The City of Sydney v Streetscape Projects (Australia) Pty Limited
[2011] NSWSC 942
•24 August 2011
Supreme Court
New South Wales
- Amendment notes
Medium Neutral Citation: The City of Sydney v Streetscape Projects (Australia) Pty Limited & Anor [2011] NSWSC 942 Hearing dates: 23 August 2011 Decision date: 24 August 2011 Jurisdiction: Equity Division - Commercial List Before: Einstein J Decision: The plaintiff's objection to cross-examination concerning the document sought to be put before Mr Matchett is upheld
Catchwords: CROSS-EXAMINATION - section 44 Evidence Act 1995 - Admissibility of a document - Cross-examination on an issue outside the pleadings - Voir dire Legislation Cited: Evidence Act 1995 (NSW) Cases Cited: Barnes v Addy (1874) LR 9 Ch App 244
Council of the City of Sydney v Goldspar Pty Ltd [2004] FCA 568
The City of Sydney v Street Scape Projects (Australia) [2011] NSWSC 831Category: Procedural and other rulings Parties: The City of Sydney (Plaintiff)
Streetscape Projects (Australia) Pty Limited (First Defendant)
Moses Edward Obeid (Second Defendant)Representation: Counsel
Mr S Couper QC, Mr J Gooley, Mr R Higgins (Defendants)
Mr T Jucovic QC, Mr S Climpson, Mr C Bova (Plaintiff)
Solicitors
Holding Redlich (Plaintiff)
Colin Biggers & Paisley (Defendants)
File Number(s): 2009/00298673 & 2010/0085353
Judgment
The current controversy
The current controversy has its roots in certain rulings to be found in the Court's decision handed down on 4 August 2011 ( The City of Sydney v Street Scape Projects (Australia) [2011] NSWSC 831).
It is unnecessary to repeat those rulings, save perhaps to note the terms of paragraphs 30-36 and 48-55 :
The 1998 copyright pleading
[30] This amendment sought to plead that the design on which Streetscape's smartpoles are based was designed by KWA for Streetscape and therefore Streetscape owns the copyright in this design.
[31] The plaintiff submitted and I accept that that these amendments are not defensive but seek to plead a new matter, which wasn't previously sufficiently identified as an issue. This is because:
(1) these particulars are in response to para 4 of the Commercial List Statement which pleads that pursuant to the Licence Agreement, the City licensed the Intellectual Property to Streetscape Projects; these particulars have nothing to do with the equitable duty/ Barnes v Addy claim; and
(2) these particulars are particulars to para 4(a) of the Commercial List Response which pleads that "The City did not own or was not entitled to own or maintain the Intellectual Property ... pursuant to the Licence Agreement"; these particulars have nothing to do with the equitable duty/ Barnes v Addy claim.
[32] In my view that leave should not be granted to include particulars 2A and 2B to para 4(a) of the Commercial List Response because the City will suffer prejudice in that:
(1) It has not investigated the relationship between KWA Design and Streetscape Projects during the period at least June 1998 to May 1999; such investigations will require the City to examine in detail the relationships between third parties such as Goldspar and KWA Design including seeking to discuss the matters raised with former employees of KWA Design (such as Jeremy Turner and Mike Farrelly, the latter of whom has already given evidence) and Streetscape Projects (such as Peter Harrison - see for example Tabs 1 and 2 of the plaintiff's Additional Tender Bundle);
(2) the events are outside the direct knowledge of the City and occurred 13 years ago;
(3) the City will have to take detailed instructions from Mr Matchett who is currently overseas; and
(4) the City will have to take detailed instructions from Mr Newman and Dr Green.
[33] In my view leave should not be granted because the relevance of the allegation that Streetscape Projects owned copyright in the drawings is not apparent on the face of the pleading or particulars; the effect of ownership is in some unknown way allegedly related to the fact that the defendants allege that "the City did not own or was not entitled to own or maintain the Intellectual Property ... the subject of the Licence Agreement" (para 4(a) of the Commercial List Response); the particulars do not, "invite [the Court] to find ... that Streetscape cannot be stopped from using or producing poles derived from its own drawings" (as Senior Counsel for the defendant submitted the purpose of the proposed amendment would be) (transcript 01/08/11 T39 L47 - T40 L2).
