The City of Sydney v Streetscape Projects (Australia) Pty Limited

[2011] NSWSC 847

Supreme Court

New South Wales

Medium Neutral Citation:	The City of Sydney v Streetscape Projects (Australia) Pty Limited & Anor [2011] NSWSC 847
Hearing dates:	05/08/2011
Decision date:	08 August 2011
Jurisdiction:	Equity Division - Commercial List
Before:	Einstein J
Decision:	The plaintiff's objection to cross-examination at transcript page 24 line 10 is upheld
Catchwords:	PRACTICE AND PROCEDURE- Responsibility of the parties, through their legal representatives, to exercise a degree of co-operation to express the issues for trial before and during the trial -Need for clarity, precision and openness as part of this co-operation emphasised in the context of ambush or surprise - Plaintiff's contention that the defendants has failed to comply with rules 14.14 of the Uniform Civil Procedure Rules 2005
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd & Ors [2008] NSWCA 243 Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd [2008] NSWCA 228 Boyes v Colins [2000] WASCA 344; 23 WAR 123 Glover v Australian Ultra Concrete Floors Pty Ltd [2003] NSWCA 80 Hooker v Gilling [2007] NSWCA 99 Khan v Armaguard Ltd [1994] 1 WLR 1204 Mercer v Chief Constable of the Lancashire Constabulary [1991] 1 WLR 367 Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; 53 NSWLR 116 Sutton v Erect Safe Scaffolding (Aust) Pty Ltd [2006] NSWCA 265 White v Overland [2001] FCA 1333
Category:	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 T Jucovic SC, Mr S Climpson, Mr C Bova (Plaintiff) Mr S Couper QC, Mr J Gooley, Mr R Higgins (Defendants) Solicitors: Holding Redlich (Plaintiff) Colin Biggers & Paisley (Defendants)
File Number(s):	2009/00298673 & 2010/0085353

Judgment

The further pleading issue

1. The parties have continued to place before the court arguments as to the extent to which the pleadings permit or do not to permit particular issues to be litigated.

A brief reference to the authorities

1. It is constructive to recall the decision of the New South Wales Court of Appeal in Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd & Ors [ 2008] NSWCA 243.

1. The leading judgment delivered by Allsop P included the following observations commencing at [160]:

" [160] Giving due weight to the realities of life in running a long and complex trial and the vicissitudes of the appreciation of the evidence given, it cannot be emphasised too strongly that it is the responsibility of the parties, through their legal representatives, to exercise a degree of co-operation to express the issues for trial before and during the trial. Such co-operation can now be taken as an essential aspect of modern civil procedure in the running of any civil litigation, including hard-fought commercial cases. The need for clarity, precision and openness as part of this co-operation has been emphasised in the context of ambush or surprise: White v Overland [2001] FCA 1333 at [4], expressly approved in Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346 ; 53 NSWLR 116 (Heydon JA, with whom Mason P and Young CJ in Eq agreed); Glover v Australian Ultra Concrete Floors Pty Ltd [2003] NSWCA 80 at [59]-[60] (Ipp JA, with whom Sheller and Hodgson JJA agreed); Sutton v Erect Safe Scaffolding (Aust) Pty Ltd [2006] NSWCA 265 at [4] (Bryson JA with whom Basten JA agreed); and Hooker v Gilling [2007] NSWCA 99 at [52] (McColl JA, with whom Ipp and Basten JJA agreed).

[161] The need for clarity, precision and openness in the conduct of litigation and the responsibility of parties and their legal representatives therefore flows most clearly from the statutory duty of a party and his, her or its legal representatives in civil proceedings to assist the court to further the overriding purpose to facilitate the just, quick and cheap resolution of the real issues in dispute and to participate in the processes of the Court to that end: see Civil Procedure Act 2005 (NSW), 56. It may be that the provision no more than restates the proper approach of the modern law of procedure reflected in cases such as Nowlan v Marson Transport . It places the proper approach, however, on a firm statutory foundation. These principles can be seen to be reflected in the longstanding rules of pleading requiring any matter that may cause surprise to be pleaded.

