at least 14 days to respond to any notice to produce. HSF stated that the defendants required a response to HSF’s letter of 21 June 2024 by 28 June 2024 so they could consider their response to the Original NtP. HSF also asked for the time for production under the Original NtP to be extended to 8 July 2024.

On 28 June 2024, MBL sent a letter by email to HSF concerning the Original NtP. MBL said that in their letter of 21 May 2024 they had requested production of the Requested Programs and whilst there had been some changes to the scope of that request, the documents were of the same nature as those identified in their original request and that in their letter they had explained the relevance of the requested documents to the issues in dispute and had assumed that the relevance was obvious.

MBL explained the relevance of and need for the Requested Programs in this way:

MBL said that the plaintiffs were willing to consent to extending the time for production under the Original NtP to 8 July 2024.

MBL concluded by saying that the matters contained in HSF’s letter of 21 June 2024 concerning potential prejudice to the defendants caused by the plaintiffs seeking to adduce evidence exceeding evidence in reply were premature and were matters to be dealt with at a later time (if and when the relevant circumstances arose), that the plaintiffs would propose an alternative timetable for the provision of reply evidence at another time, and that there was no relevant prejudice to the defendants in that course as no dates for mediation or the trial had been fixed and the defendants had expressly stated that they would resist the fixing of such dates until after the application for special leave had been resolved.

Although some quibbles were raised by the plaintiffs, I accept the generally unchallenged extensive evidence of the defendants that considerable work is required to be undertaken to locate and produce the documents sought under the Original NtP for each of the four categories of documents sought, it is difficult to estimate the costs of undertaking that work and the costs of undertaking that work is likely to be at least in order of $500,000. That work is detailed as follows:

On 23 July 2024, the defendants filed the notice of motion seeking orders setting aside the Original NtP.

By the HSF emails/letters of 8, 16, 30 July 2024 and 1 August 2024 and the MBL emails of 12, 17 July 2024 and 1 August 2024 (two emails), the parties rehearsed many of the arguments which were made before me on this application. I have addressed these arguments below. In short, the plaintiffs refused to accept the invitation of the defendants to withdraw the Original NtP.

At the hearing of the defendants’ notice of motion on 23 August 2024, I made orders directing the plaintiffs to file and serve an amended form of the Original NtP refining the categories of documents sought by 4pm on 30 August 2024.

On 30 August 2024, the plaintiffs served the Alternative NtPs.

The Detailed NtP seeks production of the following categories of documents:

The Summary NtP seeks production of the following categories of documents:

I accept the generally unchallenged extensive evidence of the defendants detailing the extensive work that would be required to be undertaken to locate and produce the documents sought under the Alternative NtPs for each of the categories. I accept that it is as much as, if not more than, the work that would be required for the defendants to produce documents in response to the Original NtP. Even though the defendants’ time and costs of doing so for the Detailed NtP are calculated in a highly uncertain exercise because of all the unknowns, they are estimated to be:

These costs total $318,000. I accept this evidence.

In letters exchanged in August 2024 and September 2024, the parties endeavoured to reach agreement in relation to a form of orders for production but were unsuccessful in doing so. I do not criticise any party arising from their failure to reach agreement.

Given that the plaintiffs press for production under the Original NtP, I will not consider the time and cost implications of production under either of the Alternative NtPs any further.

As the defendants challenge the relevance of the documents sought in the Original NtP and the Alternative NtPs, it is necessary to consider the allegations which are made in the ACLS in generalised terms.

Part C of the ACLS ([23]–[40]) sets out various publications, announcements and disclosures made by the defendants at various dates (being 17 October 2017, 17 November 2017, 21 February 2018, 22 August 2018, 9 November 2018, 16 November 2018, 26 November 2018 and 25 February 2019) regarding their financial performance, with various statements said to have been made on each of those dates.

Part C1 of the ACLS ([40A]–[40AT]) contains a series of allegations as to the “true position” of the GUN Project, the KSD Project and the NCX Project on specified dates, many of which include the dates set out in Part C of the ACLS, with particular reference to the likely whole of life profit or loss (WOL P/L) for each of the Projects as assessed by the defendants compared to the actual likely WOL P/L calculated in the expert report of Mr Badala.

It is further alleged that by reason of the deficit between the WOL P/L as assessed by the defendants and the actual likely WOL P/L for the Projects, the defendants had inadequate provisions for the Projects and the Engineering Business ([40AM]) and other additional pre-tax provisions would need to be taken by the defendants, by reference to the calculations made in the report of Mr Badala and the report of Mr Stone ([40AN]–[40AR]).

It is then alleged that by reason of the inadequate provisions for the Projects and the Engineering Business, the defendants’ financial results as published for the six months ended 31 December 2017 required an additional provision of $331.3 million for the Projects and a reduction in after-tax profits of $231.9 million and the defendants’ financial results as published for the twelve months ended 30 June 2018 required an additional provision of $415.5 million for the Projects and a reduction in after-tax profits of $290.9 million ([40AS]–[40AT]).

From the basal allegations in Part C of the ACLS, the plaintiffs’ claims are split between the allegations of misleading or deceptive conduct in Part D of the ACLS ([41]–[49K]) and the continuous disclosure contraventions in Part E of the ACLS ([49L]–[49AJ]).

In summary, in Part D of the ACLS it is alleged that the defendants engaged in misleading or deceptive conduct by making a series of representations on 17 November 2017, 21 February 2018 and 22 August 2018 to the market of investors and potential investors in their securities (Affected Market) regarding their financial performance and the adequacy of their provisions for which they had no reasonable grounds.

In summary, in Part E of the ACLS it is alleged that the defendants contravened their continuous disclosure obligations by being aware of the additional pre-tax provisions that needed to be taken on 17 October 2017, 17 November 2017, 21 February 2018, 31 May 2018 and 22 August 2018 and the reduction in after-tax profits on 31 December 2017 and 30 June 2018, but failing to communicate that information. The allegations in Part E are particularised by reference to the knowledge of eight identified officers of the defendants (Stephen McCann, Tarun Gupta, David Wilson, Dale Connor, Johannes Dekker, Craig Laslett, Michelle Letton and Ashley Mason) at the various dates which is set out in detail at Annexure A to the ACLS.

In summary, Part G of the ACLS alleges causation, reliance and loss.

In general terms, the defendants respond and raise substantive defences to the ACLS as follows:

In the schedules to the ACLR, the defendants set out the particulars which form the basis on which they assert they had reasonable grounds for making the representations alleged. Those particulars include:

As stated above, the plaintiffs have served expert reports from Mr Badala, Mr Stone and Professor Zmijewski.

Mr Badala is an accountant with experience in performing construction status reviews and costs audits. Mr Badala’s report is concerned with the gross profit margin for each of the Projects forecast by the defendants.

Mr Stone is a forensic accountant who has prepared a report containing the calculation of the additional provision that would have been required to be taken at certain dates and the implications for the defendants’ reported results based on the gross profit margins that Mr Badala opined ought to have been determined.

Professor Zmijewski is an economist who has prepared a report on what the defendants’ securities would have traded at if the revised provisions and the financial results were instead announced to the market.

As submitted by the plaintiffs, the reports are constructed so that Mr Badala’s opinions inform Mr Stone’s opinions, which in turn inform the opinions of Professor Zmijewski.

As indicated above, the defendants have provided expert reports from Mr Gibson, Ms Wright, Dr Unni and Mr Ali. The response to Mr Badala’s report is provided by Mr Gibson. The response to Mr Stone’s report is provided by Ms Wright. The response to Professor Zmijewski’s report is provided by Dr Unni and Mr Ali.

The issues to which the plaintiffs assert that the documents sought in the Original NtP have relevance are those which they say arise from the report of Mr Badala and the report of Mr Gibson in response.

