Wagdy Hanna & Associates Pty Ltd v National Library of Australia
[2014] ACTCA 32
•21 August 2014
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Wagdy Hanna & Associates Pty Ltd v National Library of Australia |
Citation: | [2014] ACTCA 32 |
Hearing Date(s): | 20 February 2014 |
DecisionDate: | 21 August 2014 |
Before: | Penfold, Burns and Cowdroy JJ |
Decision: | 1. The appeal is dismissed. 2. The parties have 28 days within which to file and serve any written submissions about the costs of the appeal. |
Category: | Principal Judgment |
Catchwords: | CIVIL LAW – appeal – tender process – breach of confidence – uniqueness of design – limitation period – effect of Deed of Release in earlier proceedings CIVIL LAW – appeal – challenge to factual findings of primary judge – application to adduce further evidence – further evidence available in the proceedings before primary judge |
Legislation Cited: | Limitation Act 1985 (ACT), s 33 Court Procedures Rules 2006 (ACT), r 30 |
Cases Cited: | Akins v National Australia (1994) 34 NSWLR 15 Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 Briginshaw v Briginshaw (1938) 60 CLR 336 Comandate Marine Corp v Pan Australian Shipping Pty Ltd (2006) 157 FCR 45 Coulton v Holcombe (1986) 162 CLR 1 Greater Wollongong City Council v Cowan (1955) 93 CLR 435 Martin v Abbott Australasia Pty Ltd [1981] 2 NSWLR 430 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Re Chennell (1878) 8 Ch D 492 Wagdy Hanna & Associates Pty Ltd v National Library of Australia [2012] ACTSC 126 |
Parties: | Wagdy Hanna & Associates (Appellant) National Library of Australia (Respondent) |
Representation: | Counsel Mr W Hanna (Appellant with leave) Mr B Meagher SC (Respondent) |
| Solicitors Self-represented (Appellant) Ashurst Australia (Respondent) | |
File Numbers: | ACTCA 42 of 2012; SCC 236 of 2003 |
Decision under appeal: | Court/Tribunal: ACT Supreme Court Before: Refshauge ACJ Date of Decision: 3 August 2012 Case Title: Wagdy Hanna and Associates Pty Ltd v National Library of Australia Citation: [2012] ACTSC 126 Court File Number(s): SCC 236 of 2003 |
THE COURT:
By Notice of Appeal filed on 30 August 2012, the appellant appeals from the decision of a primary judge delivered on 3 August 2012: see Wagdy Hanna & Associates Pty Ltd v National Library of Australia [2012] ACTSC 126. It is convenient to state the background facts in order to consider the claims raised by this appeal.
Facts
On 25 September 1996, the respondent (‘NLA’) called for tenders in a formal Request for Tender for the provision of a repository required for its library, such facility to be available in the first six months of 1997. The appellant, together with other tenderers, lodged a tender and an interview was held between the appellant and the NLA on 31 October 1996. A sub-committee of the NLA recommended that the tender be awarded to a third party known as Decoin Engineering Pty Ltd (‘Decoin’). On 11 November 1996, the NLA decided to award the tender to Decoin.
On 18 February 1997, the appellant was notified of the NLA’s decision (‘the decision’). On the same day, the appellant sought information in respect of the other tenderers but the NLA declined to provide such information. A contract between NLA and Decoin was entered into during May 1997 for the work for which the appellant had tendered.
On 29 June 1998, the appellant instituted proceedings in the Federal Court of Australia (‘the Federal Court proceeding’) making various claims against the NLA. Such proceedings were settled by a Deed of Settlement made on 14 May 1999 between the appellant and the NLA (‘the Deed’). Subsequently, the appellant instituted these proceedings in the Supreme Court of the Australian Capital Territory by an Originating Application dated 8 May 2003.
Issues before primary judge
The appellant’s claim as pleaded before the primary judge raised two issues:
(a) A breach of duty of confidence
The appellant claimed that the NLA breached its duty of confidence by disclosing to Decoin certain information contained in the appellant’s tender and that such information was adapted by Decoin and used in the construction of the repository. The NLA denied that any term of confidentiality was implied in the tender process concerning the design concepts. Secondly, NLA did not admit that the design features, claimed by the appellant to have been incorporated, were in fact incorporated and denied it revealed any such matters to Decoin. The NLA also denied that any loss or damage resulted even if a breach were established.
(b) Unjust enrichment
The appellant claimed that the NLA received the benefit of the appellant’s ideas and concepts which were incorporated into the final design of the repository and accordingly the NLA had unjustly enriched itself. The NLA denied such claim.
In addition to its denials of any liability as claimed, the NLA raised further defences which, for convenience, are enumerated here with the appellant’s responses:
(a) It submitted that the Limitation Act 1985 (ACT) (‘the ACT Limitation Act’) applied with the result that the appellant’s claim was not maintainable. In response the appellant claimed that the wrongful disclosure of the confidential information amounted to fraud or deceit or deliberate concealment and that even if its cause of action were barred, then s 33 of the ACT Limitation Act extended the time by which the action could be brought.