[34] Further, I accept that the plaintiff is prejudiced, as it does not understand the case it is required to meet. The material facts necessary to establish ownership of copyright in the drawings have not been pleaded; these material facts include the basis upon which copyright is alleged to subsist in the drawings, including a plea that the drawings are original artistic works, as well as an identification of the author of the drawings.
[35] The defendants disputed that significant prejudice would arise from these amendments because the plaintiff's own witnesses had sworn evidence concerning the KWA designs and copyright prior to the licence agreements.
[36] There is an important distinction to be drawn between evidence and pleadings. Issues arise and are appropriately flagged on the face of the pleadings, not from the volumes of evidenced tendered in a case.. I do not accept Mr Couper's submission that no, or minimal, prejudice arises, where there is evidence pertaining to an issue but it is not addressed in the pleadings.
The loss of confidentiality and no confidentiality issue
[48] Under this category, the defendants sought to amend their pleadings to claim that the drawings and specifications in relation to "Smartpoles" were not confidential or alternatively, confidentiality in the designs was lost. Further, the defendants raised a new argument that the drawings were in all material respects the same as those available to Goldspar and on this basis the plaintiff's confidentiality argument failed.
[49] The defendants claimed that this pleading is defensive and arises out of serious claims of breach of confidence put against Mr Obeid in the plaintiff's latest amended list statement. Mr Couper submitted that because of the unconventional way in which these allegations are pleaded, it is necessary for the defendants to plead their argument this way.
[50] The plaintiff disputed this submission in their overnight written submissions claiming:
(1) The proposed amendments are in response to para 32 FACLS which pleads that a disclosure of certain information was in breach of a contract (not a breach of equitable duty). They are not responsive to the pleading in para 32 that there was a disclosure of confidential information as defined in the Licence Agreement. As such, the proposed pleading of a disclosure to the RTA and other sub-contractors or that the information was not inherently confidential is irrelevant to and does not meet the pleading in para 32. As such, it is liable to be struck out as disclosing no reasonable defence and having a tendency to clause prejudice, embarrassment and delay (r 14.28).
(2) The proposed additional sub-paragraph do not appear to relate at all to the contractual terms which are referred in the existing pleading at subpara 17(e)(vii) and (viii), namely cl 9.3(a) and 9.3(d) of the Licence Agreement.
(3) The plaintiff has requested particulars of the facts, matters and circumstances relating to the alleged "disclosures" and the basis of the allegation of "inherently not confidential" in these subparagraphs (see Holding Redlich letter of 25 July 2011, paras 5(c)(iii), (iv), (v), (vii) and (viii)). Until those particulars are provided, the plaintiff is unable to know the case which it has to meet.
(4) Notwithstanding the refusal to provide those particulars, the defendants have said they intend to seek to elicit this evidence from the plaintiff's witnesses by way of cross-examination (para 5, CBP letter dated 29 July 2011). Senior counsel for the defendants obliquely referred to this intention in his opening (T36 line 40-50). They have said there are documents which will evidence these matters and which they will seek to include in a tender bundle (para 5 CBP letter dated 29 July 2011) but they are yet to identify those documents to the plaintiff.
(5) Once those particulars are provided, they may open up a new area of factual inquiry which will need to be responded to. It may be that that evidence will need to come from some of the plaintiff's existing witnesses, including Mr Newman.
[51] In relation to the defendant's newest amendment, being the last part of 17(e)(xi) the plaintiff submitted:
(1) Subparagraph 17(e)(xi) incorporates the no copyright pleading matters in proposed para 4(a)(2A) and (2B) referred to above. The submissions in relation to those proposed additional paragraphs apply equally here.
(2) Further, the introduction of the Issue A Drawings from the Goldspar proceedings causes significant prejudice to the plaintiff as it is required to investigate the creation and use of those drawings in around the period 1996/1997.
[52] The proposed re-agitation of the Issue A Drawings would open up a new debate as to the ownership of copyright in those drawings; a debate which lasted four days before Gyles J. Given that the defendants place reliance on Goldspar being the owner of copyright in the Issue A Drawings, the plaintiff would be entitled to argue that KWA Design was the owner of copyright in the Issue A Drawings. This opens up a new and complex area of factual debate between the parties in which it will be necessary for the plaintiffs to investigate the relationship between Goldspar and KWA Design, including taking detailed instructions from at least Mr Matchett and Mr Newman in relation to the issue. It may also be necessary to confer with representatives of Goldspar and issue a subpoena for the production of documents.