Relevantly, in the letter of instruction dated 10 November 2022 from PFM, Mr Badala was asked to have regard to the brief of materials provided to him and provide his opinions on the following five questions:

It is clear that all of these questions explicitly raised for Mr Badala’s opinion the “time to complete” each of the Projects and the last two questions required Mr Badala to address the effect of any delays.

For the purposes of preparing his report, the defendants assert that Mr Badala was provided with more than 60 PDF program documents for the Projects and monthly project in delivery (PID) reports which were discovered by the defendants. Within these PID reports for each of the GUN and KSD Projects was a statement of the approved contract completion date, the current Forecast Completion Date and the current delivery completion date.

Mr Badala calculated the likely WOL P/L for each Project for each of the Assessment Months comprising direct costs (which he termed “directs”) and indirect costs (which he termed “indirects”) ([29(E)] and [29(F)]). In assessing the “indirects” for the KSD and GUN Projects, Mr Badala assessed the average monthly expenditure in respect of these costs on each Project at each Assessment Month and applied that average to the remaining months until his assessed likely completion date ([84]–[85]).

Importantly, as part of Mr Badala’s methodology in his report:

Mr Badala adopted a similar approach in his report concerning the likely completion date for the KSD Project for which he adopted 16 July 2020 as the likely completion date ([228], [232]), having noted that the Forecast Completion Date for the KSD Project was 16 July 2020, which was four months longer than stated in the PID report in October 2017 ([199]).

Mr Badala adopted a different approach for the NCX Project, without reference to the likely completion dates, because of what he regarded as a limitation in the records relating to it. Instead, to determine the likely NCX Project WOL P/L at each of the Assessment Months, Mr Badala determined the likely total final costs (TFC) based on his review and consideration of the joint venture’s risks and opportunities assessment as at each of the Assessment Months. Evidently, the Forecast Completion Dates for the NCX Project did not form any part of Mr Badala’s reasoning as it did for the GUN and KSD Projects.

There was no construction delay analysis of any sort in Mr Badala’s report and he did not profess any expertise in that area. The plaintiffs made a forensic choice not to lead any evidence in chief from a construction delay expert.

Mr Gibson responded to Mr Badala’s report. In the letter of instruction dated 2 March 2024 from HSF, Mr Gibson was instructed to consider the report of Mr Badala and the documents provided to Mr Badala and prepare a report providing his opinions on the methodology, opinions and conclusions in Mr Badala’s report. Schedule 1 to that letter of instruction set out the assumptions that Mr Gibson was asked to make, although it was expressly stated that not all of those assumptions may be relevant to his analysis. Mr Gibson was asked to identify in his report specifically which assumptions underpinned, were necessary for or otherwise informed his analysis and opinions.

Amongst the assumptions contained in Schedule 1 are that in the Relevant Period, Lendlease and the Engineering Business had in place a number of reporting systems and processes to monitor and report on the status of individual projects, including the Projects, and in summary these included:

These assumptions are then set out in further detail, with the monthly project reviews for the GUN and KSD Projects said to typically involve consideration of the project programme and the LLBJV for the NCX Project engaging Hinds Blunden (an external construction project management consultant company) to conduct independent reviews assessing the project’s programme.

In Mr Gibson’s report, he criticises Mr Badala’s approach as inappropriately using hindsight ([1.1.4]) which leads him to overstate the number of months remaining on the GUN and KSD Projects after each Assessment Month ([1.5.1(c)]). Mr Gibson says that Mr Badala has adopted the Completion Date in the last Assessment Month of November 2018 in place of the Completion Date reported by Lendlease in each of the earlier Assessment Month, an approach which assumes that events that may have occurred up to November 2018 that caused delay to a Project would have been foreseeable one year earlier in November 2017 ([1.5.1(c)–(d)]). Mr Gibson opines that it is more appropriate to adopt the Completion Date forecasted by the project team at each Assessment Month as this is likely to be a more reliable reflection of what was known at the time without the influence of hindsight ([1.5.1(d)]).

Mr Gibson opines that for the Assessment Month of October 2017 and all subsequent Assessment Months for the GUN Project, Mr Badala has used hindsight and calculated the monthly costs through to 22 February 2019, which is the forecast completion date that Lendlease was predicting in its November 2018 reporting ([4.5.42]). Mr Gibson also opines that for the Assessment Month of October 2017 and all subsequent Assessment Months for the KSD Project, Mr Badala has used hindsight and calculated the monthly costs through to 16 July 2020, which is the forecast completion date that Lendlease was predicting in its November 2018 reporting ([5.5.26]).

Mr Gibson states that from his review of Mr Badala’s report, it is not apparent to him whether Mr Badala has undertaken any delay or programme analysis on the Forecast Completion Date for the GUN Project ([4.5.49]). Mr Gibson also observes that Mr Badala has not undertaken any programme review or delay analysis on the Forecast Completion Date for the KSD Project or substantiated his opinion that Lendlease should have forecasted a completion date in all earlier Assessment Months that matched its anticipated completion date reported at the last Assessment Month of November 2018 ([5.5.40]).

Mr Gibson also concludes that Mr Badala’s analysis is not reliable because in the case of the GUN and KSD Projects he substitutes Lendlease’s contemporaneous “bottom-up estimates” of its costs to complete with the results of his later in time desktop review and methodology ([1.1.4(b)]. Mr Gibson says that he was instructed to assume that Lendlease’s costs for the GUN and KSD Projects were prepared based on a “bottom-up” approach which is consistent with what he inferred from the briefed documents, in particular the GUN and KSD PID reports.

In relation to the NCX Project, Mr Gibson noted that Mr Badala held the view that in the absence of PID reports, similar monthly project and cost reporting for the NCX Project he was unable to adopt the same approach and methodology that he used for the GUN and KSD Projects ([6.2.2]). Mr Gibson again criticises Mr Badala’s conclusions as being influenced by hindsight, looking back at facts known after the Assessment Months rather than limiting his assessment at the Assessment Months to the actual project progress and known facts on the NCX Project at that time ([6.3.18]).

In expressing his opinions, Mr Gibson did not undertake any delay analysis himself.

The plaintiffs have engaged a construction programming, scheduling and delay expert, Mr Ian Thorpe, whom they intend to ask to prepare a report in response to those parts of Mr Gibson’s report concerning the likely completion dates for each of the Projects and the relevant risks and opportunities in respect of the NCX Project which should have been adopted by the defendants in preparing forecasts for each of the Projects. Mr Thorpe’s conclusions, the plaintiffs say, would then be provided as assumptions to Mr Badala, whose conclusions would in turn be provided as assumptions to Mr Stone, whose conclusions would be furnished as assumptions to Professor Zmijewski.

Mr Thorpe has been briefed with, among other documents, all programs for the Projects that have been produced in discovery in the file format (PDF or native, where available) in which they were discovered.

By letter dated 30 July 2024 to MBL (which is in evidence, forming part of Exhibit 1 on the application [Thorpe letter]), Mr Thorpe details why he needs access to the Requested Programs in order to produce his report. Mr Thorpe states that he will need the native programs to:

Mr Thorpe also says that without the Requested Programs, in order to conduct his analysis he would need to reconstruct native versions of programs from the PDF versions — although any such attempts at reconstruction would likely result in “programs that bear very little resemblance to the native programs held by Lendlease”, would not enable him to draw definitive conclusions about the likely completion date on the NCX and KSD Projects (without great difficulty), and are not an appropriate option in these circumstances.

Essentially, the evidence proposed to be given by Mr Thorpe is delay analysis in respect of each of the Projects, including an assessment of how issues arising on each Project affected their progress. The precise matters in Mr Gibson’s report to which Mr Thorpe’s proposed evidence would provide a response are canvassed in slightly more detail in the plaintiffs’ submissions (summarised below).

