COOPER V VAN HEEREN CA CA246/05

COOPER V VAN HEEREN CA CA246/05 25 May 2007IN THE COURT OF APPEAL OF NEW ZEALAND CA246/05 [2007] NZCA 207BETWEEN BRYAN JOHN COOPER Appellant AND ALEXANDER PIETER VAN HEEREN Respondent Hearing: 20 February 2007 Court: Hammond, Chambers and Ellen France JJ Counsel: N J Carter and B O'Callahan for Appellant C J Hodson QC and C M Brick for Respondent Judgment: 25 May 2007 at 11 amJUDGMENT OF THE COURT A The appeal is dismissed. B In this Court, Mr van Heeren will have costs of $6,000 and usual disbursements. C The designated sealed package on this Court file is not to be searched except with the leave of this Court. REASONSHammond and Ellen France JJ [1] Chambers J [47]HAMMOND AND ELLEN FRANCE JJ(Given by Hammond J)Table of ContentsPara NoIntroduction [1]Background [2]The proceedingThe alleged obligations [10]The first breach [12]The second breach [13]The strike out application [14]The High Court decision [16]DiscussionClause 5: Introduction – the purpose of the Deed [18]Are counsel's comments a breach of clause 5? [20]Can Mr Cooper prove and rely upon what was said by Mr van Heeren at the 24 March meeting as a breach of the Deed [27]The utility of the claim [43]Conclusion [44]Introduction[1] This is an appeal from a judgment of Harrison J in HC AK CIV-2004-404- 2545 26 October 2005. The Judge struck out this proceeding in its entirety on the footing that Mr Cooper's claim is "untenable and could not possibly succeed at trial" (at [51]).Background[2] Mr Michael Kidd and Mr van Heeren have had a long-running commercial dispute which has sprawled across several jurisdictions and the better part of a decade. Mr Kidd alleges that Mr van Heeren owes him money and property following on from the collapse of a business partnership between them. Mr Cooper was hired by Mr Kidd to recover this money and property, as well as money and property allegedly owed by a company associated with Mr van Heeren to Enterprise Nationale de Siderugie SPA, an Algerian steel manufacturer. Mr Cooper is on a "contingent fee basis". That is, he only gets paid if recovery is effected.[3] During the course of Mr Cooper's investigations he was arrested by the New Zealand Police and charged with intimidating and extorting Mr van Heeren. The intimidation charge was subsequently dismissed, and the charge of demanding with menaces was withdrawn following Mr Cooper accepting diversion, making a payment to charity, and apologising for his conduct. [4] Mr Cooper then sued Mr van Heeren and others for a range of torts relating to his arrest. That proceeding is HC AK CP62/95. Mr van Heeren endeavoured to strike out that claim, but that application was ultimately dismissed by this Court (Van Heeren v Cooper [1999] 1 NZLR 731). The CP62/95 proceeding was then settled by a relatively short Deed of Settlement and Release dated 23 December 1998 following a mediation conducted by a retired Judge. [5] Clause 5 of that Deed forms the basis on which Mr Cooper has brought this proceeding. It provides as follows:The terms and conditions of this Deed and all information relating to the Proceedings and relating directly or indirectly to the Proceedings and this Deed shall be absolutely confidential between the parties and their legal advisors and shall not be divulged to any person whatsoever provided that should they be required to do so, the plaintiffs shall be permitted to disclose the terms of the Deed to relevant and competent tax authorities on a confidential basis. In particular (but not by way of limitation), no statement shall be made by any party or its advisors to any representative of the news media save to confirm the fact that settlement has occurred in response to any inquiry concerning the Proceedings. For the avoidance of doubt, nothing in this clause 5 shall be construed as inhibiting the ability of the parties to give evidence relevant to the commercial disputes between Mr van Heeren, Mr Michael David Kidd and/or Enterprise Nationale de Siderugie SPA, save that no party shall be entitled to: 1. Accuse another party of or refer to a. extortion; b. intimidation; c. the tortious acts claimed in the proceeding; or d. any like act or acts. 2. Refer to the events at Antwerp on 24 June 1994, the events in New Zealand on 8 July 1994 and 5 & 6 October 1994, nor make any allegation concerning any of the Defendants in respect of thecircumstances under which certain files obtained by Cooper were misplaced or went missing when in the custody of the New Zealand police. 3. Divulge the terms of settlement.