Gazcorp Pty Limited v Woolworths Group Limited - [2020] NSWSC 1836 - NSWSC 2020 case summary — Zoe

NSWNSWSC

Gazcorp Pty Limited v Woolworths Group Limited

[2020] NSWSC 1836

Supreme Court of NSW|2020-12-11|Before: Ward CJ

View original source

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2020-12-11

Before

Ward CJ

Catchwords

[1999] FCA 388 First Capital Partners Pty Ltd v Sylvatech Ltd (2004) 186 FLR 266
[2004] NSWSC 846 Galafassi v Kelly (2014) 87 NSWLR 119
[2008] FCA 701 Liu v Fairfax Media Publications Pty Ltd (2012) 84 NSWLR 547
[2012] NSWSC 1352 Liu v Fairfax Media Publications Pty Ltd (2012) 91 ACSR 158

Source

Original judgment source is linked above.

Catchwords

[1999] FCA 388 First Capital Partners Pty Ltd v Sylvatech Ltd (2004) 186 FLR 266[2004] NSWSC 846 Galafassi v Kelly (2014) 87 NSWLR 119[2008] FCA 701 Liu v Fairfax Media Publications Pty Ltd (2012) 84 NSWLR 547[2012] NSWSC 1352 Liu v Fairfax Media Publications Pty Ltd (2012) 91 ACSR 158[2012] NSWSC 900 Seven Network Ltd v News Ltd (2006) 151 FCR 450[2006] FCA 343 Silver Fox Company Pty Ltd v Lenard's Pty Ltd (No 3) [2004] FCA 1570

Judgment (17 paragraphs)

[1]

Judgment

HER HONOUR: Before me for hearing on 11 December 2020 was an application, by notice of motion dated 9 November 2020 and filed on 20 November 2020 by the plaintiff (Gazcorp Pty Limited) (Gazcorp), seeking a ruling pursuant to s 192A of the Evidence Act 1995 (NSW) (Evidence Act) that certain evidence contained in an affidavit filed for the defendant (Woolworths Group Pty Limited) (Woolworths) is inadmissible at the final hearing on the basis that such evidence is privileged (under s 131 of the Evidence Act) and/or falls within the terms of an agreement (the Standstill Agreement) reached between Gazcorp and Woolworths (which will be set out in due course) under which agreement certain documents and communications were to be treated as subject to without prejudice privilege.

[2]

Introduction

The substantive dispute between the parties concerns an agreement for lease entered into by the parties on 20 February 2008 (the 2008 Agreement for Lease) in respect of a "Woolworths" supermarket proposed to be built on property owned by Gazcorp in the Green Park development in Alexandria, New South Wales (the Property).
In short, Gazcorp claims that the conduct of the parties over the past ten years is such that the 2008 Agreement for Lease (as executed or varied) has been terminated by frustration or has been mutually abandoned, or is no longer on foot for reasons including conventional estoppel and waiver. Woolworths, for its part, claims that the 2008 Agreement for Lease remains on foot and has cross-claimed that the agreement for lease provides it with an equitable interest in the Property. By its cross-claim filed on 20 November 2019, Woolworths also claims against Gazcorp for damages alleging, inter alia, that Gazcorp made certain representations to the effect that it was committed to pursuing the development contemplated by the 2008 Agreement for Lease (see below) and that these representations amounted to misleading or deceptive conduct in contravention of the Australian Consumer Law (ACL).
On 10 August 2017, the parties entered into the Standstill Agreement whereby they agreed that all negotiations and discussions held, and documents and plans created, by the parties, their representatives or agents in relation to a new Agreement for Lease (the Communications) are without prejudice and that no party shall seek compulsory disclosure of any such Communication. The Standstill Agreement was intended to reflect the operation of s 131 of the Evidence Act (see cl 1).
The issue for hearing before me on 11 December 2020, as adverted to above, was whether certain evidence (itemised in the schedule of rulings attached to these reasons) contained in an affidavit affirmed on 29 May 2020 by Mr Ralph Kemmler and served by Woolworths in the substantive proceedings, as well as certain documents annexed to Mr Kemmler's affidavit, are inadmissible because they fall within the Standstill Agreement or are otherwise privileged under s 131. Woolworths opposes the motion.
Gazcorp relies on a number of affidavits sworn by its solicitor, Ms Jennifer Hold, on 9 November 2020, 3 December 2020 and 8 December 2020. Woolworths relies on the affidavit affirmed by its solicitor, Ms Heloise Woodside, on 26 November 2020.