The Original NtP is expressed to be a notice to produce under r 21.10 of the UCPR, which states:

Rule 21.10(1)(a) has no relevance to the Original NtP as it does not profess to require production of “any document or thing that is referred to in any originating process, pleading, affidavit or witness statement filed or served by” the defendants.

To fall within a notice to produce under r 21.10(1)(b) of the UCPR, a specific document or thing which is relevant to a fact in issue needs to be clearly identified in the notice. That provision does not authorise general discovery in the manner of requiring the production of classes of identifiable documents, but requires specific documents to be clearly identified. In Norris v Kandiah [2007] NSWSC 1296, Brereton J at [3]–[5] said:

These principles were endorsed in Patonga Beach Holdings Pty Ltd v Lyons [2009] NSWSC 869 by Barrett J at [8]–[11].

In Loulach Developments Pty Ltd v Roads and Maritime Services (No 2) [2018] NSWSC 1465, Leeming JA (sitting at first instance) considered the scope of UCPR r 34.1, which deals with notices to produce to court at hearing and, like r 21.10, uses the language of “specific document or thing” in defining what may be sought in such a notice. Citing Barrett J in Patonga at [13]–[14] Leeming JA stated at [12]:

Rule 21.9(2) of the UCPR sets out the test for a document or thing to be “relevant to a fact in issue” for the purposes of r 21.10(1)(b) (and the other rules in Pt 21 Div 2) in the following terms:

It is well established that the grounds on which a notice to produce may be set aside are the same as those which justify the setting aside of a subpoena. In Azzi v Volvo [2006] NSWSC 283, Brereton J at [4] conveniently collected the relevant authorities on this principle, saying as follows:

The court should not permit a notice to produce to be used oppressively. In Foord v Brock [2005] NSWCA 156, Bryson JA at [61] said:

The test for whether the documents sought in a notice to produce or subpoena have a legitimate forensic purpose was stated in Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145, by Bell P (as the Chief Justice then was) at [65] and [68] as follows:

The setting aside of a notice to produce also bears similarity with the setting aside of a subpoena in the sense that the court’s powers rest in the notion of an abuse of process. In Blacktown City Council, Bell P said at [60]:

In exercising the powers of the court, I must also have regard to the requirements of ss 56, 57 and 58 of the Civil Procedure Act 2005 (NSW) (CPA).

The overriding purpose of the CPA and the UCPR in their application to civil proceedings in this court is to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s 56(1) of the CPA. I must seek to give effect to that overriding purpose when I exercise any power in the CPA or the UCPR: s 56(2) of the CPA.

In seeking to give effect to the overriding purpose, I must have regard to the objects of the just determination of the proceedings, the efficient disposal of the business of the court, the efficient use of available judicial and administrative resources, and the timely disposal of the proceedings at a cost affordable by the respective parties: s 57(1) of the CPA.

In deciding whether to make an order or direction for the management of proceedings, including an order of a procedural nature, I must seek to act in accordance with the dictates of justice: s 58(1) of the CPA. By operation of s 58(2) of the CPA, the determination of the dictates of justice in a particular case requires me to have regard to the provisions of ss 56 and 57 of the CPA and gives me the discretion to have regard to such of the following matters I consider to be relevant:

These considerations in the context of setting aside a notice to produce were emphasised in Lawrence v Sammut [2022] NSWSC 344, by Lonergan J at [26]:

In Blacktown City Council, Bell P considered the operation of the overriding purpose and the interests of justice in relation to an application to set aside a subpoena, saying at [58]:

In the context of the purpose of the notice to produce in the present case, it is relevant to note that an order for “evidence in reply” has a particular meaning, being that articulated in Sanrus Pty Ltd v Monto Coal 2 Pty Ltd (No 4) [2019] QSC 199 by Bond J at [17] (footnote omitted):

In Australian Securities and Investments Commission v Adler (2001) 40 ACSR 214, Santow J was called upon to determine whether the plaintiff in that case, in seeking to rely on certain affidavit evidence which it claimed was in reply to the defendants’ expert evidence, was impermissibly splitting its case. In respect of one of the affidavits sought to be relied on by the plaintiff (to which was annexed a report pertaining to the valuation of a company), Santow J refused its admission and noted that ([21]):

It is clear from the above that in determining whether evidence constitutes evidence “in reply”, the court should concern itself with substance over form.

The defendants made submissions in support of their application to set aside the Original NtP, principally arguing that: the documents were being sought as part of an attempt by the plaintiffs to obtain a third round of discovery and to put on further evidence in chief which should not be permitted; the documents would serve little or no forensic purpose; production of the documents was not necessary to enable the plaintiffs to finalise their evidence in reply; production would be unduly burdensome at such a late stage in the proceedings; certain categories of documents identified in the Original NtP were imprecise; and service of the Original NtP and/or compelled production pursuant to the Original NtP was or would be contrary to the overriding purpose in s 56 of the Civil Procedure Act 2005 (NSW).

The defendants identified the following bases on which the Original NtP (or paragraphs of it) is liable to be set aside.

Firstly, the Original NtP did not comply with r 21.10 of the UCPR insofar as the second and third categories of documents sought were not limited to “document[s] referred to in any originating process, pleading, affidavit or witness statement” (r 21.10(1)(a)) or a “specific document or thing that is clearly identified” (r 21.10(1)(b)). Instead, they said, paragraphs 2 and 3 of the Original NtP sought an unspecified number of documents, of unspecified dates, spanning a period of more than 14 months (category 1) or 19 months (category 2).

Secondly, the need for the court to pay regard to the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings (s 56(1) and (2) of the CPA), in light of the plaintiffs’ conduct in the proceedings to date, favours the setting aside of the Original NtP. The defendants observe that in making any case management orders, the court should give priority to the efficient disposal of the court’s business and the timely disposal of the proceedings, at a cost affordable by the respective parties (citing s 57 of the CPA), and should consider the degree of expedition with which the parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities (citing s 58(2)(b)(ii) of the CPA) and the extent to which the parties have each fulfilled their duties to assist the court to advance the overriding purpose and, relatedly, to comply with court orders and directions (citing ss 56(3) and 58(2)(b)(iv) of the CPA). The defendants submit that court practice and procedure should be implemented so as to eliminate any lapse of time between the commencement and the final determination of the proceedings beyond that reasonably required for any interlocutory activities necessary for the fair and just determination of the issues in dispute and the preparation of the case for trial (citing s 59 of the CPA).

In this connection, the defendants point to the failure of the plaintiffs to approach the proceedings expeditiously, with the result that now, more than five years after the proceedings were commenced, the plaintiffs have yet to file their evidence in reply. The defendants refer to various aspects of the plaintiffs’ conduct in prosecuting the proceedings (including noncompliance with successive sets of timetabling orders) which they say has generated significant delay and is both antithetical to the overriding purpose in s 56 of the CPA and oppressive. They point to the following:

Thirdly, the Original NtP represents an attempt by the plaintiffs to obtain material not for the purposes of furnishing evidence in reply — being evidence designed to rebut — but rather to essentially put on additional evidence in chief, from a new expert within a new field of expertise, which should not be permitted. The defendants note that the plaintiffs themselves acknowledge the possibility that the evidence proposed to be given by Mr Thorpe may not strictly constitute reply evidence, having expressed an intention to seek leave to rely on Mr Thorpe’s evidence if necessary and not to object to the defendants serving evidence in response.

The defendants submit, referring to Roe d Trimlestown v Kemmis (1843) 9 Cl & Fin 749 at 781, that evidence in reply can only be “for the purpose of rebutting”, and also reproduce Bond J’s remarks on this point in Sanrus at [17], which I have set out above.

The defendants cite Adler (Santow J at [21]) for the proposition that evidence which in substance falls within the scope of evidence in chief is not properly rebuttal. They note that the plaintiffs have had their opportunity to put on evidence in chief and took a significant period to do so.