[6] It is convenient to note here that the parties had not provided this Court with the entire Deed. Initially, we were given only clause 5. Doubtless this was because of the confidential material in the Deed, and it is for this reason that we do not set out the Deed in full. However, at the hearing we observed that the construction of clause 5 of the Deed could hardly be considered in isolation from the Deed as a whole. Counsel then made copies of the Deed available to the panel. Following delivery of this judgment the panel has destroyed two of its copies. One copy has been sealed and is retained on the appeal file in this Court. We direct that it is not to be searched save with the leave of this Court. [7] There were 14 parties to the Deed, including Mr Cooper and Mr van Heeren in their own right. Mr Kidd was not a party to the Deed. [8] Mr Kidd's civil proceeding seeking monetary relief against Mr van Heeren in the High Court at Auckland was stayed by a judgment of Smellie J which is reported as Kidd v van Heeren [1998] 1 NZLR 324. As Harrison J put it, the parties then "moved their theatre of warfare" (at [2]) from New Zealand to South Africa. Mr Kidd sued Mr van Heeren in South Africa. That proceeding is still extant, as case number 1998/27973 in the Witwatersrand Local Division of the High Court of South Africa. We will call this "the South African proceeding". [9] It was in this overall context that Mr Cooper commenced the proceeding against Mr van Heeren with which we are concerned.The proceedingThe alleged obligations[10] The amended statement of claim avers:[15] Under the Deed of Settlement, van Heeren covenanted, inter alia, that he would not, even in legal proceedings between he and Kidd, either personally or through his legal representatives: (a) accuse Cooper of or refer to extortion, intimidation or any like act or acts; or (b) refer to events at Antwerp on 24 June 1994 or in New Zealand on 8 July 1994 and 5 & 6 October 1994.[11] Two breaches of these obligations are then pleaded.The first breach[12] On 2 March 2004 an application in the South African proceeding came on for hearing in the High Court of South Africa. Mr Kidd was seeking an order of that Court declining jurisdiction in relation to the South African proceeding. What is pleaded is as follows:[18] During the 2 March hearing counsel for van Heeren, Cedric Puckrin SC, read the following portions from the judgment of Smellie J delivered 22 October 1997 ("the passages"): An unusual feature of the case is that no formal complaint was made by Kidd about having been defrauded or unconscionably held out of his share of the division of the joint assets until the issue of this writ in February 1996. But the defendant alleges that from about 1994 on, the plaintiff retained one Cooper, who by standover and illegal means, sought on behalf of the plaintiff to extort money from the defendant. [1998] 1 NZLR [324 at] 327, lines 28 to 33 [and interpolation that "standover tactics" meant intimidation]. Van Heeren, on the other hand, contends that Kidd's claims are completely without foundation and that he has resorted to unorthodox and illegal means to acquire moneys to which he has no right. In particular, the allegation is that Kidd instigated attempted extortion and blackmail through his agent, Cooper. [1998] 1 NZLR [324 at] 328, lines 1 to 4. I observe, however, that the long delay by Kidd in making a formal complaint is not satisfactorily explained and the reliance upon Cooper and his associates would appear to have been an error of judgment at its lowest and only time will tell whether the plaintiff had a more sinister intention. [1998] 1 NZLR [324 at] 328 lines 11 to 14. [19] The passage was read and relied on in support of a submission that van Heeren's position in relation to the dispute was credible and/or that Kidd's position was not credible.Particulars of words used by Cedrick Puckrin: "And my learned friend [Mr Joubert SC for Mr Kidd] launched into an attack, and I mean no disrespect to my learned friend, because he was at pains to explain that the attack was through the mouth of Mr Kidd. It was a scurrilous attack on Mr van Heeren and I am going to answer that to your Lordship, because it is a point which was made really for the atmosphere. I am able to dispel it by no less an eminent source than the judgment of Smellie J himself. I am going to take your Lordship to his Lordship Smellie J's judgment, which is a good source of material for judging the behaviour and conduct of the parties M'Lord there [was] a wealth of material before Mr Smellie J in respect of which his Lordship made some comments. Perhaps [Mr Kidd's] reluctance to proceed by way of action is understandable when one reads what his Lordship Smellie J has to say about the parties and their respective claims, counterclaims, allegations and the like." [20] Van Heeren was present in the public gallery of the court during the 2 March hearing, including the time at which the passages were read and relied on. [21] In such circumstances the reading of the passages and Mr Puckrin's address in respect of them was a breach by van Heeren of the Deed of