FEDERAL COURT OF AUSTRALIA
ACT Cross Country Club Inc v Cundy [2010] FCA 782
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Citation: |
ACT Cross Country Club Inc v Cundy [2010] FCA 782 |
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Parties: |
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File number(s): |
NSD 587 of 2010 |
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Judge: |
PERRAM J |
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Date of judgment: |
23 July 2010 |
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Catchwords: |
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Cases cited: |
AG Cowley Holdings Pty Ltd v Central City Pty Ltd (2010) 266 ALR 587 cited Bos International (Australia) Ltd v Murphy HC Auckland [2010] HZHC 572 cited Butt v M’Donald (1896) 7 QLJ 68 cited Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510 cited Mackay v Dick (1881) 6 App Cas 251 applied Secure Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 cited |
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Date of hearing: |
2 July 2010 |
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Date of last submissions: |
2 July 2010 |
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Place: |
Sydney |
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Division: |
GENERAL DIVISION |
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Category: |
Catchwords |
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Number of paragraphs: |
44 |
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Counsel for the Applicant / Cross-Respondent: |
Mr S Hausfeld |
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Solicitor for the Applicant / Cross-Respondent: |
DibbsBarker Lawyers |
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Counsel for the Respondent / Cross-Claimant: |
Mr M R Hall |
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Solicitor for the Respondent / Cross-Claimant: |
Banki Haddock Fiora |
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
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NSD 587 of 2010 |
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ACT CROSS COUNTRY CLUB INC Applicant
DAVID BRIAN CUNDY AND FRANCES MARY SETON T/AS CUNDY SPORTS MARKETING Respondent
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AND: |
DAVID BRIAN CUNDY AND FRANCES MARY SETON T/AS CUNDY SPORTS MARKETING Cross-Claimant
ACT CROSS COUNTRY CLUB INC Cross-Respondent
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DATE OF ORDER: |
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WHERE MADE: |
SYDNEY |
THE COURT ORDERS THAT:
1. The applicant’s proceedings be dismissed with costs which may be taxed forthwith.
2. Judgment be given for the cross-claimant, damages to be assessed, on the cross-claim.
3. The cross-respondent to pay the cross-claimant’s costs of the cross-claim to date which may be taxed forthwith.
4. The applicant’s application of 30 April 2010 be dismissed with costs which may be taxed forthwith.
5. The applicant to pay the respondent’s costs reserved by Master Harper on 14 May 2010 which may be taxed forthwith.
6. The matter be stood over for further directions on 27 July 2010 at 9.30 am.
AND, IN PROCEEDING NSD 952 OF 2009, THE COURT ORDERS THAT:
7. The applicant’s motion of 16 April 2010 be dismissed.
8. The respondent pay the applicant’s costs of the motion of 16 April 2010 which may be taxed forthwith.
9. The matter be stood over for further directions on 27 July 2010 at 9.30 am.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
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GENERAL DIVISION |
NSD 587 of 2010 |
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BETWEEN: |
ACT CROSS COUNTRY CLUB INC Applicant
DAVID BRIAN CUNDY AND FRANCES MARY SETON T/AS CUNDY SPORTS MARKETING Respondent
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AND: |
DAVID BRIAN CUNDY AND FRANCES MARY SETON T/AS CUNDY SPORTS MARKETING Cross-Claimant
ACT CROSS COUNTRY CLUB INC Cross-Respondent
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JUDGE: |
PERRAM J |
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DATE: |
23 JULY 2010 |
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PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
I - Introduction
1 For many years now there has been run an annual marathon in Canberra known as the Canberra Marathon. Those involved in its staging have included – an intentionally neutral expression – the ACT Cross Country Club Inc (“the Club”), on the one hand, and, on the other, Mr Cundy and Ms Seton who trade under the name Cundy Sports Marketing and to whom I shall refer as Cundy Sports. In 2009 the Club and Cundy Sports fell into disagreement about the nature of their relationship and their respective rights to conduct the marathon. Litigation in this Court ensued and remains on foot: Cundy v ACT Cross Country Club Inc (NSD 952 of 2009). On 1 March 2010 the Club and Cundy Sports reached a contractually enforceable agreement to settle their dispute and with it that litigation. The terms of that agreement included, as one might naturally expect, promises by both parties to bring the litigation in NSD 952 of 2009 to an end. It also included a term that Cundy Sports would have the right “to organise and administer the 2010 Canberra Marathon to be conducted on 10-11 April 2010”. As it happened, the marathon could not be run without the permission of the authorities which control the roads in and around Canberra for only they had the authority to close the roads to traffic. Those authorities indicated that permission to hold the marathon would not be forthcoming unless the parties provided written confirmation to them that the dispute had been settled. No such written confirmation was provided by 15 March 2010. On that day, Cundy Sports through its solicitors informed the Club that it was no longer feasible to hold the marathon in the remaining time before April 2010 and, again putting the matter neutrally, brought the agreement between them to an end.