In relation to the professed basis for the Original NtP, the defendants note that any assertion that it was the defendants’ expert, Mr Gibson, who put in issue the matter of delays and completion dates for the Projects, is plainly wrong given that the plaintiffs’ own evidence in chief included a report from a construction quantum expert, Mr Badala, which provided an opinion on the likely completion dates of the Projects; the categories of documents required to be discovered by the defendants repeatedly referred to “delay”; and the plaintiffs’ own evidence on this motion (including affidavit evidence addressing the differences in opinion between Mr Badala and Mr Gibson) confirms that to the extent delay and project completion dates were in issue in the proceedings, the plaintiffs were aware of this at the time they were preparing their evidence in chief. The defendants note, further, that Mr Badala was briefed with documents which record Lendlease’s forecasted completion dates for the GUN and KSD Projects which in turn are relied on in relation to his “likely completion date” opinions, and that, against this background, it was open to the plaintiffs to put on evidence in chief from a construction delay expert in respect of “likely completion dates” for the Projects, but that they did not do so.

Mr Gibson’s report in response, responding to the evidence and the pleaded case as put by the plaintiffs, contains no programming or delay analysis but rather simply points out what Mr Gibson considers to be shortcomings in Mr Badala’s approach based on the same documents with which Mr Badala was briefed. It is open to Mr Badala, the defendants say, to explain why his “likely completion dates” are appropriate and/or why Mr Gibson’s criticisms are unsound. Instead, the plaintiffs now seek to call a construction delay expert to conclusively assess progress issues with the Projects and to ascertain, for each of the Projects, the reasonableness of the assumptions, activity durations and linkages between the activities during the relevant timeframe. The defendants submit that this is not reply evidence; the plaintiffs have not referred to any part of Mr Gibson’s report or the defendants’ lay evidence dealing with “activity durations” or “linkages between the activities”, and, if put into issue now, these topics would constitute a new part of the case and the defendants would almost certainly need to put on further evidence in response.

The defendants submit that in addition to the possibility of further responsive evidence from the defendants being required, the plaintiffs’ evidence on this motion — to the effect that Mr Thorpe’s conclusions would be provided to Mr Badala, whose revised conclusions would then be given to the plaintiffs’ accounting expert (Mr Stone), with Mr Stone’s conclusions in turn informing the assumptions to be provided to the plaintiffs’ loss expert, Professor Zmijewski — gives the defendants reason to suspect that the plaintiffs’ case may need to be amended and the defendants required to produce new evidence, resulting in substantial wasted time and costs.

Given, among other factors, the advanced stage of the proceedings, the expense already incurred by the defendants in meeting the plaintiffs’ evidence in chief, the completion of the Projects, and the sale of the Engineering Business several years ago (where all but two of the defendants’ lay witnesses are no longer employees of the defendants), the defendants submit that the plaintiffs should not be permitted to receive a “second go” at their evidence in chief.

Fourthly, the defendants submit that the documents sought in the Original NtP have little or no forensic relevance to the issues in the proceedings and are not necessary to finalise the plaintiffs’ reply evidence. In this regard, the defendants state that the plaintiffs’ case principally concerns provisions the plaintiffs allege the defendants should have recognised at the Group level, materials provided to Group-level forums had already been discovered, and native program files recording the linkages between thousands of individual activities involved in the construction of the Projects undertaken by one business unit within one segment of the defendants’ global business have little bearing on that question. There is no allegation that in considering Group-level provisions, regard should have been had to program files (native or otherwise), or that relevant personnel had the ability to interrogate linkages in native program files.

The defendants submit that in circumstances where the plaintiffs’ evidence in chief and the defendants’ responsive evidence was prepared without reference to the documents sought in the Original NtP, and where the parties’ experts were provided with the same documents, it is difficult to see how those documents could be relevant to evidence in reply in any real sense. Even if the Requested Programs could potentially be relevant (which the defendants deny), Mr Badala, who has already expressed opinions on the likely completion dates for the GUN and KSD Projects without the aid of the Requested Programs, has not referred to those documents as being necessary to formulate those opinions. Moreover, the defendants say that the plaintiffs have already received multiple programs in PDF for each of the Projects as well as several .xer files.

The defendants submit that because the analysis underpinning the plaintiffs’ construction evidence (and the defendants’ construction evidence in response) about the NCX Project is based on risks and opportunities registers and cost movement documents, and the scheduled completion of the NCX Project does not form part of the plaintiffs’ existing evidence in the same way as on the GUN and KSD Projects, the Requested Programs have little or no forensic relevance.

As a final point on necessity, the defendants point to previous representations by the plaintiffs to the effect that the Requested Programs were not strictly needed in order to finalise their evidence in reply. They note that the plaintiffs had previously stated that if the documents were not provided, the plaintiffs would be set back about eight weeks in finalising and providing their expert evidence in reply (an extension to which the defendants agreed). In addition, Mr Thorpe himself, in the Thorpe letter, indicated a potential approach by which information from the PDF documents already discovered by the defendants could be reconstructed. The defendants note that the plaintiffs have not filed an affidavit from their new expert deposing to the alleged necessity of the Requested Programs (despite the court’s indications at the directions hearing on 26 July 2024), and as such the defendants are unable to interrogate that expert’s view.

Finally, the defendants submit that the Original NtP ought to be set aside because of the burden that production of the Requested Programs would pose for the defendants. The defendants state that the Requested Programs are not readily available, and, given that discovery concluded some years ago, they would be required to, among other things, retrieve the relevant project drives from their archived location; incur charges for processing and hosting retrieved data; identify and interview particular former employees of the defendants in order to locate possible sites of potentially responsive files; engage a former employee of the defendants to review those files (or, in the alternative, have HSF purchase access to the requisite specialist software and train a solicitor to use it); and conduct quality control checks. The defendants emphasise that these tasks would need to be undertaken in circumstances where the Projects were completed and the defendants sold the Engineering Business several years ago, the persons with working knowledge of the Projects and who assisted with discovery some years ago are no longer employed by the defendant, and the files that might need to be reviewed potentially number in the thousands. Additional challenges of compliance with the Original NtP pointed to by the defendants include:

In short, in opposing the defendants’ application, the plaintiffs contend that the defendants’ invocation of the overriding purpose (s 56 of the CPA) and complaints of delay are misplaced; that the Requested Programs are necessary and relevant to facts in issue; that the defendants have overstated the time, effort and cost of compliance with the Original NtP; that whether the further expert report proposed to be provided by the plaintiffs is “in reply” cannot be determined in advance of production of that report; and that the defendants’ complaints as to the form of the Original NtP constitute an arid controversy.

On the question of delay, the plaintiffs note that this needs to be considered in the broader context of the proceedings, including the defendants’ special leave application (which was granted by the High Court on 8 August 2024), paragraph 2 of which set out the defendants’ intention to resist the fixing of dates for trial or mediation until such time as the special leave application and any appeal has been resolved. The plaintiffs state that in light of that expressed intention, and in circumstances where the decision in the High Court appeal may be expected to be handed down in early 2025 (following which an opt out and/or soft closure notice will need to be issued to group members), and a listing for mediation and a substantial trial, sought in early 2025, might not occur until the end of 2025 at the very earliest, the defendants appear to be agitating not for the closure of evidence so that the matter may be promptly tried, but rather the closure of evidence so that the matter may go into abeyance — to “hurry up and wait”. The plaintiffs resist any suggestion that it is the plaintiffs that are prolonging the continuation of the proceedings against the defendants.

In this connection, the plaintiffs submit that the defendants’ assertions of generalised dilatoriness on the plaintiffs’ part — of which the additional time (15 additional weeks) taken by the plaintiffs to file and serve their expert evidence, and the multiple iterations of the plaintiffs’ proposed amended pleading are cited by the defendants as illustrations — are overstated. They submit that the delays in the plaintiffs’ preparation of their expert evidence have already been addressed, that the expert evidence in the case is complex, and that it is unreasonable for the defendants to characterise service by the plaintiffs of various iterations of a proposed amended pleading in an effort to reach a consent position and narrow the parties’ dispute as inconsistent with the overriding purpose.