[ 53] Contrary to the defendants' submission, this area of factual controversy was not live on the evidence of the parties. There was no pleaded issue in this regard. To the contrary, the detailed chronology in para 4 of the Commercial List Response - upon which the case has been conducted for the past 12 months - commenced with the 6400 Issue A Drawings which were created for the purposes of the 9912 Tender (in around May 1999).
[54] I accept if these amendments are allowed, there will also be a debate as the similarities between the Issue A Drawings and the 4930 Issue C Drawings. In order to prepare for such a debate it will be necessary for the plaintiff to confer at least with Mr Newman, Mr Matchett and Dr Green.
[55] Finally, senior counsel for the defendants submitted that any criticism that these additional paragraphs ought be "somewhere else" in the pleading was a "matter of form" and that the only question is whether the paragraphs "respond to the new case against us". I reject that submission because the submissions are seeking to raise new defences in relation to pre-existing claims which are not the breach of equitable duty claims.
Turning more particularly to the precise positions taken by the parties
The matter in issue arises in the cross-examination by the defendants' Senior Counsel of Mr Matchett.
At transcript 23/08/11 Pg 9 L42 Senior Counsel for the defendants informed the Court that "I intend to show the witness some drawings". The drawing is referred to as Drawing 4930/01 Issue A (the 4930 Issue A Document).
Senior Counsel for the defendants said that the purpose of showing Mr Matchett the 4930 Issue A Document was as follows:
"Our learned friend's starting point was that these drawings appeared to be the 4930 issue A drawings... We propose to ask Mr Matchett whether that is so because on our looking at them and looking at the voir dire exhibit which contains those drawings they are different. We propose to ask Mr Matchett what these drawings are and how they came into existence... They don't seem to be the issue A drawings... We want to ask questions about what they are and where they fit into the picture."
Senior Counsel for the defendants then conceded that:
"... if [the drawings] turn out to be part of the issue A drawings we've probably stopped dead in our tracks because your Honour's ruling seems to deal with the issue A drawings. Our starting point is such that they're not which is why I want to ask this witness what they are and where they fit in the picture."
The propositions put by the City run as follows
(1) The defendants are not permitted to show Mr Matchett the 4930 Issue A Document [other than to ask Mr Matchett, having been shown the document, whether he stands by the evidence he has given: Evidence Act 1995 (NSW), s 44(3)(c)] unless the Court is satisfied that the document will be admitted: Evidence Act 1995 (NSW), s 44(2)(b).
(2) The submission by Senior Counsel for the defendants that because "[i]t is cross-examination about a document so section 44 can safely be ignored" should be rejected. As Mr Odgers points out in Uniform Evidence Law (9 th ed) at [1.2.4180] (pg 155) in relation to s 44 of the Evidence Act 1995 (NSW):
"This provision largely reflects the existing common law position, based on the rule in Queen's Case... Under that rule, a witness cannot be asked any questions about the contents of a document unless it is admissible in evidence (and the party either reads the statement in its entirety into evidence or undertakes to tender it)."
(3) The purpose for which the 4930 Issue A Document is proposed to be shown to Mr Matchett makes it plain that the document will not be admitted into evidence. Mr Matchett was not the author of the document and its provenance has not been proven. In fact, according to the defendants the document does not seem to be part of the Issue A drawings and their starting point is that it is not.
(4) The same ruling as the Court made in relation to MFI #D9 UNITED STATES PATENT should therefore follow (see Transcript 23/08/11 Pg30 L20 - Pg 32 L3).
(5) Further, on the face of the 4930 Issue A Document it is an 4930 Issue A drawing (i.e. it is labelled as such). As was conceded by Senior Counsel for the defendants if it is a 4930 Issue A drawing the defendants are " stopped dead in [their] tracks because your Honour's ruling seems to deal with the issue A drawings ".
The defendants' position
The defendants' submissions are as follows :
(1) Streetscape Projects (Australia) Pty Ltd ("Streetscape") seek to ask questions of Mr Matchett about, and potentially tender, 2 drawings bearing the logo of KWA (the "Drawings").