[4]

2007 Development Consent and alleged variation of the 2008 Agreement for Lease

A Development Consent was granted by the City of Sydney Council in 2007 (the 2007 Development Consent) in respect of the Property, which included approval for the building of the Woolworths supermarket. (The 2008 Agreement for Lease included plans and specifications which accorded with the 2007 Development Consent.)
Between April 2008 and September 2008, the parties negotiated an agreement for lease for a "Big W Store" on the Property (the Proposed Big W Tenancy). Big W is a trading entity of Woolworths. The proposed Big W Store Tenancy was to be separate from the proposed Woolworths lease under the 2008 Agreement for Lease.
The proposed Big W Store was not permitted under the 2007 Development Consent. On 2 July 2008, Gazcorp lodged a development application with the Council (the 2008 Development Application) that incorporated a Big W Store.
Gazcorp alleges that, on about 11 or 12 September 2008, the parties agreed to vary the milestone dates and the works required to be undertaken by Gazcorp under the 2008 Agreement for Lease (the Landlord's Works) so as to accommodate the 2008 Development Application (that is, to enter into the Varied Agreement for Lease), to the effect that: the Approval Date was varied to 30 March 2009; the Date for Practical Completion to 1 October 2010; the Termination Date to 1 October 2011; and the Landlord's Works (envisaged in the 2008 Agreement for Lease) were amended to include new specifications as identified in the 2008 Development Application and a letter sent from Woolworths to Mr Nicholas Gazal (a director of Gazcorp) on 12 September 2008 (the New Landlord's Works).
Woolworths denies that the parties agreed to the Varied Agreement for Lease as claimed by Gazcorp. It admits that the milestone dates were extended, but denies that the Landlord's Works were varied as alleged. It claims that, as at 11 September 2008, plans and specifications for the revised Landlord's Works were yet to be provided to, and approved by, Woolworths.

[6]

Negotiations after the NSWLEC decision

Following the decision of the NSWLEC, Gazcorp alleges that the parties conducted themselves on the basis that the obligations under the Varied Agreement for Lease were no longer to be performed and, from at least March 2010, entered into negotiations with respect to a materially different set of plans and specifications. Gazcorp claims that these negotiations did not result in any agreement by the parties to further vary the 2008 Agreement for Lease or to enter into any new agreement for lease.
Woolworths denies that the parties acted on the basis that the obligations under the 2008 Agreement for Lease were no longer to be performed. It claims that the parties continued to work on revisions to the Landlord's Works following the LEC Decision for some years; that they were involved in ongoing and longstanding negotiations from 20 March 2009 up to the commencement of proceedings and were focussed on a lease being granted to Woolworths for a Woolworths supermarket; but that, ultimately, the negotiations did not result in a wholly new agreement for lease being entered into to replace the 2008 Agreement for Lease.
In relation to Gazcorp's conduct between March 2009 and at least 29 April 2016, when it is said that Gazcorp asserted for the first time that the Agreement for lease was at an end, Woolworths claims that Gazcorp: informed Woolworths that it was committed to pursuing the development that had been approved under the 2007 Development Consent (specifically, on 20 March 2009 and 15 December 2009) but that the milestone dates would need to be varied; entered into negotiations with Woolworths from March to August 2009 for the lease of a Dick Smith and/or Thomas Dux Store in addition to the Woolworths supermarket; from April to August 2009, and provided Woolworths with plans and drawings relating to the revised Landlord's works; on 26 February 2010, wrote to Woolworths proposing that certain revised terms be included in either a variation to the 2008 Agreement for Lease or a replacement agreement for lease (though such terms were not agreed); further proposed variations in a letter on 8 March 2010, which variations were not agreed; on 5 May 2011, requested that Woolworths remove the caveat it placed on the Property on 21 April 2011 because it would make it difficult for Gazcorp to obtain finance, which Woolworths so did on 20 May 2011; on 22 September 2011, agreed to extend the date for practical completion to 1 October 2013; and from about June 2011 to May 2012, issued to Woolworths various iterations of revised draft plans and drawings relating to the revised Landlord's Works, sought feedback on those drawings, and sought and received assistance from Woolworths to prepare its new development application of the Property.