As to the relevance and necessity of the Requested Programs sought in the Original NtP, the plaintiffs make, as a framing observation, the point that if construction fell behind with the Projects, additional indirect costs of the kind necessary to support the construction activity generally would be incurred, increasing the total cost of the Projects. They note that Mr Badala’s report, which contains a detailed analysis and quantification of the WOL P/L for each of the Projects at given points in time, feeds into an expert accountant’s report, which in turn informs an expert economist’s report. The plaintiffs state that Mr Badala’s task involved quantifying the likely WOL P/L for each of the Projects, where for the GUN and KSD Projects that meant opining on a likely completion date and extrapolating indirect costs and risks over that period, and where Mr Badala proceeded on the basis that the reported completion date at the end of the Relevant Period (for those two projects) was the most accurate. For the NCX Project, Mr Badala’s approach differed due to a dearth of relevant documents, namely an assessment of the risks and opportunities identified by the defendants; however, his identification of a likely completion date remained a key component in quantifying risks and opportunities. Mr Gibson’s report in response to Mr Badala’s evidence sets out Mr Gibson’s disagreement with Mr Badala’s assessment of likely completion dates for the Projects, including Mr Gibson’s opinion (expressed directly in respect of the KSD and GUN Projects, but also, as Mr Gibson’s reasoning discloses, applicable to the NCX Project) that delay analysis is required in order to displace the contemporaneous views of Lendlease as to likely completion dates. In this connection, the plaintiffs refer to the following opinions articulated by Mr Gibson in his report:

The plaintiffs submit that the Requested Programs as sought in the Original NtP are necessary to directly challenge the foregoing propositions and opinions advanced by Mr Gibson, and note that the plaintiffs have engaged Mr Thorpe to prepare a report responsive to those aspects of Mr Gibson’s report. The plaintiffs state that the four categories of documents sought in the Original NtP, being the native “.xer” versions of the Project programs (many of which have already been discovered as PDFs) are the contemporaneous versions of the project programs for each of the Projects, as amended in the Relevant Period (and, in the case of the NCX Project, for a six month period prior to the Relevant Period, it being unclear when, between April and September 2017, the last substantial update to that particular program occurred). The Requested Programs are Gantt charts depicting the planned timeline of activities on each of the Projects.

The plaintiffs say that Mr Thorpe has given direct evidence of his need for the native files in the Thorpe letter, where he states:

In other words, the plaintiffs say, the PDF version of relevant documents supplies only a flat, visual representation of a more sophisticated model, akin to a hard copy of a spreadsheet that does not display the formulas in each cell, and Mr Thorpe requires the Requested Programs to respond to the critical issue raised by Mr Gibson, being the causal link between individual issues and others in the sequence. Without the Requested Programs, Mr Thorpe “would need to reconstruct native versions of the programs from the .pdf versions”, the product of which would be “programs that bear very little resemblance to the native programs held by Lendlease”, from which it would be difficult for him to draw conclusions about the likely completion dates for the Projects (Thorpe letter, [10]). The plaintiffs submit that PDF versions of the relevant documents are no substitute for the native files.

The plaintiffs answer the defendants’ submissions as to the relevance of the Requested Programs as follows:

As to the burden of production, the plaintiffs submit that the Original NtP is not oppressive and does not call for time and expense out of proportion to the forensic relevance of the documents sought or the nature of the case. They submit that the only files that need to be reviewed are .xer files, which comprise a small number of the some 4.6 million documents collected and processed by the defendants for the purposes of discovery. In terms of the laboriousness of production, the plaintiffs contend that a more efficient way of identifying the relevant documents exists than that which the defendants suggest would be required, and refer to the manner in which some of the PDF versions already discovered have been numbered (sequentially, on a monthly basis). The plaintiffs submit that any additional costs that the defendants would incur in connection with producing the Requested Programs would be a fraction of the $5.5 million already expended by the defendants in complying with the Original and Further Discovery Orders, and suggest that resisting the Original NtP is likely to consume more costs than complying with it. The plaintiffs also state that any inconvenience now arising as a consequence of arrangements made by the defendants’ solicitors for the storage of documents they obtained from the defendants for the purposes of discovery, and the asserted need for HSF now to interview their own client, is not of the plaintiffs’ making.

In response to the defendants’ contention that the evidence which the plaintiffs are proposing to put on with the assistance of the Requested Programs is not properly evidence in reply, the plaintiffs frankly acknowledge that leave will be necessary to the extent Mr Thorpe’s report cannot be characterised as reply evidence and have indicated that they are amenable to the defendants having a reasonable opportunity to file and serve responsive evidence in that case. However, the plaintiffs maintain that the issues sought to be addressed in Mr Thorpe’s report, and which Mr Thorpe has been retained to consider and address, including delay analysis, are ones arising on Mr Gibson’s report. They state that a report is not non-responsive merely because it has been produced by an expert from another discipline. Moreover, they say that whether a report is wholly or partly “in reply” can only be determined by the court upon considering that report and its contents; it is not an exercise that can occur in the abstract, and the production of the Requested Programs sought in the Original NtP is necessarily and logically antecedent to that exercise.

As to the defendants’ suggestion that the introduction of evidence from Mr Thorpe would bring about a substantial change to the plaintiffs’ case, the plaintiffs note that Mr Badala’s evidence in reply (potentially including different figures on account of matters raised by Mr Gibson) will already inform that of the plaintiffs’ other experts. An amendment to the pleadings to ensure they align with the actual expert evidence might be required, as is natural and appropriate, and that could conceivably occur irrespective of anything produced by Mr Thorpe. Further, the plaintiffs distinguish between the situation in which a party seeks to rely on new evidence in advance of the trial, and the present situation, where the plaintiffs seek to rely on one additional expert in a large case already involving seven experts and with no hearing date on the horizon, which they say occasions no prejudice.

In response to the defendants’ objections to categories 2 and 3 of the Original NtP going to matters of form (namely that those categories seek identifiable rather than identified documents), and the defendants’ suggestion that what the plaintiffs are seeking is actually tantamount to discovery, the plaintiffs submit as follows:

The plaintiffs submit that absent other (substantive) grounds capable of persuading the court that the Original NtP should be set aside, the court should not be concerned with a purely technical question as to form between the parties.

The defendants raise the following points in reply.

The defendants refer to the plaintiffs’ suggestion that in seeking to have the Original NtP set aside on the grounds of delay resulting from the plaintiffs’ failure to prosecute the proceedings expeditiously, in circumstances where no trial date has been fixed, the defendants are pressing for the plaintiffs to “hurry up and wait”. The defendants say that the fact that no trial date has been fixed does not give the plaintiffs licence to obtain further discovery, brief a new expert, introduce new lines of inquiry, serve more evidence in chief and amend their case, when the proceedings have reached the stage where discovery has been completed, pleadings have closed, all evidence in chief has been served, and the defendants have expended considerable time and resources preparing lay and expert evidence in answer to the plaintiffs’ case as pleaded. The defendants emphasise that their desire is to avoid unfairness and prejudice and to ensure compliance with ss 56–60 of the CPA.

In terms of the necessity of the Requested Programs, the defendants refute the plaintiffs’ assertion that they have provided direct and cogent evidence in that regard from Mr Thorpe. They refer to what was said by Ball J to counsel for the plaintiffs at the directions hearing on 26 July 2024, quoting from the transcript as follows (T3):

The defendants state that the plaintiffs have given no explanation as to why no affidavit from Mr Thorpe addressing the alleged necessity of the Requested Programs has been produced, and instead offer untestable hearsay evidence in the form of the Thorpe letter (a first draft of which was prepared by the plaintiffs’ solicitors with subsequent drafts exchanged between MBL and PFM).

