Alpine Area Contractors Pty Ltd v Vicroads [1997] FCA 870

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 414 of 1997

BETWEEN: ALPINE AREA CONTRACTORS PTY LTD

(acn 064 066 904)

Applicant

AND: VICROADS

Respondent

JUDGE: MERKEL J

DATE OF ORDER: 3 SEPTEMBER 1997

WHERE MADE: MELBOURNE

MINUTES OF ORDER

THE COURT ORDERS THAT: 1. Pursuant to Order 15A rule 6 of the Federal Court Rules, the respondent, within 14 days, make discovery to the applicant of any documents which are or have been in its possession, custody or power relating to the tender of Spray Line Surfacing Services for VicRoads Contract Number 4235. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 414 of 1997

BETWEEN: ALPINE AREA CONTRACTORS PTY LTD

(acn 064 066 904)

APPLICANT

AND: VICROADS

Respondent

JUDGE: MERKEL J

DATE: 3 sEPTEMBER 1997

PLACE: MELBOURNE

REASONS FOR JUDGMENT INTRODUCTION The applicant ("Alpine") has applied for an order for discovery against the respondent ("VicRoads") pursuant to Order 15A rule 6 of the Federal Court Rules. The rule is as follows: "Where - (a) there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained; (b) after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain that relief; and (c) there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had possession of any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist in making the decision - the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c)." BACKGROUND FACTS Alpine had previously tendered, successfully, for a contract with VicRoads which required routine maintenance and snow clearing of the Great Alpine Road between Harrietville and Omeo. VicRoads put the new 1997 contract, being Contract Number 4235, out to tender in September 1996. One of the tendering entities was Spray Line Surfacing Services ("Spray Line") which was a business name registered by VicRoads on 23 October 1996. After the completion of the tendering process three tenders were considered by VicRoads. One was that of Alpine. Another was that of Spray Line. The third was one submitted by an outside entity. Spray Line was the successful tenderer. Its tender of $4.11 million was approximately $400,000 cheaper than Alpine's tender. On 11 March 1997 VicRoads informed Alpine that the contract had been let to itself trading as Spray Line for $4.11 million. The evidence adduced on behalf of Alpine is that: · it did not know that it was competing against an in-house tender until 11 March 1997; · it believes that the only way Spray Line could undercut Alpine's tender was to use VicRoads' market power to obtain a cheaper equipment hiring rate from A H Plant Hire Pty Ltd which hires out the necessary snow clearing equipment. In substance, Alpine's case was that it believes it was significantly disadvantaged by VicRoads tendering to itself and by the failure of VicRoads to disclose that it was doing so. The tender documentation states that the contractor for the works will be chosen by competitive tender. Nothing in the documentation suggests that an in-house tender might be made. Alpine seeks discovery of documentation in relation to Spray Line's tender under O 15A r 6. Its counsel submitted that the requirements set out in paragraphs (a), (b) and (c) of the rule have been satisfied and that Alpine requires the discovery it seeks to enable a decision to be made as to whether to commence a proceeding alleging that VicRoads engaged in anti-competitive conduct proscribed under Part IV of the Trade Practices Act 1974 ("the TPA") or misleading and deceptive conduct in contravention of s 52 of the TPA. VicRoads has adduced evidence to the effect that Spray Line was an autonomous commercial unit which did not enjoy any competitive advantage, was an arm's length tenderer and believed it was receiving the same equipment hire quotation from A H Plant Hire Pty Ltd as was given to other tenderers. VicRoads' evidence also suggested that Alpine's representatives were, or at the least ought to have been, aware that Spray Line was a business name of VicRoads.