AUCKLAND CITY COUNCIL V UNION HOUSE LTD & Anor CA CA162/03

AUCKLAND CITY COUNCIL V UNION HOUSE LTD & Anor CA CA162/03 11 August 2004IN THE COURT OF APPEAL OF NEW ZEALAND CA162/03BETWEEN AUCKLAND CITY COUNCIL Appellant AND UNION HOUSE LIMITED First Respondent AND UNION HOUSE LEASE LIMITED Second Respondent Hearing: 11 March 2004 Coram: Hammond J Chambers J O'Regan J Appearances: R J Asher QC and N R Hall for Appellant R B Stewart QC for Respondents Judgment: 11 August 2004JUDGMENT OF THE COURT DELIVERED BY HAMMOND J Introduction[1] This appeal is concerned with a complex agreement which provided for certain property transactions, resolved certain litigation, and provided for ongoing co-operation between the parties in relation to the Britomart project in downtown Auckland. [2] The central issue on the appeal is whether a confidentiality clause prohibiting the disclosure of the terms of this agreement, without the prior consent of both the parties thereto, operated to render the purported assignment of that agreement by one of them ineffective.[3] In a judgment delivered on 30 July 2003 in the High Court at Auckland (CIV-2003-404-923), Randerson J held that the relevant Deed of Assignment was effective to assign the entire agreement, even though there was no consent to the assignment, and that consequently the respondents had a caveatable interest in the subject property. The Auckland City Council (ACC) now appeals to this Court against that judgment. [4] In the result, we take a different view of the correct interpretation of the agreement than was taken by the Judge (and for that matter by the parties). The appeal will therefore be allowed, but the case will be remitted to the High Court to enable that Court to reconsider the disposition of it in light of the views we have expressed as to the proper ambit of the relevant provisions of the agreement. The burden of this judgment is therefore to explain how we have reached those conclusions.Background[5] The ACC had decided to proceed with an ambitious underground transport interchange in an area near the waterfront known as the "Britomart precinct". The Britomart precinct is bounded by Britomart Place, Customs Street, Queen Elizabeth II Square and Quay Street. [6] On 11 September 1996 the ACC entered into an agreement with the Union Steamship Company of New Zealand Limited (Union Steamship). Although the name is similar to that of the respondents, Union Steamship is a completely separate entity from them. For many years it had owned commercial property on the Auckland waterfront. The land and buildings in which Union Steamship held an interest were important to the ACC's Britomart project. [7] The main elements of this agreement were as follows: i. Union Steamship agreed to sell its leasehold interest in what is now 130 Quay Street to the ACC.ii. ACC agreed to sell its freehold interest in 136 Quay Street to Union Steamship. iii. ACC sold to Union Steamship transferable development rights which were owned by the Council , for the benefit of 136 Quay Street. iv. Should the Britomart project not proceed within five years (that is, by 11 September 2001) and if the Council still owned 130 Quay Street, then the ACC was required to give Union Steamship a first right of refusal to purchase back the site. v. The ACC agreed to provide replacement carparks to Union Steamship for any parks lost as a result of the demolition of the former Britomart Precinct carpark, If, subsequently, Britomart was demolished then the ACC had the ability to move these licences to the Downtown Carpark, vi. A basement carpark feasibility study was to be undertaken to consider construction of further levels of carparks beneath Union House... vii. ACC agreed to meet Union Steamship's reasonable costs "in dealing with the tenants of [130] Quay Street". viii. ix. ACC agreed to indemnify Union Steamship with respect to damage caused to Union House by construction and works relating to the Britomart development. x. xi. Union Steamship agreed to withdraw its appeal to the Planning Tribunal in respect of the Britomart designation.xii. Union Steamship agreed to withdraw its objection to proposed road stoppings that had been publicly notified by the Council. xiii. Union Steamship agreed to consent to an ACC application to the ARC for two excavation consents relating to the Britomart project. xiv. ACC was to pay Union Steamship a sum of for "injurious affection" [8] Clause 2.4 of the agreement (which referred to 30 Quay Street, now renumbered 130 Quay Street) provided as follows:As part of the Britomart Development it is intended that the Building be demolished and the site comprising 30 Quay Street be partially converted into public accessways and also used for the purpose of a ramp. Should however the Britomart Development not proceed within five years of the date of this Agreement and the Council has retained ownership of 30 Quay Street, then, if the Council wishes to sell the land for purposes other than the construction of a transport terminal then the Council hereby grants to Union a first right of refusal to purchase the site comprising 30 Quay Street such right to be exercised as hereafter set out. In the event of the Council wishing to sell the same it shall first give Union notice in writing of the terms and conditions upon which it wishes to sell the said site and Union shall have 21 working days in which to consider whether or not it wishes to accept that right of purchase on those terms. Should Union not respond within that time frame or indicate that it does not wish to so purchase then the Council may sell to third parties but not on more favourable terms. Should the Council wish to offer the same on more favourable terms then it shall re-offer the same to Union by notice in writing whose obligations as to consideration thereof are the sums as above which are repeated herein except that the response time shall be five workings days.