2 The question which now arises is whether the Club breached the settlement agreement by failing to co-operate with Cundy Sports to communicate the fact that the dispute had been settled to the roads authorities. If it did fail to co-operate then there is no dispute that it was in breach of the settlement agreement and Cundy Sports was entitled to terminate it. On the other hand, there is also no dispute that if the Club did not breach the settlement agreement then Cundy Sports breached it by repudiating it on 15 March 2010. If that be so then the Club is entitled to an order requiring Cundy Sports to perform the settlement agreement and, more particularly, to bring about an end to the litigation in NSD 952 of 2009 which is presently pending in this Court.
3 The parties’ positions in broad outline are as follows. The Club says that following the formation of the settlement agreement the parties were unable to agree upon the precise mechanics by which it would be carried into effect; that Cundy Sports unreasonably demanded that the Club inform the road authorities of the settlement as a precondition to the proceedings being brought to an end; and that that posture was not in accordance with the terms of the settlement agreement which had, in fact, been reached. Cundy Sports, for its part, says that the Club knew that the time remaining before the holding of the marathon was very tight; that unless the Club told the road authorities that the matter had been settled the marathon could not proceed; and that the Club simply failed to co-operate with Cundy Sports in informing the road authorities of the fact that the matter had settled.
4 The submissions of Cundy Sports are to be preferred. The dispute had been settled. The Club had agreed that Cundy Sports would organise and administer the marathon in April 2010. That agreement had been reached on 1 March 2010. To the knowledge of all parties this had to occur within a reasonable period of time before the date upon which the marathon was to be held, being known to be 11 April 2010. The Club was bound not to act in a way which would deprive Cundy Sports of the benefit of the settlement agreement and, in particular, of its right to manage the Canberra Marathon in April 2010. Once the road authorities indicated that they would not issue the necessary road closure permits without the Club and Cundy Sports indicating in writing that the dispute had been settled, the Club was bound contractually so to indicate. Its refusal to attend to this minor detail deprived Cundy Sports of the substantial benefit of the contract. That being so, Cundy Sports was entitled to treat the agreement as being at an end. The party in breach of the agreement was the Club and not Cundy Sports. It follows that the Club’s claim to have the settlement agreement enforced must be dismissed since it has been validly terminated. It also follows that Cundy Sports’ claim for damages for breach of contract should now proceed to the stage of assessment. My reasons for these conclusions are as follows.
II - Events Leading to the Settlement
5 Without descending into the rights or the wrongs of the debate it appears that for a number of years Cundy Sports has managed the Canberra Marathon in association with the Club. During 2009 the Club and Cundy Sports fell into disagreement about the future of the event. On 10 June 2009 the Club sought by letter to bring the relationship to an end. It was evident, however, that Cundy Sports regarded themselves as having an entitlement to conduct the Canberra Marathon. Other issues too divided the parties – Cundy Sports appeared to own the business name “Canberra Marathon”, the URL “canberramarathon.com.au” together with the ownership, or asserted ownership, of several trade marks associated with the marathon. The Club however contended that those things belonged to it.
6 Cundy Sports commenced litigation in this Court: Cundy v ACT Cross Country Club Inc NSD 952 of 2009. That matter was assigned to my docket. Attempts were made to mediate the matter but they were unsuccessful. All the while the 2010 Canberra Marathon drew closer. Since the nature of the dispute which then existed went to the heart of who was entitled to organise the event this propinquity was only likely to inflame the passions on both sides. No utility is presently to be derived by apportioning responsibility for who first provoked the other party. Rather, the nature of the dispute between the parties inevitably meant that the dispute either would be settled before the running of the marathon or, if not, that the parties would come into heated conflict.
7 On 1 October 2009 Cundy Sports started taking online entries for the Canberra Marathon which was to be conducted on the weekend of 10-11 April 2010. Towards the end of November 2009 a fairly upbeat press release was issued by Cundy Sports which indicated that the marathon was proceeding apace. One can well understand why Cundy Sports wanted to get this underway from an administrative perspective; one can just as readily appreciate how provocative to the Club this must have seemed.
