TENDER PROCESS - Request for tender by statutory authority - Architecture - Where tender alleged to be unique - Whether individual features or combination unique or novel - Neither individual features nor combination of features unique or novel.

TENDER PROCESS - Confidential information - Alleged disclosure to third party - No direct evidence of disclosure - Disclosure implied - Similarities between plaintiff's tender and building designed by third party - Plaintiff must demonstrate no other rational explanation for similarity - Evidence of other rational explanations - Relevant differences between tender and building constructed - Positive denial of disclosure - No evidence to support disclosure.

DUTY OF CONFIDENTIALITY - Confidentiality of tender documents - Tender process contract - Term implied into contract that tender material of each tenderer confidential - No breach of contract.

EQUITY - Duty of confidence - Fiduciary relationship between contracting parties - Commercial parties contracting at 'arms length' - Where contract relevantly prescribes respective powers and duties of contracting parties - No fiduciary obligation.

EQUITY - Unjust enrichment - Underlying or unifying concept - Not an independent basis for liability.

LIMITATION OF ACTIONS - Limitation Act 1985 (ACT) s 11 - "cause of action" extends to equitable claims - Limitation period expired - Proceedings statute-barred.

LIMITATION OF ACTIONS - Limitation Act 1985 (ACT) s 33 - Fraud, deceit or deliberate concealment - Meaning of "based on fraud" - fraud a necessary ingredient of the cause of action - no suggestion of fraud or deceit on plaintiff's case - Meaning of "deliberate concealment" - Requirement for "intended" or "active" concealment - What plaintiff must prove - No evidence to support basis for application of s 33.

ESTOPPEL - "Anshun" estoppel - Where alleged obligation so related to previous proceedings that it should have been included - Previous proceedings terminated by settlement - No res judicata - Estoppel not applicable.

DEEDS - Deed of settlement - Release - Construction of deed - Objective test - Where "the discontinued proceedings" construed to mean the facts or matters stated in the pleadings filed in the previous proceedings - Meaning of "arising out of" - Phrase wide enough to include the conduct of the tender process - Proceedings within the terms of the deed of settlement - Plaintiff released defendant from liability - Covenant not to sue - Breach of covenant.

ESTOPPEL - Whether defendant estopped from relying on terms of deed - Alleged disclosure of deed terms by defendant - Proprietary estoppel and estoppel by record or writing not applicable - No evidence that criteria for operation of promissory estoppel met.

REMEDIES - Breach of covenant - Specific performance and injunction not available - Damages - Defendant entitled to actual costs of defending the proceedings.

COSTS - Indemnity costs - Where appropriate - Not appropriate for "marginal" cases - Not a punitive measure - Compensatory - Where commencement and continuation of proceedings has no prospects of success.

Copyright Act 1968 (Cth), s 201

Freedom of Information Act 1982 (Cth)

Limitation Act 1985 (ACT), ss 11, 33

Limitation Act 1969 (NSW), s 23

Trade Practices Act 1974 (Cth)

Court Procedures Rules 2006 (ACT), rr 414, 1752

UK Law Reform Committee, Limitation of Actions, Report No 21 (2001)

Standards Australia, Code of Tendering (Australian Standard AS 4120-1994, Council of Standards Australia, 31 December 1994)

Cairns, BC, Australian Civil Procedure (Thomson Reuters, 9th ed, 2011)

Carter, JW Breach of Contract (Law Book Co, 1984)

Dal Pont G E, Equity and Trusts in Australia (Thomson Reuters, 5th ed, 2011)

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Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298

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Marks v National and General Insurance Co Ltd (1993) 114 FLR 416

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1. Judgment be entered for the defendant on the plaintiff's claim.

2. Judgment be entered for the defendant against the plaintiff on the defendant's counter-claim.

3. As damages, the plaintiff pay the defendant's costs of the plaintiff's claim and the defendant's counter-claim on an indemnity basis.

1. On the south-west shores of Lake Burley Griffin in the Canberra suburb of Parkes sits a magnificent edifice built in the style of a large Greek temple, the National Library of Australia, a Canberra icon.

2. The casual observer might conclude that such a large building houses the whole of the national collection of materials, but with the massive amount of such material, both in print and in other media, produced each day, not to mention the statutory deposit provisions of s 201 of the Copyright Act 1968 (Cth), there is a need for and there are repositories, no doubt less pre-possessing buildings, situated elsewhere in Canberra.

3. This case concerns one of those repositories. On 25 September 1996, the defendant, in a Request for Tender, invited tenders for the provision of another such repository (called in the Request for Tender, and in these reasons, a storage facility) to be available in the first half of 1997.

4. The plaintiff submitted a tender along with other companies. The plaintiff's tender was not accepted. The plaintiff complained about the process and commenced proceedings in the Federal Court of Australia. These were subsequently compromised and a Deed of Settlement entered into between the parties, setting out the terms of the compromise.

5. The plaintiff later took the view that there had been a breach of the confidentiality that he expected would be maintained as to the content of his tender and, later, a breach of the terms of the Deed of Settlement and commenced these proceedings on 8 May 2003.

6. An analysis of the pleadings shows that the case for trial is as follows.

7. The plaintiff is an incorporated company and the defendant is a statutory authority. Both have the legal capacity to sue and be sued. These matters were not in issue in these proceedings.

8. The plaintiff claims that the defendant invited tenders for the storage facility. It says these were invited on or about 3 October 1996; the defendant says they were first invited by an advertisement in The Canberra Times on 25 September 1996. Nothing turns on that difference and it appears that the plaintiff accepts the defendant's statement of the date.

9. The plaintiff claims, in a letter dated 14 August 2003 from the plaintiff's solicitors providing particulars to the defendant's solicitors, that it submitted a tender comprising twenty-four documents. With a minor disagreement about the description of one of those documents, the defendant admits this fact. While the tender was one exhibit, it was not in bound form as an exhibit. The plaintiff also provided a letter to the defendant with enclosures after the closing date for tenders and then also tabled some documents at the interview with the defendant on 31 October 1996, all of which were exhibited before me but it is not clear whether these additional documents are to be considered as included in the tender as pleaded though they were clearly intended to be taken into account in the defendant's consideration of the plaintiff's tender.

10. The plaintiff claims and the defendant admits that other parties tendered, including Decoin Engineering Pty Ltd (Decoin) and U-Stow-It Pty Ltd (U-Stow-It).

11. The plaintiff then claims that his tender proposed that the storage facility be built in a certain way and compared that with the proposals in Decoin's tender. The defendant does not admit these details, but relies on the tenders actually submitted. I shall have to deal with these issues below.

12. The plaintiff claims that there was a term "implied into the tender process" that the defendant would keep confidential certain matters, including design concepts in the plaintiff's tender and documents submitted with it. The defendant denies that there was any such contractual term and says that the existence of any other term or "type of term" is a matter of law.

13. The plaintiff says and the defendant admits that it was informed on or about 8 May 1997 that the tender by Decoin had been accepted. The defendant adds that the principal of the plaintiff had been advised of this earlier by telephone.

14. The plaintiff then claims that the storage facility as actually constructed incorporated a number of features of the plaintiff's tendered proposal which the defendant, in breach of the alleged duty of confidence, had revealed to Decoin in discussions with it prior to finalising its choice of tender. The defendant does not admit that such features were incorporated into the storage facility and denies that it revealed any such matters to Decoin.

15. The plaintiff claims that the breach has resulted in loss and damage to it, including the profit it would have derived from having its tender accepted instead of that of Decoin. It seeks to recover compensation for the loss and damage. The defendant denies any such breach or that any such breach caused a loss or damage, denies that it would have accepted the plaintiff's tender and says that, if it had not accepted the Decoin tender, it would have accepted that received from U-Stow-It.

16. The plaintiff makes what appears to be pleaded as an alternative claim, which the defendant also denies, that, by the defendant's breach of confidentiality, the defendant has been unjustly enriched by receiving the benefit of the features of the plaintiff's tender which were incorporated into the final design of the storage facility. It claims recovery of that amount by which it says the defendant has been unjustly enriched and the defendant denies that claim.

17. In addition to its denials as mentioned, the defendant raises three additional defences. In the first place, it claims that the plaintiff's action is not maintainable by reason of the Limitation Act 1985 (ACT) (the ACT Limitation Act). The plaintiff says in reply that the wrongful disclosure of the confidential material in its tender amounted to fraud or deceit or deliberate concealment of relevant facts by the defendant and, if the cause of action arose prior to 8 May 1997, then s 33 of the ACT Limitation Act extends the time within which the action could be brought.

18. The defendant also claims, as a defence to any claim by the plaintiff, that the Deed of Settlement in respect of the Federal Court proceedings released the defendant from any such claim. The plaintiff, in reply, claims that the defendant had, in breach of its terms, publicly disclosed the terms of the Deed of Settlement which estopped it from relying on its terms.

19. Finally, the defendant pleads that the plaintiff is estopped from prosecuting its claim because it had not raised in the Federal Court proceedings the claims it is now making, even though it was aware of them, and that such claims could and should have been included in the Federal Court proceedings, the defendant having, in those proceedings, foregone its right to recover costs and disbursements from the plaintiff when it discontinued the Federal Court proceedings, by reason of the compromise established in the Deed of Settlement. The plaintiff denies that the defendant was entitled to rely on any such estoppel, but, if it was, it is not so entitled because of its conduct. I was not provided with any particulars of that conduct.

20. The defendant then pleaded a counter-claim against the plaintiff. In it, the defendant claims and the plaintiff agrees that, by the Deed of Settlement, the plaintiff covenanted not to sue the defendant in respect of any matters "arising out of or in any way related" to the Federal Court proceedings. It claims, and the plaintiff denies, that these proceedings breach that covenant and that, as a result, it has suffered loss and will suffer further loss.

21. In the alternative, the defendant claims, and the plaintiff denies, that the Deed of Settlement did not reflect the intention of the parties that matters such as the plaintiff's claim in these proceedings would be included within the ambit of the release in the Deed of Settlement, or, in the alternative, that the release would extend to any cause of action connected to the allegations made in these proceedings, and that, as a result, the defendant is entitled to rectification of the Deed of Settlement and that the present proceedings are brought in breach of the intentions of the parties that should have been incorporated in the Deed of Settlement, thereby causing the defendant loss and continuing loss.

22. In further defence to the defendant's counter-claim, the plaintiff denies that the Deed of Settlement encompassed the claims made in these proceedings. The plaintiff also claims that it was a fundamental term of the Deed of Settlement that its terms were to be kept confidential and that the plaintiff has breached that term by disclosing to The Canberra Times certain details of the terms of the compromise, thereby rendering the Deed of Settlement void or, in the alternative, terminated by the defendant, or, in the alternative, releasing the plaintiff from being bound by its terms.

23. The plaintiff further denies that the parties intended that the Deed of Settlement extended to matters such as were encompassed in the cause of action pleaded in these proceedings and that, if it was the defendant's intention that it do so, it was not the common intention of the parties and that the plaintiff (though, I think in error, referred to as the defendant in par 8(f) of the Amended Defence to Counter-Claim) did not have that intention, but intended only that the Deed of Settlement should be limited to the allegations set out in the recitals to the Deed of Settlement, the terms of it being read and construed subject to the recitals.

24. Accordingly, it seems to me that the following issues arise for determination in this action:

(i) Was there a duty of confidentiality reposed in the defendant in respect of any of the contents of the plaintiff's tender?

(ii) If so, what were the specific matters in the plaintiff's tender that were subject to any duty of confidentiality on the part of the defendant?

(iii) In that event, did the defendant breach that duty of confidence by revealing to Decoin, before it chose Decoin as its successful tenderer to provide the storage facility, the confidential matters that it was bound not to reveal from the plaintiff's tender? This, perhaps, requires an answer to the question of whether any feature of the storage facility as constructed by Decoin incorporated any features that were confidentially included in the plaintiff's tender?

(iv) If so, what loss has been suffered by the plaintiff and how should it be assessed?

(v) When did the plaintiff's cause of action arise and did any act of disclosure by the defendant amount to deliberate concealment such as to extend the time for in the ACT Limitation Act?

(vi) Did the Deed of Settlement release the defendant from the claims made in these proceedings?

(vii) If not, should the Deed of Settlement be rectified so as to include a release that encompassed claims such as those made in these proceedings?

(viii) Is the plaintiff estopped from bringing these proceedings because they should have been included in the Federal Court proceedings?

(ix) If so, does the defendant's conduct prevent it from relying on any such estoppel in these proceedings?

(x) Has the plaintiff breached the Deed of Settlement by bringing these proceedings?

(xi) Is the Deed of Settlement void, or in the alternative, terminated by the defendant, or, in the alternative, is the plaintiff released from its terms?

(xii) Has the defendant suffered loss from the alleged breach of the Deed of Settlement by the commencing and prosecuting of these proceedings? If so, how should that be calculated?

25. It may not be necessary to consider every one of these issues. Clearly, a central issue is whether the defendant revealed to Decoin confidential matters in the plaintiff's tender.

26. The plaintiff accepts that there is no direct evidence of this; it says that this is to be inferred from the uniqueness of its tender and the similarity between the building that Decoin built, particularly given the differences between Decoin's tender proposal and the building it built, that can only be explained by the alleged disclosure.

27. In order to deal with these issues, it is necessary to outline the circumstances under which the relevant issues arise.

THE HISTORY OF THE TENDERS FOR THE NEW STORAGE FACILITY

28. Before I set out the relevant history for the purpose of these proceedings, I note that the plaintiff and some of its witnesses expressed great concern about the perceived lack of integrity of the tender process followed by the defendant. There were suggestions that U-Stow-It also expressed such concerns. These matters, however, are not the subject of these proceedings. They were, to some extent, the subject of the Federal Court proceedings. Despite the expressions of concern by the plaintiff and its witnesses and of some criticism of or challenges to the tender process during the hearing of these proceedings, this is not within the terms of these proceedings and I do not consider such matters further.

29. The relevant history commences in August 1996, when a Steering Committee was established by the defendant to implement a Storage Strategy agreed to by the Council of the defendant for transfer of a part of the defendant's overseas print collection to a second off-site storage facility and to allow for expansion and retention of Australian materials held by the defendant at the library building at Parkes.

30. Functional specifications for the storage facility were prepared after consultation with the Steering Committee and mechanical and electrical engineers. The specifications were designed to maximise the possible number of persons or bodies that may be interested in providing the facility, by permitting either modification of existing premises or "greenfields" development proposals.

31. The Steering Committee formed a Sub-Committee of three to be responsible for interviewing and selecting the successful tenderer.

32. The defendant caused advertisements to be published in The Canberra Times on 25 and 27 September 1996, inviting persons to tender for the proposed facility, "A Warehouse Facility". Mr Wagdy Hanna, principal of the plaintiff, saw the advertisement on or about 3 October 1996.

33. He made inquiries and collected a copy of the Request for Tender, comprising a number of documents, including Specifications, consisting of some sixteen pages.

For these proceedings, relevant provisions of the Specifications were:

The Location of the proposed offsite facility should be either on a direct motor vehicle route between the National Library of Australia's main building situated in Parkes, ACT and its existing leased warehouse at Hume, ACT, or within fifteen minutes extra travelling time of that route.

A further requirement of the proposed site would be that neighbouring buildings or sites carrying out noxious or dust producing industrial processes are sufficiently distant from the proposed site, that any by product of such industry or activity would not permeate the proposed site.

...

2.1 BASE BUILDING

2.2 ELEMENTS

The construction shall be from materials and employed techniques to effectively exclude the penetration of moisture, condensation, dust and prevent access by animal or insect pests.

...

2.4 MATERIALS

To minimise heat flow through the structure, the external walls and roof should house the following minimum (composite) 'U' or transmission coefficient values:

...

2.5 CLEAR SPAN

The minimum span between vertical structural members will be governed by the configuration of the nominated shelving system, the clearance required at the ends of the shelving ranges and access requirements listed elsewhere in this specification. The offer must reference the columns in context of the shelving configuration.

...

2.8 FLOOR AREA TO ACCOMMODATE

The type of shelving proposed with the offer will determine the footprint of the building for that section dedicated to shelving storage. Additional floor space of 560 m2 will remain a constant regardless of the shelving configuration proposed. This additional floor area will be required to accommodate the following spaces:

Staff work area inclusive of a photocopying room 110m2

34. There were specifications for shelving configurations, which, obviously, were a very important consideration. The preamble to this section provided as follows:

3.2 SHELVING CONFIGURATIONS

The National Library of Australia will consider shelving systems that are manually oriented systems and/or mechanically guided and operated systems. Standard height floor mounted single tiered bays will be considered along with multi-tier industrial stacks (high racking).

The secure area shelving described at 3.5 of this specification, shall be standard height single tiered notwithstanding the shelving system offered for the main shelving storage area.

The type of shelving and any attendant materials handling equipment proposed with the offer will determine the footprint of the building for that section dedicated to shelving storage.

(Emphasis in original)

35. Specifications were then provided at 3.3 for the case where "standard height single tiered bays" were to be proposed. Such standard shelving was, according to the evidence of Ms Janet Smith, Manager, Stock Services of the defendant, 2.1m high, though the Request for Tender did refer to shelving of units 2.375m and 2.475m high. The Specifications, however, permitted an alternative to such shelving as follows:

3.4 NON STANDARD HEIGHT SHELVING

The National Library of Australia will consider an offer based on the supply and installation of multi-tier industrial stacks (high racking) at a greater height than listed at 3.3 above. The shelving system offered at this option shall provide the means to prevent books falling through the backs or ends of the bays.

Motorised materials handling equipment suitable to the retrieval/reshelving task must accompany the offer with this option. The lowest recommended shelf height by the equipment manufacturer must be considered within the offer.

• 3.4.1 300mm MINIMUM DEPTH SHELVING QUANTITIES

20,580 shelf metres with a minimum shelf clearance of 308mm

5,460 shelf metres with a minimum shelf clearance of 350mm

540 shelf metres with a minimum shelf clearance of 440mm

• 3.4.2 500mm MINIMUM DEPTH SHELVING QUANTITIES

3,070 shelf metres with a minimum shelf clearance of 160mm

The requirement of Building Code of Australia path of travel to fire exits matched to the offer's proposed shelving configuration will govern the stack range length.

The operational parameters of the offer's proposed motorised materials handling/retrieval equipment will determine the minimum width of aisle.

The offer must describe the equipment in terms of lift capacity motor power source, safety features, manoeuvrability, extent of use within existing installations of a similar nature and hourly continous operational life of the energy source. Allowances shall be made within the offer to provide a purpose built operator's platform. The equipment supplied will be required to service an item retrieval/reshelving to a maximum of 600 actions per day. Any power source, specialised floor treatments, safety railing access restriction devices, platform, fixed lighting, maintenance arrangements, back-up equipment arrangements, dedicated parking areas, ventilation requirements etc deemed necessary for the operation or servicing of the offered equipment shall be detailed with the submission and be included in the financial offer.

Details of available operator training and licence requirements shall be detailed with the submission and be included in the financial offer.

The optimum operations height for item retrieval/reshelving of library items is estimated to be a maximum of 6 metres. However if the building economics, the configuration of the shelving of the offered system or other matters considered by the offerer to reduce or increase this limit, the National Library will consider such proposals against the benefits offered.

...

3.6 SHELVING SPECIFICATION

Shelving shall be supplied and installed in accordance with ASA 2143 and ASA 4084 should high racking be the nominated shelving system.

(Emphasis in original)

36. Twenty-six companies responded to the advertisements and a number who requested it were briefed by Mr Trevor Pidd, the then Manager, Building Management Section, Contracts and Facilities Branch, Corporate Services Division of the defendant. An open information briefing was also conducted at the defendant's off-site repository at Hume, ACT.

37. At the closing date for tenders, six tenders were received. The plaintiff lodged one of these, as did Decoin and U-Stow-It.

38. The plaintiff, in preparing for the tender, made inquiries of various commercial property agents and selected a site in Hume. It also carried out a number of other investigations with various suppliers of items or services to be used in the facility. There is no doubt that the plaintiff and its principal, Mr Hanna, put a lot of effort and care, not only in making these inquiries and obtaining firm quotations, but in thinking about and identifying how the facility could be built and its operation. While that hard work is to be applauded, it does not by itself justify the case for the plaintiff.