settlement ("the first breach").The second breach[13] The pleading in relation to the alleged second breach is as follows:[22] On or about 24 March 2004 van Heeren attended a meeting at the Johannesburg Country Club, Johannesburg, South Africa ("the 24 March meeting") at which the following persons were present at material times: (a) van Heeren; (b) Mr Duncan Sinclair, attorney for van Heeren; (c) Mrs Liezel David, attorney for van Heeren; (d) Mr Willem van Reenen, of counsel, for van Heeren (of the South African bar); (e) Kidd; (f) Mr Nick Alp, attorney for Kidd; (g) Mr Matthew Marwick, attorney for Kidd;(h) Mr Brent O'Callahan, solicitor and counsel for Kidd (of the New Zealand bar). [23] During the 24 March meeting van Heeren, inter alia, did the following ("the 24 March comments"): (a) Specifically mentioned that he had met with Cooper at the Hilton Hotel Antwerp on 24 June 1994 and said further: (i) that Cooper had failed to disclose who he was acting for; (ii) that Cooper had denied acting for Kidd; (iii) that Cooper used an assumed name; (iv) Cooper's conduct at such meeting made him a liar; (v) that Cooper was accompanied by "heavies"; (b) Read the passages; (c) Said that Cooper's allegation in CP62/95 that the reason he had not disclosed his identity was fear for his safety had a devastating effect on van Heeren's family. [24] The 24 March comments were in breach of the Deed of settlement ("the second breach").The strike out application[14] The strike out application was put, in the High Court, on four bases:• the alleged statements did not constitute breaches of the Deed as pleaded;• the first breach was founded upon the contents of submissions made in the High Court of South Africa by Mr van Heeren's counsel during the course of proceedings and as such were absolutely privileged;• the second breach relied on words used by Mr van Heeren at a meeting held in South Africa for the purpose of attempting to settle the New Zealand and South African proceedings and those proceedings were entirely without prejudice; and• if the alleged statements did constitute one or more breaches of the Deed Mr Cooper had suffered no loss or damage. [15] As to "damages", although the claim as filed had been for $2 million in damages, in the course of the hearing before Harrison J it was amended to a claim for $1 in nominal damages together with (as had always been claimed) declarations of breach of contract.The High Court decision[16] It is convenient to record here that, both in the High Court and this Court, Mr O'Callahan accepted Mr Hodson QC's submission that Mr Cooper's claim is governed by New Zealand law, it being the proper law of this contract. [17] The Judge helpfully summarised his conclusions in these terms:[51] In summary, I am satisfied that Mr Cooper's amended statement of claim is untenable and could not possibly succeed at trial for these independent reasons: (1) Mr van Heeren could not have been in breach of clause 5 of the Deed either by virtue of the statements made by his counsel in the High Court in Johannesburg in March 2004 or by statements made by him at a meeting, also in Johannesburg, later that month because, properly construed, the provision does not operate as a prohibition on the statements made (paras 19-28); (2) Alternatively, the statements made by Mr van Heeren's counsel in the High Court of South Africa are absolutely privileged (paras 29-33); (3) Alternatively, Mr van Heeren could not be vicariously liable for statements made by his counsel in open Court, and nor could those statements be attributable to him (paras 34-42); (4) Alternatively, the statements made by Mr van Heeren at the meeting on 24 March 2004 are also protected because they were made at a meeting held without prejudice (paras 43- 47). [52] Alternatively, I would have struck out the proceeding as an abuse of process (paras 48-50) if this ground had been raised by Mr van Heeren.DiscussionClause 5: Introduction – the purpose of the Deed[18] Scurrilous exchanges had taken place between Mr Cooper and Mr van Heeren. The principal purpose of clause 5 was to put an end to those kinds of things. But given the litigiousness of Mr Kidd, Mr van Heeren, and Mr Cooper there was the possibility of further proceedings, and at the very least, a continuation of the South African proceedings. It was therefore likely that evidence would be required in court proceedings. Any attempt to contract out of giving evidence by witnesses would be futile. That issue was dealt with in straightforward terms by Lord Denning MR in Harmony Shipping Co SA v Davis [1979] 3 All ER 177 at 182 (CA):If there was a contract by which a witness bound himself not to give evidence before the court on a matter on which the judge said he ought to give evidence, then I say that any such contract would be contrary to public policy and would not be enforced by the court. It is the primary duty of the courts to ascertain the truth: and, when a witness is subpoenaed, he must answer such questions as the court properly asks him. This duty is not to be taken away by some private arrangement or contract by him with one side or the other.