8 On 16 December 2009 the Club offered to settle the dispute but this offer was not accepted by Cundy Sports. As the summer passed the dispute between the parties inevitably worsened. The first source of the aggravation, which concerned road closures, had been known to Cundy Sports in November 2009 but now took on an increasingly urgent hue. The running of a marathon requires not only runners but also roads and it is imperative for the safety of the competitors that those roads be closed to ordinary traffic during its running. Since a marathon takes place over an approximate 42.2 kilometre course the road closures necessitated are extensive.
9 The power to close roads is an administrative one. However, the fact that the seat of government is located in the Australian Capital Territory has resulted in two sets of roads requiring two sets of approvals for their closure. The roads surrounding the Parliamentary triangle, through which the Canberra Marathon passes, are largely under the control of the Australian Government National Capital Authority whereas the balance of the roads in Canberra are under the control of the Territory government (Roads ACT). Without the approval of both it is impossible to close the roads and, therefore, impossible to hold a marathon. As early as November 2009 Cundy Sports understood that these bodies would only grant approval to the person who was organising the marathon which, of course, was the topic upon which the parties were in disagreement.
10 The concern became much more public on 4 February 2010 for it was on that day that the Chief Minister for the Australian Capital Territory issued a press release about the matter. Because it gives flavour to some aspects of the dispute it is useful to set it out. It also emphasises the seriousness of the problem which had developed from the perspective of the Territory government. It was in these terms:
ACT Chief Minister Jon Stanhope says it is with enormous regret he has informed the parties in dispute over the ownership and operational rights of The Canberra Marathon that the ACT Government is unable to provide the necessary approvals to allow the event to proceed this year.
Mr Stanhope said the government had been in regular contact with event management company Cundy Sports Marketing (CSM) and the ACT Cross Country Club (ACCC), encouraging them to settle their differences and not to jeopardise what has been an iconic sporting event for Canberra over many years.
“Sadly, CSM and the ACCC have failed to resolve the dispute through mediation and it is still awaiting a final determination before the courts. I am advised that might happen until later this year at the earliest.”
“The courts have been asked to make a ruling on which of the parties owns the event and the legal advice I have received is that until the court makes its decision, the government doesn’t know who owns the Marathon and so it is not in a position to approve the running of the event this April.”
“Put simply, we cannot pre-empt the findings of the court by ruling in favour of one of the disputing parties over the other.”
11 The parties traded further blows after this. Cundy Sports argued that the marathon had not been cancelled; the Club that it had. The Club complained that Cundy Sports was continuing to accept entries even though the race was off. On the other hand, Cundy Sports did its best to assuage the concerns of those who had already entered by telling them that it was a passing problem only and that the race would go on. For completeness, although the Chief Minister’s influence did not run to closing the roads on Capital Hill the National Capital Authority nevertheless quickly made clear that it was going to follow the lead of the Territory government on the question of the marathon.
12 The end of the tether was being approached by both parties and both hit upon the same solution. The Canberra Marathon – now seemingly on hold – was originally scheduled for the weekend of 10-11 April 2010. On 5 February 2010 – the day after the Chief Minister’s announcement – the Club announced that it would be holding the “Canberra Road Running Festival” on the weekend of 1-2 May 2010 and that it had secured as its patron the well-known marathon runner Mr Robert de Castella.
13 Despite that Cundy Sports continued to advertise that the Canberra Marathon was taking place on 10-11 April 2010. On 15 February 2010 the Chief Minister of the Territory wrote to Cundy Sports in these terms:
I am informed that despite my media announcements of 4 February 2010 that the ACT Government will not be providing approvals for a marathon event in Canberra on the weekend of 10-11 April 2010, your website is still actively promoting that an event is still possible on that weekend.
Can I confirm that the Government will be providing no approvals for the use of any ACT Government facilities, public land, roads or any other places for the conduct of a marathon on that weekend while there is no resolution to the ongoing dispute.
It has always been my wish that this dispute could have been resolved amicably through mediation, and the Canberra Marathon maintain its place on the Canberra events calendar. As that has not been possible and the matter is still before the courts, the Government is not able to offer any approvals or support for the weekend of 10-11 April.