(b) The NLA said that the Deed operated to release it from any claim of a kind now made. In reply, the appellant claimed that the NLA had breached a term of the Deed mainly by publicly disclosing the terms of settlement incorporated in the Deed and thereby the NLA was estopped from relying on the terms of the Deed.
(c) The NLA, based on the principles in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, claimed that the appellant was estopped from prosecuting its claim since in the Federal Court proceedings it had not raised the claims which are now being made even though it was aware of them, and that they should have been incorporated in those proceedings. In those circumstances, the NLA had foregone its right to recover costs and disbursements from the appellant when it discontinued those proceedings by reason of the compromise. In response, the appellant denied that the NLA was entitled to rely upon any such estoppel because of its conduct. No particulars were in fact provided of such conduct.
The NLA also raised a counterclaim against the appellant which in effect claimed that the Deed comprehensively resolved all disputes. In the alternative it was submitted that the Deed was intended to do so and that the Deed could be rectified to reflect the true intention of the parties. In response, the appellant denied that the Deed was comprehensive as claimed, maintaining that it was a fundamental term of the Deed that its terms were to be kept confidential and that such term was breached by a publication in The Canberra Times. Further, the appellant denied that it was a common intention of the parties to resolve all disputes.
Findings of primary judge
Disclosure of tender material
The primary judge found at [202] that there was no evidence to support the allegations of a disclosure of the content of the appellant’s tender to Decoin. His Honour further concluded at [207] that none of the staff of the NLA disclosed any of the appellant’s tender material to Decoin or to anyone else.
Confidentiality of tender
His Honour then considered, although it was not necessary for him to do so in view of his findings, whether there had been a pre-tender contract which his Honour described as a ‘tender process contract’. His Honour observed at [224] that the Request for Tender made no reference to confidentiality but found at [226] that it was ‘presumably subject to other governmental regulations’. His Honour concluded at [233] that there was a term implied into the ‘tender process contract’ that the tender material would be kept confidential. However, as previously noted, his Honour found no breach of such term by the NLA.
Limitation Issue
His Honour found at [249] that, had there been any disclosure of the appellant’s tender, it must have been made in 1996 and probably before 1 November 1996. The appellant conceded it must have occurred at the latest by 18 February 1997. Accordingly his Honour concluded that the limitation period had expired for proceedings for either breach before commencement of the proceedings in this court. Accordingly his Honour then considered whether there was any basis under s 33 of the ACT Limitation Act to extend the time in which to bring such proceedings.
At [264] his Honour found that the appellant could only succeed if it proved:
that the [NLA] either:
(i) actively or intentionally hid a fact that it was necessary for the plaintiff to plead to constitute a cause of action; or
(ii) failed to disclose such a fact which it was under a duty to disclose; or
(iii) knowingly committed a legal wrongdoing of the kind that can properly be raised in an action to which s 33 of the ACT Limitation Act applies.
His Honour found at [265] that there was no evidence of disclosure as claimed by the NLA and accordingly concluded at [266] that there was no basis for the application of s 33 of the ACT Limitation Act. In consequence the appellant’s action was barred by virtue of the operation of s 11 of that Act.
Release
The primary judge then considered the effect of the Deed, and of the Release contained therein, together with the question of Anshun estoppel. At [277] the primary judge stated that even if he were in error in his finding about the existence of a ‘tender process contract’ or its terms, the obligation of confidentiality which the appellant claims was implied was ‘so related to the tender process that it should have been included in the Federal Court proceedings’. Such was evident from the very terms of the appellant’s solicitors’ letter which, in foreshadowing litigation against the NLA (before the commencement of the Federal Court proceeding), stated that the NLA had ‘failed to maintain confidentiality in relation to the [appellant’s] tender documentation’.
At [280] the primary judge observed that the Deed provided for a discontinuance by the plaintiff which did not constitute a judgment. Accordingly his Honour, upholding the submissions of the appellant that the Anshun estoppel principle had no application, found that the principle can only operate ‘where there has been some finding or determination of the earlier proceedings that allows it to apply.’
As to the effect of the Deed, his Honour considered the NLA’s counterclaim which raised the issue of the effect of the Release contained in the Deed from [284]–[319]. His Honour concluded at [319]:
I have no doubt that these proceedings are within the terms of the Deed of Settlement and the plaintiff had, thus, released the defendant from any liability that it could have suffered in these proceedings.
The primary judge considered the claim for damages for breach of the Deed, but found that such relief would be adequately met by an award of costs, being the actual costs of defending the proceedings: see [326].
