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[2011] NSWSC 1120
Supreme Court of NSW
2011-09-02
McDougall J
Original judgment source is linked above.
Judgment 1HIS HONOUR: The question for decision in these proceedings is whether a deed made between the plaintiff (Hi-Tech) and the defendant (RSL Com) on 24 July 2009 (the deed), to settle litigation, has been terminated by RSL Com for breach by Hi-Tech. That question is to be resolved by reference to the following agreed issues: (1) whether Hi-Tech or RSL Com breached either or both of clauses 4.1 or 11 of the deed; (2) whether any breach by Hi-Tech entitled RSL Com to terminate the deed; (3) whether any breach by RSL Com precluded it from terminating the deed; and (4) whether (if the deed has not been terminated) the Court should order specific performance of the deed, or damages instead of specific performance. 2Before I turn to the substance of the disputes, I record that the hearing of these proceedings was brought on urgently, so that the parties should know where they stood in relation to both the deed and in relation to the earlier proceedings in this Court (290452/2008 - the 2008 proceedings). Accordingly, I am giving this judgment on the morning following the second day of hearing. I shall not refer to all the facts or submissions. What I am about to set out will be (I hope) sufficient to explain my conclusions. 3I record also that, since there was no attack on the credibility of the witnesses in the case, it is unnecessary to deal with that topic. 4For the reasons that follow, I conclude that: (1) each of Hi-Tech and RSL Com breached clause 4.1 of the deed; (2) Hi-Tech's breach was sufficiently serious to justify RSL Com's termination; alternatively, that breach constituted a repudiation that RSL Com was entitled accept and has accepted; (3) RSL Com's breach did not prevent it from terminating; and (4) thus, that the termination was valid. 5Taking those conclusions into account, it is not necessary to consider whether, on the facts as they appear, there were also breaches of clause 11 of the deed.
Factual background 6Hi-Tech is, and before it went into external administration RSL Com was, a reseller of telecommunication services. Hi-Tech bought telecommunication services from RSL Com (before it went into external administration) and other vendors. 7In July 2008, RSL Com commenced the 2008 proceedings. It claimed an amount of about $2.125 million from Hi-Tech for services said to have been provided from 1 June to 22 December 2007 (the period). Hi-Tech asserted that it had paid RSL Com all that was owing for the supply of telecommunication services. It said that RSL Com's records and billing systems were inaccurate. 8In July 2009, the parties agreed, on the terms of the deed, to resolve the 2008 proceedings. The deed provided that the parties would jointly retain an independent expert, on the basis of a letter of instruction, the draft of which was referred to in and a schedule to the deed, to provide a written report on the amount (if any) payable by Hi-Tech to RSL Com for calls carried by RSL Com for Hi-Tech during the period. The parties agreed that the expert's opinion would be final and binding upon them as to any amount so payable. The deed provided further for the way in which the 2008 proceedings would be dealt with on receipt of the expert's report. 9Clause 4.1 of the deed required each party to provide the expert with reasonable access to documentation etc. required by the expert for the purpose of making his determination. Clause 11 was a covenant for further assurance, obliging each party to do what was necessary or desirable to give effect to the terms of the deed. I set out those clauses: 4.1 Each Party must promptly provide the Expert with reasonable access to any documentation, information, hardware, software or data which it uses or maintains which is requested by the Expert for the purpose making the determination in clause 3.1 above. 11. Further Assurances Each of the Parties will do all things necessary or desirable to give effect to the terms of this Deed. 10The parties agreed to appoint Mr Leonard William Rooke as the expert. Mr Rooke made a number of requests for documents, information and data. RSL Com asserts that Hi-Tech has consistently failed to answer some of those requests, and has thereby breached clauses 4.1 and 11. On 12 May 2011, RSL Com gave what purported to be a notice of termination of the deed based on those alleged breaches.