[10]

The 2017 Standstill Agreement

Ms Hold has deposed, in her affidavit of 3 December 2020 (at [16]), that it was Woolworths' change in position that led to the without prejudice correspondence exchanged between the parties from at least early 2017 as to whether they could negotiate a new Agreement for Lease, without prejudice to their respective positions, being: Gazcorp's position that the Varied Agreement for Lease (as entered into and varied) was no longer on foot (i.e., terminated by frustration or mutual abandonment); and Woolworths' position that the 2008 Agreement for Lease was on foot.
From on or about 19 February 2017 to 24 August 2018, the parties discussed and then entered into a Standstill Agreement in August 2017. By that agreement, the parties agreed to have without prejudice negotiations regarding a new agreement for lease (the new Agreement for Lease). The terms of the Standstill Agreement as contained in a without prejudice letter dated 10 August 2017, relevantly, were as follows: We confirm that the protocol for direct discussions in relation to the possible grant of a new Agreement for Lease (2017 AFL) by the parties and their representatives and agents are as follows: 1. The parties agree that: a. all negotiations and discussions between the parties and their representatives and agents; and b. any documents or plans created by the parties and their representatives and agents in relation to the 2017 AFL are without prejudice (even if they are not marked or stated to be on a without prejudice basis) (Communications); 2. The parties agree that no party shall be entitled to rely upon any Communication, statement, representation, document or other communication of any kind whatsoever, including a misrepresentation other than one made fraudulently or recklessly; 3. No party shall seek compulsory disclosure by way of subpoena, discovery or notice to produce of any Communication, other than any document which is expressly stated to be made on an open basis; and 4. No binding agreement will exist between the parties until the 2017 AFL is executed by both parties (including by the way of exchange of counterparts).
Paragraph [72] of the cross-claim pleads the "Standstill Period" as being from 19 February 2017 to 24 August 2018; and Gazcorp does not appear to have disputed that. It is not in dispute that the Standstill Agreement came to an end on 24 August 2018 (see annexure B to the affidavit of Jennifer Hold of 9 November 2020, p. 27).

[11]