On the relevance and necessity of the Requested Programs generally, the defendants observe that if, as the plaintiffs claim, the documents have “forensic relevance”, they ought to have addressed them in their evidence in chief as opposed to seeking to introduce a new area of factual inquiry, requiring new documents, a new expert in a new field of expertise, and the near-certain necessity of new responsive lay and expert evidence, at this late stage in the proceedings.

As to the question of whether the foreshadowed new evidence from Mr Thorpe (a new expert) will or will not constitute evidence “in reply”, the defendants make the following submissions:

In relation to the burden, time and cost of production pursuant to the Original NtP, the defendants say that the more sensible or efficient way of identifying the Requested Programs referred to by the plaintiffs in their submissions is not detailed in any meaningful way, and it cannot be said that the burden is, as the plaintiffs suggest, merely “inconvenient”. Moreover, the immense cost of discovery formerly given does not detract from the cost and burden that the defendants would be put to if compelled to discover the Requested Programs; if anything, it reinforces why the defendants should not be required to expend further time and costs at this advanced stage in the proceedings.

Finally, the defendants say that to the extent that the plaintiffs foreshadow some attempt to amend their case — having referred, in their submissions, to the “natural and appropriate” course of potentially amending their pleadings to ensure their alignment with the actual expert evidence —, that course is not one which is natural and appropriate or one to which the defendants will consent.

Pursuant to the orders made by me on 9 September 2024 (in light of the defendants’ opposition to the Alternative NtPs which the plaintiffs had served on 30 August 2024) directing the parties to file evidence and written submissions in respect of the Alternative NtPs, the parties provided submissions outlining their respective positions on the Alternative NtPs, which I have summarised below.

In short, the defendants posit that the Alternative NtPs fail to cure the deficiencies identified by the defendants in the Original NtP; that the court should not order production in accordance with either the Alternative NtPs or the Original NtP; and that to the extent production pursuant to any part of the Alternative NtPs is ordered, the plaintiffs ought to pay the defendants’ costs of compliance as well as the defendants’ costs of the application.

The defendants state that their primary reasons for seeking to have the Original NtP set aside — including that the relevant documents are being sought for evidence that is not properly in reply, in order ultimately to re-frame the plaintiffs’ case — apply equally to the Alternative NtPs. They say, in addition to these fundamental objections, that the Summary NtP lacks the requisite detail to enable the defendants to identify responsive documents and that compliance with the Detailed NtP remains burdensome and expensive.

Clarifying those submissions on the Original NtP that remain applicable to the Alternative NtPs, the defendants repeat their submissions on relevance, case management considerations, prejudice and necessity, as well as their contentions that:

Turning to the Summary NtP, the defendants submit that owing to the lack of detail in it, there is a risk that any material produced under the Summary NtP may not correspond with what Mr Thorpe seeks, and if multiple program versions and/or drafts are produced it is unclear how Mr Thorpe would be equipped to draw “definitive conclusions” from those documents in the absence of any context as to the circumstances in which those files may have been produced.

The defendants state that although the Detailed NtP is more specific and improves the defendants’ prospects of identifying the individual documents the plaintiffs seek, compliance with it would be unduly burdensome and costly. They point to the following steps that the defendants would need to take, including obtaining access to project drives; examining the folder and file structure of each drive to identify an initial subset of potentially responsive folders and native files; providing those folders and files to the defendants for opening; reviewing potentially responsive files with the aid of appropriately qualified personnel using specialist software; where necessary, conducting a manual review of a given native file against a PDF; and transferring the native files to a database to enable production.

The defendants describe the plaintiffs’ suggestions as to more efficient ways to identify responsive files as “speculative” and unlikely to be of assistance, noting that even if the title of a particular “.xer” file includes a date, this does not necessarily mean that document is responsive; that metadata recording the modification date of a given file may not be a reliable indicator of when the file was substantively modified; that the title of any given “.xer” file may not refer to any date or revision number; and that the quantity of “.xer” files in relevant repositories is presently unknown. The upshot of this is that the defendants would still be required to review individual “.xer” files to ascertain whether they respond to the Detailed NtP, without which review responsive files might go unidentified and therefore would not be produced.

Adding to the burden of production under the Detailed NtP, the defendants say, is the following:

In relation to the NCX Project, the defendants note that the Detailed NtP seeks program files that are “referenced in” some other document such as a report or email. Those subparagraphs that use this formulation, the defendants say, in many cases do not contain sufficient information for the defendants to identify whether any given document matches the one sought. Moreover, in respect of the NCX Project, some of the descriptions in the Detailed NtP are unclear as to the specific document sought or contain apparent inconsistencies. A further complexity for the NCX Project specifically (which was undertaken as part of the LLBJV) is the additional time needed to collect files relating to the project from a third party (joint venture participant), which might take a month or more. Also, the plaintiffs seek approximately 39 distinct files relating to the NCX Project in the Detailed NtP, with several of those predating the Relevant Period, in circumstances where the need for those files in light of the plaintiffs’ ability to identify precisely which programs they seek from September 2017 onwards (in paragraph 5 of the Detailed NtP) is unclear. The defendants submit that for the foregoing reasons, which demonstrate the increased burden of complying with the Detailed NtP in respect of the NCX Project compared with the GUN and KSD Projects, even if the court were to order compliance with the Detailed NtP in connection with the GUN and KSD Projects, compliance should not necessarily also be ordered in respect of the NCX Project.

The defendants submit that the estimated time and cost of compliance with the Detailed NtP is in the realm of $113,500 over nine-and-a-half weeks for the KSD Project; $45,000 over seven weeks for the GUN Project; and $159,000 over between eleven-and-a-half and thirteen-and-a-half weeks for the NCX Project (with additional time likely to be required in the event the work was performed amid end-of-year shutdowns when relevant personnel may not be available for interviews or to assist with opening and reviewing .xer files).

The defendants reserve their position on objecting to the plaintiff’s ability to rely on any evidence from Mr Thorpe or any other evidence that is based on new documents sought to be produced and any proposed amendments to the ACLS.

For reasons that will emerge from the below summary of the plaintiffs’ submissions, the plaintiffs now contend that the court should order production in accordance with the Original NtP as opposed to either of the Alternative NtPs.

On the forensic relevance of the documents sought, the plaintiffs repeat their submissions in respect of the Original NtP. They also take issue with the defendants’ presentation of my remarks at the hearing of the defendants’ application on 23 August 2024 (T17, extracted above) as “critical and decisive”, noting that the relevant extract elides important context, namely that I was there asking counsel for the plaintiffs for their response to arguments which had been put by the defendants, and misattributes those statements to me.

In response to the defendants’ suggestion that the only appropriate course to be taken by the plaintiffs (instead of opening “a new factual inquiry not covered in the evidence to date”) would be to attempt to show that any (alleged) programming assumptions provided to Mr Gibson are not established by the evidence, the plaintiffs say that different means exist by which a party to litigation may legitimately choose to test certain assumptions, including by seeking the production of documents, documentary and expert evidence in reply, and/or cross-examination.

The plaintiffs repeat their submissions in respect of the Original NtP on each of the following matters: the question of whether evidence to be given by Mr Thorpe based on the documents sought in the NtPs will be properly “in reply”; the relevance and necessity of the documents sought in the NtPs; case management considerations; and prejudice.

Noting that their intention in serving both of the Detailed NtP and Summary NtP was to expose the most cost-effective and least onerous approach to production, the plaintiffs state that the defendants have been unwilling to engage with the plaintiffs to agree on terms of production. On the projected costs of production, the plaintiffs have produced competing evidence including a detailed set of tables in response to the defendants’ evidence regarding the estimated time and costs burden of compliance with the Detailed NtP. The plaintiffs’ approach to costing, they say, involves consideration of whether some steps (as accounted for in the defendants’ estimate) would in fact need to be taken under the Original NtP, rather than merely disputing the quantum assigned by the defendants to the performance of those steps.