[162] An enhanced requirement of clarity and disclosure in modern civil litigation can be seen in Australia and England from at least the early 1990s: see the discussion of the "cards on the table" approach by Ipp J (as his Honour then was) in An enhanced requirement of clarity and disclosure in modern civil litigation can be seen in Australia and England from at least the early 1990s: see the discussion of the "cards on the table" approach by Ipp J (as his Honour then was) in Boyes v Colins [2000] WASCA 344 ; 23 WAR 123 (with whom Pidgeon and Wallwork JJ agreed), citing Mercer v Chief Constable of the Lancashire Constabulary [1991] 1 WLR 367 and Khan v Armaguard Ltd [1994] 1 WLR 1204. Indeed, from the late 1970s and early 1980s, the Commercial List of this Court (in which List this hearing took place) has been sought to be run on the strict basis of the clear and full enunciation of issues for trial, in a way that has always demanded the fullest co-operation among parties and legal practitioners to delineate and illuminate the real issues in dispute.

[163] The clear statutory duty to assist the Court, and, in a practical way, to co-operate to bring forward the real issues in dispute, encompasses the requirement to be clear and precise in the illumination of the issues for trial. The occasion for this is not merely pleading (using the word broadly to encompass the modern commercial list summons and defence), it extends to all aspects of the engagement in the Court's processes. For similar responsibilities in the conduct of references, see Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd [2008] NSWCA 228 at [55]-[56].

[164] This does not deny the possibility, as occurs in real life in litigation, that issues will develop. Litigation is a dynamic human activity. Changes in how a case is put can be expected. This often occurs in large commercial cases. Such change, and the potential for it, makes it, however, all the more important that legal practitioners and parties ensure that the clear enunciation of issues keeps pace with that growth and change. This responsibility will encompass parties and their legal representatives making clear what is being put and also what they regard as not legitimately part of the controversy, if it is apparent to them that an issue not pleaded or presented is being relied on.

Turning to the instant issue

1. The latest set of arguments centre upon the plaintiff's contention that the defendants had not complied with rule 14.14 of the Uniform Civil Procedure Rules 2005 .

1. The relevant rule provides as follows :

(1)   In a statement of claim, the plaintiff must plead specifically any matter that, if not pleaded specifically, may take the defendant by surprise.

(2)   In a defence or subsequent pleading, a party must plead specifically any matter:

(a)   that, if not pleaded specifically, may take the opposite party by surprise, or

(b)   that the party alleges makes any claim, defence or other case of the opposite party not maintainable, or

(c)   that raises matters of fact not arising out of the preceding pleading.

(3)   Matters which must be pleaded pursuant to subrule (2) include (but are not limited to) fraud, performance, release, statute of limitation, extinction of right or title, voluntary assumption of risk, causation of accident by unknown and undiscoverable mechanical defect and facts showing illegality.

1. The judgment delivered on 4 August 2011 treated in several places with the important distinction to be drawn between evidence and pleadings. At the same time the Court accepted that it was inappropriate for the defendants to be granted leave to rely on certain particulars that gave rise to previously undisclosed factual issues, for example, the restraint of trade pleading. In that regard the Court accepted the affidavit evidence of Ms Fernandez and the prejudice fresh pleadings would cause.

1. Now, Mr Cooper QC seeks to cross-examine Mr Newman on the possibility that Smart poles have been reverse engineered from Smart poles already in existence, for example in Castlereagh Street.

1. Mr Jucovic QC objected contending that such questions fall outside of the pleadings, in the same manner as the previous issues the defendants sought to raise.

The important documents

1. Mr Cooper took the Court to a number of important documents including :

(1)   The plaintiff's sixth commercial list statement;

(2)   The relevant parts of the defendants commercial list response and in particular 4A and 17(e)(viii); and

(3)   Clause 9.3(d) of the licence agreement.

The plaintiff's submissions

1. As a starting point, Mr Jucovic invited the Court to read the section of the relevant pleading which responds as follows:

Further, any information which may be confidential (which is not admitted) to the extent to which it is disclosed by or in multi-functional street poles which the City refers to as 'Smart poles' ceased to be confidential upon supply and creation of the poles in public and/or in any event has been disclosed in copy and electronic advertising and promotional material of many of the competitors of Streetscape Projects (clause 9.3 (d)).