39. The Steering Committee considered the tenders and, in some cases, sought further information from them. In particular, Mr Pidd wrote to the plaintiff on 24 October 1996, seeking further information; ten specific requests were made. In the letter, he then added:

At this point of constructing this questionnaire I recognise that evidence of compliance with a major part of our specification needs to be solicited. Perhaps our collective efforts would be served in the most efficient way by your response to the items listed above followed by a schedule of specification clause specific, construction detail response in a text format with reference to sketches where necessary.

40. The letter then requested "[p]articular emphasis on the following clauses" and listed 24 clauses in the Specification.

41. This was the first request for further information of those that were sent to a number of the tenderers.

42. The plaintiff prepared a response to this letter and Mr Hanna delivered it personally on 25 October 1996. Further material was tabled when the plaintiff was interviewed.

43. On 28 October 1996, the Steering Committee considered all six tenders received (in respect of the plaintiff's tender presumably with the plaintiff's letter of 25 October 1996) and excluded all but the tenders from Decoin, U-Stow-It and the plaintiff. It was agreed to invite each to a meeting with its Sub-Committee.

44. Letters were then sent to Decoin and U-Stow-It, described as "offer specific letters" which sought further information on a number of issues similar to the letter sent to the plaintiff referred to above (at [39]).

45. Interviews were then conducted by the Sub-Committee on 31 October 1996 with representatives of each of the three tenderers. At the meeting of the Sub-Committee after the interview was conducted with the plaintiff, it was agreed that the plaintiff was not regarded as complying with certain of the selection criteria and was eliminated from the process.

46. On 5 or 6 November 1996, the Sub-Committee met and agreed that it would recommend Decoin as the preferred tenderer. That decision appears to have been formalised on 11 November 1996 when a recommendation to that effect was put to the delegate of the defendant who had authority to accept the successful tender and submit it to the Minister for final approval.

47. A contract was entered into with Decoin and the defendant in May 1997. The facility was then constructed by Decoin and that construction has been completed. A number of the witnesses who appeared before me had inspected the completed facility.

48. In early 1997, Ministerial approval had been given to the awarding of the tender contract to Decoin and the defendant set about notifying the unsuccessful shortlisted tenderers, the plaintiff and U-Stow-It.

49. An officer of the defendant, Francis Noel Cross, telephoned Mr Hanna of the plaintiff on 18 February 1997 and advised him that the plaintiff's tender had not been successful. Mr Hanna asked him about the site at which the successful tenderer was to build the storage facility and its tender price.

50. On the same day, the plaintiff wrote to the defendant seeking details of the sites of the tenders received by the defendant and "proposed rentals for each bid." The defendant replied saying that it considered the information requested to be commercial-in-confidence and could not be made available.

51. Subsequently, as noted above, the plaintiff commenced proceedings in the Federal Court of Australia on 29 June 1998 alleging that the defendant had breached the "tender process contract" that regulated the submission and consideration of tenders, had engaged in deceptive and misleading conduct and had breached a duty of care it owed to the plaintiff.

52. Subject to the comment I made above (at [9]), the plaintiff's tender can be considered for the purpose of these proceedings, in order to determine its content and the qualities on which the plaintiff relied, to have comprised of:

(a) the Tender Documents delivered on 22 October 1996;

(b) the response to the letter seeking further information, that response being dated 25 October 1996;

(c) a letter from the plaintiff dated 28 October 1996; and

(d) a document dated 31 October 1996, tabled at the interview with the Sub-Committee had with the plaintiff on that day.

53. These are an extensive number of documents, including plans, making a summary of its contents somewhat of a challenge. A problem for such a summary in this context is that it is clear from the evidence in this case that the plaintiff and defendant have quite differing perspectives as to the important features of the tender from their respective interests.

54. Nevertheless, I can say that, relevantly, the plaintiff's tender proposed for the storage facility:

(iii) annual rental of $477,200 (including $325,000 for the "Base Building");

(iv) net lettable area of 2,500 sq m (including 2,000 sq m of storage area);

(vi) prefinished double layer walls of heavy duty colourbond with internal insulation (unspecified);

(vii) shelving of 7.5 m from Brownbuilt which supplied a quotation for "high rise shelving ... similar to our Universal Channel" with a brochure, included in the tender, but subsequently in the letter of 28 October 1996 said to be Universal Channel shelving;

(viii) two "Crown" stockpicker motorised handling equipment, Crown also supplying a quotation and a brochure;

(ix) a plan provided with the material tabled on 31 October 1996 showing a larger building with more storage space, but which was subsequently said by Mr Hanna to show how the original design could be expanded, though it did not indicate that anywhere on the plan;

(x) shelves in the storage area that were in parallel rows facing the short sides of the rectangular building with, in the original plans, a relatively large aisle on one side with shelves above 3m clearance for the last 5 rows, though in later plans the shelves above 3m clearance extended the length of the building; and

(xi) a rectangular building with office and other facilities as a square extension half way down one side.

55. The Decoin tender proposed for the storage facility:

(ii) a lease for 10 years with 2 extensions of 5 years with alternative costings for a 15 year lease and a 20 year lease;

(iii) an annual rental of $572,715.00 (including $276,580 for the "Base Building");

(vi) clay double brick walls with 50mm styrene cavity infill;

(vii) high rise shelving of 6.6m (though the drawing actually referred to 7.0m shelving) with the same brochure for Universal Channel shelving from Brownbuilt as that included in the plaintiff's tender;

(viii) two "Crown" stockpickers as motorised handling equipment, with the same Crown brochure included as in the plaintiff's tender;

(ix) in a plan provided, shelves in the storage area in parallel rows facing the short side of the building but with a central aisle as well as side aisles and some shelves on a side wall; and

(x) a rectangular but nearly square storage and associated area with an extension at one end making an "L" with the main building at the extended end, and the secure storage and office area.

56. It is, of course, difficult to summarise the features of the proposals contained in the tenders. These summaries are not intended to follow the selection criteria established by the Steering Committee's Sub-Committee, to be comprehensive or exhaustive, or, more importantly, replicate or identify the relative importance of particular facets of the proposals from the defendant's point of view. They are, however, the matters that appear most relevant to these proceedings.

57. The evidentiary basis for the plaintiff's claim for breach of confidence is that:

(b) the Decoin tender did not contain those properties;

(c) the building ultimately built by Decoin did contain some of the unique properties;

(d) the only way Decoin could have incorporated those unique properties is if the details of the plaintiff's tender had been revealed to Decoin; and

58. Effectively, the defendant challenges each of these matters.

59. To evaluate the plaintiff's claim, it is necessary to consider each of these steps.

The plaintiff's proposal contained unique properties

60. Mr Hanna, principal of the plaintiff, made a number of affidavits filed in these proceedings. In them, he outlined the plaintiff's claim to uniqueness. It seems appropriate to set out the claims in his own words.

61. In his affidavit, sworn on 13 November 2006, he says:

The unique concept

The Exhibits to my affidavit identified as exhibits IIH 4, 4, 8, 10A and 10B contain the detailed tender proposal submitted by the plaintiff in response to RFT 96/32. The concept which I developed to meet RFT 96/32 was, I believe unique. After reading the tender proposal, RFT 96/32, I realised that the defendant was seeking a unique solution to a problem which confronted it and other large Australian and overseas libraries. That problems [sic] was to provide a facility for the storage (shelving) and retrieval of books and printed matter in a controlled environment which would prevent the materials being damaged by moisture, dust, light and temperature, and which was within a designated distance from the main library facility. Additionally, and crucially, the facility had to provide a certain volume of storage at a competitive price. The size of the building would be therefore determined by the shelving height and retrieval method employed to recover items. The defendant wanted a facility that would permit library staff to gain access to the stored materials quickly. In RFT 96/32 the defendant state [sic] that it considered that the optimum "operational height for item retrieval/reshelving ... is estimated to be a maximum of 6 metres" (Exhibit WIIH 3 at p10 pt 3.4.6). A maximum shelving height of 6 metres means that in order to store the volume of material required, the floor area of the building would be approximately 3,000 square metres. My design met these problems by a unique combination of higher shelving, shorter horizontal travel of the retrieval system, and thus a smaller floor area by approximately 17% combined with metal cladding walls and dedicated lighting for the retrieval system. My design meant that the net lettable area was therefore significantly reduced and the yearly rental for the building consequently reduced. After 15 years the defendant would own my building for no additional payments.

62. Later, he summarised the elements of his unique design in the same affidavit as follows:

The unique features of my design as submitted in the tender documents (Exhibits 4, 5, 8, 10A, 10B) were -

a. 7.5mm shelving with 7.2mm top usable shelf;

b. net lettable area of 2,500 sq m;

c. annual rent of $477,200.00;

1. wall materials - insulated panels, inner and outer layers of colorbond steel bonded to an insulated core of expanded polystyrene with U coefficient value of 0.38 W/m2.k;
2. retrieval system - 2 number Crown stockpickers model SP 3015 tL214 capable of reaching the top shelves in a safe and stable manner with dedicated lighting.

I assume that in a. the reference should have been to "7.5m" and "7.2m" not, as in the affidavit, "7.5mm" and "7.2mm".

63. There is a sense in which the proposal is obviously unique, namely that, as it has specifically quantified, identified features, which were incorporated into the plaintiff's tender, was a separate, complete whole, a separate individual proposal - a unique bundle of words, plans and figures. That, of course, is not the sense in which uniqueness is relevant.

64. The Macquarie Dictionary (Macquarie Publishing Pty Ltd, 5th ed, 2009) at 1798 gives three meanings of "unique" as follows:

1. of which there is only one; sole. 2. having no like or equal; standing alone in comparison with others; unequalled. 3. remarkable, rare or unusual.

65. What, it seems to me, the plaintiff is saying is that his tender proposal has such remarkably rare or unusual features, ones peculiarly responding creatively to the Request for Tender, that it is so unlikely that another person would independently have thought of them that they could, if included in another proposal, only have been sourced from the plaintiff's tender.

66. Of course, it is not possible absolutely to exclude serendipitous coincidences, but it is necessary to consider the circumstances carefully to see whether such coincidences can be at least discounted.

67. Nevertheless, it is appropriate to consider each of the relevant elements of the plaintiff's proposal to see what may be unique about them in the sense of being remarkable, rare or unusual. It is, thus, akin to a circumstantial case in criminal law so that the plaintiff must satisfy me that there is no other rational explanation for the presence of the relevant features in the building as constructed than that the content of the plaintiff's tender must have been disclosed. See Shepherd v The Queen [1990] HCA 56; (1990) 170 CLR 573 at 578.

68. The first item referred to was the shelf height. The plaintiff proposed a shelf height of 7.5m with 7.2m as the top usable shelf. The Request for Tender referred to an "optimum operational height ... of 6 metres" but expressly left open a higher shelf height (see paragraph 3.4.6 in [35] above). It seems to me, then, that to provide for a height greater than six metres is, in itself, hardly a unique feature, it having been in the contemplation of the defendant in considering the specifications to include in the tender. See also the evidence referred to below at [81].

69. The next question is whether 7.5m is a special height that renders it unique. For example, was 7.0m or 7.2m significantly different from the proposed 7.5m?

70. None of the plaintiff's affidavits addressed that issue directly. It was addressed in general terms in paragraph 68 of Mr Hanna's affidavit, extracted above (at [57]), but this really said no more than that a higher shelving reduced the floor area needed, which made good economic sense and a more efficient building, points made by a number of witnesses and hardly a secret; it is a matter of logic related to storage in general.

71. Indeed, as Mr Ian Stephenson, the Manager of Brownbuilt Pty Limited, which was to provide the shelving in both the plaintiff's tender and the Decoin tender, said, "I do know a lot about storage in general and book storage is just an adaptation of our product to suit their storage needs."

72. So far as the plaintiff's plan was concerned, Mr Stephenson said that he himself had actually suggested to Mr Hanna "the configuration of the shelving based on the efficiency of storage and other parameters given by the National Library and their specification." This included "what the footprint and also the elevation would be for the shelving and the basic configuration of that shelving with taking into account the efficiency of retrieval, storage and the like." His plans also showed the height of the shelves on which he said he had advised Mr Hanna. He said the height of the shelving was "an interpretation by [Mr Stephenson] ... to suit [the plaintiff's] building height."

73. Similarly, Mr Stephenson was unsurprised that a tenderer would seek to use high shelving, such as the shelving proposed by the plaintiff, and, indeed, at least on its drawings, by Decoin.

74. He said, also, that he provided information about the design, such as the needed space above the shelves to allow for "sprinklers and the like" and to allow access to the motorised retrieval device, the stockpicker, which protrudes above the top of the shelving. There were, of course, Building Code of Australia provisions relating to matters such as building height, which Mr Hanna knew. Thus, Mr Stephenson agreed that the height of the shelving was something he provided from his knowledge of shelving, after interpreting the height of the building specified by Mr Hanna. Hence his recommendation of the particular shelving proposed, which was regularly stocked by Brownbuilt. He also agreed that Brownbuilt supplies such shelving at lower and greater heights.

75. He also provided information to the plaintiff about aspects of the design, based on his work in other situations, including the width of aisles and the provision, at his suggestion of a "drive-thru situation." He agreed that he had "quite a lot of input into the plan".

76. Mr Stephenson acknowledged that he had been approached by each of the short-listed tenderers, the plaintiff, Decoin and U-Stow-It. He told them that he was providing quotations for the others. He provided a quotation for Decoin for the same kind of shelving. He recommended the same shelving to each tenderer.

77. When asked whether the provision of high shelving and stockpickers to retrieve items from high shelving is a new phenomenon, he answered "No, not at all".

78. In approaching his customers, Mr Stephenson explained:

My expertise is in the maximisation of the structure both in a plan view and in an elevation to get the maximum amount of storage in that area, given other parameters of retrieval rates and the like.

79. He was also aware that each tenderer was proposing to provide for the same mechanical retrieval system, the Crown stockpicker. Mr Stephenson's evidence was important for it showed the likely source of the shelving height for the plaintiff's tender and it made a relevant connection with each of the tenderers and the information which they had sought and which he could supply.

80. The Decoin tender referred to shelf height of 6600mm and also 7000mm. It was acknowledged that this meant 7000mm to the top of the shelf, a relevant comparator. It was not the same as the plaintiff's tender. Ultimately, the shelves were built to 7225mm. In his affidavit of 14 June 2007, Mr A Stodulka, Managing Director of Decoin at the time of the tender, pointed out that the height was determined by a number of factors, including the maximum allowable building height, the minimum allowable roof pitch, the need for allowance for insulation and linings, steel beams, airconditioning ducts and fire hydraulics and shelf braces to stabilise the shelves. This ultimately permitted a shelf height of 7.5m. Mr Stodulka said that the change was a result of these matters being further considered together with a clarification received from the supplier of the stockpicker that it could reach to a maximum height of 7.5m.

81. Further, in her affidavit of 6 June 2007, Ms Janet Smith, who had, at the time, been Manager, Stock Services of the defendant, stated:

Although the concept of 'high rise' shelving (that is shelves that were above the standard approx. 2.1 metres in height) was new to the Library for storage of books, I recall that, along with the Library's Occupational Health and Safety Officer and another member of Stack Services staff, I visited a number of facilities in Sydney prior to tender specifications being developed for the warehouse project, to view operations using this type of shelving and to investigate its feasibility for use in the Library's facility. 'High rise' shelving was in common use at many facilities at the time.

82. Ms Smith explained in cross-examination that the "many facilities" to which she referred were not libraries. It was clear, however, that she had accepted that such high rise shelving was applicable to library storage. Indeed, she commented that:

we did quite a bit of research about the possibilities because ... we wanted to know whether we should go to tender setting ... low shelving that we were used to ... or whether ... our staff could deal with [high-rise shelving] and that we could manage effectively.

83. It was clear in the context of the actual specifications in the Request for Tender, as noted above (at [35]), that Ms Smith had already answered that question in the affirmative and thus initiated the possibility of the storage facility having high-rise shelving. The idea of such shelving was that of the defendant or, at least, originated from it.

84. This was explained in his oral evidence by Mr Pidd:

You see, and if you need the RFT please indicate that, sir, but the problem for the library which the RFT was addressing was the need to obtain firstly an alternative storage facility for its material in that general sense, correct? --- Yes.

And that the particular problem was how to store large volumes of material which were ever increasing in the most efficient manner? --- That wasn't the intent of the specification that I wrote because of the nature of the property market that we didn't want to exclude people, so we virtually said that you can have - and at that time in Canberra, the market was pretty slack, so they could have a huge warehouse that they could put standard height shelving in that someone could manually take it out; they could provide mechanically assisted shelving, such as compactus; or alternatively they could supply industrial high rise shelving. So that we didn't want to exclude anybody from the market, so there was those three choices that people could adopt.

But the industrial high rise you're talking about wasn't 7.5 metre high, was it? --- We only said, and this was on the basis of the people that manage the stacks who had gone and - to visit various organisations that had high rise shelving in. And they had formed the view that 6 metres was probably the most optimum height because of the speed of retrieval et cetera. So, that's how that found it's way into the specification.

85. Accordingly, it does not seem to me that the height of the shelving was unique in any relevant way. It was an inevitable function of the imperative to maximise the floor area and the possible reach of the mechanised retrieval system and the likely result of the advice that Mr Stephenson gave, which advice was available to each tenderer.

86. The net lettable floor area was the second item. The plaintiff's proposal was for a building with a net lettable floor area of 2,500 sq m. This is, as was said a number of times in the evidence, and as is obvious, directly related to the cost of the construction of the storage facility and the rental to be paid.

87. The proposed net lettable floor area for the Decoin tender was 2,973 sq m. In a revised tender, it reduced that to 2,734 sq m. This was a result of increasing the height of the shelves to 7.2m and of amending the thickness of the walls infill from 50mm to 75mm. This reduced the net lettable floor area and also the annual rent. Mr Stodulka explained that, before he increased the height, he assured himself that there were no safety implications.

88. None of this was subject to any challenge in cross-examination of any of the defendant's witnesses, and, in particular, of Mr Stodulka. Ultimately, the building was, it appears, built with a net lettable floor area of 2,648 sq m or 2,556.6 sq m. Both figures were referred to in the material I had. It appears that the latter figure excluded the 92 sq m loading bay. This issue was not raised with Mr Stodulka in cross-examination. The latter size is, of course, very similar to the size of the plaintiff's proposed building. It seems to me, however, that the area is so much a function of a significant range of other matters that it is hardly a necessary or useful mark of uniqueness, unless all the other features are identical. Some of those other features were said by Mr Stodulka to be different from the plaintiff's tender proposal and he was not relevantly challenged. Some features, of course, were the same, such as the need to have aisles of a size to accommodate the stockpickers, which would thus have to be the same, a proposition embraced by Mr Hanna.

89. It seems to me that while the plaintiff's floor area may be unique as a number it is not so in a relevant way. Two things are important: the floor area is a product of the configuration of the building, which was primarily designed, of course, for storage of books and similar materials on shelves provided in rows and thus likely to be similar in all proposals to meet the specifications and that it depended on such a range of components that it did not provide a valid measure of whether the underlying components were unique.

90. The third item of uniqueness referred to by Mr Hanna was the annual rent. The plaintiff had included an annual rent of $477,200 which included the Base Building rent at $325,000 with specified additions set out in the tender.

91. It was never explained how this was relevantly unique. Clearly the rent would be dependent on the cost of obtaining the land, whether by purchase or lease, and the cost of constructing and maintaining the building. Different components may result in the same final rent though individually being widely different.

92. This is shown in the fact that the relevant comparators for Decoin in its original tender showed an annual rent of $572,715 (with a Base Building rent of $276,580) for a ten year lease and $532,625 (with a Base Building rent of $257,219.40) for a twenty year lease. The revised proposal reduced the annual rental to $509,730 because of the reduced area and other additions which, in discussion with the Sub-Committee, were agreed not to be required. It appears from the evidence that the final annual rental for the building as built was $467,666 which is, of course, very close to but not identical with that proposed by the plaintiff.

93. In this case, there are significant differences between the overall rent and the components in each case of the original tenders. The evidence, referred to below, as to how Decoin came to the final rental shows factors quite independent of the features of the tenders that, in the case of the plaintiff's tender, the plaintiff said were unique. No explanation was offered in the material submitted by the plaintiff, that is evidence or submissions, as to why such evidence should be ignored.