The draft letter of instruction 11It was common ground that, since the draft letter of instruction was referred to in and a schedule to the deed (see clause 3.1 and schedule A), it was relevant to the question of construction of clause 4.1. 12Under the heading "Requested opinion", the draft letter stated, among other things: I shall set out paragraphs 7 and 8 from pages 49 and 50 of the court book: B. Requested Opinion 7. Please prepare a written report expressing your opinion on the amount payable for the calls carried by RSL Com for Hi-Tech in the Period. The written report should contain sufficient reasoning to enable the parties to understand the basis for your conclusion. 8. The disagreement between RSL Com and Hi-Tech is as to the number and duration of the various types of calls carried by Hi-Tech for RSL Com during the Period, including whether charges for particular calls may have been duplicated. There is no disagreement between RSL Com and Hi-Tech as to the rates applicable to the various types of calls. They are as set out in the table annexed hereto and marked " A ". Accordingly, in determining the amount payable by Hi-Tech to RSL Com for the calls carried by RSL Com for Hi-Tech in the Period, your task is limited to ascertaining the number and duration of the various types of calls carried by RSL Com for Hi-Tech in the Period and applying the rates as set out in Annexure A. 13Under the heading "Procedural Matters", the draft letter stated, among other things: C. Procedural Matters 10. Without intending to interfere with your broad discretion in undertake[ing] the work necessary to provide the requested opinion including your speaking to the people you consider you need to speak to and to obtain information as you see appropriate, to the extent reasonably practicable we ask that: (a) All communications to a party should be sent to their legal representatives, being Mr John Biggs at Watson Mangioni Pty Limited on behalf of RSL Com and Ms Lisa Farrand at Piper Alderman on behalf of Hi-Tech or take place with the parties' representatives present. (b) The parties anticipate that it will be necessary for you to be provided with further documentation, information and data from the parties' billing systems and that it may be necessary for you to have access to the hardware and software systems maintained by the parties. Any requests by you to either party for further documentation, information or data or access to the hardware and software systems should be in writing to the legal representative of the party concerned and copied to the other party's legal representative. (c) Any requests for clarification of any matter relating to these instructions or your report should also be sent in writing and addressed jointly to both parties' legal representatives. 11. Each party must promptly provide you with reasonable access to any documentation, information, hardware, software or data which it uses or maintains which is requested by you for the purpose of providing the opinion required by you. 14The protocol for communication that would be established on the terms of the letter of instruction (when sent, and following the appointment of the expert) contemplated that, in the main, communications between the parties and the expert would take place through their respective solicitors, with the other party being copied with each communication. However, as will become apparent, each party offered at least once to make its expert available to Mr Rooke to assist him to understand the material that would be given to him. 15The letter of instruction that was sent to Mr Rooke was, if not identical to then at least not materially different from, the draft.
The requests for information and events leading up to termination. 16Mr Rooke was appointed on 21 September 2009. Before he was appointed, he had been provided with some electronic information to assist him to understand the nature of the task, and to enable him to demonstrate that he was an appropriate person to appoint as independent expert. That information included material contained in seven disks provided by Hi-Tech, which were apparently extracts from its call logs. Those call logs were archived records downloaded from the computer systems used by Hi-Tech to run its business. 17Mr Rooke divided his task into three stages: (1) stage 1: evaluation of each party's capacity to supply adequately detailed call data for his analysis; (2) stage 2: obtaining call data from each party, analysing it to some extent and providing a quotation for the cost of completion of stage 3; and (3) stage 3: preparation of his opinion and provision of the written opinion to the parties. 18On 23 November 2009, Mr Rooke produced a document called "Discovery - Stage 2 (Revised)". That document set out, among other things, the material that Mr Rooke required from each party. Since the format of Mr Rooke's later requests for information followed the format of this document, it is convenient to set those requests out from this document: Hi-Tech - Request for Call Detail Data