1. Mr Jucovic then made the following points in oral submissions:

"What I rely upon is what is the meaning of the words, and what it puts us on notice of, and the rules that I've directed your Honour's attention to.

Now, the topic is Reverse Engineering, and it is said "That it ceased to be confidential upon supply and creation of poles in public", and it stopped there, your Honour. That is what paragraph 4A, 17E(viii) says.

What it doesn't say why, and what it doesn't do it put us on notice of the why? Now, it is the why that is not pleaded. Now, your Honour, knows enough about the technical issues involved in reverse engineering to know that that is something that we need to put on notice of.

Now, the complaint that is made that I am trying to limit him to what is in the affidavits, is a misconception of my complaint. Your Honour, if there had been material in the affidavit evidence that squarely put us on notice of the why , that is, the affidavit evidence of the defendant, we may have been put on notice, but we have not been put on notice until we first hear of this today.

Now, your Honour, your Honour has been taken to the defences to the various paragraphs relating to the use of the confidential information in the United Arab Emirates. Your Honour will observe that their defence to that claim - the claim - and your Honour has been taken to the defences - contain bare denials.

If they wanted to put on a case that what is seen in the United Arab Emirates, is the product of some process of reverse engineering or, more to the point, your Honour, theoretically could be the product of reverse engineering that would have to be pleaded as well.

So that what is not pleaded, your Honour, is the intricacies of - or the facts of the reverse engineering - and that is plainly called for by the rules, your Honour, and we have not been put on notice of that issue by the way in which 4A, paragraph 17(e)(viii) and the defences to the conduct in paragraph 30 and onwards, which your Honour has been taken to, which contain bare denials, and the defence to paragraph 30B, so the only relevant place that my friend can point to, is 4A and 17(e)viii).

Mr Cooper can only point to the words, "Cease to be confidential upon supply and creation in public", full stop. No elaboration by what process, thereafter, a process now sought to be explored called, reverse engineering. That confidence is lost, your Honour"

The defendants' submissions

1. Mr Couper argued that the pleading self-evidently gives rise to a question of whether once the pole was in the public domain, its design was no longer confidential. His contention was that if the plaintiff did not understand that this would raise issues of reverse engineering, then that is the plaintiff's mistake and the defendants should not be prejudiced by the inadequate preparation of the plaintiff. Mr Couper further contended that the defendants have never been asked for all particulars of this pleading and that this is the first that he has heard of a suggestion that the pleading was unclear.

1. Mr Couper also rejected the plaintiff's proposition that an absence of evidence from his side on reverse engineering meant that he should not be allowed to cross-examine on the issue. His contention was that the pleading indicates that the confidentiality of the poll is an issue and that therefore he should be allowed to cross-examine on it.

Conclusion

1. The essential question for the Court is whether a careful reading of 4A and 17 (e)(viii) of the defendants' commercial list response would disclose reverse engineering of a smart poles as an issue in the proceedings or would otherwise take the plaintiff by surprise and introduce a new factual matter.

1. The opening comments to these reasons make plain, as did the reasons handed down last week, that ambush is no longer tolerated.

1. In my view the words of the pleading:

Further, any information which may be confidential (which is not admitted) to the extent to which it is disclosed by or in multifunctional street poles which the City refers to as 'Smart poles' ceased to be confidential upon supply and creation of the poles in public

do not indicate that reverse engineering is going to be an issue. The plaintiff would understand that whether placing a pole in the public domain removes confidentiality is an issue and they would be expected to prepare accordingly. However it is abundantly clear that this pleading does not indicate whether poles in the UAE were reverse engineered is in issue. If the defendants wished to raise this contention, out of fairness, it should have been pleaded by the defendants.

1. In the circumstances the Court is satisfied that rule 14 .14 [in particular subsection c] has been infringed by the defendants. The defendants have failed to plead specifically matters of fact not arising out of the pleading. Furthermore they have failed to plead matters which if not pleaded specifically, may take the opposite party by surprise; cf rule14.14(a)

1. For those reasons the defendants are disentitled from pursuing the line of cross-examination to be found in the transcript at page 24 line 10.

Decision

1. The plaintiff's objection to cross-examination at transcript page 24 line 10 is upheld.

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Decision last updated: 08 August 2011