94. Thus, while the actual amount of the rent may be unique, it is such a composite figure that it cannot be said to be a relevant feature showing that there was a uniqueness justifying a conclusion that there had been disclosure of the plaintiff's tender.

95. The materials from which the walls of the proposed storage facility were to be constructed comprised the next item. The plaintiff proposed "prefinished heavy duty color bond [sic] with insulation barrier". Mr Hanna described this in his affidavit as noted above (at [62]). He also said that he told the Sub-Committee on 31 October 1996, that "[t]he material which I am using is colorbond clad finished, which discourages settlement of dust." In the tender plans, it was described as "BHP custom blue orb in colorbond off-white".

96. Decoin's tender proposed the use of cavity brickwork with insulation, quite different from that of the plaintiff's proposed wall construction. What was actually constructed used a proprietary product known as Equitilt. It was described in a product brochure tendered in the proceedings as:

a stressed skin sandwich panel, comprising COLORBOND© pre-painted steel skins continuously laminated over a fire retardant treated Expanded Polystyrene (EPS) core ... [a] lightweight panel with excellent thermal insulation properties.

97. Mr Alistair Swayn, a distinguished architect, filed an affidavit as to the comparison between the relevant Decoin plans and those of the plaintiff. He addressed the wall materials. He said that, in his opinion, they were different but that, in any event, the materials proposed in the plaintiff's tender were not unique. They were, he said, "industry standard products".

98. Mr Eric Martin, a very well-qualified architect, addressed briefly the issue of the wall materials. In his affidavit, he described the wall material for both the plaintiff's tender and the building as built by Decoin as "metal cladding both sides and insulation between". He did not go into particulars. This evidence was not inconsistent with that of Mr Swayn.

99. Mr Roger Pegrum, also a distinguished architect, referred as well to the wall materials in the building as built. He referred to the wall materials as one of the "similarities" with the plaintiff's tender as follows:

External walls were to be brickwork but are now prefinished steel panels and precast concrete.

100. The reference to concrete is interesting. Mr Swayn also referred in his oral evidence to the "concrete internal lining", which is consistent with Mr Pegrum's description. Mr Stodulka, however, was adamant that there was no concrete wall on the inside of the building he proposed.

101. Mr Stodulka also described the materials he used and those in the plaintiff's tender as different. The BHP product proposed by the plaintiff was "corrugated sheeting" and he said that BHP did not "make anything like Equitilt at that time in corrugated sheeting with a laminated polystyrene foam insulation layer". The plaintiff's wall material was not, he said, "a laminated product like Equitilt".

102. In any event, the U-Stow-It proposal for the walls was "100mm colourbond steel sheet insulated panels vapour sealed and external to the structural frame" for the main book storage space, relevantly similar to that which was in the plaintiff's tender. There is no suggestion that the plaintiff's tender had been disclosed to U-Stow-it.

103. While at some level, there may be a descriptive similarity between the two methods of wall construction, I am not satisfied from the evidence that the plaintiff's wall material was unique; it was clearly a readily available product which was not, in fact, the product ultimately used in the construction of the storage facility itself.

104. The final item referred to was the retrieval system for the stored material. The plaintiff proposed two "Crown" stockpickers model SP3015TL214. Decoin proposed two or three "Crown" stockpickers and included a brochure for the series SP3000 stockpicker which included, it appears, the model referred to by the plaintiff. U-Stow-It proposed "[t]wo Crown Model SP 3015TL214 stockpickers".

105. There can be no suggestion that the plaintiff's proposed materials handling system was unique.

106. The only issue, then, is whether, notwithstanding that I have not found any of the individual items were unique in the relevant sense, the combination was unique.

107. In a different context, Megarry V-C said in Coco v AN Clark (Engineers) Ltd [1968] FSR 415 at 420:

Novelty depends on the thing itself, and not upon the quality of its constituent parts. Indeed, often the more striking the novelty, the more commonplace its components.

108. Attractive though such a statement is, and undoubtedly true in many cases, the storage facility in this case is somewhat different.

109. I am satisfied that the plaintiff's proposal is not novel in this sense. The similarities of the proposals contained in the various tenders was as much a result of the limited options that were available to comply with the specifications of the defendant as on novel solutions. Unsurprisingly, all three tenders showed a rectangular base building with rows of shelves parallel to the shorter side of the rectangle. The actual height of the shelves differed, but, for reasons set out above (at [68]-[85]), I am satisfied that was an issue expressly raised in the Request for Tender.

110. The actual height of the shelving was in large part determined by the regulatory height allowable for the building itself and the height that the stockpicker could reach and safely allow staff to use it. The first matter was a matter of building and planning regulation, the second of commercial availability, the third occupational health and safety regulation.

111. I note, too, that in her affidavit of 25 May 2007, Ms Maggie Jones, who was at the relevant time, Director, Collection Management and Retrieval Services for the defendant, expressed the following view:

In my opinion, the detail in the plaintiff's tender is not unusual or unique and I do not recall at the time considering that the plaintiff's designs were particularly noteworthy in any aspect as to uniqueness.

112. Her opinion as so expressed was not challenged in cross-examination.

113. Ms Smith made a similar statement in her affidavit and was also not challenged on it in cross-examination.

114. In any event, if the Court is to consider novelty in the sense in which it is referred to by Sir Robert Megarry V-C, then the Court must consider the whole of the facility, not merely one part, even if the central and largest part is the serried racks of high-use shelving. The similarity of the shelving was demonstrated by placing a transparency of the plaintiff's proposed layout of the proposed storage facility over the storage facility as built. The shelving was, in the circumstances, however, not strikingly similar: rows of parallel shelves will, of course, be similar to rows of parallel shelves, hardly striking. Further, the "thing itself", namely the whole of the facility, included significant functional differences such as the central aisle of the Decoin facility, the different operational arrangements for the stockpickers between the facilities proposed by the plaintiff and that constructed by Decoin, and the layout more generally, including some features of the shelves which, in the plaintiff's tender, included some high rise shelves which commenced at a height to allow the stockpickers to travel under them (as noted in item (x) in [54]), a feature not replicated by the ultimately built facility. The floor plan comparison between the two made by Mr Swayn seems to me to be compelling. It also shows that the broad outline and functionality of the Decoin facility did not change significantly between the original tender and the completed facility but was significantly different from that proposed by the plaintiff.

115. I am not satisfied that there was in the relevant sense any uniqueness or novelty in the facility proposed by the plaintiff in its tender such that similarities with the proposals in the other tenders, especially that of Decoin, could only be explained by Decoin gaining knowledge of the plaintiff's tender. Indeed, as noted below, there were rational and compelling explanations for similarities not dependent upon disclosure.

116. I accept that, as submitted by Mr R Thomas, counsel for the plaintiff, information can be confidential even if not novel. He referred to what Gordon J said in Krueger Transport Equipment Pty Ltd v Glen Cameron Storage and Distribution Pty Ltd [2008] FCA 803; (2008) 78 IPR 262 at 284; [92]:

Before proceeding, however, I pause here to note that care must be taken in using such loaded terms as 'novel' in this context. The parties proceeded in this case as if it were a patent matter, presenting expert testimony regarding prior art, common general knowledge, and so forth. That is to say, they implicitly proceeded as if the Krueger design had to be patentable in order to be confidential ... Unfortunately, this is a fundamentally wrong approach in breach of confidence litigation. As Megarry J said in Coco (at 48), one should not get caught up by particular adjectives such as novel; 'whether it is described as originality or novelty or ingenuity or otherwise, I think there must be some product of the human brain which suffices to confer a confidential nature upon the information'. To put it more plainly, information need not be patentable, copyrightable, or otherwise protected by the intellectual property laws in order to be confidential. Common examples of commercial information that may be considered confidential even if not novel in the patent law sense include customer lists, price lists, business proposals, and marketing strategies. In this regard, I would draw the parties' attention to the concise definition of confidentiality provided by IP Toolbox in its handy reference page, 'The concept of legal confidentiality' (available at http://www.iptoolbox.gov.au/default.asp?print=true&action= article&ID=194):

Confidential information need not be entirely composed of information that is not available publicly. Public information can also be considered as confidential. This depends on the way a business uses the information. A customer list, for example, can be protected as having the necessary legal confidentiality where it has been developed and treated as confidential, even though it is drawn from information which is publicly known (ie. telephone records, trade journals, public registers etc).

117. While that must all be accepted, it is not here to the point in this case, for the issue is not whether the information in the tender was confidential. That seems to be accepted by both parties. The issue is whether the features in what Decoin ultimately built as the storage facility were so unique, or novel, that it could only have been so built if the plaintiff's tender had been disclosed to Decoin. That does rely on concepts of novelty and not merely confidentiality.

118. Just as the plaintiff's tender, or, at least, final proposal for consideration by the Sub-Committee, consisted of a number of documents submitted over time and after the first response to the request for tender had been lodged with the defendant on 22 October 1996, so Decoin's tender consisted of the document submitted also on 22 October 1996, the closing date, but also some modifications made thereafter.

119. This involved a revision dated 31 October 1996, the day of the interviews. There were also two other variations after that. I need to take these into account.

120. I also need to take into account, for a full evaluation of the matters, issues that were raised by Mr Pegrum. I have already addressed the issues that the plaintiff said were unique in his tender proposal. I have found that these were not so unique that any inclusion of one or more of them in another tender on the building as actually constructed would only be explicable by the disclosure of the contents of the plaintiff's tender. Mr Pegrum, however, referred to a list of six "similarities" between the plaintiff's tender and the completed building which he said was "short but telling". I infer that he was saying that these were such as to suggest that there must have been disclosure. This list includes some matters referred to by the plaintiff, but includes some additional matters I shall consider.

121. Thus, I need to consider each of these matters in terms of the Decoin tender and the completed building in the context already proposed (at [53] above).

122. The first item is the location. Decoin in its original tender (that is the document lodged on 22 October 1996), proposed a block at Block 14 Section 22 Hume at the southern end of the suburb. It was close to a sawmill and a pre-mixed concrete plant. this site was also the site identified in the revised tender (of 31 October 1996). On 4 November 1996, however, he proposed instead a block at Block 27 Section 2 Hume, which was about 1.6 kilometres further north in the suburb. It was well away from the sawmill and the concrete plant. It was also only three blocks away from the site proposed by the plaintiff. That variation was accepted by the Sub-Committee.

123. The second item is the floor area. As noted above, the Decoin tender originally showed this as 2973 sq m in the tender schedule. On the accompanying plan, it was noted as 2937 sq m. In the revised tender, the area was 2734 sq m. In evidence, Mr Stodulka said this was achieved "by rationalising the shelving layer". This includes an increase in the height of the shelves to 7225mm.

124. The third item is the shelving layout. In the Decoin tender, there were 37 standard "shelf units in two rows facing the short side of the building with, at one end of one row 5 shorter shelf units adjacent to the loading bay and three shelf units at the side between the secure storage, the office and the trolley area". There was an aisle between the two rows. In the revised tender, the shorter shelf units had been made full length and one of the thee shelf units at the side had been removed.

125. The fourth item is the shelving height. In the Decoin tender, the shelf height was noted as 6600mm, though on the accompanying plan, it was shown as 7000mm. It appears that this difference was from the shelf to the top of the shelf. As noted above (at [123]), the revised tender showed the height as 7225mm. This, it appears, would have resulted in a height to the top of the shelf of about 7500mm.

126. The fifth item is the external wall materials. In the Decoin tender and the revised tender, the wall materials proposed was 270mm clay brickwork with 50mm styrene cavity fill (75 mm in the revised tender).

127. The final item was the rental for the first year. The Decoin tender had three schedules: $572,715 (with Base Building $276,580) for a 10 year lease, $555,533.60 (with Base Building $268,282.60) for a 15 year lease, and $532,625 (with Base Building $257,219.40) for a 20 year lease. The revised tender did not include a schedule of prices. A letter dated 5 November 1996, however, noted a 3% per annum reduction in rental "for a 15 year lease from 10 years".

128. In addition, a document tabled at the interview that Decoin attended with the Sub-Committee on 31 October 1996 addressed issues that had been raised by the Sub-Committee and, as a result, reduced the rental to $509,730 per annum for a 10 year lease. On 5 November 1996, Decoin offered to reduce the rental to $467,666 per annum for a 15 year lease. I note that U-Stow-It also addressed the issue of a 15 year lease on or about 6 November 1996.

129. Mr Hanna had also referred in his description of uniqueness to two other matters which, for completeness, I mention here. The first is the material from which the walls were to be constructed. That is dealt with above (at [126]).

130. The second matter was the retrieval system. As noted above (at [104]), all three tenderers, including Decoin, proposed 2 "Crown" stockpickers model SP 3015TL214.

131. Finally, in its Statement of Claim though not elsewhere, such as in Mr Hanna's affidavit, the plaintiff referred to the matter of "clear span". The plaintiff proposed no internal columns. The Decoin tender was not completely clear but it seemed that it proposed columns at 25 metres.

132. Using the terms referred to by Mr Pegrum, it appears that the building as constructed contained the following elements.

133. As to the first element, namely the site, the facility was built at the location Decoin re-negotiated with the defendant on 4 and 5 November 1996.

134. As to the second element, the evidence of the net lettable area of the building was unclear. A letter from Decoin to the defendant dated 8 August 1997, stated that "the actual figures from those plans submitted to DELP [Department of Environment, Land and Planning of the ACT] are: ...

Net lettable area warehouse 2289 m²

(As defined by BOMA) loading bay 92 m²

office 267 m²

135. This totals 2648 sq m of net lettable area. A plan prepared by Archline and dated May 1997, however, showed the floor area as 2556.6 sq m. I am, on the state of the evidence, unclear about the true comparator given the matters referred to above (at [88]). For the purposes of these reasons, I am prepared to accept that it was, in fact 2556.6 sq m, that is, excluding the loading bay.

136. The third element is the shelving layout. The actual layout was similar to that in the revised tender, though it appears that two "half" shelf units (that is one sided, not two-sided) had been added to the two units shown at the side. Nineteen of the shelf units in the parallel rows are shorter than the remaining twenty-two units. A row of shelf units was also placed on the outer wall of the secure storage area. There was an aisle down the middle of the rows.

137. The fourth element was the shelving height. The shelving in the completed building was a height of 7225mm, the same as in the revised tender.

138. The fifth element was the wall material. The building was constructed using the Equitilt panels. These differed markedly from the brick and infill proposed in the Decoin tender and revised tender.

139. The final element was the rental. The final rental, according to the letter from Decoin dated 8 August 1997 (see [134] above), stated a rental for a 15 year lease was $467,666 per annum.

140. As to the additional matters, the position is as follows.

141. The walls were ultimately constructed of the product, Equitilt. It is referred to above (at [96]). The description is important but I do not need to repeat it. I refer to the comments above (at [97]-[101]). The reason for this is that the Sub-Committee had a concern that the plaintiff's construction may require a metal to metal connection from the outer skin of the wall, being corrugated iron, which could easily result in transfer which can cause condensation and which would, therefore, be a risk to the stored collections. This concern was not alleviated in questioning at the interview with the plaintiff. The lamination of the Equitilt product and its method of construction would have resolved that issue.

142. The materials retrieval system actually in use was as proposed in each of the tenders.

143. As to the clear span, the facility was actually built with columns which were incorporated within the shelving, different from the tender proposal of the plaintiff.

Decoin could only have included those items different from its tender by knowing what was in the plaintiff's tender

144. In relation to this, there is a range of evidence I must consider. The first is what explanation was offered for the changes between the tender and the ultimate construction as set out above. The second is the evidence of whether there was any disclosure. The third is simply an assessment of the necessity of disclosure to the final design.

145. As to the first of these matters, there is a range of evidentiary material. I turn initially to the evidence of Mr Stodulka. His overall approach to the tender process was explained in his affidavit of 18 October 2007:

The original plans accompanying Decoin's tender response of 22 October 1996 were conceptual and plan 96060/01 was indicative of Decoin's proposed shelving. Decoin, in consultation with the Library, intended to refine its plans so that the plans would meet the necessary planning authority requirements ...

146. Under cross-examination, he expanded on this approach:

So would it be fair to say then that the original tender lacked, in your mind, some degree of specificity, lacked some specifications, that were going to be added later? --- I think we understood there would be evolutionary improvement in those concepts that we submitted. Now I can give you several examples of how those evolutionary concepts came about in every sort of aspects of the design.

...

The tender that you put forward on 22 October 1996 lacked some specifications, a degree of precision, that you understood would be added to it, in your words, as it evolved over time? --- Refinement. Refinement, yes.

Well, the word 'concept' is a bit more than indicating something more than refinement would be needed, does it not? --- Not in my mind, I knew what I was going to build and it was sort of set by size of the parameters around the shelving.

But it is the case that you understood that consultation would take place with the library, in order to refine your concept, your design? --- I would say that the - in our submission we met the minimum requirements, so if we were - can I give you an example of this maybe where we refined it, or we sort of improved the design, or?

Well I'll come to that in a moment, sir. What I'm focusing on is your own words in paragraph 4. 'Decoin, in consultation with the library, intended to refine its plan so the plan could meet the necessary Planning Authority requirement'? --- That was one aspect of that refining process, to meet the requirements of the ACT Land and Development ...

But you understood that your concept and plan 9606001 would be refined in consultation with the library. Correct? --- The details would be, like certain details would be, yes. You know, not the design of the shell, they were interested in the design of the shell, they were interested in the mechanism of the - how the shelving would operate more than the superstructure.

147. This was, in fact, the approach that the defendant took. As Mr Pidd put it rather colourfully:

Mr Stodulka in his affidavits, in talking about the tender, makes the point that his tender was a concept design? --- That's what we expected from all tenderers. The thing could have been built out of cardboard, providing it met the requirements of the specifications. And those requirements were thermal and an envelope which would protect the collections inside.

So that the difference between the Decoin and the plaintiff's tenderer is that Decoin's tender was a concept, and the plaintiff's tenderer had some specifications in it? --- No, that is incorrect.

What difference would you say in that general sense? --- Well, that Decoin were - gave a fully-documented tender in that they had recognised all of the requirements plus they had placed extra into their tender which we did not require.

Right? --- So I wouldn't describe it as a - in the terms that you have, that it was a concept.

Well I'm using Mr Stodulka's terms? --- But that was the view that I held prior to the tender, that people would put in a concept providing that it met all of the specification conditions. Now, in Decoin's case he met all of those conditions.

So is it fair to say that he understood correctly that what the tender called for was a concept? --- Well, it was a flexible arrangement as I noted in my earlier evidence that in order to appeal to the whole of the property market it could either be an existing place, it could be a greenfields development, and we thought that there may be three shelving configurations.

148. As already noted (at [28]), I do not stay to consider whether that approach is permitted, desirable, or proper under the tender process or not. I do note that each of the tenderers, including the plaintiff, was permitted to add additional material after they had formally submitted their tenders on 22 October 1996.

149. It is helpful, however, to explain the way in which the relevant elements of the design was an interactive process. Of course, that is neutral as to whether there was unauthorised disclosure of the plaintiff's tender and plans, for this process would lend itself to incorporation of any disclosed elements.

150. That the defendant accepted this kind of process is clear from the evidence of a number of its officers. Thus, Mr Pidd said in his affidavit of 23 April 1999, annexed to his later affidavit of 26 August 2003:

Prior to going out to tender I had read the conditions of tendering which comprise section 1 of the RFT. It was not my understanding, at any time, that clauses 1.1.4.5 and 1.1.4.6 proscribed all alterations or modifications of an original tender. My approach to the question of tender alterations was based upon the Commonwealth's Procurement Guidelines, issued by Purchasing Australia (a business unit of the then Department of Administrative Services).

151. He later referred to the alteration made by Decoin to the thickness of the walls that "it was considered that the change benefitted the Library without disadvantaging U-Stow-It (the [plaintiff] having already been excluded)."

152. It can be seen from a comparison between the Decoin tender and the building actually built that there were changes. These also resulted in a building that had similarities with the building proposed in the plaintiff's tender. It is, therefore, appropriate to consider the evidence about how those changes were made and the reasons for them. So as to consider the plaintiff's case at its highest, I will consider the matters referred to as relevant similarities mentioned in Mr Pegrum's affidavit, even though there were more mentioned by him than were in the list relied on by the plaintiff in its evidence.