First issue: breach of the deed The proper construction of clauses 4.1 and 11. 53There was not a great deal of dispute as to this. Clause 4.1 requires each party to provide Mr Rooke "with reasonable access to any documentation, [etc.] which it uses or maintains which is requested by [Mr Rooke] for the purpose of making [his] determination...". 54The dictionary definitions of "access" include "way, means or opportunity of approach"; and (specifically of computers) "to locate and provide means of getting (information) out of or into a computer storage". (See revised third edition of the Macquarie Dictionary .) Both the general definition and more specific definition relating to computers suggest that "access" involves making something available or accessible. 55Thus, in the context of clause 4.1, the requirement to provide access connotes, in my view, a requirement to make the documentation, etc required by Mr Rooke available to him for his analysis. It is a requirement to make that which is sought accessible, or readable, or capable of use for the purposes of Mr Rooke's analysis and report. 56In the case of electronically stored data, the requirement to give access might include not only providing the data to Mr Rooke by some medium such as a disk or flash drive, but also (if necessary to enable him to read and analyse the data) whatever programs or other information he required to make it meaningful to him. 57The obligation to provide access is limited to "reasonable access". In my view, the adjective qualifies or limits what is to be done, but does not otherwise bear on the connotation of the word "access" in the context of clause 4.1. 58It is not necessary to spend much time on clause 11. It is described as a covenant for further assurance. In my view, it rises no higher, and has no greater effect, than any individual covenant in the deed to which it is, in effect, ancillary. The breaches alleged by RSL Com 59RSL Com relied on three separate failures on the part of Hi-Tech to provide documentation etc. to Mr Rooke: (1) the failure to supply all call transaction logs, as opposed to call transaction logs relating to calls routed by Hi-Tech through RSL Com, in response to item 2 of the "Discovery" document of 15 February 2010 and the requests for information of 8 December 2010 and 4 May 2011; (2) the failure to supply technical information concerning specifications, data structure and field format as referred to in item 2.2 of those requests; and (3) the failure to supply every possible originating number associated with Hi-Tech's customers in accordance with item 3 of those requests. 60RSL Com submitted that those breaches were serious breaches of an intermediate term of the deed. It relied on the context of those breaches, including the repeated requests for information, what it characterised as evasive or incorrect answers, and the repeated warnings given by its solicitors, to justify the proposition that, by 12 May 2011, the breaches were sufficiently serious to justify termination. Alternatively, RSL Com submitted that the conduct of Hi-Tech was repudiatory and that it was entitled to accept that repudiation and terminate the deed accordingly; and that it had done so, if not otherwise then by its defence of these proceedings. 61Hi-Tech submitted that the alleged breaches had not been made out. Alternatively, it submitted, the breaches were not sufficiently serious to justify termination. It relied, in particular, on the fact that it had repeatedly offered to make its expert available to Mr Rooke to assist him in his enquiries: specifically, to assist him to understand the material that Hi-Tech had given him. Hi-Tech submitted further, in relation to the characterisation of the breaches (of course, if there were breaches) as serious or otherwise, that there had been some failure of understanding, in particular in relation to item 2, that should be taken into account in assessing the character of the breach. The breaches alleged by Hi-Tech 62In its "pleaded" case and written submissions, Hi-Tech relied on the following failures on the part of RSL Com to supply information: (1) the failure to supply technical specifications and field format items, as pointed out in item 2 of the request of 5 May 2011; (2) the failure to supply technical information relating to the structure of certain files that had been supplied earlier, as pointed out in item 7 of that request; and (3) the failure to provide a summary of invoiced call data as sought by item 9 of that request. 63Further, in submissions in reply after the evidence was complete, Mr Kelly of Senior Counsel, who appeared with Mr Sulan of Counsel for Hi-Tech, relied also on an alleged breach said to have been constituted by failure to supply billing records relating to carriers other than Hi-Tech. (See item 3 of the request for information of 5 May 2011.) That alleged breach had not been pleaded. Nor was it referred to in Hi-Tech's written outline of submissions exchanged and delivered before the commencement of the hearing. 64Mr Pritchard of Senior Counsel, who appeared with Mr Stephenson of Counsel for RSL Com, submitted that Hi-Tech should not be permitted to rely on the asserted breach of item 3. He pointed out that his client had led evidence in some detail from Mr Rooke on the breaches that had been alleged, and submitted that, by reason of the failure of notification of the point, his client had been prevented from adducing evidence in respect of the asserted breach in relation to item 3. 65Mr Kelly sought to rely on the alleged breach of item 3 in two ways. First, he submitted, that and the other breaches were of such a character that even if Hi-Tech were in breach of the deed (which of course he denied), the breaches alleged against RSL Com were of such a character as to deprive it of the right to terminate. Alternatively, Mr Kelly submitted, RSL Com's failure to supply all records in relation to item 3 of the requests, in particular its assertion that the request "is...not relevant to this investigation", showed that any breach by his client of the like request should not be regarded as sufficiently serious to justify termination. 