The City of Sydney v Streetscape Projects (Australia) Pty Limited
[2011] NSWSC 1100
•13 September 2011
Supreme Court
New South Wales
Medium Neutral Citation: The City of Sydney v Streetscape Projects (Australia) Pty Limited & Anor [2011] NSWSC 1100 Hearing dates: 1 August 2011, 12 September 2011 Decision date: 13 September 2011 Jurisdiction: Equity Division - Commercial List Before: Einstein J Decision: The Court disallows paragraphs 25 -36 of John McLeod's 27 July 2011 affidavit, including tabs 5 -15 and paragraph 8 and JAM -1 and JAM - 2 of Mr McLeod's 25 October 2010 affidavit.
Catchwords: EVIDENCE - Rejection of evidence - Late service of evidence - Relevance to pleaded issue - Prejudice- Legislation Cited: Evidence Act 1995 (NSW) Cases Cited: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Autodesk v Dyson (No 2.) (1993) 176 CLR 300Category: Procedural and other rulings Parties: The City of Sydney (Plaintiff)
Streetscape Projects (Australia) Pty Limited (First Defendant)
Moses Edward Obeid (Second Defendant)Representation: Mr T Jucovic QC, Mr S Climpson, Mr C Bova (Plaintiff)
Mr S Couper QC, Mr J Gooley, Mr R Higgins (Defendants)
Holding Redlich (Plaintiff)
Colin Biggers & Paisley (Defendants)
File Number(s): 2009/00298673 & 2010/0085353
Judgment
The current controversy
Prior to the defendants calling Mr McLeod, a matter, which had been put on the backburner for some time, has re-emerged. The current controversy concerns the admissibility of paragraphs 25-33 of Mr McLeod's 27 July 2011 affidavit and a small number of sundry paragraphs which I deferred ruling on until today.
As a number of earlier judgments, such as those given on 4 August 2011, 8 August 2011 and on 24 August 2011 have made plain, each and every occasion in which a party seeks an indulgence, in circumstances, which will inevitably result in an extensive hiatus, must be very carefully treated with. These considerations were treated with in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, referred to in some of the judgments already handed down during the extended period of this hearing.
Treating with the issues
The matter turns on the admissibility of the evidence of Mr McLeod at paragraphs [25]-[33] which the plaintiffs contend is not admissible for the reason that it is not relevant to an issue on the pleadings.
The Defendants now assert that the McLeod Evidence (i.e. paragraphs [25]-[33] of the McLeod Affidavit) is relevant on both the Contract Claim and the equitable duty/ Barnes v Addy Claim.
Although not pleaded, the Defendants now assert that as a matter of construction it is relevant to enquire whether the definition of "Confidential Information" in the Licence Agreement extends only to information that is actually confidential. This was first raised at paragraph 15 of the Defendant's written submissions of 4 August 2011.
The Court accepts that this is contrary to the way in which the Defendants opened their case and the asserted relevance of the McLeod Evidence. Senior Counsel for the Defendants said in this regard:
"This is a case in which it is said that there was an equitable duty of confidence owed, that is that these something, the intellectual property however described, could properly be regarded as confidential. Therefore it becomes- and not merely confidential pursuant to the terms of the contract, but confidential in the sense that equity adopts. It therefore is plainly relevant to inquire who else uses and advertises itself as producing the equivalent of Smartpole Systems. Paragraphs 25 to 33 are directed at that topic. On the basis of those paragraphs we would anticipate making a submission in due course that almost no aspect of what our friends wish to call the Smartpole System can properly be regarded as confidential because a number of entities throughout the world use the equivalent."
The plaintiff's contention is that this allegation is not pleaded and takes the Plaintiffs by surprise. It should not be allowed.
The stance taken by the defendants
The defendants hark back to certain orders case managed by McDougall J and made by consent. It is common ground that 17AB(b) of the defendant's response sought to expressly state that none of the information in subparagraphs (a) to (d) of 30B of the Statement was at any material time was confidential, and that this amendment was refused leave by the Court.
Having carefully considered the matter against the background of the sundry judgements delivered during the course of the hearing I am not persuaded that the defendants are entitled to put paragraphs 25 to 33 of the McLeod affidavit into evidence.