Summary of Claims

As adverted to above, Gazcorp claims that, pursuant to cl 14.2 of the Varied Agreement for Lease (or the 2008 Agreement for Lease), Woolworths was obliged within 15 business days of the Approval Date to either terminate the 2008 Agreement for Lease or give notice of a revised Approval Date. It claims that in failing to terminate or provide that notice by 22 April 2009, Woolworths evinced an intention no longer to insist upon performance of the Varied Agreement for Lease (or alternatively the 2008 Agreement for Lease).Gazcorp claims that Woolworths impliedly represented to Gazcorp that it would no longer insist upon performance of those obligations, which representation was relied upon by Gazcorp to its detriment. Furthermore, Gazcorp contends that Woolworths is estopped from insisting upon performance of Gazcorp's obligations with respect of the New Landlord's Works (or alternatively the Landlord's Works) or that it has waived its right to insist.
Gazcorp claims that the Varied Agreement for Lease has been terminated or is no longer in force by reason of frustration of abandonment. It is claimed that: where the 2012 Development Consent made significant and material changes to the to the Plans and Specifications under the Varied Agreement for Lease (or 2008 Agreement for Lease), and where Gazcorp is now unable to carry out or obtain approvals for the New Landlord's Works (or the Landlord's Works), the present situation is fundamentally and/or radically different from the situation contemplated by the Varied Agreement for Lease and that it has been terminated by frustration.
Woolworths denies Gazcorp's claims. By its cross-claim, it alleges that, by its conduct, Gazcorp made representations to Woolworths from about 20 March 2009 to at least 29 April 2016, but no later than 25 December 2016, that it would: work with Woolworths to agree to revised Plans and Specifications (that did not include a Big W store) to be included in the 2008 Agreement for Lease and to agree to extensions of the milestone dates in accordance with the revised plans; and that it was committed to providing a lease to Woolworths for a Woolworths supermarket at the Centre.
In these circumstances, Woolworths further claims that: Gazcorp represented that the "15 Business Days" referred to in cl 14.2 of the 2008 Agreement for Lease would not begin to run until the revised plans and specifications and milestone dates were agreed; and that Gazcorp would not rely upon cl 14.2 as a basis for termination without first providing Woolworths with reasonable notice that it no longer intended that the parties would agree upon the plans and specifications or Landlord's Works before the revised dates under the 2008 Agreement for Lease, and would now be enforcing the 15 Business Day notice period.
As adverted to above Woolworths claims that in making the representations, Gazcorp engaged in misleading and deceptive conduct in contravention of the ACL.
Woolworths further argues that in reliance on these representations, it did not provide the requisite notice under cl 14.2 because it assumed that Gazcorp agreed that the "15 Business Days" would not run until the plans and specifications and the milestone dates were agreed. Woolworths seeks a declaration that Mr Gazal was involved in and had actual knowledge of the misleading and deceptive conduct.
Woolworths claims that in not having provided that notice, it is exposed to a declaration that the 2008 Agreement for Lease has been terminated and may suffer loss and damage, such that it is entitled to a compensation order under s 237 of the ACL in the terms of Orders 4(a), 4(b), 5 and 6 in the relief claimed. It contends that Gazcorp is estopped from claiming that the 2008 Agreement for Lease has been terminated or is no longer in force. In the alternative, Woolworths seeks an order that by Gazcorp's conduct from about 20 March 2009 to at least 29 April 2016, but no later than on or about 15 October 2018, Gazcorp affirmed that the 2008 Agreement for Lease was not terminated under cl 14.2 and thereby waived any right it held under that clause to elect to terminate the 2008 Agreement for Lease.
In the alternative, Woolworths claims that, in circumstances where it was unable to estimate a revised Approval Date and Date for Practical Completion because Gazcorp continued to revise the Landlord's Works, the following words are to be implied in cl 14.2 after the words "15 Business Days": "after the relevant Plans and Specifications or Landlord's Works are agreed"; or "after the relevant Plans and Specifications or Landlord's Works are agreed, so that Woolworths can reasonably estimate the time needed to obtain the Approvals". Further or in the alternative, Woolworths claims that the 2008 Agreement for Lease was varied by agreement to the effect that the above words were inserted.
In relation to Gazcorp's claim that the Varied Agreement for Lease (or the 2008 Agreement for Lease) has been terminated by frustration, Woolworths admits that Gazcorp is not lawfully entitled to carry out the Landlord's Works as specified in the plans and specifications in their initial form as at the date of entry into the 2008 Agreement for Lease but otherwise denies that Gazcorp is not able to obtain approval or to grant a lease as specified.

[13]