(2) The Drawings are marked "ISSUED FOR PRODUCTION" and are dated 22 September 1997. They bear the description Drawing No 4930/01 Issue A, and the client is described as Goldspar Pty Ltd.
(3) The City of Sydney (the "City") was a party to proceedings in the Federal Court that involved Goldspar Pty Ltd. Included were the following proceedings:
(a) [2002] FCA 1064;
(b) [2002] FCA 1268;
(c) [2004] FCA 568; and
(d) [2006] FCA 472.
(4) Mr Newman and Mr Matchett gave evidence in the Goldspar litigation: see for example [2004] FCA 568 at [75]. Professor Green also gave evidence in that litigation: [2004] FCA 568 at [141].
(5) In [2004] FCA 568, Gyles J held at paragraph 136 that as between the City and Goldspar, Goldspar has the copyright in the 4930 Issue A Drawings and the City has the copyright in the 4930 Issue C Drawings. According to his Honour, "there would be significant similarities between a pole constructed in accordance with issue A drawings and a pole constructed in accordance with issue C drawings because one is developed from the other."
(6) The City has objected to any questions being asked of Mr Matchett about the Drawings on the basis that they are irrelevant. It is Streetscape's position that the Drawings are relevant to both copyright and confidential information issues raised in both the pleadings and the evidence.
Further, in reply to the plaintiff's submissions, the defendants contended:
(1) Section 44 does not apply because the drawings are not representations by a person. They are drawings. If contrary to these submissions s 44 is held to apply, we make the following submission in reply.
(2) The plaintiff's submissions are fundamentally incorrect on a number of levels. The first and most obvious is in its application of s 44 of the Act. What has been objected to at this stage is the witness Mr Matchett being asked questions about a document, not the tender of that document.
(3) As is immediately obvious from the text of s 44, s 44(3) specially allows a cross-examiner to show a document to a witness containing someone else's prior representations. It therefore is not, and can never be, a basis to object to a document being shown to a witness.
(4) Secondly, the plaintiff's submissions proceed on the basis that the document can never be admitted into evidence as its provenance has not been proven. However, on its face, the document appears to be produced by KWA, Mr Matchett's company.
(5) There is no reason why the defendants should be prevented from asking Mr Matchett if he recognises the document, and if he does, have that document admitted into evidence.
(6) Finally, merely because the document is on its face an Issue A drawing does not mean that Mr Matchett cannot be asked about whether this is true given Mr Matchett's role in the production of the relevant drawings.
The defendants' contentions as to pleading and evidence
The City in paragraph 6(b) of Section A of the sixth further amended commercial list statement acknowledges that the ownership of the intellectual property in the Smartpoles, including ownership of copyright that subsists in certain drawings, is in dispute. In paragraph 8 of the sixth further amended summons, the City seeks declaratory relief that it is the owner of the intellectual property in the poles.
The City in paragraph 3 of the sixth further amended commercial list statement contends that prior to August 2002, it owned all of the intellectual property, including copyright, "which subsist in relation to the "Smartpole" street poles" .
Streetscape puts in issue the City's ownership and subsistence of copyright (Response to sixth further amended commercial list statement ("Response") paragraph 4(a), and specifically in particular (2) to this paragraph).
In addition, the City asserts that Streetscape and Mr Moses Obeid have breached an equitable duty of confidentiality, and in the case of Streetscape, also a contractual one. Related to this particular pleading is the allegation that as a result of Streetscape's conduct pleaded in paragraphs 32, 34, 34A, 35, 36, 37, 38, 38A, 38AA and 39, Streetscape breached:
(1) The terms of the License Agreement;
(2) A fiduciary duty; and
(3) An equitable duty of confidence.
(paragraph 40 6FACLS). Paragraph 40 is denied by both Streetscape and Mr Moses Obeid (paragraph 17(q) Response).
The City allege that as a result of the conduct of Mr Moses Obeid pleaded in paragraphs 33, 34A, 35, 36, 37, 38, 38A and 38AA, Mr Moses Obeid breached an equitable duty of confidence (paragraph 45A 6FACLS) and, in the alternative, assisted or was involved in Streetscape's breaches of fiduciary duty and breaches of confidence (paragraph 45B 6FACLS). Paragraphs 45A and 45B are denied by both Streetscape and Mr Moses Obeid (paragraph 25A Response).