[9] It was common ground in the High Court that at the time this agreement was executed, the political climate in Auckland relating to the Britomart development was highly charged. There were strong views both for and against the proposal. ACC was particularly anxious not to have known the terms and conditions it was agreeing to with respect to individual properties, because of the leverage that might give other landowners. Accordingly, the agreement contained a clause which provided:15.1 Except as may be necessary to disclose to professional advisors, the terms and conditions of this Agreement shall remain confidential and shall not be disclosed to any other party without the prior agreement of both parties hereto.[10] This agreement was apparently negotiated under conditions of relative urgency. It was recognised that there might well be matters which the agreement had not covered, and that future co-operation between ACC and Union Steamship would in any event be necessary. The agreement therefore had a clause going to good faith and ongoing co-operation between the parties. It provided as follows:16.1 The parties shall work co-operatively to make appropriate arrangements in respect of any matters not covered by this Agreement arising out of the Britomart Development or Union's development proposals, and the Council shall consult with Union in good faith as the Britomart Development proceeds with a view to minimising any effects of the development on Union and advising it of the scheduling and progress of the works.[11] On 31 October 1996 ACC entered into an agreement for the sale and purchase of 136 Quay Street with Quay Street Property Services Ltd, Union Steamship's nominated purchaser. [12] On 22 September 2000 that company agreed to sell 136 Quay Street to Union House, which was the nominee of a Mr Krukziener, who is an Auckland property developer and who had taken an interest in 130 and 136 Quay Street. He is a director and shareholder of the first respondent (Union House Ltd) and the second respondent (Union House Lease Ltd). Nothing appears to turn on the distinction between these two companies. We refer to them jointly as "Union House". [13] On 25 October 2000 a Deed of Assignment was entered into between Union Steamship and Union House. This deed provided that Union Steamship (as Assignor), "wishes to the extent that it is legally able to do so to assign to [the respondents] all of its rights under the contract that Union Steamship had entered into with the ACC on 11 September 1996." The deed further provided that, "the Assignor to the extent that it is legally able to do so assigns to the Assignee absolutely all of the Assignor's right, title and interest to and under [that] contract". The deed recognised that there might be some difficulties over the assignment, and clause 3.1 thereof provided that, "if for any reason the assignment in clause 1.1 isineffective " the Assignor was to have no liability to the Assignees. (Emphasis added.)[14] On 24 October 2000, Union House's solicitors, Chapman Tripp, sought the consent of ACC to the assignment. On 7 November 2000 the ACC solicitors, Simpson Grierson, wrote to Chapman Tripp suggesting that the agreement was "obsolete" and that the assignment provisions were therefore no longer relevant. There was no further correspondence between the solicitors. It was common ground in the High Court that no consent has since been given by the ACC to this assignment. [15] On 30 November 2001, Union Steamship was struck off the Register of Companies. [16] Nearly a year later, in October of 2002, ACC resolved to dispose of certain properties in the Britomart precinct, including 130 Quay Street. That resolution would have triggered the right of first refusal in the agreement, had Union Steamship wanted to exercise it. [17] On 18 December 2002 (that is, some two years or so after the initial request for ACC's consent to the assignment) ACC received a facsimile request from Union House's then legal advisor, Mr Bartlett, advising that Union Steamship's interest in the agreement had "been transferred to Union House" and that ACC had been "given notice of this" by Chapman Tripp's letter of 24 October 2000. Mr Bartlett further suggested that the buy-back entitlement in the agreement in relation to 130 Quay Street had been triggered, and that the Council was obliged to give Union House notice of the terms and conditions upon which it wanted to sell 130 Quay Street. [18] On 19 December 2002, Union House lodged a caveat against the titles comprising all of the Britomart Precinct, of which 130 Quay Street formed less than 2%. As Mr Stewart QC, for Union House, acknowledged before this Court that