153. The change of site was not relied on by the plaintiff but was mentioned by Mr Pegrum. That it was a site closer to that proposed by the plaintiff does not seem to me to be of great significance, despite what Mr Pegrum said. There was not, so far as I could see in the evidence, anything particular about the location at or immediately around the plaintiff's proposed site which had any particular significance. Some features of the block itself proposed by the plaintiff were beneficial, as shown in the record of a meeting between Mr Hanna for the plaintiff and officers and agents of the proprietor of the land. None of these were relevant to the changed site proposed by Decoin. Mr Hanna only mentions the block in his affidavits when he described it as "the most suitable site", without other elaboration.

154. Indeed, the notes from some members of the Sub-Committee show that there were concerns that the block adjacent to that of the plaintiff's proposed site was reserved for "heavy industry" and this was said "not [to] provide assurance of compliance with condition 1.2 (location - neighbouring industry) of the National Library's [sic] specifications".

155. I note, too, that the Sub-Committee imposed three conditions on Decoin before accepting the new site:

(ii) the storage area of the new building could accommodate all the shelving; and

(iii) there would be no penalties/downsides for the defendant as a result of the site substitution.

156. There was no suggestion in any of the evidence that the Sub-Committee or the defendant actually required Decoin to provide another site, nor that it should move closer to where the plaintiff's site was located. Indeed, the evidence was quite to the contrary. Despite the plaintiff suggesting that, contrary to the specifications, the original Decoin site was not within a neighbourhood free of noxious or dust producing industries, being next door to a sawmill, the Sub-Committee, in fact, was satisfied that the building proposed by Decoin would be sufficiently sealed that it would not permit the ingress of any dust or noxious materials from adjacent activities. The Sub-Committee also had some concerns about the neighbouring activities to the plaintiff's proposed site as noted above (at [154]).

157. In any event, the circumstances of Decoin making the change are summarised in Mr Stodulka's affidavit of 14 June 2007, as follows:

Decoin had considered offering the alternative site in its original tender response, but had not done so because the original site was owned by Decoin and the Decoin team had done specific research into the dust and environmental issues raised by the tender and we considered that the original site was adequate. However, upon realising that the Library had concerns in relation to the original site, Decoin promptly acted to offer an alternative. The alternative site was a site which Decoin had an option to purchase subject to Decoin winning the Tender, but Decoin's preference and the reason the original site was offered, was to offer a site which it owned.

158. In cross-examination, Mr Stodulka accepted that he had thought that the members of the Sub-Committee were not satisfied with the site and that was why he identified the other site. He emphatically rejected the suggestion that the defendant "would have preferred" a site that "is up in Hume", that is near where the plaintiff's proposed site was.

159. That the Sub-Committee was satisfied with the Decoin site was attested to by the members of the Sub-Committee, all of whom gave evidence before me. It is not necessary to quote from them all. What Mr Pidd said, as follows, is sufficient:

And as I understand it, the change in site comes about as a result of the library's suggestion to Decoin to change the site? --- Absolutely not. During the interview Decoin were made aware of the concerns about the proximity to those things and Decoin were able to assure us that by providing positive pressures within the airlock that there would be no intrusion into the envelope. And not only that, he had provided particle counts from the air. So to suggest that the library requested that he change the site is absolutely incorrect.

So just so it's clear, you are very clear that the library did not suggest to Decoin that the site in its original tender should be changed? --- Absolutely not.

I see. And therefore it would have been a surprise to you when Decoin came along and said, 'We want to change the site'? --- It was. Quite a surprise.

...

See what I want to suggest to you is that at that meeting on - sorry, interview ...? --- Yes.

... on 31 October, it was made very clear to Decoin that the site was unacceptable, that is their original site? --- No, it wasn't that it was unsuitable, but just pointed out that there may be some problem as far as the library is concerned with the ingress of particles. but as I stated before, that Decoin had already had an answer for that in the positive pressure within the airlock, and gave us assurances that that would not be a problem. So I guess that was the catalyst for him to think. 'Well gee, are they happy or are they not?' So there's certainly no request from the library, and certainly not from myself, that he come up with an alternative site.

And of course the site ...? --- So I reject that completely.

160. In fact, the evidence suggests that Mr Stodulka had mis-read the view of the Sub-Committee, for the evidence was that "[a]ny concerns that the [Sub-Committee] had regarding the site originally proposed ... were resolved at the interview with Decoin".

161. There was no evidence or challenge in cross-examination to suggest that this evidence was inaccurate or unreliable. It is credible; I accept it. There is no basis for suggesting that the changed site proposed by Decoin was other than arrived at independently without Decoin having to have access to the plaintiff's tender or having details of it provided to it.

162. The second matter was the floor area. As already noted (at [88]), this is really a consequence of other matters: shelving height, aisle size, layout and so on. The convergence of the Decoin process to 2566.6 sq m compared to the plaintiff's 2500 sq m is, perhaps, remarkable but only if it stood alone and there were no explanations to it in respect of the other matters to which I will refer.

163. Indeed, as consideration of the next matter will show, what is perhaps more remarkable (but innocently) is that, with what appears to me a relevantly different layout, the resulting area is so close.

164. Thus, without other matters showing disclosure of the contents of the plaintiff's tender, I do not consider that this convergence is evidence on its own, or in combination with the other factors, of any disclosure to Decoin of the plaintiff's tender or any information in it.

165. The third matter is the shelving layout. As I noted above (at [114]), there was produced at the hearing a transparency of the plaintiff's plan in its tender which could be laid over a plan used by Decoin (the Spacerack plan) to construct the facility so that the plaintiff's layout could be directly compared with the plan used in the facility actually constructed. The fit between the two, however, was not perfect.

166. Mr Swayn described it as "a significant degree of convergence". Ms Jones seemed to see some divergence at the end, though it was suggested that if the plans were laid quite flat this disappeared. Ms Jones, however, referred to what she said in her affidavit, namely:

Given that both the plaintiff and Decoin were proposing to use industrial type high rise modular shelving it would not be surprising to me that they would end up with similar arrangements.

167. There were, however, significant differences. In the first place, in the constructed building, shelving rows 20 to 41 were one bay longer than rows 2 to 19. The plaintiff's proposed rows were all of uniform length except the high rise extensions to some as referred to above (at [114]). There were, also, two rows and two single-sided rows off to the side in the constructed building which were not included in the plaintiff's proposal. There was a single-sided unit against the wall of the secure storage area perpendicular to the main rows. There was also a mid-row aisle down the main rows. The plaintiff's proposal for a continuation of shelving from the main block of shelves on one side but starting above the level at which the stockpicker would travel was not replicated in the actual building.

168. Thus, what was common was that there were in both plans 20 rows of double-sided straight-line shelving units. This is hardly surprising. That is entirely what would be expected. Indeed, it is difficult to conceive of another form of layout: a circular layout, as in the State Library of Victoria, or circular bays as in the library of the Supreme Court of Victoria may be more aesthetic, but is hardly as serviceable and efficient for what is a storage facility to which the public are unlikely to have access. Rows of shelves is the almost inevitable form of the facility. All of these short-listed tenders proposed that.

169. What must also be taken into account are the other parts of the plan. The building as constructed has a parking bay for the stockpickers half-way along the long side of the building, whereas the only place for parking in the plaintiff's plan was at one end of the building. There were arguments about which was more efficient but I do not need to consider them. This is, however, a significant functional difference.

170. Ultimately, there was no basis to be inferred from the shelving layout for a finding that the building constructed by Decoin and the shelving layout could only have been arrived at from a disclosure of the plaintiff's tender plan.

171. The fourth matter was the shelving height. The height of the proposal in the plaintiff's tender was 7500mm; the height of the shelving installed in the building as constructed was 7225mm. They were not the same. It seems that the plaintiff says that his proposal to put shelves above standard height was his own idea. That is not so; as noted above (at [35]), the defendant had itself contemplated a higher height than the standard 2.1m and, as Ms Smith said in her evidence quoted above (at [82]), the defendant had already done some research into this.

172. I have also noted the obviousness of the relationship between the height of the shelves and the size of the floor area which has an economic impact.

173. Mr Stodulka had given some careful thought about the shelf size. In his affidavit, he said:

The revised response included amended proposed shelving height from 6600mm to 7200mm, following clarification from Crown that the stock picker combined with the height of the operator could reach up to an absolute maximum of 7500mm. At this height, the operator would be able to read the labels on the books and comfortably insert and remove books.

174. He expanded on this in his oral evidence under cross-examination. There, he said:

I was unfamiliar with the usage or application of stockpickers, so I went to Woolworths and I checked out what their rate is for stocking shelves in a high level bay warehouse, where they've got, you know, 5-10 metres high shelving, so.

...

What I'm putting to you is this, Mr Stodulka, and I'll put it in this way so it's clear to you. The issue of shelf height was ... a crucial issue for the library because of the issue of the capacity of the building to store material, correct? --- No, I wouldn't put the emphasis on it like that at all. I would say that their major concern was safety at operating over 6 metres. So, you know, we sort of spoke to Crown possibly and got their assurance that that has become an industry standard where they're operating up to 7.5 now. So we selected a stockpicker that was capable of operating fairly safely at that height. Now there are a lot of ramifications, first of all there's an oscillation effect where the stockpicker could move side to side at speed. It could bounce backwards and forwards depending on the levelness of the floor. If there's a protruding book it could sort of hit that book and knock out half a dozen shelves or something like that. So there were a lot of implications there. So we would have looked at and analysed this in between times and sort of eventually come to the conclusion that we can convince the library that they can operate at 7.5 metres safely. And the reason we probably didn't go to 7.5 was because our ceiling and services would impact on the top of the stockpicker at that height so we reduced it by 300 millimetres perhaps to 7.2 and that's we maximised the height of the shelves. And that was the sort of analysis that we progressed and you know in consultation with the people that were providing the shelving in consultation with the stockpicker suppliers.

175. In his affidavit, Mr Stodulka had expanded on the rationale for the height in some detail. He deposed:

I recall that at the time at which I was putting together Decoin's tender, planning ordinances in the Australian Capital Territory restricted building height in Hume to 10 metres.

Taking into account:

(a) the height of the slab;

(b) the maximum allowable building height at 10m;

(c) the minimum allowable roof pitch - which I recall was 5 degrees;

(d) the need for ceiling insulation and linings which Decoin provided for as 300mm styrene insulation;

(e) shelf braces to stabilise the shelves at approximately 600mm;

(f) 600mm deep steel beams;

(g) air conditioning ducts that were 600mm in diameter; and

(h) fire hydraulics that were 150mm;

the maximum shelf height that any tenderer could submit would be 7.5 metres. Decoin, taking into consideration all of the factors listed above, tried to maximise the height of the shelves and given those factors, the maximum for it (and in my opinion, for all other tenderers who would have been similarly constrained) was 7.5 metres because the shelves had to be a certain distance from the ceiling. The change in the proposed shelving height between Decoin's original tender response and its revised tender response was, I recall, a result of all these factors being considered as well as clarification from Crown referred to in paragraph 19 above.

The factors outlined above ... mean that it was inevitable that all of the tenders would have contained some similarities.

176. This was, again, credible evidence, not contradicted by any other evidence. I consider that I should accept it.

177. In doing so, I am satisfied that there was an independent basis on which Decoin arrived at the height of shelving, prompted by the fact that the defendant had already raised the issue in the Request for Tender. There is, therefore, no basis for holding that the height of shelving in the building as constructed could only have been arrived at by a disclosure of the plaintiff's tender.

178. The fifth matter was the annual rental. Ultimately, the actual rental is much lower than that proposed in the Decoin tender. There were a number of reasons for this:

(1) initially, Decoin reduced the size of the building by amending the thickness of the styrene cavity and increasing the height of the shelves. This reduced the floor area by 200 sq m;

(2) Decoin also moderated some of the items included over and above the base building in a response to queries raised by the Sub-Committee;

(3) a tax ruling which was relevant that was published after tenders had closed and the circumstances of the building and its operation permitted a further reduction in the rent; and

(4) the lease period was 15 years, rather than that proposed by the plaintiff of 10 years with 2 five-year options.

179. These provide reasonable justifications for reduction in rental. I am satisfied that there was a justified basis for Decoin reducing the rental quite independently of anything in the plaintiff's tender. Indeed, the tax ruling may have impacted on the plaintiff's tender to allow it also to reduce the rental further. There is no evidence to suggest that Decoin's rental charged to the defendant was based on any disclosure of any information in the plaintiff's tender. I am satisfied that there is no basis for finding that the rental payable in respect of the completed building was set because of a disclosure of the plaintiff's tender.

180. The next matter is the wall materials, which did change substantially from the Decoin tender to the completed building. I will refer to the relevant evidence about this change, but I have already addressed some of the evidence about whether the materials in the plaintiff's tender and used in the actual construction were relevantly similar above (at [95]-[101]). In my view, they are not relevantly similar, which is, in itself, sufficient to find that the change was not a result of any disclosure of the plaintiff's tender.

181. Turning, however, to the evidence, the explanation offered by Mr Stodulka is impressive. He deposed in his affidavit:

In relation to the wall system used, and which the plaintiff alleges was its own design, Decoin responded to Library concerns about the "R" rating of its proposed two skins of brick and an insulting polystyrene of 75mm and went out to market to obtain an alternative product. Decoin decided to use a product manufactured by James Hardie, available at the time that had two metal sheets and an insulator as features. The plaintiff's choice of materials was not known to myself or through me, Decoin, at the time and did not impact on the choice of this particular product.

182. In his oral evidence, under cross-examination, he said:

In the end I wasn't convinced that the double brickwork would be able to provide the same insulation as I required. It may have met the tender document but I wanted to make sure that in terms of air conditioning cost and so on it was reduced by going to a more insulating material.

...

In the original scheme of things, I was never going to use double skin brickwork in the first place.

...

Did you say that in the tender? --- No, because it was a detail that I thought the library wasn't really concerned with, they just wanted to meet the specification. I don't think they cared whether it was going to be plasterboard or brickwork or metal.

183. That approach was supported by the oral evidence of Ms Jones, who said:

Do I understand from what you say in that paragraph that the wall construction of the proposed building was not a matter of consideration to the committee, other than in relation to the - I think it would probably be the environmental factors, the temperature rating and that sort of thing? --- That's correct, yes.

So that if someone, as in the Decoin, tendered for a particular building using double brick and brick cavity and a brick building, they could dispense with that construction, that method of construction and those materials, even though they won the tender on that basis? That was your understanding of the way it would work? --- Yes, provided it had the same insulating qualities, yes, yes.

184. This was consistent with what she had deposed to in her affidavit.

Well, you must bear in mind, your Honour, that we were asking people to build and lease it to us. So there was no power in the documents to specify exactly what materials they could use providing they met the thermal and structural considerations set out in the RFT.

...

And so that could change during the process and you wouldn't regard that as being a change in the tender arrangements? --- No, not at all, because the tender was a flexible one.

...

So that we couldn't dictate what the wall or roof elements were provided ---

You dictate the result? --- Yes.

186. Thus, there was no imperative to use a particular wall material; the important thing was the result - the certainty of insulation, and, of course, the absence of condensation. This makes what Mr Stodulka said ring true and make sense.

187. In fact, his evidence was also that the Equitilt material was easier and cheaper to construct. That it had additional insulation was of critical importance. It also avoided a potential risk identified with the plaintiff's proposal.

188. I am unable to see any basis for suggesting that this change between the Decoin tender and the facility as constructed is only explicable in terms of a disclosure of the plaintiff's tender. The credible and persuasive evidence is all to the contrary.

189. The next matter is the retrieval system. There was no change and so this is irrelevant. As noted, above (at [104]), all three tenders proposed the same system, though the model chosen by Decoin may have been different.

190. Even here, however, it was clear that Decoin had exercised independent expertise and consideration. Mr Stodulka said in evidence:

I was unfamiliar with the usage or application of stockpickers so I went to Woolworths and I checked out what their rate is for stocking shelves in a high level bay warehouse, where they've got, you know, 5-10 metres high shelving, so. And then I based what their figures [for usage of similar stockpicker] were on what we could provide, or what the Library wanted, and Woolworths sort of said to me that they could provide a stock picker operator and he could do 360 picks in an hour, just going up and down in between the shelving and picking a box of biscuits and a box of detergent, and a box of this and that was their sort of benchmark rate, or whatever, and so I went back and ---

And you thought with books and expertise it might be? --- You had to look at the label and I sort of downgraded that to - if these guys could do 100 per hour, that would be good and I can't remember what the library asked for in terms of what their requirements for - but in the end we supplied two just in case they had overtime requirements, or one of them had broken down and they needed to access the books.

191. Finally, the clear span needs to be mentioned. The plaintiff's tender proposed that the building would be constructed with "steel frame with 36000mm clear span". As the building as constructed had columns, this is irrelevant to this issue, despite its inclusion in the Statement of Claim.

192. Before leaving this matter, it is worth noting that all relevant witnesses of the defendant denied on oath that there had been any disclosure. The members of the Sub-Committee, Mr Pidd, Ms Jones and Ms Smith, were all explicit and emphatic. Although there was some cross-examination designed to suggest that security of the tenders was not as safe as it should have been, and it may be that some of the security systems for protection of the confidentiality of the tenders were not perfectly secure, each of them expressly denied disclosing any material from the plaintiff's tender to Decoin or permitting that to be done.

193. Mr Stodulka was equally as emphatic. His evidence was that he was not aware of the contents of the plaintiff's tender until he was involved in court proceedings. He denied receiving any information from the plaintiff's tender. While he became a little defensive, as the giving of evidence clearly tired him, I found him to be a reliable witness of truth in the way he answered questions, the consistency of his answers and the consistency of his evidence with his affidavit and, indeed, with all the other evidence of the defendant. I accept him as reliable a witness of truth. He denied that he had received any material from the plaintiff's tender.

194. What the plaintiff says, however, is that I can draw an inference from the similarities of the plaintiff's tender and the building as constructed. Mr Thomas referred me to the following passage in which Dixon CJ in Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 at 304-5, referring to the drawing of inferences, though in the context of actions for damages arising from death or personal injuries caused by a defendant's negligence. His Honour said:

[I]n any case, we are not concerned with a choice between rival conjectures. In an action of negligence for death or personal injuries the plaintiff must fail unless he offers evidence supporting some positive inference implying negligence and it must be an inference which arises as an affirmative conclusion from the circumstances proved in evidence and one which they establish to the reasonable satisfaction of a judicial mind. It is true that 'you need only circumstances raising a more probable inference in favour of what is alleged'. But 'they must do more than give rise to conflicting inferences of equal degree of probability so that the choice between them is mere matter of conjecture.' These phrases are taken from an unreported judgment of this Court in Bradshaw v McEwans Pty Ltd [(Unreported, delivered 27th April 1951)], which is referred to in Holloway v McFeeters [(1956) [1956] HCA 25; 94 CLR 470], by Williams, Webb and Taylor JJ. The passage continues: 'All that is necessary is that according to the course of common experience the more probable inference from the circumstances that sufficiently appear by evidence or admission, left unexplained, should be that the injury arose from the defendant's negligence. By more probable is meant no more than that upon a balance of probabilities such an inference might reasonably be considered to have some greater degree of likelihood.' [(1956) [1956] HCA 25; 94 CLR 470, at 480-481]. But the law which this passage attempts to explain does not authorise a court to choose between guesses, where the possibilities are not unlimited, on the ground that one guess seems more likely than another or the others. The facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied.

(Emphasis added)

195. Here, however, I have positive evidence denying disclosure and, at best, evidence of similarities, all of which are explained to varying degrees, though none of the explanations are inherently incredible; indeed, they are all quite plausible. I am prepared to accept them.

196. The plaintiff's evidence was all inferential. Mr Hanna, in his affidavit stated:

Upon the basis of the matters set out above, and in particular upon the basis of my comparison with the shelving system plan layout, my original drawings and the plans and details of the facility as constructed, I have formed the opinion that the facility as constructed has incorporated into it a number of features of my design, and that these features form the core of my unique design.

197. The "matters set out above" have been dealt within my assessment of the two tenders and the issues propounded by the plaintiff and its witnesses.