I would again ask that no runners who have already entered the marathon are in any way disadvantaged through the failure of CSM and the ACTCCC to settle their differences. Further, with no likelihood of an event proceeding, I would ask that – in everyone’s interest – you let those who were hoping to participate know at the earliest opportunity that the event is unfortunately off for 2010.
14 Cundy Sports was unmoved by this request. On Thursday 18 February 2010 they issued their own press release which indicated that they were not standing aside and that they were doing their best to “explore all options”. In the week of 15-19 February 2010 Cundy Sports then announced that they would be holding their own marathon, this time to be called the “Classic Marathon” on the weekend of 17-18 April 2010. Simultaneously, its solicitors wrote to the Club’s solicitors, informed them of their view that the holding of the Canberra Road Running Festival infringed Cundy Sports’ copyright in the course map and demanded that the map be removed from the Club’s promotional material.
15 On 23 February 2010 the Club again offered to settle the proceedings then pending in this Court in terms to which I shortly return. The following day Cundy Sports’ solicitors signalled the deficiencies they perceived in that offer. However, the offer was probably not rejected (although an alternative view is available) and a counter-offer was not made. Instead Cundy Sports sought to elicit from the Club a further offer. I am by no means sure that the offer of settlement made by the Club was made in response to the allegation that the Club’s marathon would infringe Cundy Sports’ copyright. The following day (25 February 2010), for example, the Club’s solicitors replied to that assertion pointing out that the proposed course for the Canberra Road Running Festival differed from the course of the Canberra Marathon and denying, inter alia, any breach of copyright. Matters then took on a quickened pace.
16 The Chief Minister’s intervention seems to have brought about a different approach in Cundy Sports. Having pondered the matter over the weekend their solicitors wrote to the Club’s solicitors on Monday, 1 March 2010 and accepted the offer which was still open for acceptance. That letter was as follows:
We refer to our letter dated 24 February 2010.
We note that we have had no response to that letter, nor any contact from you.
Accordingly, reluctantly, our clients must accept that the terms of your client’s offer made on 23 February 2010 are the only terms on which your client is prepared to settle this dispute.
In these circumstances, and after careful reflection, our clients accept the offer. We will inform the Court and the Chief Minister. Our clients trust that your client will do all it can to facilitate the smooth preparations and conduct of the Canberra Marathon 2010.
17 The terms of the contract which thereby came to into effect were attached to the Club’s solicitors’ letter of 23 February 2010. They were as follows:
1. The Applicants to have the right to organise and administer the Canberra Marathon to be conducted in April 2010 on behalf of the Respondent on the same terms as those applying to the 2009 event;
2. In consideration of sub-paragraph 1 above, the Applicants to:
(i) pay the Respondent the sum of $5,000.00;
(ii) transfer ownership of the business name “Canberra Marathon” to the Respondent;
(iii) transfer ownership of the domain name or URL “canberramarathon.com.au” to the Respondent;
(iv) transfer to the Respondent all rights in or associated with trademark or trademark applications Nos. 1278411, 1303115; 1307993; and
(v) withdraw their opposition to the Respondent’s trademark application No. 1272172.
3. Subject to paragraph 5, the Respondent to grant to the Applicants the right to sell, on the Applicants’ own behalf and for the Applicants’ benefit, the management rights for the Canberra Marathons to be conducted in April 2011 and April 2012, with no right of further resale to be vested in the purchaser (the “right to sell”);
4. The Respondent to have the right of veto of a potential purchaser obtained by the Applicants for the purposes of sale pursuant to paragraph 3 above, such right not to be unreasonably exercised;
5. If the Applicants fail to conclude a sale agreement to sell the management rights pursuant to paragraph 3 on or before 31 August 2010, the Applicants’ right to sell to be automatically extinguished and all rights in respect of the Canberra Marathon to revert to the Respondent from 1 September 2010;
6. The proceedings No NSD 952 of 2009 to be dismissed, including the cross-claim, with no order as to costs.
(emphasis added)
18 Each party saw in this arrangement something different. I have no doubt that the Club regarded itself as giving away little by agreeing to allow Cundy Sports to manage the Canberra Marathon in April 2010. From its perspective it would have perceived that since the Chief Minister had made clear that the Canberra Marathon was not going ahead it was giving away little by agreeing to let Cundy Sports manage something which was not going to happen. On the other hand, it would have perceived that it would obtain the substantial benefit of the discontinuance of the proceedings NSD 952 of 2009 in this Court. So viewed it would have appeared attractive to the Club.