66I do not think that it is appropriate to allow Hi-Tech to rely on the asserted breach in relation to item 3 as something that should be taken into account in considering whether or not, assuming that Hi-Tech itself was in breach, RSL Com was able to terminate the deed. Nor do I think that the asserted breach in relation to item 3 should be given any evidentiary weight, in circumstances where RSL Com was not given notice, and where, accordingly, it was deprived of the opportunity to lead evidence of the alleged breach and its consequences. It may be - I do not know - that there is some valid reason for asserting that any breach by RSL Com in relation to this item is not of the same gravity or character as any breach by Hi-Tech of the equivalent item. I take into account also that Mr Rooke was not cross-examined at all on the significance of item 3 - another factor that, in my view, makes it inappropriate to give this complaint any evidentiary weight. 67In short, I think, Hi-Tech should be confined to its pleaded case on this issue. Breach by Hi-Tech Item 2 68The first alleged breach relates to item 2. That item called for all call transaction logs (and the word "all" was emphasised by being emboldened and underlined). Hi-Tech had extracted from its records, data relating to calls that had been routed through RSL Com. It did not supply data for calls routed through other carriers. There is no doubt that it could have done so. The evidence of its Systems Engineer, Mr M A C Delfin, is clear on this point. See T 26.19 - 27.3: Q. And what you understood you were being asked to do was to retrieve out of archives call transaction date? A. Concerning transaction data between Hi-Tech and RSL. Q. And you didn't understand your task to be to retrieve all call transaction data for the period; is that right? A. No. My instructions to me was just the whole records between Hi-Tech and RSL. Q. And I take it if you had been asked you could have retrieved the entire call transaction history for customers other than Hi-Tech? A. No. You mean our suppliers other than RSL? No. Q. Sorry? A. No. Q. You could have done, but you just didn't do it; is that what you are saying? A. Yes, because it only involves Hi-Tech and RSL and the instructions to me was to retrieve the call transactions that is between Hi-Tech and RSL, so that is what I do. I did. Q. Thank you. Just so I understand, if you had been asked to retrieve and put on the USB all call transaction records for customers, not just RSL? A. Yes. Q. You could have done that? A. Yes. Q. And the reason you did not do that is you understood your instructions from Mark were to limit-- A. No, not from Mark because-- Q. You understood your instructions from someone-- A. Yeah. From my boss Amadu. Q. Yes, Amadu, to limit what would be on the USB to call transaction records as between Hi-Tech Hi-Tech and RSL only? A. Yes. Q. And if your instructions had been to produce all call transaction documents for the relevant period with all customers, not just between RSL and Hi-Tech, that could have been done and put on to the USB provided on the 15th of September? A. Yes. 69At one point in his cross-examination, Mr Delfin suggested that it might take longer than the three month period to which he had referred (to supply the limited call data) to supply all call data. I do not accept that evidence, but I do not think that Mr Delfin was seeking to give untruthful evidence or to mislead the Court. Rather, I think, there was some lack of correspondence between the question that was asked and his understanding of it. The difficulty was clarified and resolved at T28.48 - 29.10: Q. Okay. Now, please assume that in about June 2010 someone said to you, Please, I don't want this limited to RSL and Hi-Tech, I want the whole call transaction history for the seven month period? A. Mmm. Q. Do you understand what I am asking you? A. Yes. Q. Is it the case that you would have been able to produce that? A. Yes, we would. Q. And would you have been able to produce that by the 15th of September? A. Yes. 70It is also clear from Mr Delfin's evidence that the reason that the full data set was not supplied was that he was instructed only to extract, so that it could be supplied, data relating to calls routed by Hi-Tech through RSL Com. That instruction seem to have been given by Mr Delfin's superior, Mr Amadu Yahaya. Mr Yahaya, who was the Chief Operating Officer of Hi-Tech, was not called to give evidence. Thus, we do not know why it was that he saw fit to limit the production of data in the way that, apparently, he did. 71Mr Rooke gave evidence as to why he regarded it as important for him to have access to all call data, and not just to data relating to calls routed by Hi-Tech through RSL Com. He was not challenged on that aspect of his evidence, and I accept it. 72Mr Kelly submitted that there was sufficient compliance with clause 4.1, in relation to item 2, because of the offer to "make the soft-switch engineer available to discuss your queries". (That engineer was Mr Delfin.) I do not accept that submission. It was Mr Delfin's function to obtain the relevant data (relevant, that is, according to his instructions). No doubt, had there been some question as to the operation of Hi-Tech's systems, or as to the way in which the data was recorded or had been extracted, Mr Delfin could have dealt with those questions. But speaking to Mr Delfin could hardly make up for the lack of data that, Mr Rooke said, he required for the purposes of his analysis. It is not in my view a sufficient response to a request for data to say that the person who supervised the extraction and presentation of the data was available to discuss any queries in relation to it. 73Mr Rooke's position was that he wanted the data. It was not suggested that the data was irrelevant to his analysis. As I have said, his evidence on this point was not challenged. Accordingly, it was no answer to his request to withhold the data but to make available, for enquiry, the person who could have arranged its production. 