198. Mr Eric Martin compared the three tenders and the storage facility as built. It appears he only compared the original Decoin tender and not any subsequent amendments. He also appears to have used the plaintiff's original tender and not the subsequent modifications. He stated, in a paragraph that was not the subject of objection:

CONCLUSION

I believe that it is clear that the Decoin tender was changed to be similar to the WHA tender after tenders closed. It is clear that what NLA built is closer to the WHA tender submission than the Decoin tender.

199. I cannot dismiss Mr Martin's belief, but there is nothing in his affidavit other than the changes from the Decoin tender to the storage facility as built and the comparison of the latter with the plaintiff's tender, all of which I have dealt with exhaustively above, to justify his belief. This comment was, however, read for the purposes of the evidence (see s 136 of the Evidence Act 1995 (Cth)) only as meaning that as a matter of physical fact, the storage facility as built was "closer to" the plaintiff's tender without any inference that it was deliberately made so. That it was "closer to the plaintiff's tender is so, but that is far from proving the plaintiff's case."

200. Finally, Mr Pegrum also approached the matter in a similar fashion. He deposed:

The remarkable similarities between the completed facility and the plans tendered in October 1996 by Wagdy Hanna and Associates cannot be dismissed as mere coincidences. In my opinion, the completed facility resembles the Hanna design more closely than it does the original Decoin design.

201. Mr Pegrum, understandably, takes no account of the explanations given by Mr Stodulka or the other evidence of witnesses; there is no information before me to suggest he has read any of that evidence and he was, so far as I could see, only in court when he gave evidence. There was no material in Mr Pegrum's evidence to support his comment that the similarities are "remarkable". It seems to me that, given my considerations so far, it is not the most likely assessment to make, given that both the storage facility and the plaintiff's proposed facility had few unique features. Certainly, in the light of the evidence before me "remarkable similarities" cannot be the only inference to be drawn, if it is a fair inference at all. I am not convinced even that the inference can be drawn.

202. In the state of such evidence, it is not possible to find to the degree required that the plaintiff has raised anything more than an hypothesis. No inferences can be drawn to the requisite degree of satisfaction. I do not find that I can infer from a comparison between the plaintiff's tender, the Decoin tender and the completed storage facility that there must have been some disclosure of the contents of the plaintiff's tender to Decoin.

203. As I have found that there is no evidence of a disclosure, I do not have to consider this element in any detail, as it would only arise had there been a disclosure. I do, however, make the following comments.

204. Mr R Thomas, who appeared for the plaintiff, cross-examined a number of the staff of the defendant who gave evidence as to whether directly or through poor handling of the tender documents, disclosure could have occurred. I listened carefully to that evidence and have refreshed my memory from the transcript and from my contemporaneous notes.

205. Each of the witnesses for the defendant who were members of its staff at the relevant time denied in their affidavit evidence that they had disclosed any of the plaintiff's tender material to Decoin or, indeed, to anyone else. They, so far as they were questioned on it, maintained such denials.

206. Having scrutinised their evidence carefully, I accept them as witnesses of truth. Most of the critical witnesses were no longer employed by the defendant which eliminated any likelihood that their employment by the defendant would consciously or unconsciously influence their evidence. They all gave their oral evidence in a clear, careful and forthright manner. I formed a clear view that they were honestly delivering their evidence which was reliable.

207. I am quite satisfied that none of the staff of the defendant disclosed any of the plaintiff's tender material to Decoin or, indeed, to anyone else.

208. There is, also, nothing other than pure speculation in the plaintiff's case to suggest any other form of disclosure. So far as that was inadvertent, by an illegal act, whether of the defendant's staff or otherwise, or, as is open to speculation, disclosure by a third party, such as a supplier involved in the plaintiff's tender or with whom some idea was discussed, it cannot be a responsibility or liability of the defendant. There is, however, no evidence to any degree of reliability of any of such likelihood and, even were there to be such evidence, it would not result in a finding for the plaintiff against the defendant in these proceedings.

209. This is sufficient to dispose of the plaintiff's claim that there was disclosure of parts or all of its tender.

210. Although it does not, therefore, expressly arise, it is appropriate that I deal, but not extensively, with the breach that the plaintiff alleges such a disclosure represents, namely a breach of a duty of confidentiality by which, the plaintiff says, the defendant was bound. This is both in deference to the submissions of counsel made to me but more importantly because of the defendant's counterclaim.

211. There seem to be two ways in which a duty of confidence binding on the defendant could be imported into the tender process, namely by contract and as a fiduciary obligation.

212. The law as to confidentiality in tender documents seems to me to be accurately stated in Seddon, N Government Contracts (Federation Press, 4th ed, 2009) at p 388; [7.33], where the author writes:

Duty of confidentiality. During the tendering process a duty of confidentiality may arise to protect information provided by either party. This duty exists whenever information, such as trade secrets or sensitive government or commercial information, is provided in circumstances where it is obvious that it is being provided in confidence. This may arise expressly or by implication. Alternatively, the parties may enter into a confidentiality agreement. The existence of a duty of confidentiality may indirectly control one practice sometimes resorted to in negotiated tenders by the body seeking tenders, namely, disclosing to one tenderer an innovative feature of another tenderer's bid. So long as the innovative feature was in the form of information provided in confidence, the disclosure would be in breach of confidence. The appropriate remedy would depend on the circumstances but may include an injunction and damages. (footnotes omitted)

213. That is to say, the fact of a tender process does not, of itself, import a duty of confidentiality; it must be imported by the circumstances or by contract. The circumstances would include a statement by the tenderer marking his or her tender as confidential or where, as Dr Seddon says, "information ... is provided ... when it is obvious that it is being provided in confidence."

214. It is not at all clear that any of the relevant information was confidential. For example, all short-listed tenderers proposed using stockpickers of the same brand. The shelving proposed by all was readily available on the market.

215. Indeed, the plaintiff itself apparently did not consider that the site proposed by each tenderer, the tender price or the annual rental was confidential as it sought access to it when advised that its tender had not been accepted. See above (at [48]-[49]).

216. As to whether there was a contractual duty of confidence, the position is a little unclear.

217. There is a growing body of cases in which an invitation to tender gives rise to contractual obligations arising that bind the party issuing the request for tender: Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council [1990] 3 All ER 25; R v Ron Engineering and Construction (Eastern) Ltd (1981) 119 DLR (3d) 267; Fairclough Building Ltd v Port Talbot Borough Council (1992) 62 BLR 82; Hughes Aircraft Systems International v Airservices Australia (No 3) [1997] FCA 558; (1997) 76 FCR 151; Harvela Investments Ltd v Royal Trust Co of Canada (CI) Ltd [1986] AC 207; IPEX ITG Pty Ltd (in liq) v Victoria [2010] VSC 480; Cubic Transportation Systems Inc v New South Wales [2002] NSWSC 656; Pratt Contractors Ltd v Transport New Zealand [2005] 2 NZLR 433; Dockpride Pty Ltd v Subiaco Redevelopment Authority [2005] WASC 211.

218. Not all pre-tenders processes, even those with some complexity, have been held to be conducted contractually, though those cases tend to be older cases: Streamline Travel Service Pty Ltd v Sydney City Council (1981) 46 LGRA 168; Gregory v Rangitikei District Council [1995] 2 NZLR 208; though see more recently Hickinbotham Developments Pty Ltd v Woods [2005] SASC 215; (2005) 92 SASR 52.

219. The question of whether there is a contract will, as pointed out by Gallen J in Pratt Contractors Ltd v Palmerston North City Council [1995] 1 NZLR 469 at 478-9 be a matter of considering all the circumstances of the case:

Authority makes it clear that the starting point is that a simple uncomplicated request for bids will generally be no more than an invitation to treat, not giving rise to contractual obligations, although it may give rise to obligations to act fairly. On the other hand, it is obviously open to persons to enter into a preliminary contract with the expectation that it will lead in defined circumstances to a second or principal contract ... Whether or not the particular case falls into one category or the other will depend upon a consideration of the circumstances and the obligations expressly or impliedly accepted. (Emphasis added)

220. In IPEX ITG Pty Ltd (In liq) v Victoria, Sifris J said (at [42]):

A review of the authorities suggests that courts are more willing to find process contracts as governing the relationship of the parties pre-award in cases where a timeline and detailed process, including evaluation criteria, are set out in such a way that suggests that an obligation (promissory in nature) to follow such timeline and process has been incurred.

221. In this case, there was included in the Request for Tender a detailed regime for the extension of the deadline for submission of late tenders, a detailed set of selection criteria and a tender validity period. They were such as to suggest that the defendant was obliged to follow this process.

222. In addition, though perhaps not of great significance, I note that in the Federal Court proceedings, the plaintiff pleaded, though the defendant denied, that there was a tender process contract. While subsequent conduct appears still to be inadmissible to construe the terms of a contract (Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570 at 582; [35]), there does appear to be an exception where the Court needs to consider whether a contract has been made at all: Cox v Goldcrest Developments (NSW) Pty Ltd [2000] NSWSC 763; (2000) 50 NSWLR 76 at 78; [12], relying on Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9251 at 9255-6. See also Abadeen Group Pty Ltd v Bluestone Property Services Pty Ltd [2009] NSWCA 386; (2009) 14 BPR 27,133 at 27,144-5; [112].

223. Having considered all the circumstances, in my view there was here a pre-tender contract, commonly called a "tender process contract". The question, then, is as to the terms of the contract and, in particular, whether they include an obligation of confidentiality.

224. In this case, the Request for Tender did not make any reference to confidentiality. Indeed, it expressly referred to the possibility that material submitted may be subject to the Freedom of Information Act 1982 (Cth) though this reference may imply that, otherwise, the information would not be made public. In this respect, the situation was quite different to that in Hughes Aircraft Systems International v Airservices Australia (No 3).

225. The plaintiff claimed that there was an implied term "in the tender process" that the defendant would keep the details of the plaintiff's tender confidential. Particulars were sought and it was said, in reply, that the term was "to be implied as a matter of law." Of course, that is neutral as to whether what was being identified was an implied term of a contract or a duty otherwise imposed, such as a fiduciary duty or a duty of confidence. Regrettably, no clarification was sought or given.

226. Despite the absence in the Request for Tender of a reference to confidentiality, it was, presumably subject to other governmental regulation. The plaintiff referred to the Commonwealth Procurement Guideline. I assume that this governs the approach to be taken to the tender process. Those Guidelines state that "[y]ou should not, of course, divulge to one vendor information which is confidential to another", but it does not define what is confidential and what is not. It is entirely unclear that this would protect information such as the use of industry standard materials available on the open market.

227. The plaintiff also made reference to Standards Australia, Code of Tendering (Australian Standard AS 4120-1994, Council of Standards Australia, 31 December 1994). Paragraph 8 of the Code requires that "[a]ll information provided between Tenderers and the Principal shall be treated as confidential information." This would certainly found the duty of confidence, but the question is whether, as a matter of fact (not law) this provision was incorporated in the tender process. There was no reference to the Code in the Request for Tender or the Commonwealth Procurement Guideline. I was directed to no authority, legislative, regulatory or judicial, that suggested that the Code was necessarily incorporated in the tender process.

228. There was little argument from either counsel about this point. Mr Hanna, in his affidavit, deposed that his experience as a Commonwealth public servant and then in private practice tendering for Commonwealth projects led him to form the view that

all information, including all design specifications and drawings, submitted as part of a tender to the Commonwealth would be subject to the Commonwealth Procurement Guidelines, which provided, amongst other matters, that all quotations and specific product information and all information that could prejudice the interest of tenders [sic] would be kept strictly confidential.

229. This was, however, strangely at odds with the demand that, on behalf of the plaintiff, he made of the defendant after he was informed that the plaintiff had not been successful with its tender, that it provide to him a list of bids received at the tender closing time "with details of sites and proposed rentals for each bid". This information, which he demanded, would surely be, on his own analysis, confidential.

230. Mr Hanna's assertion, of course, does not determine the issue. On the other hand, the plaintiff was very keen, at this stage, to protect information which it had provided. In its letter of 18 February 1997 and a subsequent one on 9 May 1997 (see [50] above), it expresses the view that it was "entitled ... [to a] statutory declaration that none of our [sic] intellectual property was passed onto the successful tenderer".

231. Similarly, the defendant in its reply, declined to provide the information sought on the ground that it was "commercial-in-confidence".

232. Again, while these are communications subsequent to the making of any contract, they seem to come within the exception that they may be relied on to work out the terms of the contract: County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 at [21].

233. It seems to me that there was in this case, viewed from the intention of the parties, a term implied into the "tender process contract", that the tender material of each tenderer would be kept confidential. I have, however, found no breach of such a term by the defendant.

234. The defendant defended the plaintiff's claim also on the basis that any action of the plaintiff was statute-barred under the ACT Limitation Act. As the proceedings were commenced on 8 May 2003, any cause of action, must have arisen on or after 8 May 1997: s 11 of the ACT Limitation Act.

235. As noted above, the plaintiff's action was pleaded on the basis of an implied duty of confidence. This is neutral as to whether it was implied at law into the tender process contract or by operation of an equitable duty, though the use of the term "implied" is perhaps inconsistent with an equitable duty which arises by virtue of the circumstances.

236. As to the contractual implication, if there was a contract, it would arise despite the plaintiff's failure to use the word "contract". Further, it does not make sense to refer to a "term" of a duty of confidence arising outside of a contract. Nevertheless, the plaintiff, in the written submissions stated that its claim was "Equitable claim and not contract."

237. I have, however, found that there was a "tender process contract" and that it included a term that tender material would be kept confidential.

238. Nevertheless, that is, apparently, not how the plaintiff pleads the case. This, however, raises an issue of whether there is, apart from contract, any equitable duty. There is, of course, no reason why a fiduciary duty might not coexist with a contractual relationship: Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 at 70. On the other hand, where a contract is made by the parties in an ordinary and arms length commercial relationship and relevantly prescribes the respective powers and duties of the parties, no fiduciary obligations will arise because there is no need for equity to intervene: The Paul Dainty Corporation Pty Ltd v The National Tennis Centre Trust [1990] FCA 163; (1990) 22 FCR 495 at 515-16. Indeed, it seems clear that where a contract covers the position, there is no room for the intervention of equity by way of fiduciary obligations. As Mason J said in Hospital Products Ltd v United States Surgical Corporation at 97, any fiduciary obligation has to be consistent with the contract and conform with its terms, and "cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction." As McLachlin J stated in Norberg v Wynrib [1992] 2 SCR 226 at 272, quoted with approval by the High Court in Pilmer v Duke Group Ltd (in liq) [2001] HCA 31; (2001) 207 CLR 165 at 196-7; [71]:

The foundation and ambit of the fiduciary obligation are conceptually distinct from the foundation and ambit of contract and tort. Sometimes, the doctrines may overlap in their application, but that does not destroy their conceptual and functional uniqueness. In negligence and contract the parties are taken to be independent and equal actors, concerned primarily with their own self-interest. Consequently, the law seeks a balance between enforcing obligations by awarding compensation when those obligations are breached, and preserving optimum freedom for those involved in the relationship in question. The essence of a fiduciary relationship, by contrast, is that one party exercises power on behalf of another and pledges himself or herself to act in the best interests of another.

239. It seems to me that, in this case, the contract provides for the relationship and, in particular, any obligation of confidence, especially as there was no additional factor, such as the marking of the tender documents as confidential or any statement to that effect. If the contract it was breached, then the cause of action arises as at the date of the breach, as has been held as long ago as in Gould v Johnson [1795] EngR 1839; (1702) 2 Salk 422; 91 ER 367 and followed in many cases subsequently. I deal with when that occurred below.

240. The plaintiff seems also to attempt to plead a cause of action in unjust enrichment. It is clear to me that there is no such cause of action recognised in Australian law. Thus, in Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; (2007) 232 CLR 635 at 665; [85], the plurality made the point that unjust enrichment does not operate as an independent basis of liability as a sufficient premise for direct application in particular cases; it was an underlying or unifying concept in certain established causes of action. See also Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 at 156-9; [150]-[157].

241. In any event, such a claim would be an equitable claim and, as I note below (at [243]), would be subject to the same limitation issues as any other equitable claim.

242. If I am wrong and there co-exists an equitable duty not to disclose the tender material, the plaintiff's cause of action is the breach of an equitable duty of confidence and arises when the breach occurs by way of disclosure. Indeed, in that sense, the two possible bases of the plaintiff's claim (referred to above at [235]), seem to collapse into one.

243. Section 11 of the ACT Limitation Act, which sets the limitation period for certain civil proceedings, applies to "an action on any cause of action". "Cause of action" is defined in the Dictionary to the Act to mean "a fact or combination of facts that gives rise to a right to bring a civil proceeding". This is certainly wide enough to include an equitable proceeding: Paramasivam v Flynn [1998] FCA 1711; (1998) 90 FCR 489 at 501. In my view, it does apply to equitable proceedings. This is to be contrasted with, for example, s 23 of the Limitation Act 1969 (NSW), which expressly excludes from the general limitations a cause of action for equitable relief. Thus, the limitation period established by s 11 of the ACT Limitation Act of six years from the date of when the cause of action accrues, applies to these proceedings, whether pleaded in contract or equity.

244. The question then is when the breach of confidence, whether contractual or equitable, is alleged to have taken place. This is somewhat problematic, because the plaintiff does not specifically allege the occasion, for it says that the Court can only know that it has occurred because of the similarity of the result. The date must have pre-dated the completion of plans for the building, but even that date is not one of which I can be quite certain from the evidence. The plaintiff, however, pleaded that it arose "prior to [the defendant] finalising its choice of tenderer." This was either on 11 November 1996 (see [46]) or prior to 18 February 1997 (see [48]-[49]).

245. Perhaps, in fairness to the plaintiff, I should look at the allegedly unique or similar properties of the plaintiff's tender and then see when they first appeared in the materials prepared by Decoin which must, on the plaintiff's case, be after the disclosure has occurred. The breach must then have occurred before then.

246. So far as I can ascertain from the evidence, the most significant issues are:

The Spacerack plans which show the shelving system as installed are dated 26 September 1997. They were prepared on the bases of a shelf height in the main shelving area of 7225 mm. This, however, is exactly the height advised by Decoin to the defendant by facsimile dated 1 November 1996. Thus, this information must have been disclosed, if at all, prior to 1 November 1996.

Decoin advised the defendant also on 1 November 1996, that it proposed a new site. Thus, this information must have been disclosed, if at all, prior to 1 November 1996.

247. From these two factors, the net lettable area can be determined. The rent was dependent, of course, upon these matters though two other relevant factors were a change in a ruling by the Australian Taxation Office and a subsequent reduction by Decoin in what it was prepared to accept for a 15 year lease. The former was advised to Decoin by the defendant on 10 December 1996, by letter of 5 November 1996.

248. As to the wall materials, the unchallenged evidence was that Decoin had, at the interview on 31 October 1996, discussed constructing the wall of materials other than brick.

249. Accordingly, if there was any disclosure of the plaintiff's tender, it must have been made in 1996, probably before 1 November 1996. In terms of the plaintiff's pleading, it must have occurred before, at the latest, 18 February 1997. These dates would apply to both any breach of contract and any breach of a duty of confidentiality. As a result, the limitation period had expired for proceedings for either breach prior to these proceedings being commenced. Unless, then, there is any extension or deferment of the bar, the plaintiff's proceedings are statute-barred.

250. The defendant, however, pleaded, in its reply, that the defendant committed fraud, deceit or deliberate concealment of the relevant facts and that this deferred the limitation period. This is based on s 33 of the ACT Limitation Act, which provides:

(1) Subject to this section, if -

(a) there is a cause of action based on fraud or deceit; or

(b) a fact relevant to a cause of action or the identity of a person against whom a cause of action lies is deliberately concealed;

the time that elapses after a limitation period fixed by or under this Act for the cause of action begins to run and before the date when a person having (either solely or with other persons) the cause of action first discovers, or may with reasonable diligence discover, the fraud, deceit or concealment, as the case may be, does not count in the reckoning of the limitation period for an action on the cause of action by him or her or by a person claiming through him or her against a person answerable for the fraud, deceit or concealment.

(2) Subsection (1) has effect whether the limitation period for the cause of action would, apart from this section, end before or after the date mentioned in that subsection.

(3) Without limiting subsection (1), deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty.