Summary of Legal Principles

Section 192A(a) of the Evidence Act provides that the Court may, if it considers it to be appropriate, give a ruling or make a finding in relation to the admissibility of evidence proposed to be adduced before that evidence is adduced if it considers it appropriate.
Section 131(1) of the Evidence Act provides: 1. Evidence is not to be adduced of: (a) a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute; or (b) a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute.
The issue for determination is whether the communication is "in connection" with an "attempt" to negotiate the settlement of the dispute (see Liu v Fairfax Media Publications Pty Ltd (2012) 84 NSWLR 547; [2012] NSWSC 1352 at [78]). The "connection" and "attempt" must be direct, not tenuous (GPI Leisure Corp Ltd (in liq) v Yuill (1997) 42 NSWLR 225 at 226-7; Seven Network Ltd v News Ltd (2006) 151 FCR 450; [2006] FCA 343 at [50]). It is sufficient if the communication or document is directed at arranging or bringing about a settlement (Galafassi v Kelly (2014) 87 NSWLR 119; [2014] NSWCA 190 (Galafassi v Kelly) at [115] per Gleeson JA (with whom Bathurst CJ and I agreed); Hera Resources Pty Ltd v Gekko Systems Pty Ltd [2019] NSWSC 37 at [22]). The privilege does not extend to parts of an otherwise privileged conversation that do not relate to an attempt to settle the dispute (Burg Design Pty Ltd v Wolki (1999) 162 ALR 639 at 646; [1999] FCA 388).
"Dispute" is defined in s 131(5); a reference to a "dispute" is of a kind in respect of which relief may be given in proceedings, but a "dispute" in this sense is not confined to one which is the subject of existing proceedings (Korean Airlines Co Ltd v ACCC (No 3) (2008) 247 ALR 781 at [66]-[71]; [2008] FCA 701; First Capital Partners Pty Ltd v Sylvatech Ltd (2004) 186 FLR 266 at [28]-[37]; [2004] NSWSC 846).
The party who claims that the evidence is excluded as a "without prejudice" communication bears the onus of establishing the factual basis of the claim: Australian Securities and Investments Commission (ASIC) v Rich [2004] NSWSC 1089 at [2]; Liu v Fairfax Media Publications Pty Ltd (2012) 91 ACSR 158; [2012] NSWSC 900 at [38].
Section 131(2) sets out several exceptions. Woolworths argues that s 131(2)(g) applies in this case. That sub-section provides that s 131 does not apply if evidence that has been adduced in the proceeding is likely to mislead the court unless evidence of the communication or document is adduced to contradict or to qualify that evidence (see Galafassi v Kelly).
In Galafassi v Kelly, Gleeson JA reviewed the authorities in relation to s 131 (commencing at [135]) and distilled the following propositions: 135. Section 131(2)(g) applies where the court would be likely to be misled as to the existence or contents of an excluded communication or document, where those matters are in issue in the proceedings: Barrett Property Group Pty Ltd v Dennis Family Homes Pty Ltd (No 2) [2011] at [52], citing Brown v Commissioner of Taxation [2001] FCA 596; (2001) 187 ALR 714 (Brown) at [184]-[185] per Emmett J. 136. Varying views have been expressed as to the breadth of s 131(2)(g). In Brown Emmett J at [183] rejected a broad construction that s 131(2)(g) applies where the evidence sought to be adduced simply contradicts or qualifies evidence that has already been adduced. Emmett J gave a brief exposition of the effect of s 131(2)(g) and at [185] said: "[185] … However, I consider that it will not be attracted simply because evidence to which s 131(1) applies contradicts or qualifies evidence that has already been adduced. Section 131(2)(g) will apply where the court would be likely to be misled as to the existence or contents of an excluded communication or document, where those matters are in issue in the proceeding. …". 137 In Mulkearns v Chandos Developments Pty Ltd (No 4) [2005] NSWSC 511 at [66]-[67] Young CJ in Eq referred to the brief exposition of Emmett J in Brown and held, in relation to a claim by a purchaser for a return of the deposit, that a without prejudice offer made by the vendor to the purchaser in full settlement of the dispute was admissible because unless this additional fact was permitted into evidence, the purchaser may mislead the court into thinking their case is one against a greedy vendor who would not give an inch, and this would be a factor to go to the court's discretion. 138. Subsequently this court in Nader v Sutherland Shire Council [2008] NSWCA 265 at [50]-[52] per Young CJ in Eq (Beazley JA and Sackville AJA agreeing) noted that a prime example of a situation where, if the evidence were not admitted, other material before the court was likely to mislead the court, was provided by Kinsella J in McFadden v Snow (1952) 69 WN (NSW) 8 at 10, where it was put that a tenant had not replied to a letter sent by the landlord. There had in fact been a reply, but in a without prejudice letter. His Honour held that if the without prejudice letter were not admitted it would mislead the court into thinking that there had been no reply to the landlord's letter and thus an implied admission. At [51] Young CJ in Eq said that to qualify under the exception in s 131(2)(g) the relevant material must be presented where otherwise the court is likely to be misled by the existing evidence.
As explained by his Honour (at [116]), "the purpose of s 131(1), subject to its exceptions, is to give "effect to the policy of ensuring the course of negotiations - whether private or by mediation - are not adduced into evidence for the purpose of influencing the outcome on the primary matters in issue"" (there citing Mansfield J in Silver Fox Company Pty Ltd v Lenard's Pty Ltd (No 3) [2004] FCA 1570; (2004) 214 ALR 621 at [36]).