74On the basis of Mr Delfin's evidence, it cannot be suggested that making the totality of the item 2 records available to Mr Rooke would have caused substantial expense or difficulty. Mr Delfin gave evidence of the elaborate process by which archived call data was extracted from the archived call logs. There are two points to be made in relation to this. The first is that at least part of that elaborate process was necessary because of, and to give effect to, the decision taken by Hi-Tech to limit production to data relating to calls routed by Hi-Tech through RSL Com. The second point is that, as Mr Delfin acknowledged in the passages of his cross-examination that I have set out above, all archived call data for the relevant period could have been produced within the time that it took to produce the limited data set that was in fact given to Mr Rooke. 75Mr Kelly relied on Mr Rooke's response to item 2 in the request of 4 May 2011. I have set that out at [42] above. After repeating the request and the relevant part of the response, Mr Rooke commented on the response. For convenience, I repeat that comment: We accept that the data is in the format as supplied by the equipment. However, as we have not been supplied with the detailed technical information on the data structure as requested we are not able to decipher the fields. CCG reserve the right to revisit this subject upon receiving the detailed data structures requested (see below item 2.2 and other). 76Mr Kelly submitted, based on the last sentence, that Mr Rooke had indicated that he was content for the time being, but that he might return to the subject once he had received the further information requested that would enable him to understand what he had been given. 77Mr Kelly relied also on some evidence given by Mr Rooke in cross-examination at T81.8 - .47. However, in my view, a proper understanding of that evidence requires consideration of the three preceding questions and answers (T80.41 - 81.6). I set out the totality of that part of Mr Rooke's cross-examination: Q. But so far as access to information is concerned, had you had that meeting, but for the termination, you would have had the information that would have enabled you then to go forward to this next step? A. No, we would have found that the calls had been - and identified the calls had been filtered down to just calls between Hi-Tech and RSL Com, and we would have had to have come back and asked for all the other - the information that we'd asked for. Q. What do you mean you would have found out? A. Well, then the information would have identified that it was probably filtered to a single call route. Q. But the information that you got was the same as the information you'd had since August 2009, bar the two extra columns, I suggest. A. Doesn't change the fact that the information was not what we asked for. We asked for all calls, not just calls between Hi-Tech and RSL Com. 78I do not think that it is a fair reading of this part of the document, considered as a whole, that Mr Rooke expressed satisfaction with the amount of material that had been given to him in response to item 2. Reading this aspect of the request as a whole, I think it is clear that Mr Rooke's response made two points. The first point was his acceptance of the proposition that the data given to him was in the format supplied by Hi-Tech's "equipment". The second point was that, since he could not decipher the data without the technical information that he had requested, he reserved "the right to revisit the subject" once he received that information. In short, I think, Mr Rooke was doing no more than saying that when he could understand the data given to him, he would consider whether it was sufficient. 79It is of course inevitable that, once Mr Rooke considered that data, he would have realised that it fell well short of his request. 80That is the way that I would have read the response, regardless of Mr Rooke's evidence in cross-examination. However, I think, my reading is supported by the passage that I have set out above. Thus, I do not accept that, in the part of that passage on which Mr Kelly relied, Mr Rooke indicated that he was satisfied with the call data produced to date. 81Mr Kelly relied also on item 2.1 of the request of 4 May 2011 and the response. For convenience again, I set out that passage: 2.1 Structure: This file should be in comma delimited CSV format and include all data for calls irrespective of Billed Client or Wholesale Carrier. CCG Previous Response: Complied 82Mr Kelly submitted, based on the words "include all data for calls irrespective of billed client or wholesale carrier", and the response "complied", that Mr Rooke had indicated satisfaction with the limited data set that had been given to him. I do not think that this is a fair reading of this passage of the request. It is quite clear, when one looks at the antecedent version of the request (that sent on 8 December 2010, which I have set out above) that the response "Complied" related to the request that the file should be in the specified format. It is plain, from the first part of the request set out in item 2, that Mr Rooke wanted all call transaction logs and not just those relating to calls routed by Hi-Tech through RSL Com. It makes no sense whatsoever to read his comment on item 2.1 as vacating or negating that request. 