Reliance on the Deed
The primary judge considered the claim of the appellant that NLA could not rely on the Deed because it had breached it by failing to keep the terms of the Deed confidential. The appellant claimed that disclosures were made to a freelance journalist, Frank Bernard Cassidy. However his Honour concluded at [368] that there was no evidence to suggest that, if there were a breach of the non-disclosure term in the Deed, it was unconscionable: rather the disclosure may have been made by ignorance, by mistake or without authority. His Honour said at [372] that he was prepared to accept that there was a breach of cl 5 of the Deed through one of these causes but the evidence was inadequate to make any final conclusion on this question.
As a result the appellant’s claims were dismissed and an award of indemnity costs was made against the appellant arising out of the counterclaim.
The nature of this appeal
The nature of an appeal to this Court from a decision of a single judge of the Supreme Court was recently considered by this Court in Stone v The Owners Units Plan 1214 and Ors [2014] ACTCA 14 at [31]–[33]:
This appeal is in the nature of a rehearing on the evidence which was before the primary judge. This court may in certain circumstances receive fresh evidence on the hearing of such an appeal, but no application was made to lead fresh evidence in this appeal. The nature of such an appeal was examined by the High Court in Fox v Percy (2003) 214 CLR 118, where, in a frequently quoted passage, the plurality (Gleeson CJ, Gummow and Kirby JJ) said at [22]-[23] and [25]:
The nature of the “rehearing” provided in these and like provisions has been described in many cases... The “rehearing” does not involve a completely fresh hearing by the appellate court of all the evidence. That court proceeds on the basis of the record and any fresh evidence that, exceptionally, it admits. No such fresh evidence was admitted in the present appeal.
The foregoing procedure shapes the requirements, and limitations, of such an appeal. On the one hand, the appellate court is obliged to “give the judgment which in its opinion ought to have been given in the first instance”. On the other, it must, of necessity, observe the “natural limitations” that exist in the case of any appellate court proceeding wholly or substantially on the record. These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses’ credibility and the “feeling” of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole...
Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge’s reasons. Appellate courts are not excused from the task of “weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses and should make due allowance in this respect.
[citations omitted]
The plurality then quoted from the decision of the majority in Warren v Coombes (1979) 142 CLR 531 at 551:
[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it.
In the case of Abalos v Australian Postal Commission (1990) 171 CLR 167 McHugh J, with whom Mason CJ, Deane, Dawson and Gaudron JJ agreed, said concerning the nature of such an appeal at 178:
In S.S. Hontestroom v S.S. Sagaporack [1927] A.C. at 37 at p. 47, Lord Sumner pointed out that:
“not to have seen the witnesses puts appellate judges in a permanent position of disadvantage as against the trial judge, and, unless it can be shown that he has failed to use or has palpably misused his advantage, the higher Court ought not to take the responsibility of reversing conclusions so arrived at, merely on the result of their own comparisons and criticisms of the witnesses and of their own views of the probabilities of the case. The course of the trial and the whole substance of the judgment must be looked at, and the matter does not depend on the question whether a witness has been cross examined to credit or has been pronounced by the judge in terms to be unworthy of it. If his estimate of the man forms any substantial part of his reasons for his judgment the trial judge’s conclusions offact should, as I understand the decisions, be left alone.”
Consequently, where a trial judge has made a finding of fact contrary to the evidence of the witness but has made no reference to that evidence, an appellate court cannot act on that evidence to reverse the finding unless it is satisfied “that any advantage enjoyed by the trial judge by reason of having seen and heard the witnesses, could not be sufficient to explain or justify the trial judge’s conclusion”: Watt or Thomas v Thomas [1947] A.C. 484, at p. 488.
The appellant’s case before the primary judge hinged on the propositions that there were unique features to the tender it submitted, and that the NLA had provided information about those unique features to Decoin; Decoin incorporated the appellant’s features in its design; and Decoin was selected as the successful tender. As the primary judge observed, there was no direct evidence that information from the appellant’s tender had been provided to Decoin. Instead, the appellant argued this was “to be inferred from the uniqueness of [the appellant’s] tender and the similarity between the building that Decoin built, particularly given the differences between Decoin’s tender proposal and the building [Decoin] built that can only be explained by the alleged disclosure.” The appellant’s case, as so expressed, faced significant hurdles, not the least of which were the principles found in Briginshaw v Briginshaw (1938) 60 CLR 336, where Dixon J said at 362:
[R]easonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences.
Before the primary judge, witnesses were called by the respondent, including members of the respondent’s tender sub-committee and the managing director of Decoin, who gave evidence denying that the NLA had disclosed details of the appellant’s tender to Decoin. As such, the credibility of those witnesses was important, and due weight must be given to the advantage held by the primary judge in having seen and heard the witnesses.
Notice of appeal
The notice of appeal seeks to set aside the findings of the primary judge. Such notice was not prepared by a legal practitioner but by Mr Wagdy Hanna on behalf of the appellant. The grounds of the appeal are stated to be:
Facts supported by documentary evidence had been disregarded in favour of incorrect Oral evidence given by mistake or deliberately by the defendant representatives.