19 Perspective, however, shapes perception. From Cundy Sports’ view point matters looked quite different. The Chief Minister had not said that the Canberra Marathon would not proceed; rather, he had said that it would not proceed whilst it was the subject of legal disputation. Having procured the Club’s agreement to settle the dispute in contractual form, Cundy Sports believed that the Chief Minister’s caveat no longer applied and that, under a tight time frame, the marathon could proceed on 11 April 2010.
III - The Present Dispute
20 Cundy Sports’ solicitors’ letter of Monday 1 March 2010 accepting the offer had intimated that the Chief Minister would be immediately informed of the settlement. Their letter on Tuesday, 2 March 2010 indicated that just such a course had been taken. It was in these terms:
As set out in that letter [1 March 2010] (and as the writer confirmed to you yesterday afternoon by telephone) we informed the Chief of Staff to the ACT Chief Minister that the parties have agreed the terms of settlement of the above proceedings.
The Chief of Staff has told us that the ACT government will issue a permit for roads closure on 11 April 2010 for the 2010 Canberra Marathon, on written confirmation by the parties to Mr Tony Gill at Roads ACT that the parties have resolved their dispute.
Accordingly, we attach a document to be signed by Mr Limbrick on behalf of your client (or by anyone else with authority to bind your client) and to be emailed to us by return please.
We will forward the signed document to Mr Gill on receipt, and seek his urgent attention to issuing the approval. Our clients would welcome an announcement from the Chief Minister today that the 2010 Canberra Marathon will proceed on 11 April, so that entrants are informed without delay and our clients can resume organisation of the event.
21 The attachment was in these terms:
ACT Cross Country Club (ACTCCC) and Cundy Sports Management (CSM) (together, the Parties) confirm the following:
1. The Parties have resolved by agreement their legal dispute concerning the Canberra Marathon. Subject to paragraph 3 below, the Canberra Marathon event will take place on 11 April 2010 and will be managed by CSM and sponsored by ACTCCC on the same terms as the 2009 Canberra Marathon event.
2. The Parties request that their applications to Roads ACT for [a] roads closure permit for the 2010 Canberra Marathon event on 11 April 2010 be considered as a joint application by the Parties.
3. Subject to acknowledgment to the Parties from Roads ACT that the permit for roads closure has been approved for the Canberra Marathon event to be held on 11 April 2010, the Parties will discontinue Federal Court proceedings NSD 952 of 2009.
(emphasis added)
22 As a matter of contract law the Club had bound itself by legally enforceable promise to give Cundy Sports “the right to organise and administer the Canberra Marathon to be conducted in April 2010” on the Club’s behalf and “on the same terms as those applying to the 2009 event”. Further, it had offered this promise on 23 February 2010 at a time when it had secured approval for the holding of its own marathon on 1-2 May 2010. That promise had become legally enforceable within the week when it was accepted by Cundy Sports. Evidently, the promise to grant Cundy Sports the right to organise and administer the Canberra Marathon had no hope of being carried into effect without the Club’s co-operation. That co-operation would have been likely to be necessary in the ordinary course of events. However, in light of the Chief Minister’s position that the ACT government (and hence also the National Road Authority) would not act without written confirmation from both parties that they had resolved their dispute, this co-operation was essential and, in the context, urgent.
23 The law about this is clear and was explained over 120 years ago by Lord Blackburn in Mackay v Dick (1881) 6 App Cas 251 at 263 in these terms:
… as a general rule … where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that it is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect.
24 It is therefore a general rule applicable to every contract “that each party agrees, by implication, to do all such things as are necessary on his part to enable the other party to have the benefit of the contract”: Butt v M’Donald (1896) 7 QLJ 68 at 71 per Griffith CJ (Cooper and Power JJ concurring). Both of these statements were applied by Mason J in Secure Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607 and every other Justice sitting with him concurred. It is a basic principle of commonsense; it is an established part of the law.
25 In this particular case it had this consequence: before 1 March 2010 the fact that road closure approvals could not be obtained was Cundy Sports’ problem; after 1 March 2010 it was the Club’s problem as well. Nor was the duty cast upon the Club a passive duty which required nothing of it but a meticulous consideration of any suggestion put to it by Cundy Sports. On the contrary it was, as Mackay v Dick confirms, under a positive duty “to do all that is necessary … on [its] part for the carrying out of that thing”. Those emphasised words mean that the duty will be breached where a party bound by it passively awaits instructions from the other party to carry out the duty: Bos International (Australia) Ltd v Murphy HC Auckland [2010] NZHC 572 at [118] per Bell J.