The plaintiffs have created the following summary table comparing the defendants’ estimated costs for production in compliance with the Detailed NtP with the plaintiffs’ estimated costs for production in line with the terms of the Original NtP:

The plaintiffs say the difference in cost is by virtue of the fact that the most time-intensive and expensive steps identified in the defendants’ evidence as needing to be done under the Detailed NtP are not necessary under the Original NtP. The plaintiffs set out their reasoning as follows:

In terms of additional reasons to prefer production under the Original NtP, the plaintiffs point out that production, so-ordered, would mean shifting the burden onto the plaintiffs to identify, from the collection of native files provided, the most relevant documents for use by Mr Thorpe, which burden they are content to assume. The plaintiffs submit that although the Original NtP is likely to result in the production of more documents than the Detailed NtP, this is not necessarily undesirable (as the materials that will be caught are the native project files for the Projects, all of which may be relevant or at least not entirely irrelevant), and indeed would reduce the risk of potentially relevant documents not being captured if the categories of documents described in the Detailed NtP do not correspond exactly with the relevant document held by the defendants.

In relation to the defendants’ indication that they formally reserve their position as to future evidence sought to be adduced or amendments to the ACLS made by the plaintiffs, the plaintiffs maintain that those issues are arguments for another day and state that no reservation is required.

The defendants submit that the plaintiffs’ position in now seeking production under the Original NtP, after conceding at the hearing before me on 23 August 2024 that it could be narrowed and serving the Alternative NtPs, demonstrates that the plaintiffs do not know precisely what they are seeking.

In response to the plaintiffs’ submission that it is open to them to test certain assumptions by using documentary material, evidence in reply, or cross-examination, the defendants assert that they do not object to the plaintiffs pursuing any of those avenues, but that the plaintiffs’ stated objectives — which they say amount to effectively seeking discovery in order to serve more expert evidence in chief rather than in reply — go beyond any of those permissible courses. The defendants state that if the plaintiffs’ position is accepted, and they are permitted to adduce the foreshadowed evidence, the defendants would undoubtedly need to be afforded an opportunity in turn to adduce programming evidence, and that fact alone confirms that the plaintiffs are seeking the documents for the impermissible purpose of putting on evidence in chief, contrary to the court’s orders stipulating service by the plaintiffs of evidence in reply.

The defendants reject the plaintiffs’ suggestion that the defendants have failed to engage with the plaintiffs in relation to the Alternative NtPs and for the purpose of settling the terms of production, and describe such suggestion as an attempt to lay blame on the defendants for refusing to consent to inappropriate orders proposed and/or improper requests for production by the plaintiffs.

On the cost of production pursuant to the Original NtP or the Detailed NtP, the defendants say that their evidence should be preferred to that of the plaintiffs, noting that the defendants are the ones who will be required to perform any steps needed to comply with any production ordered; that the defendants’ evidence on the costs of complying with the Original NtP was unchallenged; that the plaintiffs’ assertions regarding those costs are belated and self-serving, and either incorrect or inappropriate; that the plaintiffs’ evidence on the costs and burden of production are speculative and provide no firm basis for definitive conclusions on the matter; that the plaintiffs’ evidence on technical matters is based on purported “experience” when the deponent has not established any relevant expertise to give that evidence; that the plaintiffs do not contest the defendants’ evidence on costs for the Alternative NtPs; and that if actual costs are below the defendants’ estimated costs, the defendants have proposed that the difference should revert to the plaintiffs.

In response to the plaintiffs’ suggestions as to how the process of (and steps preliminary to) production might be abridged, including their indication that potentially responsive material could be produced without review by the defendants’ solicitors or instructors, the defendants state that such suggestions are imprudent and unrealistic. They say that the plaintiffs fail to distinguish between certain employees of the defendants with access to the specialist software on the one hand and the defendants’ solicitors on the other, the latter of whom are abreast of the issues in the proceedings, alive to possible issues in document disclosure in litigation, and capable of making forensic judgments including as to whether a certain document is responsive. The defendants emphasise that review of the documents by solicitors is necessary to ensure the defendants’ compliance with its obligations to the court in respect of the Original NtP.

The defendants submit that the plaintiffs’ assertion as to the reduced time and cost burden of compliance under the Original NtP rests on the plaintiffs’ incorrect assumption that solicitor review would not be required, and once it is accepted that review of the documents by the defendants’ solicitors is necessary, it is clear that the time and expense associated would not be “significantly lower” for the Original NtP. The defendants also state that the plaintiffs’ assertion that manual line-by-line comparison is ultimately unnecessary lacks a proper evidentiary foundation, is bare assertion, and is contradicted by the defendants’ evidence as to the necessity of this step. The defendants say, likewise, in answer to the plaintiffs’ assertions that the costs of quality control checks and management review are likely to be materially lower, that those assertions are speculative, lack any cogent or reasoned basis, and are insufficient to displace the defendants’ unchallenged evidence as to cost.

Referring to the plaintiffs’ submission to the effect that to the extent the Original NtP is likely to result in the production of more documents than the Detailed NtP, that is not necessarily undesirable and indeed would reduce the risk of potentially relevant documents not being captured under the Detailed NtP, the defendants characterise this as a request for impermissible fishing which should be rejected, and say that it highlights problems with the Original NtP. They say, further, that although the plaintiffs have expressed their willingness to incur the burden of then identifying which subset of native programs among those produced are relevant to Mr Thorpe’s analysis, the plaintiffs have not indicated how they would go about identifying relevant documents and distinguishing final programs from working drafts, how it would be more efficient or cost-effective, and how Mr Thorpe would be able to draw any definitive conclusions if provided with multiple versions or working drafts of programs.

In relation to the costs of complying with any order for production pursuant to the NtPs, the defendants submit that to the extent the defendants are required to produce any documents, the plaintiffs should indemnify the defendants for their actual costs of compliance, including costs of compliance in excess of the estimates given. They state that the plaintiffs have failed to articulate any reason for departing from that (fair) position. To the extent that any payment exceeds actual costs, the defendants repeat their proposed position that the difference revert to the plaintiffs.

The plaintiffs submit that what they are seeking is not that the defendants incur costs performing a task the plaintiffs themselves can do equally well, but rather are calling for the defendants to produce relevant materials that exist only in the defendants’ possession, and that this is important context that should inform the determination of which of the parties should bear the costs of compliance with any order for production. Subject to this, the plaintiffs submit that if the court is minded to order payment by the plaintiffs of a sum of money, an order requiring the plaintiffs to indemnify the defendants for their costs of compliance by paying a specified amount determined by reference to the plaintiffs’ evidence by a date not exceeding 21 days from the date of any orders for production being made would be appropriate.

The defendants state that the plaintiffs should pay their costs of the application because:

The defendants add that alternatively, if production is ordered under the Original NtP and their submissions outlined above are rejected, the plaintiffs should at least pay the costs incurred by the defendants in responding to the Alternative NtPs since the plaintiffs have essentially abandoned the Alternative NtPs after putting the defendants to the expense of responding to them in detailed evidence and submissions.

For their part, the plaintiffs contend that the defendants’ submissions as to the costs of the application should be rejected because, among other things:

The form of orders sought by the defendants is as follows:

The plaintiffs seek orders dismissing the defendants’ application with costs and ordering production in accordance with the Original NtP.

In my opinion, the Original NtP must be set aside based on the confluence of factors I have set out below. As the Alternative NtPs are not pressed by the plaintiffs, I limit my consideration accordingly.

