Australian Airports Advertising Pty Ltd v Federal Airports Corp

[1997] FCA 1120

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 829 of 1997

BETWEEN:	AUSTRALIAN AIRPORT ADVERTISING PTY LIMITED (ACN 002 646 282) Applicant
AND:	FEDERAL AIRPORTS CORPORATION Respondent

JUDGE:	EMMETT J
DATE:	20 OCTOBER 1997
PLACE:	SYDNEY

EX TEMPORE REASONS FOR JUDGMENT

HIS HONOUR:   The applicant and the respondent are parties to arrangements whereby the applicant (“the Concessionaire”) is granted a non-exclusive right by the respondent (“the Corporation”) to use certain sites situated at Sydney Airport for the purposes granted by the licence.  The relationship between the parties was evidenced in the first instance by an agreement dated 24 December 1990 which has been renewed on several occasions.  The detail of the renewals are not relevant since it is common ground that the terms of the agreement of 24 December 1990 govern the relationship between the parties.

By clause 2 of that agreement, the Corporation granted to the Concessionaire the non-exclusive right and authority to conduct the business of providing advertising space on and from certain sites within the airport and to install, operate, clean and maintain advertising displays at the licensed sites and as may be approved by the Corporation from time to time.

Under clause 5(1) the Concessionaire undertook to pay to the Corporation a fixed sum for each year.  Under clause 5(2) the Concessionaire also undertook to pay an amount by which the total actual Gross Revenue (as that term is defined in the agreement) receivable by the Concessionaire from its business in a relevant year, exceeded the nominated Gross Revenue set out in that clause.  The details of the amounts are not relevant.  What is significant is that the consideration payable by the Concessionaire was calculated by reference to Gross Revenue as defined.  Gross Revenue is defined in the agreement as the total of all amounts paid or payable to the Concessionaire, from or incidental to the conduct of the Business as defined.  It is also expressed to include, without limitation, any amounts paid or payable for space rental, display fixtures rental, erection and/or installation, cleaning and maintenance, insurance, as advertising agent's commission and production of advertising copy and display fixtures.

Under clause 6 the Concessionaire entered into certain covenants and agreements with the Corporation.  Included in those provisions were a covenant that the Concessionaire would comply with the obligation on its part contained in Annexure D.  Annexure D is described as “Guidelines and Specifications for Advertising in Terminal Buildings at Federal Airports”.  Under section 10 of annexure D, the Concessionaire is required to report to each airport separately the financial details applying to advertising in the terminal buildings under the control of that airport.  Specifically, financial details were to include agreements with advertisers and a copy of each agreement entered into with a third party to advertise in a terminal building was to be forwarded to the respective airport.  Under section 11 of Annexure D, the Concessionaire is required to supply for the approval of the Corporation a copy of the terms and conditions to apply to agreements with advertisers.  Those terms and conditions were to make reference to the fact that details of those agreements, including financial information, might be disclosed by the Corporation in any future tender invitation.

Subclauses (33), (34), (35) and (37) of clause 6 of the Licence Agreement contain provisions whereby the Concessionaire is required to furnish information to the Corporation.  Those subclauses relevantly provide as follows:

(33)     Monthly Statements

Within 14 days after the expiration of each month of the period of this Licence Agreement to make out and forward to the Corporation a true and particular statement in writing setting out the Gross Revenue derived by the Business in the preceding month... The statement shall incorporate details of the total Gross Revenue of the Business.

(34)     Audited Business Statements

To furnish to the Corporation within 60 days after the end of each Year or part thereof financial statements consisting of a Profit and Loss Account and Balance Sheet...

(35)     Annual Concessionaire Statements

To furnish to the Corporation within 90 days of the completion of the Concessionaire's accounting period a copy of any financial statements of the Concessionaire which are required to be prepared pursuant to any legislation of the Commonwealth of Australia or the State of New South Wales.

........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..

(37)     Supply of Information

If required by notice in writing by the Corporation to supply to the Corporation within 30 days of the date of the notice (unless otherwise specified in the notice) such information it may require concerning the conduct of the Business...

The dispute between the parties turns on the effect of clause 7 of the Licence Agreement.  By clause 7 the Corporation covenants and agrees with the Concessionaire as follows:

(1)      Non-Disclosure of Information

Subject to clause 8(17) that the Corporation... will not disclose to any person not employed engaged or consulted by the Corporation any financial information obtained by the Corporation pursuant to the Licence Agreement... without the prior consent in writing of the Concessionaire... or a Court Order.

In addition to the exception contained at the beginning of that provision, there is a further exception in respect of:

...information on the Gross Revenue of the Business including sales analysis and details of agreements entered into with advertisers.

Clause 8(17) provides:

(17)     Disclosure of Information

Notwithstanding clause 7(1) the Corporation shall have the right to disclose the following information to any person:

(a)      annual total of the Gross Revenue;

(b)monthly total of the Gross Revenue as reported by the Concessionaire for each Year; and

(c)any other information related to the Gross Revenue of the Business for the purpose of tender information or for such other purposes as the Corporation desires.

The Corporation is in the process of inviting tenders for the concession, the benefit of which the concessionaire presently has.  In that connection, the Corporation has published a document entitled “Call for Proposals”.  The Concessionaire contends in the proceedings that certain aspects of that document are misleading and deceptive.  It also contends that confidential information has been disclosed in that document in breach of clause 7(1).