And
His Honour mistook the facts and/or did not refer to relevant matters’
And this lead to the wrong application/interpretation of the law.
The notice of appeal also foreshadowed that the appellant would seek to put further evidence before the Court consisting of a variety of documents (described at [36] below).
The notice of appeal proposed that the appeal be dealt with on written submissions. However at a directions hearing held on 10 February 2014 this application was abandoned.
The Court also at that directions hearing drew the appellant’s attention to the fact that conduct of the case by Mr Hanna on behalf of the appellant would require leave of the Court pursuant to Court Procedures Rules 2006 (ACT), r 30. The Court records show that leave was subsequently granted to permit Mr Hanna to conduct the hearing on behalf of the appellant without legal representation.
At the hearing of this appeal on 20 February 2014, Mr Hanna provided the Court with extensive written and oral submissions in support of the appellant’s appeal. Mr Hanna’s written submission ranged widely over the minutiae of the evidence presented to the primary judge, often with little obvious purpose. We do not propose addressing every factual issue identified by Mr Hanna, and we will restrict ourselves to addressing those issues we perceive as important to the resolution of this appeal.
Additional Evidence
The evidence which the appellant seeks to adduce on this appeal constitutes ‘additional evidence’. The usual rule is that a court, on appeal, shall not receive such evidence except on special grounds. However, it has been recognised that it is impossible to provide an exhaustive statement concerning those facts which constitute ‘special grounds’: see Re Chennell (1878) 8 Ch D 492 at 505 per Jessel MR and see Vasiljeve v Public Trustee [1974] 2 NSWLR 497; Martin v Abbott Australasia Pty Ltd [1981] 2 NSWLR 430 at 436; Murphy v Stone-Wallwork (Charlton) Ltd [1969] 2 All ER 949; [1969] 1 WLR 1023 at 1035; Mulholland v Mitchell [1971] AC 666 at 676, 679, 681; [1971] 1 All ER 307.
Essentially, the conditions which are required to be satisfied before circumstances can be said to be ‘special circumstances’ include the credibility of the evidence, its probative value and the question whether parties seeking to adduce such evidence had acted diligently to find the evidence so that it may be concluded that the evidence would not have been available for use at the trial: Greater Wollongong City Council v Cowan (1955) 93 CLR 435 at 444; 29 ALJR 36 at 38; Preston v Green (1944) 61 WN (NSW) 204; Akins v National Australia Bank (1994) 34 NSWLR 155 at 160.
In Tran t/as Canberra Direct and as Canberra Mailing v Calvista Australia Pty Ltd [2010] ACTCA 5, this Court, after reviewing the authorities concerning the reception of additional evidence on appeal, said at [30]:
It is clear from the authorities that relevant factors to be considered when an application is made to receive further evidence on appeal include:
· The reason why the further evidence was not adduced at trial;
· The steps taken or which could have been taken to have the further evidence available at trial; and
· Whether the admission of the further evidence would have had an effect on the outcome of the trial.
The evidence which the appellant now seeks to adduce in this appeal (at [23] above) was evidence which was readily available to it before the commencement of the hearing before the primary judge, and could have been adduced if the appellant’s then legal advisers considered it was probative.
Where the court is satisfied that additional evidence is sought to be adduced in order, in effect, to allow what would amount to a re-hearing of the proceedings before the primary judge, it will readily conclude that the introduction of the evidence would be contrary to the interests of the administration of justice: see Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175. As Gibbs CJ, and Wilson, Brennan and Dawson JJ observed in Coulton v Holcombe (1986) 162 CLR 1 at 7:
It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish.
A corollary of this principle is that parties are expected to adduce all relevant evidence at the trial.
In an affidavit sworn 21 January 2014 in support of the application to adduce fresh evidence, Mr Hanna was at pains to point out that the documents he now wants to adduce were all discovered documents of which both parties before the primary judge were well aware at the time of trial. This does not assist the appellant, as it strongly suggests that a forensic decision was made by the then legal representatives of the appellant not to tender the documents. This should not be interpreted as a criticism of the appellant’s former legal representatives; indeed, in our view, the decision not to tender these documents at trial was correct.
Furthermore, it seems that there was no other reason not to use the documents at the trial. There is no suggestion that there was any substantive obstacle to the appellant’s use of the documents at the trial that has only now been overcome.
In his affidavit in support of the application to adduce additional evidence, Mr Hanna identifies the purpose for the proposed tender of the documents as:
(a) Establishing the tendency of the NLA to mislead the court;
(b) Establishing the tendency of the NLA to withhold information and provide half-truths;
(c) Establishing the tendency of the NLA to frustrate the discovery of material; and
(d) Establishing that the tendency of the NLA to withhold information continues to the present date.