[14]

Submissions

As noted, Gazcorp submits that the documents fall within the Standstill Agreement or are otherwise inadmissible under s 131(2) of the Evidence Act. It contends that any documents sent or prepared by the parties during the Standstill Period in relation to the potential new Agreement for Lease are not relevant to whether the Varied Agreement for Lease (or 2008 Agreement for Lease) has been terminated by frustration or abandonment, because: the Standstill Agreement came about because the parties reached an impasse as to whether the 2008 Agreement for Lease was on foot; there are no facts pleaded in the statement of claim that occurred during the term of the Standstill Agreement; Gazcorp's evidence similarly only extends up to December 2016; and the cross-claim merely pleads the existence of the Standstill Agreement and there are no facts pleaded that occurred during the Standstill Period (there being no allegation of breach of the Standstill Agreement).
Gazcorp further submits that no evidence in the Standstill Period is relevant to the cross-claim, as: Woolworths' allegation that Gazcorp misleadingly represented that it would "work with" Woolworths to agree amendments to the AFL and that it was "committed to providing a lease" to Woolworths only concerns conduct in the period up to 25 December 2016; and Woolworths was on notice that if the amendments to the 2008 Agreement for Lease could not be agreed then the rights and obligations of the parties would "need to be determined", such that the allegation that Gazcorp misleadingly represented that it would give notice before relying upon cl 14.2 (or until the parties agreed amendments) has no relevance to the Standstill Period.
Gazcorp argues that, in circumstances where cl 1 of the Standstill Agreement expressly provides that the agreement is intended to be consistent with the principles under s 131 of the Evidence Act, Woolworths is now seeking to avoid compliance with cl 3. It is submitted that allowing the admission of such evidence at final hearing would be contrary to s 131(1) of the Evidence Act or the Standstill Agreement, and has the potential to generate unnecessary satellite litigation as to whether Woolworths has breached cl 3 by adducing and relying on evidence covered by the agreement.
Woolworths claims that Mr Kemmler's affidavit is Woolworths' primary evidence of its state of mind and reliance on the alleged misleading conduct by Gazcorp, including when the Standstill Agreement was on foot. It is also submitted that it is relevant to Woolworths' case that, at no time before the proceedings commenced did Gazcorp inform Woolworths of the basis on which it alleged (from April 2016) that the 2008 Agreement for Lease was no longer on foot, or refer to cl 14.2 in any of its communications with Woolworths over a decade. It is submitted that an absence of activity would support Gazcorp's claims of abandonment, frustration and conventional estoppel (and hence that Gazcorp might make submissions in relation to the lack of communications that would be inconsistent with the true position as disclosed by the impugned correspondence such that the Court would be misled).
Woolworths argues that as the content of the negotiations concerned agreement of terms of a new Agreement for Lease, and not to settle these proceedings, it is permissible to adduce the evidence in the Standstill Period because Gazcorp would not have had a legitimate expectation that Woolworths would not be able to rely on its own internal documents to evidence in these proceedings that during the Standstill Period, Woolworths considered the 2008 Agreement for Lease to be on foot and was unaware of the basis on which Gazcorp claimed that the 2008 Agreement for Lease had been terminated (citing Dowling v Ultraceuticals Pty Ltd [2016] NSWSC 386 (Dowling) per Hammerschlag J at [37]).
Further, Woolworths contends that a large portion of the evidence that Gazcorp seeks to remove are internal Woolworths documents as to Woolworths' state of mind and/or reliance on Gazcorp's alleged misleading conduct; and not evidence of any settlement offer or admission of liability made during negotiations. It is said that these documents were not created in direct connection with an attempt to settle the proceedings and therefore are not subject to without prejudice privilege (citing Field v Commissioner for Railways for NSW (1957) 99 CLR 285).