Standing back from the controversy
The plaintiff's proposition is that it has prepared its Contract Claim on the basis of the pleadings and the evidence served long ago and will be prejudiced by the McLeod Evidence. Furthermore and as submitted by the plaintiff, the evidence is not relevant to the equitable duty/ Barnes v Addy claim.
The plaintiff's contention is as follows
(1) If the Defendants are asserting that the information that the Plaintiff pleads was confidential (such as the Product Manual and Specification) was not in fact confidential as at the date of the Licence Agreement (26 August 2002) because there were competitors using that same information, then the evidence post-dates the Licence Agreement and cannot therefore be relevant; and
(2) If the information was once confidential, but the Defendant asserts that it is no longer confidential because of events which have occurred since 26 August 2002 (such as there are now other competitors using the confidential information in the marketplace) then that matter needs to be properly pleaded. Absent a pleading to this effect the Plaintiff is taken by surprise.
Mr Couper had also put the following matter to the court :
"Again the point put shortly your Honour is that here is another publicly available website which illustrates in some detail those things which we apprehend the council asserts are confidential to it. And may we say that the other without multiplying examples the other website in photographs referred to by Mr McLeod in those paragraphs of his affidavit go to the same point, that is one can find readily details and detailed pictures and explanations about what these types of poles look like and how they operate and how you go about attaching street lights and arms and things to them. And that is evidence relevant to the question, what if any aspect of what the council wishes to describe as the Smartpole system, is in fact confidential?"
Prejudice
It is clear that further investigations will need to be carried out if the evidence is allowed. In particular the Plaintiff will need to investigate and call evidence as to:
(a) the state of the street pole market in Australia and overseas as at the date of the Licence Agreement;
(b) the state of the street pole market in Australia and overseas during the period after the Licence Agreement to date;
(c) the design and manufacturing process involved in the creation and manufacturing of the Smartpole concept and product;
(d) the ability to reverse engineer the Smartpole and the extent to which the confidential information claimed remains protected despite the manufacture and sale of Smartpole poles;
(e) a comparison of the similarities and difference of the prior art poles in existence at the time of the Licence Agreement and those which came into existence after the Licence Agreement;
(f) the extent of the advertising and promotional material in the market during the period before and after the Licence Agreement;
(g) the number of hits on the websites of the suppliers of poles which are relied upon by the Defendants.
Much of this evidence is the type of evidence that the Plaintiff required to meet the restraint of trade case. Quite some time ago the court accepted that there would be significant prejudice to the Plaintiff in relation to that case as the City would be entitled to call detailed expert evidence. Further, as was the case in relation to the restraint of trade case which the Defendants sought to plead, the plaintiff could only respond if the case was adjourned.
In reply, at paragraph 16 of Mr Couper's latest submissions, the defendants argued that the plaintiff had ample opportunity to investigate the substance of the defendants' denial of confidentiality. This has been a matter pleaded by the defendants from early in the case.
For the reasons given above, the Court does not accept that the pleadings gave sufficient notice of the issues raised by paragraphs 25-33 of Mr McLeod's latest affidavit. The evidence was served very late in the proceedings and would cause insurmountable prejudice to the plaintiff, including requiring the plaintiff to take all the steps I have listed above.
Even if the Court had been incorrect in its assessment of the anterior pleading circumstances, the Court would have excluded the evidence to be found at paragraphs [25]-[33] pursuant to section 135 of the Evidence Act 1995 (NSW), that is to say that the probative value of the evidence is substantially outweighed by the danger that it is :
(1) unfairly prejudicial to the defendant; and/or
(2) misleading or confusing; and/or
(3) would cause or result in an undue waste of time.
Sundry paragraphs
The Court rejects the following evidence for the reasons given above:
(1) JAM -1 of Mr McLeod's 25 October 2010 affidavit is rejected for the reasons above;
(2) Paragraph 8 and JAM -2 of Mr McLeod's 25 October 2010 affidavit is rejected for the reasons above;
(3) Paragraphs 35 and 36 of Mr McLeod's 27 July 2011 affidavit.
The application by the defendants to revisit earlier rulings
The defendants' application to revisit earlier rulings concerning the admissibility of paragraphs 3 to 7 of the McLeod evidence is without merit and is dismissed. cf Autodesk v Dyson (No 2.) (1993) 176 CLR 300 at 302-303 per Mason CJ.
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Decision last updated: 19 September 2011
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