Having carefully considered the approximately 250 pages of documents the appellant wants to adduce as additional evidence, we are not satisfied that they were relevant to the issues which were contested before the primary judge. The documents the appellant now wants to adduce are essentially documents relevant to a complaint made by another tenderer, prolix and argumentative documents prepared by Mr Hanna for the purposes of the dispute between the parties, extracts from transcripts of the proceeding before the primary judge and correspondence between the NLA and Decoin in 1997 concerning Decoin’s failure to respond to requests on the progress of design issues. It would be an unproductive use of the time of this Court to describe each document and demonstrate that each was irrelevant or, at least, incapable of affecting the outcome of the appeal, but we are satisfied that this is the case.
We note also that on appeal, the appellant sought to tender material solely for the purpose of damaging the credibility of the respondent, which had been established by the primary judge. Since that material was available at the trial, the tender seems to us to be a particularly egregious attempt to revisit, on this appeal, the trial judge’s finding on credibility.
For these reasons we reject the application to adduce fresh evidence.
The effect of the Deed
Leaving aside other matters sought to be raised by the appellant, we consider that a critical issue is whether the appellant can maintain these proceedings in view of the releases provided in the Deed.
The critical agreement made between the parties is found in paras 1-5 of the Deed dated 14 May 1999. Those paragraphs provide:
1. Upon execution of this deed [the appellant] and the [NLA] will execute a Notice of Discontinuance with no order as to costs, which will be filed with the Court forthwith.
2. Neither [the appellant] nor the [NLA] shall take or continue any action against the other in respect of the allegations and each party covenants not to sue the other in respect of any matter arising out of or in any way related to the discontinued proceedings.
3. Hanna hereby releases and forever discharges the [NLA] from all actions, suits, proceedings, causes of action, claims and demands of whatsoever kind which [the appellant] may have had, now has or, but for this deed, may hereafter have against the [NLA], arising out of or in respect of any of the allegations.
4. The [NLA] hereby releases and forever discharges [the appellant] from all actions, suits, proceedings, causes of action, claims and demands of whatsoever kind which the [NLA] may have had, now has or, but for this deed, may hereafter have against [the appellant], arising out of or in respect of the proceedings.
5. [The appellant] and the [NLA] have agreed that the details of the contents of this Deed shall not be disclosed, except as required or authorised by law or in order to comply with a request by a Commonwealth Minister or the Parliament.
It is significant that the recital to the Deed refers to the claim brought by the appellant against the NLA, which was stated to be as follows:
(i) formation and breach of a tender process contract;
(ii) misleading and deceptive conduct by the Library within the meaning of section 52 of the Trade Practices Act 1974;
(iii) negligence; and
(iv) estoppel (‘the allegations’).
‘The proceedings’ were those identified as the Federal Court proceedings brought against NLA by the appellant in No AG 52 of 1998 in the Federal Court of Australia.
The principles concerning the interpretation of a deed of release are conveniently summarised by the High Court of Australia in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165. At [40] the Court said:
This Court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.
[Footnotes deleted]
The actual interpretation of clauses of a deed was considered by the New South Wales Court of Appeal in Marinchek v Cabport Pty Ltd [2010] NSWCA 334. At [37] of its decision the Court referred to the observations of Gleeson CJ in International Air Transport Association v Ansett Australia Holdings Limited & Ors (2008) 234 CLR 151 at [8] where Gleeson CJ said:
In giving a commercial contract a businesslike interpretation, it is necessary to consider the language used by the parties, the circumstances addressed by the contract, and the objects which it is intended to secure. An appreciation of the commercial purpose of a contract calls for an understanding of the genesis of the transaction, the background, and the market. This is a case in which the Court's general understanding of background and purpose is supplemented by specific information as to the genesis of the transaction. The Agreement has a history; and that history is part of the context in which the contract takes its meaning. Before considering that history, it is necessary to explain, by reference to the text, how the issue of construction arises.
[Footnotes deleted]
In Commonwealth Development Bank of Australia Ltd v Kok (2003) FCA 90 Beaumont J said at [34]:
In the first place, it is a settled principle of interpretation that general words in an instrument of release are limited always to that thing, or those things, which were especially in the contemplation of the parties at the time when the release was given.
To similar effect, the majority of the High Court of Australia (Dixon CJ, Fullagar, Kitto and Taylor JJ) in Grant v John Grant & Sons Proprietary Limited (1954) 91 CLR 112 at 131-2 said:
The question is whether upon a proper interpretation of the deed the general release clause should be restrained to matters in dispute within the meaning of these recitals. The question depends primarily on the application of the prima facie canon of construction qualifying the general words of a release by reference to particular matters which recitals show to be the occasion of the instrument. But it is also affected by the general tenor of the deed. It is unnecessary to say more about the canon of construction or to discuss further the contents of the deed. As to the first all that remains is to apply the principle that prima facie the release should be read as confined to the matters forming the subject of the disputes which the deed recites. As to the second, such indications as can be found in the provisions of the deed point rather in the same direction. The detailed character of the terms of settlement, the careful readjustment of rights, the specific reference to the debt of H. C. Grant and his wife and its discharge and the particularity of the allocation of things and contracts between the companies do not favour the view that a general release was intended going outside the actual area of dispute.