26 As a consequence, the Club was bound once it was informed that it had to confirm in writing to the Chief Minister that the dispute had settled forthwith to do so. It is necessary then to trace precisely what thereafter occurred. Having received, on Tuesday 2 March 2010, the consent document, the Club’s solicitors replied on Thursday 4 March 2010. Rather than at once signalling its agreement to inform the Chief Minister of that which it had already agreed to do, the Club’s solicitors indicated that it would not be signing that document before the handing over of the intellectual property in the race. The letter was in these terms (relevantly):
Consistent with the settlement agreement, our client will need, in advance of signing any document like the “Conformation [sic] of Resolution of Dispute”:
(a) signed transfer documentation to transfer to our client ownership of the business name “Canberra Marathon” in each jurisdiction in which it is registered;
(b) signed transfer documentation to transfer to our client ownership of the URL or domain name “canberramarathon.com.au”;
(c) signed transfer documentation to transfer to our client ownership of all rights in or associated with trademarks or trademark applications 1278411, 1303115 and 1307993, including confirmation that any associated debts incurred by your clients have been paid;
(d) a signed withdrawal of your clients’ opposition to trademark application 1272172;
(e) a cheque to our client for $5,000;
(f) a mutual deed of release between the parties concerning all matters covered in the current litigation; and
(g) signed consent orders dismissing the current proceedings, including the cross-claim, with no orders as to costs, for lodgement in the Federal Court of Australia
In this context, we suggest that a “settlement” occur at which there is a mutual handing over of all relevant signed documents sought by each party before your clients begin managing the 2010 event. In this context, a note such as the “Confirmation of resolution of dispute” could form part of the documentation handed over at the settlement. Given the limited resources of our client and the fact that our client’s representatives have twice travelled to Sydney in this matter, this settlement should occur in Canberra, where you could use a settlement agent.
27 The agreement formed on 1 March 2010 did not make the Club’s obligation to give Cundy Sports the right to administer the April 2010 Canberra Marathon contingent upon other obligations in the agreement and the positive duty of co-operation flowing from Mackay v Dick was certainly not so contingent. That duty bound the Club, at once, to write to the Chief Minister to tell him that the dispute had been settled. After Monday 2 March 2010 when the Club was informed that the Chief Minister required its confirmation of settlement the Club was in breach of the obligation of co-operation by not so informing him. The following day, Friday 5 March 2010, Cundy Sports’ solicitors wrote to the Club’s solicitors enclosing a proposed deed of settlement and release. But, of course, that was a proposed new arrangement; until it was executed the Club remained bound by its positive duty of co-operation flowing from the contractual arrangement into which it had already entered.
28 On the same day the Club’s solicitors wrote back indicating disagreement with the terms of the proposed deed. I interpolate at this point that the correspondence from here on in begins to exhibit the hallmarks of a negotiation about the terms of a proposed deed. However, that quality is apt to obscure the continuing, legally enforceable, obligation resting on the Club to co-operate to ensure that the Canberra Marathon went ahead in April 2010. That matter appears, with respect, to have been overlooked by the Club. Clause 2.2 of the proposed deed provided by Cundy Sports read as follows:
2.2.1 On or before the Settlement Date:
(a) the parties will sign the Confirmation of Resolution of Dispute in the form annexed to this agreement and marked ‘B’; and
(b) the Applicants will provide the signed document to the ACT Chief Minister.
2.2.2 As soon as practicable following receipt of a permit for roads closure by the Applicants from Roads ACT for the 2010 Canberra Marathon, the Applicants will attend to filing a Notice of Discontinuance of the Proceedings in the form annexed to this agreement and marked ‘C’.
29 It attached the same notice as had been attached to the letter of 2 March 2010. It will be recalled that no objection had been taken to the terms of that notice in the Club’s Solicitors’ letter of 4 March 2010. In their letter of 5 March 2010 those solicitors now said:
Re clause 2.2.1(a), we advise that clause 3 of the document entitled ‘Confirmation of Resolution of Dispute’ and to be marked as annexure B to the draft Deed is not acceptable. The proceedings are settled and must be discontinued pursuant to the offer and acceptance. The offer was not made conditionally, nor was the acceptance expressed to be conditional.
30 The letter also went on to say that the Club’s representatives would be unavailable over the long weekend and that settlement could not occur on Monday 8 March 2010, as that would be a public holiday (Canberra Day).