(4) For subsection (1), a person is answerable for fraud, deceit or concealment if, but only if -

(a) he or she is a party to the fraud, deceit or concealment; or

(b) he or she is, in relation to the cause of action, a successor of a party to the fraud, deceit or concealment under a devolution from the party occurring after the date when the fraud, deceit or concealment first occurs.

(5) If property is, after the first occurrence of fraud, deceit or concealment, purchased for valuable consideration by a person who is not a party to the fraud, deceit or concealment and does not, at the time of the purchase, know or have reason to believe that the fraud, deceit or concealment has occurred, subsection (1) does not, in relation to that fraud, deceit or concealment, apply to a limitation period for a cause of action against the purchaser or a person claiming through him or her.

251. It does not seem to me that s 33(1)(a) applies to these proceedings.

252. In Beaman v ARTS Ltd [1949] 1 KB 550 at 558, Lord Greene MR held that an action based on fraud meant an action in which fraud was a necessary ingredient of the cause of action. That construction was also accepted by Somervell LJ (at 567). See also Barnstaple Boat Co Ltd v Jones [2007] EWCA Civ 727; [2008] 1 All ER 1124 at 1133.

253. The same would apply to a cause of action in deceit, for, of course, such a cause of action requires the pleading of fraud. That is to say, the representation on which reliance is made must be made with knowledge of its falsity, that is wilfully false, or at least made in the absence of any genuine belief that it is true, or reckless: Derry v Peek [1889] UKHL 1; [1889] 14 App Cas 337.

254. The reference in the plaintiff's reply to "fraud and/or deceit" seems to me more like a rhetorical flourish to imply some opprobrium of the defendant's conduct rather than a serious pleading. There was, after all, no suggestion of fraud or deceit in the plaintiff's case. To seek in some way to plead it for the first time in the reply would be a departure: Herbert v Vaughan [1972] 1 WLR 1128 at 1133. This is impermissible under r 414 of the Court Procedures Rules 2006 (ACT).

255. The question of "deliberate concealment" is, however, a little different. In the first place, the provision containing that reference is different from the limitation provisions in other Australian jurisdictions; it is based on the provisions of s 32 of the Limitation Act 1980 (UK). That provision has been the subject of judicial consideration which is helpful in understanding what it means and to what it is directed. The English jurisprudence can profitably be considered as to this provision. It was, in turn, based on UK Law Reform Committee, Limitation of Actions, Report No 21 (2001) and some of that history is usefully set out in counsel's argument in Cave v Robinson Jarvis & Rolf [2002] EWHC 30; [2003] 1 AC 384 at 388.

256. In that decision, the House of Lords considered s 32(2) of the UK Act, the equivalent to s 33(3) of the ACT Limitation Act. It was there held that for deliberate concealment under the equivalent provision to s 33(1)(b) of the ACT Limitation Act there had to be an "intended" or "active" concealment (at 403; [59], 394; [23]-[24]). In the same case, Lord Scott (with whose speech Lords Slynn, Mackay and Hobhouse concurred) said (at 403; [60]):

[D]eliberate concealment for section 32(1)(b) purposes may be brought about by an act or an omission and that, in either case, the result of the act or omission, i e, the concealment, must be an intended result ... A claimant who proposes to invoke section 32(1)(b) in order to defeat a Limitation Act defence must prove the facts necessary to bring the case within the paragraph. He can do so if he can show that some fact relevant to his right of action has been concealed from him either by a positive act of concealment or by a withholding of relevant information, but, in either case, with the intention of concealing the fact or facts in question. In many cases the requisite proof of intention might be quite difficult to provide. The standard of proof would be the usual balance of probabilities standard and inferences could of course be drawn from suitable primary facts but, nonetheless, proof of intention, particularly where an omission rather than a positive act is relied on, is often very difficult.

257. In Williams v Fanshaw Porter & Hazelhurst [2004] EWCA Civ 157; [2004] 1 WLR 3185 at 3194; [14],

The requirement is that the fact must be 'deliberately concealed'. It is, I think, plain that, for concealment to be deliberate, the defendant must have considered whether to inform the claimant of the fact and decided not to. I would go further and accept that the fact which he decides not to disclose either must be one which is his duty to disclose, or must at least be one which he would ordinarily have disclosed in the normal course of his relationship with the claimant, but in the case of which he consciously decided to depart from what he would normally have done and to keep quiet about it.

258. In AIC Ltd v ITS Testing Services (UK) Ltd ("The Kriti Palm") [2006] EWCA Civ 1601; [2007] Lloyds Rep 555, Rix LJ, after referring to the passage I have cited above from Williams v Fanshaw Porter & Hazelhurst, continued (at [319]-[321]):

In the same case, Mance LJ discussed the possibility that whereas Lord Millett in Cave v Robinson had regarded active concealment (in relation to a recognised breach of duty) as indispensable to the operation of section 32(1)(b) (a 'narrower' formulation), Lord Scott had also regarded a mere omission to be within the subsection (a 'wider' formulation). Mance LJ said it was unnecessary to determine which formulation prevailed, since in that case, involving a solicitor's deliberate concealment of what he knew himself to be under an ongoing duty to disclose, the deliberate concealment fell within either formulation (at para 36). But he also said (at para 29):

But in many cases there may be no running relationship, and, even where there is, it may not involve any general duty to inform the other party of relevant facts. On the face of it, 'concealment' in such a context might seem to require active conduct, rather than a mere decision to remain silent - even in circumstances where it would be normal or moral to speak.

Brooke LJ agreed on the basis that the defendant solicitor had 'deliberately concealed its existence from her although he was under a duty to tell her about it' (at para 51).

It appears therefore that there must be either active and intentional concealment of a fact relevant to a cause of action, or at least the intentional concealment by omission to speak of a fact relevant to a cause of action which the defendant knew himself to be under a duty to disclose. There is no decision that anything less than a duty to disclose will suffice in the absence of active concealment.

259. While Buxton LJ, with whom, on this issue, Sir Martin Nourse agreed, differed from Rix LJ on the application of these principles to the case in hand, his Lordship came to the same conclusion as that enunciated by Rix LJ at [321], as quoted above (at [258]).

260. What has to be concealed is, however, not as straightforward as might be supposed. In Williams v Lishman, Sidwell, Campbell & Price Ltd [2010] EWCA Civ 418,

[I]t is necessary to take into account the jurisprudence on section 32, from which it is clear that that phrase has a more limited meaning than might be supposed. Thus it has been established that only those facts which are necessary to the ability to plead the cause of action in question are within the phrase. That jurisprudence has been set out in AIC Limited v ITS Testing Services (UK) Ltd (The 'Kriti Palm') [2006] EWCA 1601, [2007] 1 Lloyd's Rep 555; see at paras 322/324, where the earlier authorities of Johnson v Chief Constable of Surrey (CA, 19 October 1992, unreported), and C v Mirror Group Newspapers [1997] 1 WLR 131 (CA) are cited. As I put it (at para 307 of AIC v ITS):

This is important because the purpose of section 32(1)(b) appears to be designed to cater for the case where, because of deliberate concealment, the claimant lacks sufficient information to plead a complete cause of action (the so-called 'statement of claim' test). It is therefore important to consider the facts of deliberate concealment vis-à-vis a claimant's pleaded case.

See also at para 384 (Sir Martin Nourse) and at paras 452/3 (Lord Justice Buxton). At para 453 Buxton LJ said:

The court therefore has to look for the gist of the cause of action that is asserted, to see if that was available to the claimant without knowledge of the concealed material.

This case is concerned with what constitutes a 'fact relevant to the plaintiff's right of action.' That concept has been considered in a number of decisions of this court; see e.g. Johnson v Chief Constable of Surrey; The Times, 23 November 1992; C v Mirror Group Newspapers [1997] 1 WLR 131, and AIC Limited v ITS Testing Services (UK) Ltd, 'The Kriti Palm' [2006] EWCA Civ 1601; [2007] 1 Lloyd's Rep 555. The judges in these cases have adopted what has become known as the 'statement of claim' test. That approach requires that in order to be a 'relevant fact' within the meaning of section 32, any fact which is concealed must be a fact which should be pleaded in a statement of claim. The cases have distinguished between facts relevant to the right of action itself and facts which evidentially strengthen a party's case. In Johnson, a case concerning an alleged wrongful arrest, Russell LJ put the matter as follows:

In order to give relief to the plaintiff any new fact must be relevant to the plaintiff's 'right of action' and is to be contrasted with the facts relevant, for example, to 'the plaintiff's action' or 'his case' or 'his right to damages.' The right of action in this case was complete at the moment of arrest. No other ingredient was necessary to complete the right of action. Accordingly, whilst I acknowledge that new facts might make the plaintiff's case stronger or his right to damages more readily capable of proof they do not in my view bite upon the 'right of action' itself. They do not affect the 'right of action,' which was already complete, and consequently in my judgment are not relevant to it.

262. The provision equivalent to s 33(3) of the ACT Limitation Act, however, was held in Cave v Robinson Jarvis & Rolf at 403; [60] to be, in the words of Lord Scott, "an alternative route" to the postponement of the limitation period. The plaintiff, his Lordship said, has to prove that the defendant

knew he was committing a breach of duty or intended to commit the breach of duty - I can discern no difference between the two formulations, each would constitute, in my opinion, a deliberate commission of a breach - then, if the circumstances are such that the claimant is unlikely to discover for some time that the breach of duty has been committed, the facts involved in the breach are taken to have been deliberately concealed ...

263. The question, then, is, as to what kind of duty must be breached. This, too, has been the subject of consideration. In Giles v Rhind [2008] EWCA Civ 118; [2008] 3 All ER 697, Arden LJ, with whom Sedley and Buxton LJJ agreed, said, referring to the findings of the trial judge (at 710, [37]-[38]):

The judge thus held that the expression 'breach of duty' applied to any legal wrongdoing in contradistinction to a breach of duty in a tortious or contractual sense or in the sense of a breach of an equitable or fiduciary duty (which I will call 'the narrower meaning').

With one qualification, I agree with the judge's conclusion. The qualification I would make is this. I do not consider that the expression 'breach of duty' includes any legal wrongdoing whatsoever. In my judgment there must be a legal wrongdoing of a kind that can properly be raised in action to which s 32 applies. I will call this the 'wider meaning' of 'breach of duty'. Thus, the expression 'breach of duty' would not cover legal wrongs which are not justiciable, for example target duties. It may also not cover a breach of duty owed by a public authority which can be subject of judicial review proceedings at the instance of a person who is not directly affected thereby but who has a sufficient interest for the purposes of standing in public law. I would not wish to be taken as approving the view that any such actions fall within s 32, at least without further argument.

264. In this case, then, the plaintiff can only succeed if it proves that the defendant either:

(i) actively or intentionally hid a fact that it was necessary for the plaintiff to plead to constitute a cause of action; or

(ii) failed to disclose such a fact which it was under a duty to disclose; or

(iii) knowingly committed a legal wrongdoing of the kind that can properly be raised in an action to which s 33 of the ACT Limitation Act applies.

265. The answers to these questions, however, are, in fact, relatively simple, for I have found no evidence that there was any disclosure of any of the contents of the plaintiff's tender to Decoin. It is that disclosure which is the fact referred to in (i) and (ii). It does seem to me, however, that were there to have been such a disclosure, that would have been a breach of duty to which (iii) applied. I do not need to consider the other matters.

266. Since, however, there has, in my judgment, been no such disclosure, there is no basis for the application of s 33 of the ACT Limitation Act. That leaves the plaintiff's action barred by virtue of the operation of s 11 of that Act.

267. The defendant raised two other defences. As I have found that there was no disclosure and that the ACT Limitations Act applies, I need only mention them briefly.

268. The first such further defence was that the plaintiff had released the defendant from the claim it makes in these proceedings. That is based on the settlement of the Federal Court proceedings referred to above (at [4]) and the release contained in the Deed of Settlement by which the proceedings were settled.

269. This is referred to below when I refer to the defendant's counter-claim which is based on the breach of the covenant not to sue in the Deed of Settlement which these proceedings comprise.

270. The defendant, secondly, pleaded that the plaintiff was stopped from bringing its claim because of "Anshun Estoppel". While named after the decision of the High Court in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589 (Anshun), this form of estoppel can be traced back at least to Henderson v Henderson [1843] EngR 917; (1843) 3 Hare 100; where Wigram V-C said (at 115; 319):

[W]here a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.

271. In Anshun, the High Court noted (at 598) that the principle had been affirmed by the Judicial Committee of the Privy Council on four occasions since then, as recently as 1979. In Anshun, however, the claim made by the plaintiff should have been raised as a defence in the original proceedings to a claim for contribution made between the plaintiff and defendant in the subsequent proceedings, who were both defendants in the original proceedings.

272. The Court, however, noted (at 602), that the principle applies when, having regard to the nature of the plaintiff's claim and its subject matter, the matter pleaded in the second action "was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it." The Court went on to point out that, generally speaking, it will be considered unreasonable not to plead the matter in the first action which is later relied upon if "having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding."

273. It seems to me that, in the circumstances, the claim in the present proceedings is so related to the subject matter of the Federal Court proceedings that it should have been included in those proceedings.

274. While one can conceive of situations where an action for a breach of a term of a contract might properly be prosecuted separately from an action for another breach of the same or a different term of the same contract, this is not one of those situations.

275. The plaintiff was, in the Federal Court proceedings, challenging the fairness and propriety of the "tender process contract". A breach of a term as to the confidentiality of tender information is very closely related, and relevant, to such a challenge. It would, in the circumstances, be expected that the issue would be determined in the same proceeding.

276. I note that Mr Thomas, in his opening written submissions, was dismissive of this defence; he simply commented "Anshun estoppel - no application". He did not address the issue in his opening or closing oral submissions.

277. Even were I to be wrong about the existence of a "tender process contract" or its terms, it seems to me that the alleged obligation of confidentiality, which the plaintiff asserts was implied, was so related to the tender process that it should have been included in the Federal Court proceedings. It was clear that the plaintiff was aware of the issue. By letter from its then solicitors, Phillips Fox, the plaintiff alleged that the defendant had "failed to maintain confidentiality in relation to [the plaintiff's] tender documentation".

279. Had the Federal Court proceedings been terminated by judgment, I would have upheld the defendant's defence. I accept that there is some question about the applicability of the doctrine where there has been a consent judgment and about what, in particular such a judgment decides. A consent judgment which is entered will create a res judicata: Chamberlain v Deputy Commission of Taxation [1988] HCA 21; (1988) 164 CLR 502. It will also found a plea of issue estoppel in appropriate cases: Marks v National and General Insurance Co Ltd (1993) 114 FLR 416. There may be a question as to what issues are decided by a consent judgment, as explained by Street CJ and Roper CJ in Eq in Isaacs v The Ocean Accident and Guarantee Corporation Ltd [1958] SR (NSW) 59 at 75. See also Grimsey v Southern Regional Health Board [1997] TASSC 103; (1997) 7 Tas R 67 at 80-3. There was, however, no judgment here entered.

280. The Deed of Settlement provided for a discontinuance by the plaintiff. I respectfully agree with Professor BC Cairns in his valuable publication, Australian Civil Procedure (Thomson Reuters, 9th ed, 2011) at 508, that discontinuance is not, of course, a judgment and does not determine the merits of the proceedings in any sense. As was made clear by the House of Lords in The Owners of the Cargo of the "Kronprinz" v Owners of the "Kronprinz" (1887) 12 App Cas 256, a discontinuance is not a bar to subsequent proceedings. As Lord Herschell, with whom Lord Macnaughton agreed, said (at 262), "an order for discontinuance does not of itself operate as a release or an extinguishment of the claims, or in any other way bar further proceedings".

281. See also KBRV Resort Operations Pty Ltd v Chilcott [2001] NSWCA 116; (2001) 51 NSWLR 516 at 527-8; [34]-[40].

282. In these circumstances, it seems to me that, indeed, as submitted by the plaintiff, the principle of Anshun estoppel has no application. It can only operate where there has been some finding or determination of the earlier proceedings that allows it to apply. Here, there was no such finding or determination; indeed, had the provisions of the rules of procedure and other matters such as the ACT Limitation Act allowed, the plaintiff could have re-commenced the Federal Court proceedings.

283. This issue does not prevent the plaintiff from proceeding with this action in this Court, though, of course, there are other reasons I have found why that is the ultimate result.

284. In addition to its defence of the plaintiff's claim, the defendant claimed, by way of counter-claim, against the plaintiff, arising out of what it pleaded was a breach by the plaintiff of the Deed of Settlement.

285. As referred to above (at [4]), the plaintiff commenced proceedings in the Federal Court of Australia on 29 June 1998, challenging aspects of the tender process and other dealings between the plaintiff and the defendant. I had a copy of the pleadings in those proceedings.

(a) The incorporation of the defendant (referred in those proceedings as the respondent; to avoid confusion I will refer to it here, even in reference to the Federal Court proceedings, as the defendant). Interestingly and curiously, it did not plead the incorporation of the plaintiff (referred in those proceedings as the applicant but again I will refer to it throughout as the plaintiff). That may have rendered the pleading to that extent defective as held in Moldex Ltd v Recon Pty Ltd [1948] VicLawRp 15; [1948] VLR 59, and Pioneer Concrete (Vic) Pty Ltd v L Grollo & Co Pty Ltd [1973] VicRp 47; [1973] VR 473 at 475.

(b) The issuing of the Request for Tender and the lodging of the plaintiff's tender.

(c) Thereupon a contract was formed "as to the procedures to be followed and the criteria to be applied" in consideration of the tenders and the acceptance of one. The following express terms were alleged:

(i) the deadline for lodgement of tenders was 2 pm (Canberra time) at the designated box on Tuesday 22 October 1996;

(ii) the deadline could only be extended by written notice of the defendant to be given the same distribution as the Request for Tender;

(iii) alterations would be made to tender documents only if satisfactorily shown that there was a clerical/keyboard error or in electronic transmission;

(iv) supporting material was material which elaborated or clarified the formal offer but did not alter it; material presented as supporting material but which altered the tender had to be received before the deadline; and

(v) late tenders would not be admitted unless mishandled by the defendant or the transmitting agency.

(vi) the defendant would deal fairly with the plaintiff in the performance of the contract.

(d) That Decoin lodged a tender and identified the following features of it as:

(i) wall assembly of "270 mm clay brickwork with 50 mm styrene cavity in-fill";

(ii) shelving system of "high rise shelving 6600 mm high";

(iv) the annual rent of $572,715 for a ten year lease and $555,534 for a fifteen year lease; and

(v) net lettable floor area of the building of 2973 sq m.

(e) That Decoin, on 31 October 1996, lodged a revised tender which amended the terms so as to provide for "75 mm styrene cavity fill" for the walls, shelving of 7200 mm high and a proposed annual rent of $509,730 for a ten year lease and net lettable floor area of 2734 sq m, a further amendment of the site to Block 27 Section 2 Hume and a yet further later amendment to the proposed annual rent by first a reduction of $27,600 and second to $467,606 for a fifteen year lease. A further amendment to the wall assembly was also pleaded.

(f) That U-Stow-It also submitted a tender with an annual rent of $558,872 for a ten year lease and that on 6 November 1996, it, too, was amended to a reduced rent of $507,825 for a fifteen year lease. It pleaded further amendments on 13 December 1996.

(g) The awarding of the tender to Decoin which, it pleaded, took into account the amendments which had earlier been pleaded and pleaded that this breached the terms of the contract.

(h) That, because of the breaches, the plaintiff had suffered loss, namely the chance of being awarded the tender.

(i) A cause of action under the Trade Practices Act 1974 (Cth), namely that certain representations, being the matters alleged as express terms of the contract (see (c) above), had been made by the defendant.

(j) That, once its tender was lodged, the plaintiff "was reasonably entitled to expect that [the defendant] would disclose to it any departure which [the defendant] intended or had made from the Representatives [sic]".

(k) That no such disclosure had been made and that, in considering the Decoin and U-Stow-It tenders with the amendments, the defendants had proposed to engage or had engaged in conduct (which was, it pleaded, in trade or commerce or in carrying on a business) whereby the representations were falsified and the conduct became deceptive, misleading or likely to mislead or deceive.