The terms of the Deed between the appellant and the NLA clearly demonstrate that the parties intended to exclude any further litigation between them ‘in respect of any matter arising out of or in any way related to’ the discontinued proceedings (paragraph 2) or “arising out of or in respect of any of the allegations” (paragraph 3). The width of such words clearly encompasses the present proceedings since they are proceedings which, if not arising out of the discontinued proceedings, are certainly ‘related to them’. The proceedings before the primary judge were not the same as those commenced in the Federal Court, but they were certainly proceedings which would not have been commenced but for the fact that the appellant had tendered to the NLA. The words ‘or in any way related to’, as was observed by the primary judge in his decision at [314], are of very wide import: see IBM Australia Ltd v National Distribution Services Pty Ltd (1991) 22 NSWLR 466 at 477, 483, 487; Fairey Australasia Pty Ltd v Joyce [1981] 2 NSWLR 314 at 322-3; Smith v Australian Woollen Mills (1933) 50 CLR 504 at 517-518; Comandate Marine Corp v Pan Australian Shipping Pty Ltd (2006) 157 FCR 45 at 90-1; [176]. The Court acknowledges that the Deed terminated the Federal Court proceedings and that by virtue of clauses 3 and 4 of the Deed, set out above, the action in respect of the allegations was discontinued as was the proceedings. However, the Deed, by virtue of its extension to ‘any matter arising out or in any way related to’ the discontinued proceedings, extends beyond the ambit of the dispute which was then before the Federal Court, and not merely to ‘the allegations’. The reference in the Deed to ‘the allegations’ is clearly intended to mean all of the causes of actions referred to. The words ‘arising out of’ or ‘in any way connected to’ are expansive words, to which effect must be given. The use of the words “related to” suggests a connection between the subject matters. With respect to statutory interpretation on this subject, see Fountain v Alexander (1982) 150 CLR 615 at 629; see also PMT Partners Pty Ltd (in liq) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 at 313.
We are satisfied that his Honour was correct in concluding that the release contained in the Deed was sufficiently wide to include the conduct of the tender process and any breach of any alleged duty owed by the NLA. The Federal Court’s pleading referred to the tender process contract alleged by the appellant as regulating ‘the procedures to be followed and the criteria to be applied in the award of the [tender]’.
We concur with his Honour’s finding at [319] that the proceedings before the primary judge fell within the ambit of the terms of the Deed and that the Deed therefore released the NLA from any liability for which it might be liable under the claim before the primary judge.
In his written submissions, the appellant did not address the finding by the primary judge that the NLA was not estopped from relying on the terms of the Deed by its prior breach of the Deed’s term providing for confidentiality of its terms. For completeness, we record that we agree with the primary judge’s conclusion, and with his reasons.
The Limitation Act defence
The appellant sought to argue that the primary judge was wrong to find that any cause of action it pleaded was not maintainable by virtue of the operation of the ACT Limitation Act. As we have already observed, the appellant sought to plead two alternative causes of action: breach of confidence and unjust enrichment. We respectfully agree with the observation of the primary judge that there is no separate, recognised cause of action in this country for unjust enrichment: Lumbers v W Cook Builders Pty Ltd (In Liquidation) (2008) 232 CLR 635 at 665; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [150]-[152]. The relevant limitation period, as identified by the primary judge, was that which applied to the cause of action in breach of confidence. The limitation period established by s 11 of the ACT Limitation Act for a cause of action in breach of confidence was 6 years from the date when the cause of action accrues. The appellant argued that the limitation period had not commenced to run because the NLA had continued to have the benefit of the appellant’s design.
The obligation to maintain confidentiality in the contents of the tender was found by the primary judge to be contractual. As such, any cause of action available to the appellant in breach of confidence accrued when the breach of the condition of confidentiality occurred. In contrast, in a recognised restitutionary claim, such as a quantum meruit, time runs from the date the party receives a benefit that gives rise to an obligation to make restitution: Coshott v Lenin [2007] NSWCA 153 at [17]. The appellant’s claim, however, was not in the nature of a quantum meruit and, in any event, on the appellant’s own case the NLA received the benefit at the time that it incorporated confidential features of the appellant’s tender into the final design of the facility without having to pay the appellant for that information and design concept: paragraph 9 of the appellant’s Statement of Claim. In this paragraph of the Statement of Claim, the appellant identified its loss suffered as a consequence of the alleged breach of confidence, being that it was not paid for its design concept; this concept, the appellant says, having been incorporated into Decoin’s ultimate design, allowed the NLA to achieve savings which would not have been achieved if the storage facility had not been constructed using those elements of the design concept that the appellant said were leaked to Decoin.