[15]

Determination

I note that there had been a conscious attempt by Woolworths to address the concerns of Gazcorp in relation to the impugned documents (and, without conceding that portions of the documents were subject to without prejudice privilege or otherwise caught by the Standstill Period) had agreed to redact or not read certain portions of the impugned documents. During the course of submissions I was taken through the remaining portions of the documents and evidence said by Gazcorp to be inadmissible but pressed by Woolworths.
Relevantly, Woolworths contends that the documents and evidence in question go to the allegations of abandonment and the like - in other words, what is said is that the documents disclose that Woolworths was proceeding at relevant times on the basis or in the belief that the 2008 Agreement for Lease remained on foot (or, perhaps, that there was a proposed agreement for lease that was still operative). It is submitted that there is a risk that the court would be misled if these documents are not in evidence (as there would be the appearance of inactivity in relation to the status of the proposed lease, which was not in fact the case).
In summary, I have concluded that the bulk of the impugned documents and evidence are not inadmissible (as set out in the schedule of rulings annexed) for the following reasons.
As to whether the documents are caught by the Standstill Agreement, this depends on whether they were "created" by the parties, their representatives or agents "in relation to" the proposed new agreement for lease. The Standstill Agreement was expressly intended by the parties to reflect or mirror the provisions of s 131 of the Evidence Act (though in terms it is not precisely on all fours with the legislation, nothing turns on this).
Apart from the first of the impugned evidence (which records something apparently said in discussions between the parties and which I consider would be caught by cl 1(a) of the Standstill Agreement), the material about which complaint is made comprises internal Woolworths' documents that on their face were not prepared or created in relation to the proposed new agreement for lease (or negotiations or discussions in relation thereto) but, rather, as part of or in relation to reviews by Woolworths of a variety of lease sites (including the Green Park site the subject of the proposed new agreement for lease - and of the earlier 2008 Agreement for Lease). The fact that there is a reference in a document of that kind to terms of the proposed agreement for lease does not to my mind bring the document within the Standstill Agreement.
As to s 131 of the Evidence Act, the internal Woolworths' documents are not communications between persons in dispute in connection with an attempt to negotiate a settlement of the dispute; nor (on their face) are they documents prepared in connection with an attempt to negotiate a settlement of the dispute. The fact that they refer to proposed terms of the agreement for lease (in the context of Woolworths' internal property reviews) is not sufficient in my opinion to clothe the documents with without prejudice privilege.
I accept that the purpose of the Standstill Agreement was to allow the parties freely to negotiate new terms for the proposed agreement for lease. I do not consider that admission into evidence of the internal Woolworths' documents would in any way frustrate that purpose. Therefore it is not necessary to consider the applicability or otherwise of the exceptions in s 131(2).
Suffice it to say that I accept that there is an available argument that, if documents evidencing Woolworths' belief at the time as to the existence or otherwise of the 2008 Agreement for Lease are not in evidence, then the absence of such material may create a misleading impression of relevance to the abandonment or conventional estoppel claims.
I accept that Gazcorp would have had a legitimate expectation that internal documents created by Woolworths in the Standstill Period in relation to negotiations for a new agreement for lease would not be used as evidence in these proceedings. However, I do not accept that the impugned documents were created for those purposes.
I attach a schedule of the rulings in relation to the impugned documents. In summary, I have ruled inadmissible only one sub-paragraph of Mr Kemmler's affidavit (28). I add that nothing in these reasons precludes objections to the impugned documents on other bases during the course of the final hearing (for example, on the basis of relevance or the like).

Gazcorp Pty Limited v Woolworths Group Limited

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (17 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (24)