83The structure of the request is carried through into the request of 4 May 2011. In the case of the latter document, the responses that had been given are interpolated. It is apparent that the response "complied" to item 2.1 was merely carried over from the previous iteration of the document. It does not represent some further thought given by Mr Rooke to this aspect of his request. 84Mr Kelly submitted, further, that his client had misunderstood this aspect of the request. He said, that his client and Mr Rooke were "ships passing in the night". Quite why this is relevant to the question of failure to supply information I do not understand. But in any event, I do not accept the submission. Mr Rooke's request was crystal clear. He wanted all transaction logs, and not just the limited subset of data that had been given to him. If the request had been made to Mr Delfin, it is conceivable that there might have been some possibility of misunderstanding. But it was not. It was made of Hi-Tech's solicitors, and answered by them. I am unable to accept that a competent and experienced solicitor could have understood the request as limited to data relating to calls routed to Hi-Tech through RSL Com. Since the solicitor in question was not called to give evidence of the alleged misunderstanding, I do not propose to draw the inference that there was such a misunderstanding as Mr Kelly submitted. 85As I have indicated, Mr Kelly relied on what he asserted was an equivalent breach on the part of RSL Com to support the inference that the breach was not serious. Even if, contrary to what I have said, the material were available for that purpose, the failure to put the proposition to Mr Rooke in cross-examination means that it cannot be accepted. 86Accordingly, I conclude that Hi-Tech breached clause 4.1 of the deed by failing to supply all the call data requested by item 2 of the request of 4 May 2011. Item 2.2 87It is clear that Hi-Tech did not in terms provide to Mr Rooke the information sought by item 2.2. It was suggested to Mr Rooke in cross-examination that if he had revisited the seven disks of Hi-Tech's material given to him originally, he would have seen at least some of the information that he required. That may be so. But it was never explained why Hi-Tech did not point this out, rather than leaving the question up in the air. 88Nor was it ever explained why, contrary to the assertion made in the letter of 9 March 2011, this information had not been supplied. It is apparent from Mr Delfin's evidence in cross-examination that the answers to the questions raised in item 2.2 were known to him and other employees of Hi-Tech at the time. I infer that the information would have been known to Mr Delfin at all material times (ie, at all times since the request was first made). Certainly, when (after the notice of termination was given) Hi-Tech stirred itself to answer item 2.2, it was Mr Delfin who gave instructions for the technical aspects of the answers to be prepared. There is no reason, on the evidence, why he could not have done this earlier if asked to do so. 89Mr Kelly submitted, correctly, that the letter of instructions to Mr Rooke authorised him to make enquiries in such manner as he saw fit. It is equally correct to say, as again Mr Kelly submitted, that the broad general discretion so given was not limited by the protocol that was apparently to govern the general course of the dealings between him and the parties. But to say that Mr Rooke could have spoken direct to Mr Delfin, and obtained the information that he wanted, is one thing. To say that he should have done so is quite another. The discretion is one given to Mr Rooke. It is up to him to decide how he should exercise it. If he decides that it is appropriate to proceed by way of written communication, so that each party is informed of requests made to the other and of answers given by the other, that is within the ambit of the discretion given. It is not for either party to say that, in any particular case, Mr Rooke might (let alone should) have proceeded in a more informal way. 90I accept that both Hi-Tech and RSL Com offered to make their technical experts available to Mr Rooke. I am prepared to accept, further, that this was done specifically (by Hi-Tech) in relation to item 2.2. However, as I have said, it was up to Mr Rooke to decide whether he wished to proceed in that way, or whether he wished to proceed more formally. In circumstances where Mr Rooke chose to proceed more formally, it was not for Hi-Tech to dictate that he should do otherwise. 91I acknowledge that Mr Rooke said, in cross-examination, that he was prevented, by notification of the fact of termination, from making oral enquiries. But it does not follow that, as at and prior to the date of termination, he was bound to do so. Still less does it follow that one or other of the parties could dictate that he should do so. 92It cannot be said that it was unreasonable for Mr Rooke to seek to proceed more formally, or that it was unreasonable for him to ask Hi-Tech to provide the information sought in writing. The parties had agreed to settle their dispute on the basis of a binding expert determination. It was, no doubt, important that each of them should be satisfied that the expert was carrying out that task on the basis of full and accurate information. It was, no doubt, equally important, as a result, that each of them should have an adequate opportunity to monitor both the process of supply of information and the information supplied. Presumably, that is why they specified, in the draft and final letter of instruction, that the usual method of communication should be through their solicitors, with each party being copied into communications to or from the other. 