The City has led evidence in relation to the development of the Smartpole, for example:
(1) Affidavit of Steven Newman dated 24 September 2010 (court book tab 42) paragraphs 11 to 87;
(2) Affidavit of Steven Newman dated 22 December 2010 (court book tab 43) paragraphs 8 to 36 and 45 to 51;
(3) Affidavit of Steven Newman dated 21 January 2011 (court book tab 44) paragraphs 2 to 6;
(4) Affidavit of Robert Stephen Matchett dated 24 September 2010 (court book tab 46) paragraphs 4 to 37; and
(5) Affidavit of Robert Stephen Matchett dated 10 December 2010 (court book tab 47) paragraphs 22 and 31.
As part of the City's evidence, Mr Newman asserts in his affidavit dated 24 September 2010 (paragraph 47) that as at 29 May 1998, KWA had created 3 versions of the 4930 series drawings, being:
(1) Issue A (which consisted of Goldspar's non-conforming tender submission design);
(2) Issue B (which documented the evolution of the Smartpole design); and
(3) Issue C, which was completed in around April 1998.
Further, Mr Newman refers to the decision of the Federal Court in the Goldspar litigation that determined that the City was the owner of the intellectual property in the 4930 series drawings Issue C (24/9/10 paragraph 52). Mr McLeod's evidence (25/10/10 paragraph 9) was that the 4930 Issue A Drawings were recognised as being the property of Goldspar: Council of the City of Sydney v Goldspar Pty Ltd [2004] FCA 568. The evidence of Mr Newman dealt specifically with the asserted difference between the pole depicted in the 4930 Issue A Drawings and the Smartpole. The evidence can be relevant only to the issues of ownership of copyright and confidentiality. It is patent that the plaintiff has recognised for a considerable time the relevance of the 4930 Issue A Drawings to these issues.
Streetscape has led evidence in relation to the development of the Smartpole, for example:
(1) Supplementary Affidavit John Angus McLeod dated 21 July 2009 (court book tab 69) paragraphs 29 to 21;
(2) Affidavit of John Angus McLeod dated 24 May 2010 (court book tab 70) paragraphs 13 to 133; and
(3) Affidavit of John Angus McLeod dated 25 October 2010 (court book tab 71) paragraph 11.
The defendants' contentions as to parameters of the interlocutory ruling
On 4 August 2011, the Court disallowed particular paragraphs of the defendants' sixth further amended commercial list response. The paragraphs referred to above were allowed in, or to the extent that they were part of a previous pleading, not struck out.
In paragraph 33 of the interlocutory ruling, it was found that the "relevance of the allegation that Streetscape Projects owned copyright in the drawings is not apparent on the face of the pleading or particulars." Further, at paragraph 34, it was held that "the material facts necessary to establish ownership of copyright in the drawings have not been pleaded; these material facts include the basis upon which copyright is alleged to subsist in the drawings, including a plea that the drawings are original artistic works, as well as an identification of the author of the drawings."
In relation to confidentiality, the Court was influenced by what it considered to be the proposed reagitation of the Issue A Drawings which, it was found, would "open up a new debate as to the ownership of copyright in those drawings" , the drawings being the Issue A Drawings. With respect, it is submitted that the Court was influenced by the affidavit of Ms Fernandez that asserted that this was a new issue. As the evidence has unfolded at the trial, it is plain that it is not. The plaintiff led the evidence of Mr Newman about these drawings. The plaintiff understood that the evidence was, and is, relevant to the pleaded issues referred to above.
The City asserts that it owns copyright in "certain drawings" relating to Smartpole poles. Those drawings are said to comprise the Issue C Drawings that were created "during the period 1997 to 1998" by employees of KWA. Further, the City asserts that copyright subsists, and at all material times has subsisted, in the Issue C Drawings as original artistic works. These contentions are denied by Streetscape and Mr Moses Obeid (paragraph 54C Response).
The proposed cross-examination goes to an issue that is not live on the pleadings.
Decision
The short position is that :
(1) The evidence act point :
(a) As the plaintiffs have contended the defendants are not permitted to show Mr Matchett the 4930 Issue A Document unless the Court is satisfied that the document will be admitted: Evidence Act 1995 (NSW), s 44(2)(b).
