The City of Sydney v Streetscape Projects (Australia) Pty Limited & Anor [2011] NSWSC 942

Supreme Court New South Wales

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 831 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 QC, 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 current controversy 1The 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). 2It 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.