FEDERAL COURT OF AUSTRALIA Strang Aniokaka Limited v Lihir Gold Limited [2010] FCA 1064 Citation: Strang Aniokaka Limited v Lihir Gold Limited [2010] FCA 1064 Parties: STRANG ANIOKAKA LIMITED and STRANG INTERNATIONAL PTY LTD v LIHIR GOLD LIMITED ABN 78 069 803 998 File number: NSD 343 of 2010 Judge: RARES J Date of judgment: 16 August 2010 Date of hearing: 16 August 2010 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 8 Counsel for the First and Second Applicants J Stoljar SC and M Friedgut Solicitor for the First and Second Applicants: Levitt Robinson Counsel for the Respondent: M Speakman SC and S Lawrence Solicitor for the Respondent: Blake Dawson IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 343 of 2010 BETWEEN: STRANG ANIOKAKA LIMITED First Applicant STRANG INTERNATIONAL PTY LTD Second Applicant AND: LIHIR GOLD LIMITED ABN 78 069 803 998 Respondent JUDGE: RARES J DATE: 16 AUGUST 2010 PLACE: SYDNEY REASONS FOR JUDGMENT (REVISED FROM THE TRANSCRIPT) 1 Lihir Gold Limited is the respondent on this application by Strang Aniokaka Ltd and Strang International Pty Ltd for an order for preliminary discovery under O 15A r 6 of the Federal Court Rules. Lihir Gold hasobjected to par 168 of the affidavit of Strang Aniokaka's managing director, Bob Green, principally because it involves two substantive assertions, first that Strang Aniokaka incurred loss or damage by reason of its participation in a process under which Lihir Gold had called for expressions of interest and then tenders and, secondly, because, in it, Mr Green estimated Strang Aniokaka's costs of preparing and submitting the expression of interest and, later, its tender, were between $250,000 and $300,000. He gave no foundation for the estimations that he attributed to those costs. 2 Proceedings under O 15A r 6 are not the trial of causes of action for the purposes of obtaining substantive relief so as to resolve an actual controversy. Rather, they are proceedings to aid a person in assessing whether he, she, or it has sufficient information to justify the commencement of proceedings with a view to vindicate his, her or its, actual or reasonably arguable, rights arising from some cause of action. Accordingly, the quality of the evidence necessary to sustain the claim for relief under O 15A r 6 must be weighed having regard to the nature of the issue sought to be proved. 3 In my opinion, the managing director of an enterprise is entitled to assert in such proceedings as the present, that the enterprise has suffered loss or damage because it participated in a process calling for expressions of interest and tenders at the request of a person alleged to have called for these, by the steps it took to prepare both. Accordingly, I admit the second sentence of par 168. 4 The last sentence of par 168 is more problematic because it conflates an estimate, for which no identified basis is given, with a large number of activities. There is a body of evidence to suggest that the applicants did undertake those activities. Common sense suggests they had, or may have, undertaken them on the faith of an express or implied representation that the tender process was a genuine one. While that suggestion may be negated at the trial of an action, I think that for the purposes of proceedings under O 15A r 6, there is a sufficient evidentiary basis to make admissible some kind of estimate of the costs that would be involved. 5 Lihir Gold Limited argued that some authorities have determined that the ordinary overheads of a business are not recoverable when the persons involved in its operations perform work for one of many possible tasks in the absence of evidence that those persons or resources would have been used to do other work of a kind that has a value over and above the cost of the ordinary overheads: e.g. NRMA Ltd v Morgan (1999) 31 ACSR 435 at 804-805 [1508]-[1510] per Giles J; Manwelland Pty Ltd v Danes & Moore Pty Ltd (2001) ATPR §41-845 at 43,467 [26] per McPherson JA with whom Thomas JA and Douglas J agreed. 6 It is not in contest for the purposes of the present application that some disbursements, including travel and communication costs, were incurred by the applicants in the preparation of the expression of interest and tender materials. It seems to me that, at this stage, there is a sufficiently arguable basis to consider that a claim for compensation may be possible. A person who calls for tenders requests, expressly or impliedly, that a person who wishes to respond to the call divert its resources to the preparation of the tender, even though those resources may not otherwise have been able to be employed on any remunerative basis. After all, a person who requests that work be done for them would ordinarily expect to have to pay for performance of the work, even if they never intended to use it, and intended that the person perform the work with that knowledge or belief. 7 It may be that the authorities that have ruled on the evidence that could be adduced at a full trial of proceedings may or may not allow this cost to be recovered. However, in McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 at 418, Dixon and Fullagar JJ allowed a claim for office expenses that were incurred and wasted saying "though nothing much better than a guess is possible, it is probably fair enough to add £100 for these". That was a case based on reliance damages in contract and not on an analogous claim for damages under s 82 of the Trade Practices Act 1974 (Cth). 8 I will allow the last sentence of par 168, but limit the use of the estimate of $250,000 to $300,000 under s 136 of the Evidence Act 1995 (Cth) to being evidence of an assertion or submission and not as evidence of an opinion or of a fact. So, in other words I allow it as, in effect, stating that there was some loss or damage, but not allow it to be used to quantify that claim in any substantive way. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate: Dated: 29 September 2010