93In those circumstances, particularly where there had been delay, and where it was open to Mr Rooke to conclude that some of the assurances given to him in communications on behalf of Hi-Tech had not been accurate, I think that Mr Rooke was fully justified in seeking information formally and openly, rather than through informal (and, it may be, unilateral) consultations. 94Thus, I do not accept that, when Hi-Tech chose to respond to item 2.2 of the request for information before May 2011 only by making Mr Delfin available rather than by replying in writing, it was doing what was reasonable in the circumstances. In the language of clause 4.1, that action by Hi-Tech could not be described as giving Mr Rooke reasonable access to the information that he had requested. 95It follows that Hi-Tech breached clause 4.1 of the deed also in relation to item 2.2. Item 3 96On a fair reading of item 3, it required Hi-Tech to supply not only originating numbers "associated with" its customers for calls that had been routed through RSL Com, but also all numbers "associated with" those customers, regardless of which carrier the calls had been routed through. Mr Rooke accepted that the request could be so read (T77.8 - .39, 78.26 - .45): Q. But you wanted a list of every customer of each of Hi-Tech's customers who could have made a call that could have been routed through Hi-Tech and RSL Com? A. The number, the A party number. Q. But "every possible number" means every customer whose contract with those four customers of Hi-Tech enabled him or her to make calls of the kind that might be routed through Hi-Tech and RSL Com, doesn't it? A. It is, yes, could be. Q. And how would Hi-Tech, in your understanding, have access to that data of its four wholesale customers? A. They may not. KELLY Q. What I suggested to you was that the request for such a list was ridiculous. That is the case, isn't it? A. The request was to identify whether that information was available. Q. No, the request was to prepare a list. A. I received no correspondence back to me to indicate one way or the other that it was either - it can be done, can't be done, or that they thought that that request was ridiculous. Q. But you knew it was ridiculous, I suggest, because "any possible customer" would include anyone who had bought a phone card and was still walking down a street and hadn't made a phone call yet? A. It could possibly go to that level. Q. How would Hi-Tech have any means of knowing that? A. They may not. ... Q. But it would also require every other customer of Ghana Mobile who could have put a call through Hi-Tech and RSL, would it not? A. It could possibly do just that. Q. I thought the question was, wasn't it? KELLY: Yes. HIS HONOUR Q. That's what you intended to mean, isn't it? A. The intention would not to be - to be asked at this level. The 86,232 for Ghana, that information is already in the billing system because the A party is recorded. We've seen that from the electronic data that comes out. Q. And that's why you were wanting the other potential A parties who weren't in the billing system, isn't it? A. For their specific clients. If that was only the method we had of actually tracking a call and reconciling it through the two systems, and also through any other wholesale vendor that they were using. 97The evidence showed that Hi-Tech had four customers, each of whom itself was a wholesaler, and that through or from those customers were routed calls from millions of individual callers each month. Those callers were customers not just of the four wholesale customers of Hi-Tech but in some cases, of other wholesale telecommunication companies who in turn were customers of one or other of Hi-Tech's customers. 98On its proper construction, the request required Hi-Tech to identify all telephone numbers of all those customers of all those other wholesalers. In my view, that was not reasonable and, in failing to give that information, Hi-Tech did not breach clause 4.1. I should note that the data that Hi-Tech did provide to Mr Rooke included the telephone numbers of all the customers of all those wholesalers whose calls had been routed through Hi-Tech and through RSL Com. Breach by RSL Com 99It was not disputed that RSL Com had failed to supply to Mr Rooke all the information requested by him. Nor could that be disputed, having regard to the terms of the request for information made of RSL Com on 5 May 2011. 100There was some debate as to whether the breaches were great or trivial. It is not necessary to resolve that debate. Conclusion on the first issue 101I conclude that Hi-Tech breached clause 4.1 of the deed by failing to supply the information requested in items 2 and 2.2 of the request for information dated 4 May 2011 (and in the earlier iterations of those requests to which I have referred). I conclude, further, that RSL Com breached clause 4.1 of the deed in the manner alleged by Hi-Tech as set out above. 102In those circumstances, it is not necessary to consider whether, on the facts that have been found, either Hi-Tech or RSL breached clause 11 as well.