(l) The plaintiff's reliance on the representations and the loss caused by the pleaded conduct of the defendant, which loss included the time spent in preparing and lodging the tender and the loss of all chance of being awarded the tender.

(m) That, by the matters pleaded in respect of the Trade Practices Act claim, it would be unconscionable for the defendant to depart from the representations and it was estopped from doing so.

(n) Finally, a cause of action in negligence, in that it pleaded that it was reasonably foreseeable to the defendant in issuing the Request for Tender and undertaking to evaluate the plaintiff's tender that it would cause loss and damage to the plaintiff if it did not exercise reasonable care in evaluating the plaintiff's tender and the other tenders in accordance with the Request for Tender, thereby the defendant assuming responsibility to the plaintiff who relied on the defendant to exercise reasonable care.

(i) accepting amendments to the Decoin and U-Stow-It tenders without giving the required notices;

(ii) accepting amendments to the Decoin and U-Stow-it tenders without proving there were clerical/keyboard or electronic transmission errors;

(iii) accepting amendments to the Decoin and U-Stow-It tenders that altered their original tenders;

(iv) accepting amendment to the Decoin and U-Stow-It tenders even though there was no mishandling of the original tender.

(p) Again, it pleaded that the breaches of the duty of care caused the defendant loss, being the loss of a chance for the plaintiff's tender to be accepted.

287. The pleadings are necessary to be set out, for it is important for evaluating the counter-claim to see exactly what had been pleaded and what the scope was of the Federal Court proceedings.

288. As noted above (at [4]), these proceedings were compromised. A deed was entered into by both plaintiff and defendant. I have referred to it, and shall continue to refer to it, as the Deed of Settlement. It was in the following terms:

DEED OF SETTLEMENT

This Deed is made on 14 May 1999.

BETWEEN:

WAGDY HANNA & ASSOCIATES PTY LTD (ACN 008 647 541) ('Hanna') of 5/17 Napier Close Deakin in the Australian Capital Territory

and

The National Library of Australia ('the Library') of Parkes Place, Australian Capital Territory

WHEREAS:

1. On 29 June 1998, Hanna commenced proceedings number AG 52 of 1998 in the Federal court of Australia ('the proceedings').
2. In the proceedings, Hanna has claimed damages against the Library on the following bases:
   • (i) formation and breach of a tender process contract;
   • (ii) misleading and deceptive conduct by the Library within the meaning of section 52 of the Trade Practices Act 1974;
   • (iii) negligence; and
   • (iv) estoppel ('the allegations').
3. The Library has denied Hanna's allegations.
4. Hanna and the Library have agreed to compromise the proceedings upon the terms and subject to the conditions set out below.

1. Upon execution of this deed Hanna and the Library will execute a Notice of Discontinuance with no order as to costs, which will be filed with the Court forthwith.
2. Neither Hanna nor the Library shall take or continue any action against the other in respect of the allegations and each party covenants not to sue the other in respect of any matter arising out of or in any way related to the discontinued proceedings.
3. Hanna hereby releases and forever discharges the Library from all actions, suits, proceedings, causes of action, claims and demands of whatsoever kind which Hanna may have had, now has or, but for this deed, may hereafter have against the Library, arising out of or in respect of any of the allegations.
4. The Library hereby releases and forever discharges Hanna from all actions, suits, proceedings, causes of action, claims and demands of whatsoever kind which the Library may have had, now has or, but for this deed, may hereafter have against Hanna, arising out of or in respect of the proceedings.
5. Hanna and the Library have agreed that the details of the contents of this Deed shall not be disclosed, except as required or authorised by law or in order to comply with a request by a Commonwealth Minister or the Parliament.

289. As noted above (at [223]), I have found that there was, in this case, a "tender process contract", which regulated the pre-tender process and I have also found (at [233]), that it included a term that required the defendant to maintain the confidentiality of relevant tender material. This is, of course, the same contract that was the subject of the Federal Court proceedings and the Deed of Settlement.

290. The defendant relies for its counter-claim on the covenant by the plaintiff not to sue the defendant contained in clause 2 of the Deed of Settlement.

291. The release, referred to above (at [267]-[269]), is contained in clause 3. The wording of this, which refers to a release, etc "arising out of or in respect of any of the allegations [in the Federal Court proceedings]", may be in slightly narrower terms than the covenant not to sue in clause 2, which refers to "arising out of or in any way related to the discontinued proceedings." The discontinued proceedings were, of course, the Federal Court proceedings.

292. For reasons that I set out below, it seems to me that, so far as those proceedings are concerned, the two phrases have the same coverage and that the covenant to sue and the release includes the subject matter of these proceedings.

293. I need first to consider the meaning of clause 2. The reference in the clause to "the discontinued proceedings" is, of course, to the Federal Court proceedings.

294. It is, perhaps, slightly strangely worded. It may be a kind of metonymy. I assume that what was intended was that the covenant relate to any matter arising out of in any way related to the facts or matters alleged in the pleadings in the discontinued proceedings. It would be strange to limit the possible subject matter of any proscribed suits to the discontinued proceedings themselves rather than the facts which were the subject of the proceedings, so strange, in fact, that it seems to me I can construe the Deed of Settlement in this way. I cannot immediately see what would be contemplated by a covenant not to sue in respect of the proceedings themselves.

295. The use of "allegations" in the clause, which is, of course, a defined term, alongside a different term "the discontinued proceedings" raises the question of whether they are intended to refer to different things. Prima facie this would be so.

296. The "allegations", as defined, refer to four causes of action. The Statement of Claim contains pleadings that are not necessarily part of the causes of action. For example, these are prefatory averments which are pleaded and allegations, such as the actual contents of the Decoin tender, which were not necessary facts to prove in order to sustain the relevant cause of action. Thus, there were facts that were strictly outside the allegations. This permits a wider meaning to the term "the discontinued proceedings" (as I have suggested it be read) than "the allegations" as strictly defined.

297. This issue was not raised directly in the proceedings. While the plaintiff, by its reply, put in issue the applicability of the Deed of Settlement, it did not do so with any particularity. It certainly did not argue this point. The pleadings to which I refer below (at [304]) relate to the rectification and only by inference can be relevant here. Its submission was argued on the basis that the Deed of Settlement applied and applied only to the "tender process contract" and that the alleged duty of confidentiality and any breach of it, which, it said, was the basis of its claim, was outside that.

298. The defendant submitted that, were the Deed of Settlement not sufficient to cover the issue of a breach of any duty of confidentiality, then the Deed should be rectified. That rectification, in the proceedings, however, was not directed to this issue.

299. Where the issue is whether the courts should resort to a process of construction or rectification, there has, perhaps, until recently been some uncertainty. In Bowler v Hilda Pty Ltd [2001] FCA 342; (2001) 112 FCR 59 at 63-4; [13], Drummond J put the position clearly, in the following terms:

It is not always easy to determine whether construction or rectification is the appropriate method for dealing with a problem as to the true meaning of an instrument. The difficulty has been exacerbated by the readiness of courts in modern times to look beyond the four corners of the document to its factual matrix, in order to construe it, even before any question of ambiguity arises.

See B & B Construction at 233-236, per Kirby P and at 243-247, per Mahoney JA and contrast Mason J's statements in Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337 at 352 and in K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48; (1985) 157 CLR 309 at 315. The same approach is now accepted as applicable to statutory interpretation: see CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408. But, in my opinion, the position is correctly stated in R P Meagher, W M C Gummow and J R F Lehane, Equity: Doctrines and Remedies (3rd ed, 1997) at par 2608:

... proceedings for rectification ought not be brought if whatever mistake appearing in the written instrument is of the kind that the true meaning of a document could be ascertained as a matter of construction without recourse to extrinsic evidence.

300. His Honour also cited from what the Judicial Committee of the Privy Council said in Watson v Phipps (1985) 63 ALR 321 at 324:

The function of a court of construction is to ascertain what the parties meant by the words which they have used. For this purpose the grammatical and ordinary sense of the words is to be adhered to, unless they lead to some absurdity or to some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified so as to avoid that absurdity or inconsistency, but no further.

301. The passage from R P Meagher, W M C Gummow, and J R F Lehane, Equity: Doctrines and Remedies (Butterworths, 3rd ed, 1997) referred to above (at [299]), was also cited with approval by Brereton J in Saxby Soft Drinks Pty Ltd v George Saxby Beverages Pty Ltd [2009] NSWSC 1486; (2009) 14 BPR 27,213 at 27,215; [10], where his Honour also referred with approval to the further passage as follows:

Courts both of law and of equity regularly insert, delete, alter and interpret words in such a fashion as to make the document sensible, without necessary recourse to any doctrine or rectification. Thus, in Wilson v Wilson [1854] EngR 513; (1854) 5 HLC 40 at 67; [1854] EngR 513; 10 ER 811 at 822, Lord St Leonards had no difficulty in reading 'Mary' for 'John' and in St Edmundsbury Board of Finance v Clark [1973] 3 All ER 902 at 915; [1973] 1 WLR 1572 at 1585. Megarry J read 'coloured blue and red' instead of 'coloured blue'. In Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 the High Court of Australia was able to construe clause 8 of a contract for sale on a parcel of land reading:

The usual conditions of sale in sue or approved of by the Real Estate Institute of New South Wales relating to sales by approved contract of land held under the Crown Lands Act shall so far as they are inconsistent herewith be deemed to be embodied herein.

So that 'inconsistent' was read as meaning 'consistent'. As their Honours, Dixon CJ and Fullagar J said in their joint judgment (at 426-7):

There is a superficial difficulty in clause 8, because it purports to incorporate a set of conditions so far as they are inconsistent with what has been specifically agreed upon. No real difficulty, however, is created. Words may generally be supplied, omitted or corrected, in an instrument, where it is clearly necessary in order to avoid absurdity or inconsistency. Here it would be indeed absurd to suppose that the parties, having expressed their agreement on a number of special and essential matters, should intend to incorporate by reference terms inconsistent with what they had specially agreed upon. What they must clearly have intended is to incorporate a set of general conditions except so far as they were inconsistent with what they had specially agreed upon, and clause 8 must be read as if it is said 'consistent' or 'not inconsistent'.

302. It seems to me that what faces me in clause 2 of the Deed of Settlement is a matter of construction and as the alternative construction would be so strange as to be absurd in the circumstances, I will construe the reference in clause 2 of the Deed of Settlement to "the discontinued proceedings" as referring to the facts or matters stated in the pleadings filed in the Federal Court proceedings.

303. On this construction, it is clear that the basis of these proceedings as I have found it, namely a contractual term requiring the defendant to keep the plaintiff's tender material confidential, is encompassed within clause 2 of the Deed of Settlement. There can be no doubt that it arises out of facts or matters alleged in the pleadings filed in the Federal Court proceedings.

304. The plaintiff says, in its amended defence to the defendant's counter-claim, in answer to the counter-claim:

(a) it was not the intention of the parties to include the causes of action in these proceedings and in particular it was not the intention of the parties to include an action for breach of confidence and/or to include any other matter arising in correspondence and negotiations between the parties prior to the signing of the said deed of settlement;

(b) it was not the intention the Federal Court of Australia proceedings number AG 52 of 1998 referred to in clause 2 of the deed, include the causes of action in these proceedings and in particular the action for breach of confidence and any other matter arising in correspondence and negotiations between the parties prior to the signing of the said deed of settlement;

(c) it was not the intention of the parties that clause 3 of the deed was to extend to any cause of action connected to the allegations including claims made in the pleadings in these proceedings including an action for breach of confidence;

(d) by reason of the matters set out above the defendant is not entitled to rectification of the deed as claimed in paragraph 4 of the relief claimed in its counter claim;

...

(f) if, which is denied, the defendant intended that clauses 2 and/or 3 of the deed were to include and/or to cover the causes of action in these proceedings and in particular that they were to apply to and to include an action for breach of confidence and any other matter arising in correspondence and negotiations between the parties prior to the signing of the deed of settlement then that intention was not the common intention of the parties and the defendant at no time had such intention but had the intention that the deed of settlement should be limited to the allegations set out in Recital 2 of the said Deed and the intention that clauses 2 and 3 of the deed were to be read and construed subject to recital 2 and that the deed excluded and did not apply to any claim by him against the defendant for breach of confidence;

305. Of course, this is directed to the issue of rectification which only arises if I find that the terms of the Deed of Settlement are not apposite to include in the covenant not to sue in clause 2 and the release in clause 3 the cause of action in these proceedings. Indeed, the actual intention of the parties as particularised is inadmissible as to the construction of the Deed of Settlement which is governed by the objective theory of contract: Franklins Pty Ltd v Metcash Pty Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 at 613; [4].

306. I refer to these particulars, however, because they refer, especially in particular (f), to the need to construe clauses 2 and 3 in the light of the allegations set out in Recital 2 of the Deed of Settlement. I pause to note that while, strictly, the release by the plaintiff is in clause 3, which is, perhaps, in more restricted terms, the counter-claim is based on the covenant not to sue in clause 2.

307. The allegations as defined are, of course, the four numbered items in Recital 2. Clause 2, however, refers to "the discontinued proceedings". This includes the "tender process contract" which I have found to be the basis of these proceedings. That is expressly referred to as part of the "allegations" and so falls within the covenant not to sue and the release. A term of the tender process contract was that the tender material be kept confidential and the plaintiff has alleged a breach of that contract, though not expressly in the Federal Court proceedings.

308. If, however, I am wrong about the action being, in reality, based, that is, only able in law to be based, on a term of the "tender process contract", the question then arises as to whether an equitable duty to keep confidential the plaintiff's tender material is "arising out of or in any way related to the discontinued proceedings" as I have construed that term.

309. The term "arising out of" has received much judicial consideration. It is a commonly encountered term but often in specific statutory contexts. It is important when looking at cases which have considered such a term to note that "arising out of" is likely to be different in precise scope to "arising under". Similarly, the statutory and factual context may give particular meaning or limit to the phrase.

310. It is clear, as Gleeson CJ pointed out in Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 at 165, that "the expression 'arising out of' has usually been given a wide meaning", though as Smith J observed in Peter Isaacson Publications Pty Ltd v Victorian Workcover Authority [1996] VicRp 6; [1996] 1 VR 49 at 61, "whilst courts [are] prepared, in general terms, to give such phrases a broad meaning, the meaning [is] not to be stretched beyond that which the language, in context, [can] reasonably sustain."

311. While decisions on the term can be useful, they must be approached with caution. Nevertheless, I note that in State Government Insurance Commission v Stevens Brothers Pty Ltd [1984] HCA 32; (1984) 154 CLR 552 at 555, the Court did articulate some principles in respect of the terms of a third party policy where the phrase was "liability ... in respect of... bodily injury ... caused by, or arising out of the use of, the vehicle". The court said:

Thirdly, the expression 'arising out of' must be taken to require a less proximate relationship of the injury to the relevant use of the vehicle than is required to satisfy the words 'caused by' (citation omitted).

312. In Fairey Australasia Pty Ltd v Joyce [1981] 2 NSWLR 314 at 322-3, Yeldham J considered the jurisdiction of a tribunal and said:

As I have earlier said I consider that the expression 'arising out of a contract for the supply of goods or the provision of services' is sufficiently wide to bring within the definition of 'consumer claim', a claim by a person for money or performance of work (or otherwise, as is provided in the definition itself) being an obligation arising out of a contract of the relevant kind, to which the respondent to the claim against whom an order is sought is not a party. Provided a contract between consumer and the person engaged in a business activity for the supply of goods or services does exist it is necessary only, to constitute a 'consumer claim', that such claim be one 'arising out of' the contract. Whether it is in tort or under the Sale of Goods Act or in contract is to my mind an irrelevant consideration.

313. Starke J in Smith v Australian Woollen Mills [1933] HCA 60; (1933) 50 CLR 504 at 517-18, stated that "[t]he expression 'arising out of' imports some kind of causal relationship ... but it does not necessitate direct or physical causation." Thus, for example, Allsop J, with whom Finn and Finkelstein JJ relevantly agreed, held in Comandate Marine Corp v Pan Australian Shipping Pty Ltd [2006] FCAFC 192; (2006) 157 FCR 45 at 90-1; [176] that a claim under the Trade Practices Act 1974 (Cth), in respect of representations made during negotiations leading up to the entry into a charter party for a ship which representations turned out to be false, was a claim "arising out of the time charter". His Honour said:

This being, in my view, the correct approach, it is clear that all the Trade Practices Act 1974 (Cth) claims here arise out of the time charter in that they arise out of the formation of the contract. That this is so is demonstrated here by the equivalent evidence (as can be seen from the pleading) necessary to show (1) the falsity of the representations and the breach of the asserted contractual terms; and (2) the damage flowing from the misleading or deceptive conduct and the breach of contract. It is also demonstrated by the fact that the conduct asserted to be misleading or deceptive was the body of negotiations that led to the formation of the contract. It is also demonstrated by the fact that the contract was entered in reliance upon the impugned conduct. Without the entry into the time charter, that is without the coming into existence of the time charter, there would have been no act of reliance upon which to found a cause of action under the Trade Practice Act. It is true to say that, in one sense, the claims also arise out of the Trade Practices Act itself; but they do arise out of the contract in the sense discussed above.

314. Of course, the phrase has to be read in conjunction with "or in any way related to", also in clause 2, which is clearly a phrase of very wide import: IBM Australia Ltd v National Distribution Services Pty Ltd (1991) 22 NSWLR 466 at 477, 483, 487. As Yeldham J pointed out in Dowell Australia Ltd v Triden Contractors Pty Ltd [1982] 1 NSWLR 508, the phrase would, in relation to a contract, include a reference to matters such as frustration, rescission and rectification.

315. It seems to me that, in this case, the phrase is quite wide enough to include the conduct of the tender process (assuming no contract has come into existence) and the breach of any duty owed by the defendant as the party calling for the tenders.

316. I rely particularly on the fact that the tender process contract pleaded by the plaintiff in the Federal Court proceedings was referred specifically as regulating "the procedures to be followed and the criteria to be applied in the award of the [tender]", which procedures must have included compliance with any duty of confidentiality, as this would be crucial to the assurance of a process that did not undermine the application of the selection criteria. It is confirmed by the evidence of Mr Hanna and officers of the defendant as to their understanding of the need for confidentiality as an element in the process.

317. Even were there to be no express contractual term as to confidentiality, the existence of the contract pleaded by the plaintiff and the circumstances in which it was made gave rise to the implication of the implied term imposing a duty to respect the confidentiality of the plaintiff's tender material and this is clearly "arising out of" the process regulated by the contract. At worst it is in a very direct way "related to" it.

318. Further, the pleadings alleged that the defendant issued the Request to Tender and the plaintiff lodged a tender. Even in the absence of a tender process contract, any alleged duty must arise out of or be related to those facts.

319. I have no doubt that these proceedings are within the terms of the Deed of Settlement and the plaintiff had, thus, released the defendant from any liability that it could have suffered in these proceedings.

320. Accordingly, the plaintiff had covenanted not to sue the defendant, by virtue of the Deed of Settlement, for any claim that the plaintiff may have had arising out of any breach of any term of the "tender process contract" or, alternatively, of any breach of a duty of confidentiality created by the tender process. This would, of course, have been a complete defence to the plaintiff's claim. It was, of course, pleaded as such by the defendant.

321. In the counter-claim, however, the defendant seeks the following remedies:

(i) An order in the nature of specific performance to stay the present proceedings.

(ii) An injunction restraining the plaintiff from commencing any further court proceedings against the defendant in respect of any matter arising out of or in any way related to Federal Court of Australia proceeding number AG 52 of 1998.

(iii) In the alternative to (i) and (ii), damages for breach of the deed of settlement, and, in the alternative, restitution on the basis of a failure of consideration under the said Deed.

322. The first two orders do not seem to me to be available. As to the first, the proceedings have now been heard. Such an order would ordinarily be likely to be made at an interlocutory stage of the proceedings rather than after they have been heard. I do not consider it appropriate, especially as I have found in favour of the defendant on the plaintiff's claim, to make such an order.

323. As to the second, I have no evidence to suggest that the plaintiff proposes to commence any further proceedings. No doubt my findings on the questions of the limitation issue would be a significant disincentive to such further proceedings in any event. There is no evidence of "substantial imminence of irreparable damage" to justify such an order: R v Macfarlane [1923] HCA 39; (1923) 32 CLR 518 at 551.