The purpose of the appellant submitting a tender was, effectively, to sell the design concept to the NLA. Any “savings” which the NLA could achieve by utilising the appellant’s design (as opposed to some other design) would be to the benefit of the NLA, and not the appellant. The benefit the NLA received, therefore, from any breach of a duty to maintain confidentiality, whether contractual or equitable, was avoiding payment for, the designs that the NLA subsequently used. That benefit would have accrued when Decoin incorporated any confidential elements of the appellant’s design into the final design, which was accepted by the NLA. As such, even if the appellant had put forward some form of restitutionary claim, the limitation period for that claim would have commenced only slightly later than that for a claim in contract.
The appellant’s argument before us, that the limitation period did not run because the NLA had continued to have the benefit of his design, is for this reason untenable. Any cause of action upon which the appellant relied in the proceedings before the primary judge accrued at the time of any breach of the obligation of confidentiality constituted by the NLA providing that information to Decoin. The evidence established that this must have occurred, on the appellant’s case, before the revision of the original Decoin design. We agree with the observation of the primary judge that the case pleaded by the appellant was that the revision of the Decoin design must on the appellant’s case have occurred “prior to [the NLA] finalising its choice of tenderer”, which the evidence established occurred no later than 18 February 1997. The Originating Application commencing the appellant’s action against the respondent was not lodged until 8 May 2003, outside the 6 year limitation period. The primary judge was correct in determining that if any breach of the obligation of confidence had occurred (which he rejected), the proceeding commenced by the appellant was commenced outside the 6 year period provided by the ACT Limitation Act.
At trial, the appellant argued that the NLA had committed fraud, deceit or deliberate concealment of the relevant facts and that this deferred the limitation period: s 33 ACT Limitation Act. As the primary judge correctly determined, the suggested operation of s 33 depended on a finding of fact that there had been a disclosure by the NLA of confidential information to Decoin. If the appellant could not prove that the NLA had disclosed confidential information from its tender to Decoin, s 33 had no operation.
The alleged disclosure of confidential information
We have, to this point, concentrated upon the defences raised by the NLA in the proceedings before the primary judge, but the appellant’s most significant hurdle in this appeal is the finding by the primary judge that there had been no disclosure of confidential information by the NLA to Decoin. That finding, of course, was fatal to the appellant’s case.
As we have already observed, the case presented by the appellant to the primary judge was circumstantial and, as expressed by the primary judge, depended upon establishing that “the features in what Decoin ultimately built on the storage facility were so unique, or novel, that it could only have been so built if the [appellant’s] tender had been disclosed to Decoin.” Those features of the appellant’s design included in its tender which it identified as unique were:
(a) Shelving dimensions;
(b) Nett lettable area of 2,500 square metres;
(c) Annual rent of $477,200;
(d) Wall materials; and
(e) Mechanical retrieval systems.
The primary judge considered each of the features in turn. With respect to the shelving, the primary judge noted that both the appellant and Decoin sought advice from a company which manufactured shelving, Brownbuilt Pty Ltd. The manager of that company, Mr Ian Stephenson, gave evidence that he was approached by both the appellant and Decoin in preparing their respective tenders, and gave each advice and provided quotations. Each party knew that he was providing a quotation for the other. He recommended the same shelving to each tenderer. Mr Stephenson was also aware that each tenderer was proposing to provide for the same mechanical retrieval system, a “Crown stockpicker”. As far as the height of the proposed shelving was concerned, the primary judge carefully identified the evidence concerning the initial Decoin tender, and its evolution to the final constructed product, before concluding at [85]:
Accordingly it does not seem to me that the height of the shelving was unique in any relevant way. It was an inevitable function of the imperative to maximise the floor area and the possible reach of the mechanical retrieval system and the likely result of the advice that Mr Stephenson gave, which advice was available to each tenderer.
Turning to the nett lettable floor area, the primary judge noted that the proposed lettable floor area in the appellant’s tender was 2,500 square metres, while that of Decoin was 2,973 square metres. Subsequently, the Decoin tender was revised to 2,734 square metres, and was ultimately constructed as either 2,648 square metres or 2,556.6 square metres, both figures being referred to in the evidence. The primary judge noted that the last of these figures is very similar to the size of the appellant’s proposed building. The primary judge then said (at [88]–[89]) that:
It seems to me, however, that the area is so much a function of a significant range of other matters that it is hardly a necessary or useful mark of uniqueness, unless all the other features are identical. Some of those other features were said by Mr Stodulka to be different from the plaintiff’s original tender proposal and he was not relevantly challenged. Some features, of course, were the same, such as the need to have aisles of a size to accommodate the stockpickers, which would thus have to be the same, a proposition embraced by Mr Hanna.
It seems to me that while the plaintiff’s floor area may be unique as a number it is not so in a relevant way. Two things are important: the floor area is a product of the configuration of the building, which was primarily designed, of course, for storage of books and similar materials on shelves provided in rows and thus likely to be similar in all proposals to meet the specifications and that it depended on such a range of components that it did not provide a valid measure of whether the underlying components were unique.