Second issue: entitlement to terminate 103It was, as I have said, common ground that clause 4.1 was an intermediate term of the deed. (See Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 at [49] to [52].) In those circumstances, as was explained in Koompahtoo at [49], termination for breach of an intermediate term can be justified where the breach deprives the other party of substantially the whole benefit that it was intended it should obtain from the contract. In more general words, as was explained in Koompahtoo at [50], the right to terminate should be restricted "to cases where breach occasions serious prejudice". 104In this case, the effect of Hi-Tech's prolonged and repeated failures to comply with Mr Rooke's requests for information meant that Mr Rooke was unable to complete stage 2 of his task, which of course had to be completed before he could proceed to stage 3 (the preparation and issue of his expert opinion). As a result, the quantification of any amount owed by Hi-Tech to RSL Com has been delayed. 105In my view, when one looks at the nature and the extent of the delay, and at the failure to give any satisfactory explanation (apart from the "ships passing in the night" theory which was not supported by any evidence and which I do not accept), it is clear that the delay was sufficiently serious to justify termination. It should not be forgotten, in this context, that: (1) the request had been made first of all in February 2010 and repeated in December 2010; (2) the replies given to Mr Rooke on 15 September 2010 were not accurate, because what was supplied did not include all the call data that he had requested (and neither was the deficiency pointed out); (3) RSL Com's solicitors had complained on three occasions about Hi-Tech's failures to comply with the requests, and had warned repeatedly that RSL Com might terminate the deed. 106In those circumstances, I conclude that RSL Com was justified in terminating the deed once it became apparent (when it received a copy of the request for information of 4 May 2011) that Hi-Tech was still in default. 107In addition, in my view, the unexplained conduct of Hi-Tech in failing to answer Mr Rooke's questions fully, despite their repetition and the warnings to which I have referred, justifies the inference that it was not prepared to perform its obligations under clause 4.1 of the deed in accordance with its terms. That inference is strengthened by the fact that the answer given on 9 March 2011 was wrong, and materially misleading. Thus, in my view, it is open to conclude, as I do, that Hi-Tech repudiated the deed and its obligations under it. RSL Com is entitled to rely, in these proceedings, on that repudiation as justifying its termination. See Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359.
Third issue: did RSL lose the right to terminate? 108Mr Kelly submitted that, because RSL Com was itself in breach of its obligations under clause 4.1, it was not in a position to rely on any breach on the part of Hi-Tech to terminate. That submission seems to me to confuse termination for breach (by which I mean actual, or present, or existing breach) or repudiation with termination for anticipatory breach. It is clear, in my view, that where there is, on the part of one party to a contract, an actual breach that entitles the other party to terminate, the other party does not lose that right merely because it is itself in breach of a non-essential term. See Almond Investors Ltd v Kualitree Nursery Pty Ltd [2011] NSWCA 198 at [73] (Bathurst CJ, with whom Giles JA and Handley AJA agreed). 109Mr Kelly strove valiantly to maintain that any breach on his client's part was an anticipatory breach. I do not agree. By 4 May 2011 (and, more relevantly, as at 12 May 2011), his client was in longstanding and substantial breach of its obligations under clause 4.1. The fact that the breach might continue into the future does not convert it from a present or actual breach into an anticipatory breach. 110I conclude that it was open to RSL Com, notwithstanding that it was itself in breach of clause 4.1, to rely on Hi-Tech's breaches of that clause to terminate the deed when, on 12 May 2011, it did so.
Fourth issue: specific performance or damages 111This issue does not arise. However, I record that Mr Pritchard accepted that, if I were to conclude that the termination was not valid, it would be appropriate to order specific performance rather than to leave Hi-Tech to its remedy in damages.
Conclusions and orders 112RSL Com's termination of the deed was justified. The action fails. The summons must be dismissed with costs, and I so order. The exhibits should be retained and dealt with in accordance with the rules. 113Mr Pritchard sought a declaration that the deed had been validly terminated, and directions for the conduct of the 2008 proceedings. 114RSL Com did not file a cross-summons making a cross-claim for declaratory relieve. In those circumstances, it is not appropriate to grant declaratory relief. Nor is there any utility in doing so where the validity of the termination is in any event the basis for the orders just made, and the parties are (so long as those orders stand) estopped from contending otherwise. 115It is appropriate that the 2008 proceedings should be prepared for hearing. Accordingly, I list proceedings 290452/2008 for directions on 9 September 2011.
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Hi-Tech Telecom
RSL Com Australia