324. The next order sought is damages. As I have found the Deed of Settlement, a contract, to have been breached, the ordinary consequence would be an award of damages. Such damages have traditionally been based on the rule formulated in Robinson v Harman [1848] EngR 135; (1848) 1 Ex 850 at 855-6; [1848] EngR 135; 154 ER 363 at 365, namely that:

where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.

325. This has been confirmed in the High Court on numerous occasions. See, for example, Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272 at 286; [13].

326. The damages to which the defendant would then be entitled would be the actual costs of defending the proceedings, for, had the contract not been breached, the proceedings would not have been taken. That, it seems to me, is the measure of the damages.

327. This would amount, then, to what is now commonly called indemnity costs as claimed by the defendant in the fourth order sought. There seems to me to be a convergence here. An order for costs is, of course, an indemnity for the costs expended by the party for whose benefit the order is made: Harold v Smith [1860] EngR 516; (1860) 5 Hurl & N 381 at 385; [1860] EngR 516; 157 ER 1229 at 1231. That is to say, they are a compensation for the costs incurred by reason of the proceedings, as was made clear by Mason CJ in Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 543. See also per McHugh J at 567 and what his Honour then said in Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at 97; [67].

328. This court has power under r 1752(1)(b) of the Court Procedures Rules to make a special costs order that the costs be payable "on an indemnity basis". That basis has been described in the order made in Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1997) 72 FCR 151 at 159, as

such costs ... to include all costs except insofar as they are of an unreasonable amount or were unreasonably incurred so that, subject to such exceptions, the [party for whose benefit the costs order is made] will be completely indemnified by [the party who is ordered to pay the costs] for its costs ...

329. This accords with formulations such as those of Megarry V-C in EMI Records Ltd v Ian Cameron Wallace Ltd [1983] 1 Ch 59 at 72. See also Singleton v Macquarie Broadcasting Holdings Ltd (1991) 24 NSWLR 103. This has been adopted in this Territory in Quirk v Bawden (1992) 112 ACTR 1.

330. The circumstances under which indemnity costs may be made are now well-known. They were set out in Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225 at 232-4. They have been discussed since then in a large number of cases.

331. One ground for such an order is where the proceedings are, in the words of Woodward J in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 202; (1988) 81 ALR 397 at 401, "commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success."

332. Of course, such cases should be distinguished from "marginal" cases, else every unsuccessful litigant would, by definition, be at risk of paying costs on an indemnity basis as the court has rejected their claim or defence. That is neither the law nor appropriate.

333. Of course, the distinction between a case so hopeless that it ought to be visited with an indemnity costs order and a merely marginal one is not easy to draw. As Gray J said in Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2007] FCA 1844; (2007) ATPR 42-200 at 48,332; [26]:

There is not a line, much less a clear line, between having a sound basis for litigation and acting unreasonably in pursuing litigation. Rather, there is a gap, perhaps a substantial one, between having a sufficiently good case to commence and continue proceedings, even if they turn out to be unsuccessful, and having acted so unreasonably as to warrant the award of indemnity costs, or of costs on a basis other than the usual one.

334. See also Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd (No 2) [2005] FCA 401 at [2].

335. As noted by Marshall J in Winspear v Mackinnon [2008] FCA 322 at [5], "[t]he overriding consideration is the justice of the particular case." The principles were set out as follows in Hamod v New South Wales (2002) 188 ALR 659 at 665; [20]:

Indemnity costs are not designed to punish a party for persisting with a case that turns out to fail. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs.

336. In this case, the plaintiff had settled with the defendant and executed a comprehensive Deed of Settlement. There was no reservations about issues that could later be litigated.

337. I accept that the plaintiff's witnesses gave evidence that supported its case, though, as I have noted above (at [198]-[201]), it was not evidence on which I could particularly rely to draw the necessary inferences to the requisite standard of proof.

338. It is true, and needs fairly to be borne in mind, as Gray J said in Australian Competition Consumer Commission v Leahy Petroleum Pty Ltd at 48,332; [26] that "[i]t would be a rare case, however, in which any party proposing to commence litigation would be able to look at the material available to it as if it were a judge doing so at the end of a trial."

339. Nevertheless, it seems to me that there is a case here for an award of indemnity costs on the traditional basis, both because the litigation was commenced in the face of the Deed of Settlement and then its continuance in the light of the comprehensive evidence of the defendant's witnesses which showed the flimsiness of the inferences that were necessary to underpin the plaintiff's case.

340. In any event, I am also satisfied that this would be the measure of the damages payable to the defendant for the breach of the Deed of Settlement. There should be an award of costs of the claim and counter-claim on the indemnity basis to the defendant.

341. There is, however, one final issue that needs to be resolved. The plaintiff says that the defendant cannot rely on the Deed of Settlement in its counter-claim for it breached it. The allegation is that the defendant breached the term, clause 5, requiring that the contents of the Deed not be disclosed.

342. The plaintiff alleges that the disclosure was made to Frank Bernard Cassidy, a freelance journalist.

343. Mr Cassidy's evidence was that the media outlet for whom he worked at the time had been telephoned by Mr Hanna and they subsequently arranged to meet. The two had a conversation on 27 June 1999 in which Mr Hanna informed Mr Cassidy that the plaintiff had been a tenderer for the storage facility and explained how he thought the process was unfair. Mr Cassidy recorded the conversation on tape, but the taped record does not survive.

344. There appear to be other conversations with Mr Hanna, but the dates were a little unclear.

345. Mr Hanna told Mr Cassidy that he had complained about the tender process and had taken action in court, though he did not give much detail about that.

346. Mr Cassidy was aware that the tender process was, at that stage, some two years old and that the building had been built. It appears that Mr Hanna told him that the court case had concluded.

347. Mr Cassidy had a very hazy recollection of the conversation but he had made some notes which gave some content to the conversation. Some of the notes, however, meant little to him now. He knew, from what Mr Hanna told him, that U-Stow-It was also a tenderer.

348. Mr Hanna was very critical of the defendant. He gave Mr Cassidy a folder of material. There was a reference to the defendant's annual report in which it was written in glowing terms that the storage facility was a "first" for Australia. Mr Hanna clearly thought that he was the author of the ideas that had justified that claim, though, as I have found, this cannot be said to be so.

349. In Mr Cassidy's notes there was a reference to "compensation" but he could not recall to what that referred. In particular, he was adamant that Mr Hanna had not spoken about the outcome of the court case.

350. Subsequently, Mr Cassidy spoke to Mr P Robbie of U-Stow-It. His notes of that conversation included the following information as he explained in cross-examination:

And then, 'The ombudsman said he was actively looking during 1998.' 'Halfway through the year we thought they were going to make a judgment.' 'One of the other tenderers took court case against National Library.' 'Ombudsman said, "complaint put in abeyance while the court case heard"'.

All right, and the next, what's after that? --- 'Now we're getting to great difficulty.' 'Court equals' or it was - 'didn't make up its mind' I presume that - 'There was an outcome in May 1999.' 'Settled out of court.' 'Undisclosed details.' 'We've written back to ombudsman. Have asked him to reactivate the case.'

So you now know by reason of having spoken to Mr Hanna and Mr Robbey that there was a court case that Mr Hanna had brought, that had been settled out of court in May 1999 with undisclosed details? --- Yes.

And you knew that after Mr Hanna came to you complaining to you about the, the way the library had handled it? --- Yes.

And asking you to write a story about that? --- Essentially, yes.

351. Mr Cassidy then approached the defendant. There was, so he said, a process for doing so where, if he wanted information, he would be directed to a media person who, he understood, was authorised to speak on behalf of the defendant. Mr Cassidy has no memory of to whom he spoke when he contacted the defendant. He did not, so far as he could recall, speak to the then Director-General of the defendant, Mr Warren Horton.

352. He appears, from his notes, to have discussed the tender process with the person to whom he spoke. He also appears, from those notes, to have been told that "Purchasing Australia" and the Minister "gave [the process] the tick" and that it "[m]et all due measures of probity".

353. He was also told, it appears from his notes, that the court case - presumably that brought by the plaintiff in the Federal Court - was "[s]ettled out of court." His notes also record "[w]ithdrew the action". This was, Mr Cassidy accepted, about the action of the plaintiff of which he had already been informed by Mr Hanna. His notes also record "Not paid. Not a settlement".

354. In one of his affidavits, Mr Cassidy deposed:

I contacted Mr Hanna around the end of June to ask him questions about the tender and he advised me in words to the following effect 'there was a dispute with the Library. It has been settled out of court and the details are confidential. I cannot discuss the matter with you.' Mr Hanna did not disclose any details, or documents to me concerning the settlement and he was quite strong about discussing the matter.

355. Mr Cassidy then wrote an article which was published in The Canberra Times on 21 July 1999, under the headline "Library 'failed' in $5m Contract". Relevantly, in the article appeared the following paragraphs:

Another unsuccessful tenderer, Wagdy Hanna and Associates, of Deakin, took legal action against the Library, but settled out of court.

Mr Horton said the case was dropped and Wagdy Hanna was not paid.

The parties agreed to keep details of the withdrawal confidential and Wagdy Hanna had no comment.

356. This was clearly based on the conversations Mr Cassidy had with someone from the defendant. This was, Mr Thomas submitted, a breach of clause 5 of the Deed of Settlement.

357. The plaintiff pleaded in its reply to the defence:

The Plaintiff joins issue with the Defence and additionally says that

...

that [sic] if, which is denied, the Deed of Release relied upon by the Defendant applies to the Plaintiff's claim then the Defendant is estopped from relying upon the terms of that Deed by reason of its conduct in publicly disclosing terms of that Deed without consent or knowledge of the Plaintiff; and

358. I find it difficult to see how an estoppel arises in these circumstances. The notion of estoppel is usefully summarised in Professor G E Dal Pont, Equity and Trusts in Australia (Thomson Reuters, 5th ed, 2011) at 321; [10.05] as follows:

The basic purpose of an estoppel is to prevent the harm that results from a person repudiating the foundation of a belief or assumption he or she has induced. Beyond this broad statement are numerous applications to specific circumstances and qualifications, which have developed into different 'forms' of estoppel, at common law and in equity.

359. Professor Dal Pont then refers to the "customary classification" of the three classes of estoppel as identified by Deane J, with whom Blackburn J agreed, in Reed v Sheehan [1982] FCA 1; (1982) 39 ALR 257 at 275:

At least since the time of Coke (Coke's Littleton, 352a), it has been customary to recognize three general classes of estoppel: of record (eg, judgment), of writing (viz, deed) and in pais (between persons in the land or country (pays) ie by conduct). Estoppel in pais includes both the traditional common law estoppel which prevents a party from denying an assumption which formed the conventional basis of a relationship between himself and the other party or which he has adopted against the other party by the assertion of a right based on it and estoppel by representation which was of later development with origins in chancery. Estoppel in pais is also commonly regarded as including at least under a Judicature Act system such as in the Australian Capital Territory, the overlapping equitable doctrines of proprietary estoppel and estoppel by acquiescence or encouragement. I put to one side, for the moment, the question whether the High Trees House case, supra, type of equitable estoppel, which is usually and conveniently called 'promissory estoppel', exists in the law of the Australian Capital Territory and, if it does, whether it is also included in estoppel in pais or should be consigned to a separate class.

360. See also the summary of the principles of equitable estoppel set out by Einstein J in Redowood Pty Ltd v Mongoose Pty Ltd (2004) 49 ACSR 172 at 191; [123].

361. Regrettably, I was not much assisted by submissions from the plaintiff as to how this case was put. The plaintiff's opening submissions put it as follows:

The confidentiality clause was recognised by the parties ... as an important term. The evidence of Cassidy [sic] would be accepted that the defendant provided details of the settlement terms to him - that disclosure was wrongful and the defendant should not be permitted to rely upon the Deed in these proceedings.

That, of course, appears to be the argument from estoppel which was pleaded in the reply to the defence.

362. There was brief reference to this issue in the oral submissions of Mr Thomas, who said:

And your Honour in relation to the Deed of Release, your Honour has the evidence of Mr Hanna in relation to the confidentiality clause and [one of the defendant's officer's] acknowledgement that that was an issue. We simply say in relation to that it's not a matter of setting aside the Deed, we never sought to do that. We simply say equity won't allow the defendant to rely on it in circumstances where your Honour would find, we say, that they disclosed the terms.

363. No authority or principle was cited to justify the claimed defence, namely that by its own breach of the Deed of Settlement, the defendant was estopped from relying on its terms.

364. Because of this, it is a little difficult to understand and evaluate the claimed answer to the defendant's defence. Doing the best I can, however, it seems to me that:

(1) there is no case here for estoppel by record or by writing;

(2) there is no case here for proprietary estoppel, which applies where, by encouragement or acquiescence an owner of property is prevented from denying an interest in the property to another party who has been encouraged or allowed to expend funds or otherwise act in relation to the property with some representation of a benefit that will accrue, as in Chalmers v Pardoe [1963] 1 WLR 677 at 681-2;

(3) only promissory estoppel is left as the form of estoppel that could be meant by the plaintiff;

(4) for such an estoppel to operate, in the words of Priestly JA in Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 at 610:

[T]here must be the creation or encouragement by the defendant in the plaintiff of an assumption that a contract will come into existence or a promise be performed or an interest granted to the plaintiff by the defendant, and reliance on that by the plaintiff, in the circumstances where departure from the assumption by the defendant will be unconscionable.

(5) there was here no assumption created or encouraged by the defendant in the plaintiff of the kind referred to by Priestly JA and none was identified by the plaintiff.

365. This is a somewhat simple approach but in the absence of a clearer exposition of the plaintiff's case on this issue it is, in my view, sufficient to dispose of the matter.

366. Indeed, it might also be pointed out that as equity follows the law, the assumption on which this pleading has proceeded is fundamentally flawed. It assumes that a breach, even a flagrant breach (which, for the argument, I will assume that it was) is necessarily unconscionable. Again, it is difficult to accept that as representing the law.

367. While, as Mahoney JA said in Antonovic v Volker (1986) 7 NSWLR 151 at 165, the term "unconscionability" is far better described than defined, I do note that Deane J said of the term in Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 441:

The most that can be said is that 'unconscionable' should be understood in the sense of referring to what one party 'ought not, in conscience, as between [the parties], to be allowed' to do ... In this as in other areas of equity-related doctrine, conduct which is 'unconscionable' will commonly involve the use of or insistence upon legal entitlement to take advantage of another's special vulnerability or misadventure ... in a way that is unreasonable and oppressive to an extent that affronts ordinary minimum standards of fair dealing (citations omitted).

368. There is simply no evidence here to suggest that, if there were a breach of the non-disclosure term in the Deed of Settlement, it was unconscionable; it may have been made in ignorance, by mistake or without authority.

369. In any event, it cannot be seen to have taken advantage of any vulnerability of the plaintiff in an unreasonable or oppressive way.

370. More importantly, it did not induce the plaintiff to assume that a state of affairs existed or would exist and to rely on that to it detriment.

371. Separately from the reply and the oral argument, the plaintiff, in its defence to the counter-claim, pleaded that clause 5 of the Deed of Settlement was a fundamental term, that the conversation with Mr Cassidy breached that term and that, as a result, the Deed of Settlement was void, or in the alternative terminated the Deed of Settlement or, in the alternative, the plaintiff was not bound by the Deed of Settlement.

372. I am prepared to accept that, whether through inadvertence, mistake, ignorance or deliberately, there was a breach of clause 5 of the Deed of Settlement. The evidence is too unclear for me to make a final finding on that, though I accept that it is unlikely that Mr Cassidy would have attributed the statement he did to Mr Horton if it had not come from what he reasonably regarded as a reliable source of the defendant. That breach did not, of itself, however, terminate or bring to an end the Deed of Settlement. Despite a breach of a contract, both parties remain bound by the contract unless there is an election by the innocent party, if he, she or it has the right to do so, to rescind: Foran v Wight [1989] HCA 51; (1989) 168 CLR 385 at 416-17; Heyman v Darwins Ltd [1942] AC 356 at 361.

373. Here, there was no election by the plaintiff to rescind the Deed of Settlement. As there was neither contractual nor statutory provisions as to termination of the contract, the common law applies. At common law, the clearest form of election is by communication of unequivocal words or conduct evincing an election to terminate performance of the Deed of Settlement: Car and Universal Finance Co Ltd v Caldwell [1965] 1 QB 525 at 550. There was, here, no such communication by the plaintiff.

374. In J W Carter, Breach of Contract (Law Book Co, 1984) at 336; [1016], the author states:

Of course, a promisee who wishes to terminate should do his best to communicate his election since actual communication will leave no doubt in the promisor's mind.

Examples of types of conduct which are capable of being regarded as unequivocal include: the rejection of the promisor's performance; the making of an alternative contract; an act, on the part of the promise, which puts it out of his power to perform the contract with the promisor; the forfeiture of a lease; the issue and service of a writ alleging termination, claiming damages based on a termination of performance, or seeking a declaration that termination has occurred; and an unequivocal statement at the trial of the action.

Where the promisee's conduct is equivocal no election will occur, even if there is communication to the promisor. For example, the issue and service of a writ making alternative claims for damages based on termination and for specific performance is not to be regarded as unequivocal conduct (footnotes omitted).

375. No such efforts were made by the plaintiff prior to or in the course of these proceedings. Indeed, the statement of its counsel, set out above (at [362]) is contrary to that position. The commencement of these proceedings being, so far as the plaintiff's pleading was concerned, quite independent of the Deed of Settlement, is no such election.

376. Lest the plaintiff suggest otherwise, its pleadings were not consistent with an election to terminate the Deed of Settlement. Thus, in answer to the defendant's defence of release, it pleaded first that the Deed of Settlement did not "pertain to the cause of action pleaded in these proceedings" and then that, in the alternative, the Deed of Settlement was void, terminated by the defendant or that the plaintiff was not bound. Nowhere did it plead that the plaintiff accepted the repudiation of the Deed of Settlement alleged to be constituted by the breach, thereby bringing the Deed of Settlement to an end.

377. Perhaps as significantly, there was no affidavit or oral evidence of or on behalf of the plaintiff of any such election.

378. In my view, the plaintiff's reply to the defendant's counter-claim fails.

379. As a result of my consideration, I answer the questions I posed above (at [24]) as follows:

(i) Was there a duty of confidence reposed on the defendant in respect of the plaintiff's tender?

(ii) What were the specific matters in the plaintiff's tender that were subject to any duty of confidentiality on the part of the defendant?

(iii) Did the defendant breach that duty of confidence by revealing to Decoin before it chose Decoin as its successful tenderer to provide the repository, the confidential matters that it was bound not to reveal from the plaintiff's tender? This perhaps, requires an answer to the question of whether any feature of the repository as constructed by Decoin incorporated any features that were confidentially included in the plaintiff's tender?

(iv) If so, what loss has been suffered by the plaintiff and how should it be assessed?

Answer: Unnecessary to answer as the plaintiff has suffered no loss compensable by the defendant.

(v) Did the act of any disclosure by the defendant amount to deliberate concealment such as to extend the time for in the ACT Limitation Act?

Answer: As there was no disclosure, unnecessary to answer.

(vi) Did the Deed of Settlement release the defendant from the claims made in these proceedings?

(vii) If not, should the Deed of Settlement be rectified so as to include a release that encompassed claims such as those made in these proceedings?

(viii) Is the plaintiff estopped from bringing these proceedings because they should have been included in the Federal Court proceedings?

(ix) If so, does the defendant's conduct prevent it from relying on any such estoppel in these proceedings?

(x) Has the plaintiff breached the Deed of Settlement by bringing these proceedings?

(xi) Is the Deed of Settlement void, or in the alternative, terminated by the defendant, or, in the alternative, is the plaintiff released from its terms?

(xii) Has the defendant suffered loss from the alleged breach of the Deed of Settlement? If so, how should that be calculated?

Answer: Yes and the damages should be calculated on the basis of an award for indemnity costs.

380. As a result, there must be judgment for the defendant on the plaintiff's claim and judgment for the defendant on its counter-claim. I shall make orders accordingly.

I certify that the preceding three hundred and eighty (380) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Acting Chief Justice Refshauge.

Solicitor for the plaintiff: Trevor Barker and Associates (now Dickson Legal)

Solicitor for the defendant: Blake Dawson (now Ashurst)