(b) The court rejected the defendants submission that because "[i]t is cross-examination about a document so section 44 can safely be ignored" should be rejected.
(c) As Mr Odgers points out in Uniform Evidence Law (9 th ed) at [1.2.4180] (pg 155) in relation to s 44 of the Evidence Act 1995 (NSW):
"This provision largely reflects the existing common law position, based on the rule in Queen's Case... Under that rule, a witness cannot be asked any questions about the contents of a document unless it is admissible in evidence (and the party either reads the statement in its entirety into evidence or undertakes to tender it)."
The defendant's contention that section 44 does not apply because the drawings are not representations by a person is not persuasive. There is no authority cited for this proposition. Indeed all the authority indicates to the contrary. In Birchnall v Bullough [1896] 1 QB 325 an unstamped promissory note was inadmissible. I can see no distinction between the drawings and a promissory note.
Addressing the section 44(3) issue. That subsection sets out a particular procedure to be followed and as section 44(3)(c) indicates, cross-examination is limited to asking a witness whether they stand by their evidence, despite the document shown to the witness. The defendant seeks to cross-examine for a different purpose, that is to explore what the document is and who created it. In these circumstances, the subsection is inapplicable.
Returning to the purpose for which the 4930 Issue A Document is proposed to be shown to Mr Matchett I accept that the document cannot be admitted into evidence. Mr Matchett was not the author of the document and its provenance has not been proven. In fact, according to the defendants the document does not seem to be part of the Issue A drawings and their starting point is that it is not.
The same ruling as the Court made in relation to MFI #D9 UNITED STATES PATENT should therefore follow (see Transcript 23/08/11 Pg 30 L20 - Pg 32 L3).
Further, on the face of the 4930 Issue A Document it is an 4930 Issue A drawing (i.e. it is labelled as such). As was conceded by Senior Counsel for the defendants if it is a 4930 Issue A drawing the defendants are " stopped dead in [their] tracks because your Honour's ruling seems to deal with the issue A drawings "
Finally it is appropriate to make clear that the earlier rulings made in the 4 August 2011 decision remain in place.
[30] This amendment sought to plead that the design on which Streetscape's smartpoles are based was designed by KWA for Streetscape and therefore Streetscape owns the copyright in this design.
In that regard, I accept that the relevance of the 4930 Issue A Document falls to be judged by reference to the pleadings. For that reason paragraphs 4, 5 and 12 to 15 of the defendants' submissions may be put aside.
The pleadings - copyright issue
I accept that in relation to the copyright, it is not open to the defendants to rely on the 4930 Issue A Document as relevant to the question of whether the plaintiff is the owner of the Issue C Drawings or the Tender 9912 6400 Issue A Drawings. This is because reliance on the 4930 Issue A Document or drawings is not pleaded.
The plaintiff is therefore taken by surprise and does not understand the case it has to meet: Pt 14 r 14.14(2) of the Uniform Civil Procedure Rules .
That the plaintiff is taken by surprise is clear from the fact that the defendants saw it necessary to raise another set of drawings (the 5470 Drawings) in their application to amend their Commercial List Response (MFI-D2). At particulars (2A) and (2B) to paragraph 4 of MFI-D2 the defendants sought to impugn the plaintiff's title to copyright by alleging that the 5470 Drawings were owned by Streetscape Projects.
Although the defendants did not (and now do not) seek to plead the 4930 Issue A Drawings in paragraph 4 of their Commercial List Response it appears they now wish to make similar use of the 4930 Issue A Drawings as they sought to make of the 5470 Drawings. That is, it appears that the defendants are seeking to attack the plaintiff's ownership to copyright in the later 4930 Issue C Drawings on the basis of the earlier 4930 Issue A Drawings.
This is contrary to the way in which the Commercial List Response is framed, which starts with the 9912 6400 Issue A Drawings (which were created in May 1999) and moves forward in time. It does not move backwards in time to by referring to the 4970 Issue A Drawings which were created in 1997.
Had the defendants wished to rely on the 4930 Issue A Document or drawings they should have sought to do so at that time of its proposed amendments (MFI-D2). They did not do so.
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Amendments
25 August 2011 - Replace the numbers 6400 in line 1 with the numbers 4930.
Amended paragraphs: 35
Decision last updated: 25 August 2011
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