31 Confronted with this lacklustre co-operation from the Club, Cundy Sports’ solicitors wrote again to the Club’s solicitors on Monday 8 March 2010 about cl 2.2.1(a) in these terms:
Clause 2.2.1(a): Your client is aware that Roads ACT requires written confirmation signed by the parties that they have resolved their dispute in order to issue a road closures permit for the 2010 Canberra Marathon on 11 April 2010. If your client prefers, we can remove Annexure B and provide Mr Gill with a copy of the signed deed for this purpose. See the attached revised deed. Obviously, settlement requires that the 2010 Canberra Marathon proceed (see paragraph 1 of your client’s offer).
32 This signalled the obvious, namely, that the only thing that mattered at this point was for the Chief Minister to be informed of the fact of the settlement. I pause to add that even if the terms of the proposed deed were not satisfactory to the Club it was not relieved of its obligation to tell the Chief Minister of the settlement. It is for that reason that I do not find persuasive the Club’s contention that the proposed deed made the discontinuance of the proceedings conditional on the provision of its consent. I accept in the Club’s favour that the proposed deed sought to do so, but that deed never had any operative effect The version of 8 March 2010 provided in cl 2.2.1 as follows:
2.2.1 As soon as practicable following receipt of a permit for roads closure by the Applicants from Roads ACT for the 2010 Canberra Marathon, the Applicants will attend to filing a Notice of Discontinuance of the Proceedings in the form annexed to this agreement and marked ‘B’.
33 I accept also that the agreement of 1 March 2010 did not make either the obligation to settle or the obligation to give Cundy Sports the right to administer the race conditional on the other. But this is beside the point. The question is not whether each party behaved properly towards each other in the course of that negotiation. It is, rather, whether the Club complied with its non-contingent obligation to co-operate arising from the contract of 1 March 2010.
34 The most recent version of the deed was that on Monday 8 March 2010. Despite the evident urgency the Club’s representatives were unavailable over the weekend. On Wednesday 10 March 2010, the solicitor wrote back disagreeing with cl 2.2.1 in these terms:
The words “following receipt of a permit for road closure by the Applicants from Roads ACT for the 2010 Canberra Marathon” must be deleted. They purport to turn an unconditional acceptance by Mr Cundy and Ms Seton, of an unconditional settlement offer by the Club, into a conditional settlement agreement. Moreover, the Club cannot be responsible for what the ACT Government does or does not do. With respect, we disagree with the related comments made in your letter of 8 March 2010.
35 It was now nine days since the Club had promised to let Cundy Sports administer the race and nine days since it was informed that this could not occur without it informing the Chief Minister of the fact that an agreement had been reached.
36 On the same day Cundy Sports solicitors invited the Club’s solicitors themselves to articulate a version of a deed with which their client would be content. This request occurred just before lunch on Wednesday 10 March 2010. The next day at 1.25pm the Club’s solicitors sent through a proposed draft deed. That deed made no provision at all for the Club to inform the Chief Minister that an agreement had been reached to settle the dispute and it was not accompanied by any indication that that would occur. On the same day, evidently and understandably frustrated by the delay, Cundy Sports’ solicitors wrote to the Club’s solicitors stating that they would now proceed to continue to prepare their evidence in NSD 952 of 2009. This was done on Friday 12 March 2010. I reject the proposition, faintly pressed, that this was a repudiation of the settlement agreement. Cundy Sports was bound by this Court’s orders to serve the evidence.
37 On Monday 15 March 2010 the Club’s solicitors wrote back indicating that they did not propose “to go to the expense of providing affidavit evidence because the matter has already been settled”. It is, I think, difficult to understand why, if the matter had been settled, the Club had found itself unable for two weeks to take the rudimentary step of informing the Chief Minister of that fact so that, consistent with its contractual obligations, the Canberra Marathon could proceed in April 2010.
38 On 15 March 2010 Cundy Sports’ solicitors sent a letter bringing the settlement agreement to an end because, so it was said, there was no longer sufficient time to organise the marathon. It was in these terms:
The Chief Minister’s office indicated that in order for the 2010 event to proceed the parties must communicate the fact of settlement to Roads ACT. We attempted to explain to you that time was of the essence. We proposed alternatives for a form of words that would not compromise the parties’ positions. Your client remained silent. Your letter this afternoon avoids mention of these crucial matters.