Since there is some urgency in relation to the process of calling for tenders, the parties joined in asking the Court to make an order under Order 29 of the Federal Court Rules for the determination of a question concerning the construction of clause 7 separately from and prior to the determination of any other issues in the proceedings.  That order was, as I have said, sought by consent and I propose to make such an order.

The question which has been posed is as follows:

Did the Respondent, in the circumstances, breach the terms of its contract with the Applicant or engage in a breach of confidence by disclosing to proponents for the advertising concession at Sydney International Terminal the information:

(a)contained in pages 258-260 inclusive of the Exhibit ‘DHA1’ to the affidavit of Denis Henry Avery sworn 7 October 1997 (‘the Exhibit’);

(b)      contained in pages 261-264 inclusive of the Exhibit;

(c)       contained in pages 258-264 inclusive of the Exhibit; or

(d)contained in pages 258-264 inclusive of the Exhibit together with the information contained in Appendices 2 and 3 of the Exhibit (pages 150-175 inclusive and pages 176-209 inclusive).

The Concessionaire has identified some seven pages of financial material which has been compiled by the Corporation from information furnished by the Concessionaire pursuant to clause 6(33).

The information consists of details of the revenue derived by the Concessionaire from individual sites which are the subject of the Licence Agreement.  The Concessionaire contends that that is financial information, the disclosure of which is prohibited by clause 7(1) except to the extent that it falls within the exception in clause 8(17) or in the exception contained in clause 7(1) itself.  The Corporation accepts that, but for either of those exceptions, the information would be subject to the prohibition on disclosure.  The question then is whether that information can be characterised as information on the Gross Revenue of the Business, including details of agreements entered into with advertisers, or, alternatively, whether it can be characterised as other information related to the Gross Revenue of the Business.  It is clear that the disclosure is for the purpose of tender information. 

The Concessionaire bases its contention on the notion that the information is commercially very sensitive.  I do not understand there to be a real dispute as to that question.  The issue is whether he language of the exceptions should be read down in some way in order to take account of that sensitivity.  In effect, the Concessionaire says that the only information which falls within either of the relevant exceptions is information as to the Gross Revenue as a total.

The difficulty with such a contention is that it does not accord with the language of the exceptions themselves.  The exception contained within clause 7(1) itself and the exception contained within clause 8(17) overlap to some extent.  The provisions are not as felicitously expressed as they might have been.  However, the fact that there is some overlap does not mean that the language of both exceptions should not be heeded.

The Concessionaire suggested that, because the object of clause 7(1) is clearly to protect sensitive financial information, its object would be defeated by anything other than the very narrow construction which the Concessionaire wishes to put on the exceptions.  However, that ignores the fact that under clauses 6(33), 6(34), 6(35) and 6(37) confidential financial information, other than the amount payable for each site, is required to be furnished.  That information goes far beyond anything necessary to determine the Gross Revenue of the Business.  It is information which could not be said to be information related to the Gross Revenue.  Both exceptions, as is conceded by the Concessionaire and indeed is relied upon by the Concessionaire, relate to Gross Revenue.

I do not consider that there is any basis for construing either of the phrases used to connect information with Gross Revenue in any narrow sense.  The exception contained in clause 7(1) itself could have been expressed to be limited to the total Gross Revenue.  It is not.  It is expressed to be information on the Gross Revenue and it indicates the sort of information which might be included.  Significantly, information on the Gross Revenue is to be taken to include details of agreements entered into with advertisers.  Details of agreements entered into with advertisers must, I would expect, include such things as the date of the agreement, the parties to the agreement, the subject matter of the agreement and the price payable under the agreement.  Once that information can be disclosed, it is difficult to see why there would be any reason to read down the word "on" so as to limit the information concerning Gross Revenue to the total, as distinct from details which make up the Gross Revenue.

Since it is acknowledged by the Concessionaire, in accepting the obligations under Annexure D, that details of agreements with third parties, including financial information, may be disclosed in any future tender process, there is no reason, it seems to me, for reading down the expression "information on Gross Revenue" in the way suggested by the Concessionaire.

Similar arguments can be applied to the expression "information related to the Gross Revenue".  While there is information related to the Gross Revenue, other than the amount payable in respect of each site, as appears from the definition of "Gross Revenue", I see no reason to limit the expression "information related to the gross revenue" to a breakdown of the items in the definition of Gross Revenue as distinct from a breakdown of the advertising agreements or the sites from which the Gross Revenue is derived.  The expression "related to" is one of broad import and in the absence of compelling reasons to the contrary it should not be read down.  The mere fact that the information is sensitive is not, in my opinion, a reason why the expression should be read down in this context, because it is clear that authority is given by the terms of the agreement for the Corporation to disclose sensitive information.

There is still significant work to be done for the prohibition in clause 7(1) insofar as it relates to all of the other financial information which is to be furnished under clauses 6(33), 6(34), 6(35) and 6(37).  It is only information on the Gross Revenue or information relating to the Gross Revenue which is within the exception.  I consider that the material contained in the relevant pages of the Call for Proposals falls within either, and probably both, of the exceptions to which I have referred.  In the circumstances, I would determine the question which has been posed pursuant to order 29 in favour of the Corporation, namely, no.

I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:            20 October 1997

Counsel for the Applicant:	M.R.J. Ellicott
Solicitor for the Applicant:	Minter Ellison
Counsel for the Respondent:	S.J. Gageler
Solicitor for the Respondent:	Malleson Stephen Jaques
Date of Hearing:	20 October 1997
Date of Judgment:	20 October 1997