action was quite inappropriate: the caveat should have been restricted to the title to 130 Quay Street. But in the result, that action was overtaken by events. Correspondence followed in the usual way between the legal advisers for the parties, and proceedings were issued in the High Court.The proceedings[19] It is right to acknowledge that many of the difficulties which this case has generated stem from its distinctly chequered procedural history. The case began life as an originating application, for removal of the respondents' caveat pursuant to s143 of the Land Transfer Act 1952. That application was filed with respect to all the Britomart titles on 9 April 2003. On 5 May 2003, Salmon J made orders in respect of that application, the effect of which were to require Mr Krukziener's interests to remove the all-encompassing caveat which had been lodged; those interests were required, within seven days, to give notice of any new caveat lodged solely against 130 Quay Street to ACC; leave was given to ACC to amend the proceedings then before the Court to a Part IV proceeding; and ACC was given leave to apply for the removal of that caveat, and for a declaration under the Declaratory Judgments Act 1908 as to whether or not the respondents had any caveatable interest in 130 Quay Street. The ACC was directed to file a statement of claim, and, as is usual in Part IV proceedings, the claim was to be dealt with on affidavit evidence. [20] The relief sought in the statement of claim which was filed was as follows:(a) A declaration that the agreement has not been validly assigned. (b) A declaration that the first and second defendants do not have a caveatable interest in the land or the new title based on, under or by virtue of the Agreement. (c) An order removing from the new title any caveat lodged against that title by the first and second defendants based on the Agreement. (d) The costs of and incidental to this proceeding.[21] The trial took place before Randerson J on 22 July 2003. Apparently neither side sought to cross-examine the other's deponents.The judgment in the High Court[22] Randerson J said:The sole issue I have to decide is whether, on its true construction, the 1996 agreement impliedly prohibited an assignment of the benefit of the rights under it unless the Council consented. It is common ground that the Council did not consent to the assignment and it is conceded on behalf of[Mr Krukziener's interests] that if the Council's contention is correct, then the assignment of rights would be ineffective and the defendants would not have a caveatable interest in the property.[23] Before us, Mr Stewart said that the "concession" in the second sentence of this citation was not made. However, it was common ground between counsel before us (ACC was represented by Mr Julian Miles QC in the High Court) that the Judge was asked only to determine the issue as set out in the first sentence of the quotation that we have just set out. [24] As to that issue, after reciting the facts, Randerson J held that Union House did have a caveatable interest in 130 Quay Street. The Judge began by noting, on the recent authority of this Court in New Zealand Payroll Software Systems Ltd v Advanced Management Systems Ltd [2003] 3 NZLR 1 that, in general, the benefit of a contract may be assigned unless the parties have expressly or impliedly agreed otherwise, or the nature of the contract is such that the law does not permit its assignment. The Judge accepted the submission "made by Mr Miles, [that] the confidentiality clause made in the 1996 agreement is clear and unambiguous on its face. In those circumstances, there [was] no basis for construing it as meaning anything other than what it says and it required all the terms and conditions of the agreement to be kept confidential and not disclosed to any other party without the consent of both parties." The Judge then said that the real question was whether "there is a plain implication from the contract interpreted in its factual setting, that the parties intended that the benefit of the contract could not be assigned without the consent of the other". The Judge noted the political sensitivities which surrounded this agreement. He accepted a submission made by Mr Miles that the assignment of the benefit of the 1996 agreement "would inevitably involve knowledge by the assignee of its terms and conditions". [25] The Judge then said "the existence of a broadly expressed confidentiality provision and the fact that an assignment of the right of first refusal might involve a breach of that provision, is not necessarily determinative of the issue. It is an indicator but, in the end, the existence or otherwise of an implied prohibition must depend on the construction of the contract as a whole in its factual context and having regard to its fundamental purpose or objective." The Judge said that he couldnot discern "any necessarily implied prohibition" on an assignment of the right of first refusal in clause 2.4. He said this was only a right of first refusal (not an option to purchase). The Judge considered New Zealand Payroll Software Systems Ltd v Advanced Management Systems Ltd to be distinguishable. It was not clear to the Judge that there had been a breach of the confidentiality clause, by Mr Krukziener's interests at