The time for approval has now passed and the 2010 event cannot proceed. The offer made by your client is not capable of being realised and cannot therefore be accepted.
39 As to the timing of this letter I do not see that it would have been practical to proceed with the marathon after this date. It was to be held on 11 April 2010 and there were plainly significant administrative aspects – including the road closure applications themselves – which would need to be dealt with. The Chief Minister’s earlier announcement that the marathon was not going ahead no doubt made these issues more complex.
IV - Conclusions
40 It was a trivial matter after 1 March 2010 for the Club to tell the Chief Minister that the dispute was now settled and if, as appears to have been necessary, to provide a written document to that effect. From 2 March 2010 the failure of the Club to do so was a breach of the duty of co-operation. By seeking to engage Cundy Sports in the negotiation of the proposed deed it overlooked that it was already under an existing obligation to co-operate and to secure the holding of the marathon in April. The failure to inform the Chief Minister was, by 15 March 2010, a serious breach of an essential term of the bargain between the parties. Cundy Sports was entitled, therefore, to terminate the contract and to sue for damages. This is what it did on 15 March 2010. The Club submitted that even if the settlement agreement had been validly terminated by Cundy Sports, nevertheless its rights to have the proceedings discontinued and the intellectual property delivered to it were accrued rights which survived termination. If this is a submission suggesting the continued availability of specific performance I reject it for the agreement is no longer extant. To the extent that it is somehow said to relate to the damages which Cundy Sports might be entitled to it can be dealt with in the damages part of the hearing.
41 Once the agreement was brought to an end by that act of termination some further events then occurred which should be noted. On 1 April 2010 the Club commenced specific performance proceedings before the Supreme Court of the Australian Capital Territory. On 13 April 2010 it applied in NSD 952 of 2009 for a stay of those proceedings pending resolution of the proceedings in the ACT Supreme Court. On 16 April 2010 Cundy Sports applied in the Federal Court proceeding NSD 952 of 2009 for an anti-suit injunction restraining the Club from pursuing the ACT Supreme Court proceedings. Before either of those applications were heard, the Club applied on 30 April 2010 for an anti-anti-suit injunction in the ACT Supreme Court which if granted would have prevented Cundy Sports pursuing its anti-suit injunction in this Court. On 11 May 2010 Cundy Sports entered a conditional appearance in the ACT Supreme Court signalling an intention to challenge jurisdiction. On 14 May 2010 Master Harper, of his own motion, ended all of those disputes by cross-vesting the ACT Supreme Court proceedings to this Court. It is the Club’s specific performance suit and Cundy Sports’ cross-claim in that suit for breach of the contract and damages that are presently before me.
42 This Court in proceedings NSD 952 of 2009 had jurisdiction to deal with the Club’s claim to have the agreement enforced: see Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510 and the authorities usefully collected by Barker J in AG Cowley Holdings Pty Ltd v Central City Pty Ltd (2010) 266 ALR 587 at 590 [20]. The commencement of separate proceedings seeking to restrain proceedings in the Federal Court was an application which should not, in my opinion, have been made. Master Harper reserved the costs of the application made to him. In my opinion Cundy Sports is entitled to those costs. It is also entitled to the costs in preparing or beginning to prepare the anti-suit injunction in this Court. Given the disproportionate nature of these proceedings and having regard to the subject matter – a small dispute about a running race – the very significant expenses incurred in getting to this point and the likelihood of further hearings it is appropriate that all costs orders be taxable forthwith.
43 The orders I make in proceedings NSD 587 of 2010 are:
1. I dismiss the applicant’s proceedings with costs which are taxable forthwith.
2. I give judgment for the cross-claimant, damages to be assessed, on the cross-claim.
3. The cross-respondent is to pay the cross-claimant’s costs of the cross-claim to date which may be taxed forthwith.
4. I dismiss the applicant’s application of 30 April 2010 with costs which may be taxed forthwith.
5. The applicant is to pay the respondent’s costs reserved by Master Harper on 14 May 2010 which may be taxed forthwith.
6. Stand over for further directions on 27 July 2010 at 9.30 am.
44 In proceedings NSD 952 of 2009 I make the following orders:
1. Dismiss the applicant’s motion of 16 April 2010.
2. The respondent to pay the applicant’s costs of the motion of 16 April 2010 which may be taxed forthwith.
3. Stand over for further directions on 27 July 2010 at 9.30 am.
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I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. |
Associate:
Dated: 23 July 2010