The next unique feature identified by the appellant was annual rent. Like the primary judge, we find it difficult to understand the way in which this was put forward by the appellant as a unique feature. In written submissions in support of the appeal, Mr Hanna focussed on what he perceived to be the unique benefits for the respondent in the appellant’s tender, benefits he believed were not matched by Decoin’s tender. This reveals a misunderstanding on the part of Mr Hanna on the nature of the appellant’s asserted cause of action. The proceedings before the trial judge were based on the assertion that the NLA had provided confidential information from the appellant’s tender to Decoin. It was no part of the function of the primary judge to compare the appellant’s tender to that of Decoin for the purpose of determining, in his opinion, whether the appellant’s was the better, or more compliant, tender. The only purpose of a comparison between the tenders, and between the tenders and the constructed facility, was to determine whether an inference could be drawn that the NLA had provided the appellant’s confidential tender information to Decoin.
The primary judge noted that the evidence as to how to Decoin came to the final annual rent amount showed factors quite independent of the features of the tenders that, in the case of the appellant’s tender, the appellant said were unique. It appears that this evidence was not challenged by the appellant in the proceedings before the primary judge. The primary judge concluded at [94]:
Thus, while the actual amount of the rent may be unique, it is such a composite figure that it cannot be said to be a relevant feature showing that there was a uniqueness justifying a conclusion that there had been a disclosure of the plaintiff’s tender.
The fourth feature identified by the appellant as unique in its tender was the materials used for construction of the walls of the storage facility. The appellant had proposed “pre-finished double layer of heavy duty colour bond with internal insulation”. Decoin’s tender proposed the use of cavity brick walls with insulation which was, as the primary judge observed, quite different from the appellant’s proposed wall construction. What was ultimately constructed was something different to both tenders. A proprietary product known as Equitilt was used for the wall construction. This product consisted of “a stressed skin sandwich panel, comprising Colorbond pre-painted steel skins continuously laminated over a fire retardant treated Expanded Polystyrene (EPS) core”. This product had a superficial similarity to the construction method proposed by the appellant, in that both involved insulation sandwiched between two layers of metal cladding.
The product which was used by Decoin was an industry standard product, readily available for purchase. This fact, in itself, was a significant impediment to any suggestion that an inference could be drawn that the design or construction of the storage facility walls was based upon the provision of confidential information to Decoin. In addition, the materials the appellant proposed using for the walls of the facility were also industry standard. There was, however, evidence of differences between the design and construction of the walls as proposed by the appellant compared with the walls finally constructed by Decoin. The managing director of Decoin described the materials he used and those in the plaintiff’s tender as different. He testified that the BHP product proposed by the plaintiff was not “a laminated product like Equitilt”. The trial judge concluded at [103]:
While at some level, there may be a descriptive similarity between the two methods of wall construction, I am not satisfied from the evidence that the plaintiff’s wall material was unique; it was clearly a readily available product which was not, in fact, the product ultimately used in the construction of the storage facility itself.
Finally, the primary judge considered the materials retrieval systems proposed by the appellant and Decoin, and noted that each tender proposed utilising a “Crown” brand stockpicker. The primary judge concluded that there could be no suggestion that the appellant’s proposed materials handling system was unique.
In addition to separately examining each of the supposedly unique features of the appellant’s design, the primary judge also considered whether the features viewed in combination suggested uniqueness, such that it could be inferred that confidential information had been supplied to Decoin. He concluded:
I am not satisfied that there was in the relevant sense any uniqueness or novelty in the facility proposed by the plaintiff in its tender such that similarities with the proposals in the other tenders, especially that of Decoin, could only be explained by Decoin gaining knowledge of the plaintiff’s tender.
The primary judge acknowledged that the tender provided by Decoin evolved after the close of tenders to have features similar to those in the appellant’s tender. His Honour examined each of those features and identified the evidence explaining the evolution of those features in Decoin’s tender. The primary judge concluded that there were rational and credible explanations provided for these changes, which did not involve access to any confidential information in the appellant’s tender.
With respect, we agree with the primary judge’s conclusions and reasons. The primary judge gave cogent, and indeed compelling, reasons for reaching his conclusion that any similarities between the appellant’s tender and the building constructed by Decoin were not the result of Decoin having access to confidential material in the appellant’s tender.
Conclusion
For these reasons, the appeal must be dismissed.
In the light of the costs orders made by the primary judge, based upon the terms of the Deed, we think the proper costs order in these proceedings is that the appellant pay the respondent’s costs on an indemnity basis, but we will delay the making of that order for a period of 28 days to allow the parties to file written submissions if they wish.
| I certify that the preceding sixty-nine [69] numbered paragraphs are a true copy of the Reasons for Judgment of the Court of Appeal. Associate: Date: |
4
22
2