least. But even if Union Steamship had been responsible for a breach, he considered the Council would have a remedy in damages against that company.An issue not raised[26] It is convenient to note here an issue which was not pursued before Randerson J, and which is not the subject of an appeal to us. Mr Asher QC, for ACC, suggested that this issue is still "live" and that if the ACC is unsuccessful on this appeal, it is open to ACC to return to this matter. Mr Stewart disputed that suggestion. We need express no view on that dispute. But a reader of this judgment could well be puzzled as to why this issue was not dealt with, and we record it here, without resolving it. [27] The point is this. For a person to have a caveatable interest under s137 of the Land Transfer Act 1952 that person must have a present, as distinguished from a potential, interest in land. It has long since been established in New Zealand law that personal rights will not support a caveat. For the purposes of the operation of this principle, how is a right of first refusal to be classified? Such a right is different from an option. A right of first refusal is, at least initially, essentially a right of pre- emption. All that exists is a bare right. Some triggering event may occur which requires an offer to be made to the person with the right of first refusal, and then a contract may result. On principle, it is only when the point has been reached at which a Court could order specific performance that the holder of the right of first refusal has a sufficient interest in land to lodge a caveat. Of course, once a contract is in existence a caveat may be lodged. (See generally, McMorland Sale of Land(2 ed 2000) para 3.16.) There was, therefore, a potential issue in this case as to whether the threshold to a caveatable interest had been crossed with respect to this right of first refusal. But the point remains unargued and unanswered.Discussion: the proper interpretation of the agreement[28] In Anglo-New Zealand law, it is possible to assign contractual rights, as one species of an assignment of a chose in action. This is subject to certain well established qualifications: the assignee can be no better off than the assignor; it is only possible to assign rights and not duties; and distinctly "personal" contracts (e.g. to write a book) cannot be assigned. Where there is an express or implied prohibition against assignment, the current weight of authority has recognised that such prohibitions are not against public policy, and, their effect is to render any assignment ineffective. See Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85 (HL); New Zealand Payroll Software Systems Ltd v Advanced Management Systems Ltd (see, per Tipping J at [26]); Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (2000) 202 CLR 588 at 601 (HCA); Tolhurst, "The Efficacy of Contractual Provisions Prohibiting Assignment" (2004) 26 Sydney L Rev 161. [29] In our view, the correct approach to the issue of whether there is a restriction on assignment is one of the proper construction of the particular agreement. And as Lord Hoffman said in South Australia Asset Management Corp v York Montagu Ltd[1966] 3 WLR 87, "as in the case of any implied term, the process is one of construction of the agreement as a whole in its commercial setting" (at 93). The same Judge, writing extra-judicially, has said:In fact, of course, the implication of a term into a contract is an exercise in interpretation like any other. It may seem odd to speak of interpretation when, by definition, the term has not been expressed in words, but the only difference is that when we imply a term, we are engaged in interpreting the contract as a whole. For this purpose, we apply the ordinary rule of contractual interpretation by which the parties are depersonalised and assumed to be reasonable ("The Intolerable Wrestle with Words and Meanings" (1997) 114 SALJ 656 at 662).[30] It is further our view that the temporal standpoint at which the provisions of this contract fall to be interpreted is the date of agreement, and they are to be construed as continuously speaking thereafter. It follows that the confidentiality clause in this case should not be approached as if it is "spent". Doubtless at some point there might be a question as the applicability of a long defunct contract orclause which is not otherwise addressed by a relevant statute of limitations. But in this instance that issue does not arise. [31] With these points in mind, it becomes apparent that the construction issues in this case are the narrow ones of whether (in the absence of an express provision) there is a necessary implication arising from the confidentiality clause that the agreement could not be assigned without the prior consent of the ACC, and as to terms of that implication. It is common ground that such consent, if required, has not been given. [32] Mr Asher argued (and the Judge accepted) that the confidentiality clause is plain upon its face. He noted, correctly, that the clause is undifferentiated as between the confidentiality of the various terms and conditions of the agreement. He suggested that the disclosure of any of the terms and conditions of the agreement at any time without the prior agreement of ACC would breach clause 15.1. He said it cannot "objectively be presumed that the parties intended to permit assignability of a particular clause when that necessarily would cause a breach of the confidentiality obligation". The express terms of the contract must be given full effect, and the implication of the suggested term is necessary to keep the parties to their bargain and to give proper commercial effect to the agreement. [33] Mr Stewart submitted that the starting point must be that, generally, the benefit of a contract is assignable. He then argued that this confidentiality clause was "never intended to prevent Union Steamship's 'realising' the benefit of the right of first refusal" – or at least that a reasonable person would not so read it. [34] We accept that, in this case, there is a necessary implication to be drawn from clause 15.1 that there is a restriction on assignment of the benefit of the terms of the agreement. Nevertheless, we do not accept that assignment, in the circumstances of this case, would necessarily lead to a breach of the confidentiality clause. [35] This is because, in accordance with the usual principle of construction, the necessary implication to be drawn from that clause should extend no further than is necessary to ensure that the objective of the confidentiality clause is met. And in ourview that can be achieved by implying a restriction on assignment, if the assignment involves a breach of clause 15. [36] It follows that any purported assignment by a party of its rights under this agreement without the consent of the other party will be ineffective if the assigning party has breached clause 15, and, as a consequence, some or all of the terms of the agreement have been disclosed to the assignee. [37] It is appropriate to say a little more about Payroll, particularly given a comment made by Mr Asher in his supplementary submissions. In those submissions, Mr Asher suggested that, by framing the term as set out in the previous paragraph, we were, in some measure, departing from Payroll. We do not agree. On the contrary, we are applying Payroll, but with a qualification reflecting the different contractual context in this case. In Payroll, it was accepted that the Crown had breached the confidentiality clause in the agreement. It was also a given that, as a consequence of that breach, the terms of the agreement had been disclosed to New Zealand Payroll Systems Limited. The question for this Court was whether, in those circumstances, an assignment without consent was possible. The point we have had to grapple with in this case, namely whether the assigning party did breach confidentiality, was accordingly not in the forefront of this Court's mind in Payroll. Had it been, we think the qualifier we have set out in the previous paragraph would have been expressed. [38] In any event, it is important to recognise that any decision interpreting a contract is very much dependent on that contract's provisions and on the circumstances surrounding its making. Just as the solution we have reached in this case will not necessarily provide the answer in every other case involving a contract with a confidentiality clause, so too it would be unrealistic to think that the Payrollsolution will always be applicable. Neither this case nor Payroll purports to lay down a rule of law as to the outcome in every case where a confidentiality clause is present. [39] It would be possible to list features of Payroll which are not features in the present case. First, it was clear in Payroll that, if assignment without consent werepermitted, confidential sales information which the non-assigning party was required to provide to the Crown at regular intervals (and which the Crown was required to treat in utmost confidence) would have to be disclosed to the assignee. That also meant that a breach of the confidentiality obligation was an inevitable result of the assignment. Secondly, the parties in Payroll had entered into an earlier contract which explicitly prohibited assignment without the other party's consent, and this assisted the Court to determine that the same intention applied to the contract in issue. Thirdly, the contract in issue in Payroll had been prepared without legal advice, in contrast to the present case. None of those distinctions is fundamental, but they highlight the need for a court, when interpreting a contract, to treat other decisions interpreting different contracts with respect, but not blind loyalty.Discussion: the disposition of the case[40] In reaching this view of the proper construction of the provision in issue, the Court appreciated that it had taken a view of the clause that was not what Mr Stewart had argued for; and which was narrower than what Mr Asher had contended for. Further, Randerson J had not determined in the High Court whether there was a breach of clause 15 of the agreement in this case. Practically speaking, whether there was a breach of the implied term as to assignability turns on where Union House got its knowledge of the agreement from. [41] To some extent this difficulty had already been foreshadowed in the oral argument before us. Mr Asher challenged the suggestion of Randerson J (para [35]) that the Judge was not called upon to decide whether there had been a breach. He submitted that "breach should have been determined" and that "the only plausible inference is that [breach] took place in this case". Mr Stewart responded that the statement of claim did not allege any breach and to the extent that ACC's claim rested upon establishing a breach by Union Steamship, "it had failed to plead its case, let alone establish it". [42] The arguments on those points however was limited and was made without the parties knowing what view this Court was going to take of the construction of the clause. We thought it therefore appropriate to issue a minute indicating to the partiesthe view the Court had taken, and inviting their further written submissions on the proper disposition of the appeal. Understandably, the further submissions of counsel adhered broadly to the line that they had already foreshadowed, but we were greatly assisted by the further matters which they were able to put before us. [43] Mr Asher submitted that on the record as it stands "there is significant evidence available to [justify] the Court drawing the implication that some of the terms of the agreement were disclosed to the assignee (Union House) by the assignor (Union Steamship) prior to, or at the time of, assignment". He took us to some of the correspondence: the request for an assignment in Chapman Tripp's letter; and he said that the tenor of the Deed of Assignment indicates a concern as to the implications of the confidentiality clause and the failure to obtain consent to disclosure. He said that, even more importantly, clause 3.1 of the Deed of Assignment itself demonstrates a breach, as it refers to clauses 4.5 and 5 of the agreement and indicates the nature of those terms. He took us to passages and exhibits to Mr Krukziener's own affidavit. He said that there is no evidence that Union House obtained details of the terms and conditions of the agreement from a source other than Union Steamship. [44] Mr Asher properly accepted that neither the statement of claim nor the statement of defence specifically focused on the issue of breach. But he said that "it is evident from the manner in which this matter proceeded to trial that breach of clause 15 by Union Steamship was effectively assumed". [45] Mr Asher took us in some detail through the manner in which the case had been run and dealt with in the High Court. He submitted that his interests should not be precluded from having the true merits of the case addressed by a technical pleading point. [46] If this Court felt unable to entirely dispose of the merits on the material as it presently stands before this Court, Mr Asher urged on us that this Court should remit the case back to the High Court under s62 of the Judicature Act 1908 for determination on the question of breach. He also submitted that, with the benefit of this Court's interpretation of the agreement, the parties should be given theopportunity to pursue interlocutory procedures such as discovery, to file further evidence, and if necessary for there to be cross-examination, on the question of breach. [47] Mr Stewart submitted that the appellant's case in the High Court was that by virtue of clause 15.1 of the agreement, the agreement was not capable of assignment without the prior written consent of the plaintiff, and no more. He suggested that the appellant had, as he termed it, "made a deliberate decision" not to advance its case on an argument relating to Union Steamship's alleged breach of the agreement. Mr Stewart also traversed in some detail the manner in which, in his submission, the appellant had run its case. It does his submissions no injustice to say that he was really suggesting that this aspect of the case should not be seen as an opportunity to allow or introduce fresh evidence at this very late stage. [48] As to the evidence presently before the Court, Mr Stewart argued that "there are potential responses or explanations in respect of each and every matter referred to by the appellant which would negative the implication which the appellant invites the Court to draw". And he again stressed, in this context, that the way in which the case proceeded "breach was not an issue and was not part of the case which the respondents had to meet" and that it had not therefore been met in the evidence. [49] As to the question of remission back to the High Court, Mr Stewart said that in light of the construction of the agreement as found by this Court, the fact that "the appellant's case does not fully and finally resolve all issues between them in a way that it might have done had all issues been litigated is not a basis for remitting the matter back to the High Court." He referred to certain observations of Lord Wilberforce in Air Canada v Secretary of State for Trade [1983] 2 AC at 394 to the effect that the task of the Court is to do and be seen to be doing justice between the parties on what is put before it and "not to some higher or additional duty to ascertain some independent truth". Mr Stewart also referred to Henderson v Henderson (1843) 3 Hare 100; 67 ER 313. He argued that effectively the appellant is now estopped from raising or seeking a determination of the legal position on the basis of breach by the assigning parties.[50] In our view, in light of the way this case has unfolded, there is now a distinct "fairness" issue, arising out of the state of the pleadings and the fact that this Court has taken a view of the proper construction of this agreement which was not squarely contended for by either party. There is also an issue as to the role of Courts. In this respect, the observations of Bowen LJ in Cropper v Smith (1884) 26 Ch D 700 are as salutary now as when they were first pronounced: the object of the Courts is to decide the rights of parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, It seems to me that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice (at 710-711).[51] This case came forward essentially as an action for a declaration in which both parties were seeking to achieve, in the shortest way that it could be achieved, an understanding as to the proper construction of this agreement. The parties themselves contemplated that if that determination could be obtained from the High Court then the other matters would largely fall into place. The Judge himself, in the course of the High Court hearing, raised the significance of breach, but then put it to one side. As it transpires, the breach issue is now central to the proper disposition of a dispute which the parties chose to bring before the Court. In our view it is inappropriate that the case should go off at this juncture on a pleading point. [52] We are unable to accept Mr Asher's first proposition, that we can and should determine the case on the material presently in front of us. Both parties should have the opportunity to establish in the High Court, in whatever way may be appropriate, whether there was a breach of the character we have noted. [53] We do agree with Mr Asher that in the now circumstances of this case it is appropriate that this Court should resort to s62 of the Judicature Act 1908. That section was recently considered by a Full Court of this Court in Lee v Damesh Holdings Limited (CA 77/03 30 September 2003). That case had proceeded on whatthis Court described as "narrow and inappropriate pleadings" (para [2]), and against a background in which there was a dispute as to the correct view of the law. Gault P said "the narrow face of the case meant that potentially important factual issues had not been investigated". This Court considered that "on its face the case called for broader consideration in the interests of justice". In the circumstances of that case this Court thought it appropriate to resort to the provisions of s62. We are of the view that a similar course ought here to be followed. [54] We also note that this Court has wide powers on an appeal. Under r 18 of the Court of Appeal (Civil) Rules 1997 all appeals are to be by way of rehearing. Rule 19 gives the Court wide-ranging powers. The unifying principle underlying the various subclauses of r 19 is the advancement of the resolution of the real controversy between the parties. The underlying test is the interests of justice. That consideration necessarily involves determining whether any real prejudice would be caused to a party by the adoption of a particular procedural course, and in our view no prejudice has been demonstrated in this case. In the result, although in this instance we do not find it necessary to resort to those rules, they would support a similar course to that we are adopting under s62.Conclusion[55] In the result, the appeal is allowed. There will be no order for costs in this Court. [56] There will be a declaration that any purported assignment by a party of its rights under the agreement in issue in this litigation without the consent of the other party will be ineffective if the assigning party had breached clause 15, and, as a consequence, some or all of the terms of the agreement have been disclosed to the assignee. [57] The proceeding is remitted under s62 of the Judicature Act 1908 to the High Court. That Court will have to consider whether ACC should be able to amend its pleadings to allege breach of clause 15. That Court will also need to determine, if it does permit amendment, the future course of the proceeding.[58] This judgment contains material relating to the agreement and its terms. The parties will receive the complete judgment but, at this stage, only paras [1]-[4], and [55]-[58] will be released to the public. The parties should confer as to how the balance of the judgment can be released in a manner which preserves the parties' rights to confidentiality. If by 30 August 2004 the parties can reach agreement, then a joint memorandum should be filed indicating the parties' views. If agreement cannot be reached, then the ACC should file and serve submissions on or before 6 September 2004 setting out its views. Union House should then respond by memorandum, to be filed and served on or before 13 September 2004. ACC may, on or before 20 September 2004, file and serve any submissions in reply. After considering the submissions, and if necessary hearing from the parties, we will make appropriate orders to protect what we consider to be confidential information contained in the judgment.Addendum[59] With the agreement of counsel, certain passages have been deleted from para [7] of this judgment in order to preserve confidentiality. Refer minute of the Court dated 20 September 2004. The judgment as it now stands, is now publicly available.Solicitors: Simpson Grierson, Auckland for Appellant Knight Coldicutt, Auckland for Respondents