The documents sought in the Original NtP have no apparent relevance to any of the claims which are made by the plaintiffs in the ACLS. As the defendants rightly observe, the plaintiffs’ case as pleaded principally concerns provisions the plaintiffs allege the defendants should have recognised at the Group level, and native program files recording the linkages between thousands of individual activities involved in the construction of the Projects undertaken by the Engineering Business within one segment of the defendants’ global business can shed very little light on that question. Furthermore, the plaintiffs do not allege that in considering Group-level provisions, regard should have been had to program files (native or otherwise), or that relevant Lendlease personnel could or should have interrogated linkages in native program files. In those circumstances, the relevance of the Requested Programs to the issues in the case as disclosed by the pleadings and by the evidence filed to date (including Mr Badala’s report, which does not itself contain any programming or delay analysis but instead merely uses likely completion dates for the Projects to inform his analysis) is altogether unclear.

That lack of forensic relevance itself provides grounds for setting aside the notice to produce, as recognised in Azzi v Volvo and Blacktown City Council.

I am, moreover, satisfied that the documents sought in the Original NtP are intended to be used by the plaintiffs to essentially introduce a new area of factual inquiry through the related application of new expertise, by a new expert, Mr Thorpe, to the Projects. The plaintiffs have expressly stated that the Requested Programs are needed to inform Mr Thorpe’s foreshadowed evidence, being a report furnishing conclusions based on specialist construction delay analysis in respect of each of the Projects, including an assessment of how issues arising on each Project affected their progress. I agree with the defendants’ submission that the plaintiffs’ attempts to shoehorn Mr Thorpe’s foreshadowed evidence into the four corners of the terrain covered by Mr Gibson’s report so as to bring it within the realm of “reply evidence” are tenuous.

That is in circumstances where the opinions of Mr Gibson pinpointed by the plaintiffs as ones to which Mr Thorpe’s proposed evidence will be responsive are in my view merely criticisms or questions raised by Mr Gibson about Mr Badala’s methodology, based on what Mr Badala has not factored in or independently undertaken — namely, construction delay or programming analysis. Mr Badala’s instructions expressly required him to address the time to complete the Projects and the effect of any delays in the Projects. Mr Gibson’s observations that Mr Badala did not undertake any programming or delay analysis does not permit the plaintiffs to introduce that analysis in reply. Mr Gibson did not undertake any programming or delay analysis either. Mr Gibson had the same documents which were provided to Mr Badala.

New expert evidence that is based on new material and corrects that omission or deficiency in the plaintiffs’ expert evidence and case in chief, as opposed to new expert evidence merely explaining why Mr Badala’s use of the relevant likely completion dates was appropriate, and likely leading to a substantial revision of the whole suite of the plaintiffs’ expert evidence in the process, cannot in my opinion properly be characterised as “evidence in reply”. Such evidence is not offering a reply to or rebuttal of the defendants’ expert evidence; rather, it functions or seeks to function (to use the phrase adopted by Bond J in Sanrus at [17]) as a new or alternative mode of proving the plaintiffs’ case that ought to have been put in chief. Although the plaintiffs have made every effort to frame the prospective expert evidence for which they say the Requested Programs are needed as reply evidence, including by attempting to tie it to certain assertions made by Mr Gibson in his report, the authorities (including Adler) indicate that I must be attentive to substance over form in assessing whether evidence is or is not truly “in reply”. This is a further factor to which I have given weight in my determination.

Further, applying the matters relevant to the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings in s 56 of the CPA, the matters to which I must have regard in giving effect to that overriding purpose in s 57 of the CPA and the relevant matters to which I may have regard in s 58 of the CPA, also compels me to the conclusion I have reached.

At the outset I wish to observe that the plaintiffs’ approach to the proper prosecution and progress of these proceedings is the antithesis of how a party is expected to conduct litigation that it has chosen to bring in the Commercial List of this court. To have taken over four years from when the proceedings were commenced in April 2019 until they filed the ACLS in June 2023 to formulate their case, whilst serving six proposed versions of the ACLS and flagrantly failing to meet deadlines for their amended case and evidence fixed by the court in the March 2022 orders, the August 2022 orders, the November 2022 orders, the December 2022 orders and the June 2023 orders, is at the very outer limits of delay by a party that the Commercial List of this court should permit. Without ignoring the defendants’ own very minor contributions to the delay in the progress of these proceedings (being the late service of their lay and expert evidence in December 2023 through until March 2024 which extended to mere days and weeks), I must remark on the plaintiffs’ particular consistent disregard for court-ordered deadlines.

The problems now created by the plaintiffs through the nonchalance they have displayed towards their duty to assist the court under s 56(3) of the CPA to further the overriding purpose to facilitate the just, quick and cheap resolution of the real issues in the proceedings and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court are very real.

At the behest of the plaintiffs, the defendants have participated in two rounds of formal discovery pursuant to the Original Discovery Orders in May 2020 and the Further Discovery Orders in June and July 2021, producing over 56,000 documents at a cost of well over $5.5 million. I am mindful that against the backdrop of such extensive and expensive discovery, provided over three years ago, in conjunction with the significant burden (in terms of time, effort and costs) compliance with the Original NtP would now involve for the defendants, compelling production in accordance with the Original NtP would occasion serious injustice to the defendants.

The plaintiffs made forensic choices in the way that they formulated their case and in the evidence that they put forward to support their case in chief, which they had (and took) ample time to do. In all the circumstances, I am of the view that the dictates of justice and the overriding purpose require that the plaintiffs be held to those choices.

I wish to stress that parties like the plaintiffs in these proceedings who take in excess of four years to formulate their case, make forensic choices about the lay and expert evidence they wish to lead in support of it which causes the defendants as their opponents to respond to the issues raised by that evidence should not expect any indulgences from the court in seeking to retreat to take a different evidentiary approach at significant prejudice to the defendants in time, effort and costs. When those wasted costs become practically incalculable, not just from the costs of producing the documents sought on a notice to produce but also because the plaintiffs are patently seeking to use those documents to prepare yet more expert evidence in chief when the defendants have already provided evidence in response to the existing case in chief, the court should be very slow to give its imprimatur to litigation conducted in that fashion.

The difficulty of wasted time, effort and costs is exacerbated in this case because of the manner in which any revision to the conclusions reached by Mr Badala by reason of the proposed work of Mr Thorpe would in turn cause revisions to the conclusions of Mr Stone and Professor Zmijewski. It would be quite unjust to the defendants to cause them to have to revisit all of the complex evidence they have provided in response to the evidence of the plaintiffs so as to accommodate the new case in chief that the plaintiffs wish to make. I will not allow the plaintiffs to use the documents they wish to obtain under the Original NtP to serve that end.

The plaintiffs sought to rely on the delay in the proceedings which has been caused by the parties having to wait until the High Court determines the appeal before it on the separate question of this court’s power to approve a notice to group members with the proposed settlement notation. The plaintiffs accuse the defendants of adopting a “hurry up and wait” approach because the proceedings are effectively in abeyance until the High Court’s decision. But even though the parties have the benefit of time available to deal with any further production of documents, that does not cure any of the fundamental problems caused by the Original NtP – that it does not seek documents relevant to the pleaded issues, it does not seek documents that would assist the plaintiffs in providing evidence which is truly in reply and it seeks documents which will involve the defendants incurring yet further considerable expense and effort.

It is now well past the time for the plaintiffs to file and serve their lay and expert evidence in reply, which was ordered to be filed and served by 18 May 2024 in accordance with the June 2023 orders. I agree with the defendants’ proposal that the plaintiffs be given a further 10 weeks within which to provide their reply evidence.

In relation to costs, I do not perceive any sound reason for departing from the general rule in UCPR r 42.1 that costs follow the event. The defendants have succeeded in resisting production and they should have their costs of the application.

For the reasons set out above, I propose to make the following orders: