Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties' presumed intention in this setting."
115 The second is from the joint judgment of the Court in Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165 at [40]:
"This Court, in Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, 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. Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 461 - 462 [22]."
116 There has been a deal of discussion, judicial and academic, as to whether the English and Australian law have diverged as to the necessity for an ambiguity to permit adversion to extrinsic evidence: see the decisions of Palmer J in Brooks v NSW Grains Board [2000] NSWSC 1049 and of the Court of Appeal in LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd [2003] NSWCA 74 and J W Carter & Stewart, "Interpretation, Good Faith, and the 'True Meaning' of Contracts" (2002) 18 Journal of Contract Law 182.
117 However, in Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 76 ALJR 436 the majority of the High Court said at [39] that Australian courts, if they discern any inconsistency with Codelfa, should adhere to Codelfa until the matter is definitely decided in the High Court.
118 If, as I assume, ambiguity in the deed is a necessary precondition to taking into account in construing it any of the evidence set out above, in my view it is clear that the deed is "ambiguous or susceptible of more than one meaning" in the requisite sense. What cl 10.1(a), under the heading "Non Disparagement", in terms required Orleans and Mr Eckett to do was not to make or publish any statement which may harm or injure the reputation of MindShare or a related body corporate. As I have said, the prohibition does not in terms require knowledge. The defendants' contention is that it should be construed as requiring knowledge. The plaintiff's contention is that it is an absolute obligation. In this regard, cl 10.1(a) is ambiguous or susceptible of more than one meaning. In view of this, the circumstances surrounding the making of the deed may be taken into account.
119 I approach the deed on that basis. The relevant clause is headed "Non Disparagement". The heading may be taken into account in construing the clause: Lewison, The Interpretation of Contracts (2nd ed, 1997) [5.12]. The definition of "disparage" in the Macquarie Dictionary (rev 3rd ed, 2001) is:
"1 to bring reproach or discredit upon; lower the estimation of.
2 to speak of or treat slightingly; depreciate; belittle."
120 Both the word "disparage" and the expression "conduct which may harm the reputation of" a specified person contain some suggestion of deliberateness or intent. However, the provisions for non disparagement in the deed are wide. There were in the background to its execution bitter conflicts, curial and non curial, between the parties. These conflicts included the publication of scurrilous material. The relevant area in which the purpose of the deed was to restrain disparaging disclosures is the media market in Taiwan or in North Asia generally. The evidence set out above shows that this is a market with a comparatively small number of players. Orleans and Mr Eckett were highly experienced in and knowledgeable concerning this market, as was MindShare. The evidence shows that information such as the identity of the entity which was the media buyer for a particular advertiser in the market was either in the public domain, through journal articles or otherwise, was the subject of gossip in the market place or could readily be ascertained by appropriate inquiries. In these circumstances, it should be taken that the parties to this deed either knew or could easily ascertain the identity of media buying agencies in relation to particular contracts. On this basis, the intention of the parties to the deed should be taken to be that the non disparagement provisions would operate without reference to proof that any breaches of the clause were committed knowingly. It may be that, if it were established that publication was made in circumstances where the identity of a particular operator was unknown and unable after inquiry to be ascertained, a publication which turned out to refer to one of the proscribed entities would not be taken to be breach of the provision. But, that, as will appear, was not the case here.
121 In light of this interpretation of the prohibition in the deed, I turn to my conclusions as to the state of Mr Eckett's knowledge. I do not accept Mr Eckett's statement that it was his belief that MindShare or Maxus had lost the Diageo account. In coming to this conclusion, I refer to my views as to Mr Eckett's credit and the caution with which his evidence must be approached. He gave no source of the supposed information to this effect. I take into account that his associated statement that he was not aware of Diageo ever being a client of MindShare or Maxus was subsequently accepted by him, when faced with a document of his, to be wrong. I bear in mind the evidence as to the readiness with which this information could have been obtained, including the fact that the relationship between MindShare and Johnnie Walker was published in a trade journal in December 2004. I take account of his threatening email of 29 November 2004. I find that Mr Eckett knew on 29 December 2004 that Maxus was the service provider to Diageo.
122 If this conclusion be not correct, I find for the reasons set out above that Mr Eckett could readily have ascertained at that time that Maxus was the service provider to Diageo and that he was obliged, to carry out his obligations under the deed, to make inquiries to ascertain whether that was so. There is no evidence that he made such inquiries. As a result, the Diageo communication, if it was of the proscribed character, would constitute a breach of cl 10.1(a).
123 As to Question 2(c), that is, whether, if the Diageo communication can be taken to refer to Maxus, it is to be construed as breaching cl 10.1(a), the defendants' contention is that the communication does not convey that 60 per cent of the client's TV budget was sacrificed to low audience potential TV media vendors for the sake of greater rebates. All the communication did was to ask the question whether this had occurred. In any event, the real situation was already known to the marketing and media personnel at Diageo by reason of the post buy analysis carried out by Maxus.
124 In dealing with this contention, I bear in mind that, as already stated, all the plaintiff need establish for a breach to be found is that the conduct may harm or injure the reputation or name of Maxus. Actual harm does not have to be established. Whether there is the potentiality of harm is what must be determined.
125 I do not accept the contention that the email only asks a question and does not make the suggestion that Maxus has engaged in the conduct referred to. On a fair reading of the material, that suggestion is in my view conveyed. The suggestion conveyed is, as the plaintiff has submitted, that the present media agency has dishonestly selected channel mix so as to maximise rebate revenue to the agency. That allegation is a serious allegation about a media agency and clearly one that may harm the name or reputation of a media agency.
126 In the circumstances set out above, I find that the Diageo communication constituted a breach of cl 10.1(a) of the deed.
(3) Whether there is a breach of cl 10.1(a) by the Diageo communication in relation to MindShare by reference to:
(a) whether MindShare can be taken to be referred to by the Diageo communication, particularly in light of the defendants' allegation that Mr Eckett did not know that MindShare or Maxus was the service provider; and
(b) whether the Diageo communication is to be construed as breaching the provision in relation to MindShare
(i) directly, or
(ii) indirectly because of any connection between the identity and reputation of Maxus and MindShare.
127 In view of my conclusion in [126] above that the Diageo communication constituted a breach of cl 10.1(a) of the deed in relation to Maxus, I do not need to deal with this Question.
(4) Whether there is a breach of cl 10.1(a) by the FarEasTone email in relation to MindShare by reference to:
(a) whether MindShare can be taken to be referred to by the FarEasTone email, in light of the defendants' allegation that Mr Eckett did not know that MindShare was the service provider; and
(b) whether the FarEasTone email is to be construed as breaching the provision in relation to MindShare.
128 The issue in relation to the breach of cl 10.1(a) of the deed by the FarEasTone email arises only in relation to MindShare, as the evidence clearly establishes that FarEasTone was MindShare's client. The defendants submit that the FarEasTone email cannot have constituted a breach of cl 10.1(a). It cannot have caused any harm to MindShare's reputation. It does not refer to MindShare, only to an unnamed media agency. The whole email offers a service which will enable FarEasTone to determine if there are problems in relation to its media buying, but does not state that such problems in fact exist.
129 As to Question 4(a), whether MindShare can be taken to be referred to, particularly in light of the defendants' allegation that Mr Eckett did not know that MindShare was the service provider to FarEasTone, I refer to the body of material set out in [106] - [111] above in relation to the Diageo communication. There are differences in the material in so far as it relates to the FarEasTone email. First, there is no statement in evidence by Mr Eckett that he did not know that FarEasTone was a client of MindShare. As the question of knowledge was in play at the trial, this is significant. Secondly, Mr Eckett's email of 22 November 2004 cannot be taken into account, as it postdated the FarEasTone email. I do not forget that, overall, the plaintiff bears the onus of proof of establishing the breach. Nevertheless, bearing in mind the evidence of the availability of the relevant information in the market place and the lack of his denial, I find that Mr Eckett knew that FarEasTone was MindShare's client when the FarEasTone email was sent. Alternatively, I find that Mr Eckett could easily have ascertained this fact by inquiry, which there is no evidence that he made.
130 As to Question 4(b), whether the material is to be construed as breaching the provision in relation to MindShare, I find that it is. I reject the submission that the email merely offers a service that will enable FarEasTone to determine if there are problems in relation to its media buying, and does not state that such problems in fact exist. On a fair reading of the text, it does clearly suggest that such problems do exist. Whilst I rely on the whole of the text, the statements that "indications are that FarEasTone's CPRP appears to be 10 to 15% above market costs where it should be significantly below, this means that current media costs may be inflated by around 25-30%" and that the channel mix should be selected "to optimize market coverage, not to maximize rebate revenue" are of particular significance in leading to this conclusion.
131 In the circumstances set out above, I find that the FarEasTone email constituted a breach of cl 10.1(a) of the deed.
132 As to the breach of cl 7 by either the communication to Diageo or the FarEasTone email:
(5) Whether there is a breach of cl 7 by the Diageo communication in relation to MindShare by reference to:
(a) whether the Diageo communication refers directly or indirectly to MindShare;
(b) if so, whether the Diageo communication refers directly or indirectly to MindShare as a company which receives rebates in Taiwan (cl 7(a)) or whether the document discusses or refers to or mentions rebates in Taiwan (cl 7(b)).
133 In view of my conclusion in [126] above that the Diageo communication constituted a breach of cl 10.1(a) of the deed in relation to Maxus and my conclusion in [136] below that the FarEasTone email constituted a breach of cl 7 of the deed in relation to MindShare, I do not need to deal with this Question.
(6) Whether there is a breach of cl 7 by the FarEasTone email in relation to MindShare by reference to:
(a) whether the FarEasTone email refers directly or indirectly to MindShare;
(b) if so, whether the FarEasTone email refers directly or indirectly to MindShare as a company which receives rebates in Taiwan (cl 7(a)) or whether the document discusses or refers to or mentions rebates in Taiwan (cl 7(b)).
134 As to Question 6(a), for the reasons given in [129] above in relation to Question 4(a), I find that the FarEasTone email referred to MindShare.
135 As to Question 6(b), an examination of the FarEasTone email leads inevitably to the conclusion that it at least mentions rebates in Taiwan, thus fulfilling that requirement of cl 7(b). In light of that conclusion, there is no need to consider whether cl 7(a) is fulfilled.
136 In the circumstances, I find that the FarEasTone email breached cl 7 of the deed.
137 Thus relevant breaches of the negative stipulations in both clauses are established. The defendants submit that at least some of the breaches are in all the circumstances so minor as not to justify the grant of injunctive relief. I do not take that view. The deed was entered into in the context of a savage war of words between the parties. Non disparagement terms of wide import were solemnly entered into to bring this to an end. Where it is found that those provisions have been the subject of breaches, which have not been admitted by the defendants, I am of the view that it is entirely appropriate to grant injunctive relief in terms of the contractual provisions to restrain further breaches.
138 Short minutes should be brought in to encompass my decisions. Questions of costs may be raised at that time.