[19] As it transpires, we do not have to decide how far, if at all, the qualifiers in the second paragraph of clause 5 are enforceable because this case does not concern the giving of evidence. Mr O'Callahan expressly conceded before us that he was relying solely on the first paragraph of clause 5, and in particular the words "shall not be divulged to any person whatsoever". In the High Court he had sought to mount his argument on the second part of clause 5.Are counsel's comments a breach of clause 5?[20] The first issue in this case is whether Mr Puckrin's observations in the South African proceedings (see above at [12]) are a breach of clause 5. In our view the answer to this question is "no".[21] The first point to note is that the interpretation of a contract is a matter for the proper law of the contract, which in this case is agreed to be that of New Zealand. What that means for this case is that the proper construction of the agreement is a matter for the New Zealand courts. [22] As to the approach to interpretation in this case, the observations of Lord Hoffmann in Jumbo King Ltd v Faithful Properties Ltd [1999] 3 HKLRD 757 at 773 – 774 (CFA), which were cited with approval by the United Kingdom Court of Appeal in Holding & Barnes Plc v Hill House Hammond [2002] L & TR 7 at [17] are apposite:The construction of a document is not a game with words. It is an attempt to discover what a reasonable person would have understood the parties to mean. And this involves having regard, not merely to the individual words they have used, but to the agreement as a whole, the factual and legal background against which it was concluded and the practical objects which it was intended to achieve. Quite often this exercise will lead to the conclusion that although there is no reasonable doubt about what the parties meant, they have not expressed themselves very well. Their language may sometimes be careless and they may have said things which, if taken literally, mean something different from what they obviously intended. In ordinary life people often express themselves infelicitously without leaving any doubt about what they meant. Of course in serious utterances such as legal documents, in which people may be supposed to have chosen their words with care, one does not readily accept that they have used the wrong words. If the ordinary meaning of the words makes sense in relation to the rest of the document and the factual background, then the court will give effect to that language, even though the consequences may appear hard for one side or the other. The court is not privy to the negotiation of the agreement – evidence of such negotiations is inadmissible – and has no way of knowing whether a clause which appears to have an onerous effect was a quid pro quo for some other concession. Or one of the parties may simply have made a bad bargain. The only escape from the language is an action for rectification, in which the previous negotiations can be examined. But the overriding objective in construction is to give effect to what a reasonable person rather than a pedantic lawyer would have understood the parties to mean. Therefore, if in spite of linguistic problems the meaning is clear, it is that meaning which must prevail.[23] The expectation of the parties to this contract was that the matters set out in clause 5 were not to be "divulged" – that is, they were to be kept private – save in the event of required disclosure to a proper authority, or by way of a very limited media response.[24] The Deed covers "all information relating directly or indirectly to the Proceedings" (emphasis added). In effect, this Deed was an attempt to end the mud- slinging. Even the qualification to the settlement – that nothing in the Deed prevented the giving of evidence in the ongoing commercial dispute – was expressly qualified by an attempt to prevent reference to the "other" allegations. (Whether evidence could in fact be limited in such a way is questionable: see above at [18]). The "information" in Smellie J's decision must be considered to be "indirectly" related to the proceedings covered by the Deed. It refers to the same subject matter, out of which the proceedings in CP62/95 and CP216/98 arose. [25] However, what Mr Puckrin read aloud from in court was a passage from the New Zealand Law Reports at [18] of the judgment (see above at [12]). That document was an authorised, published law report, which was in the public domain. The passage concerned was not therefore "private", or undivulged. What it said had been "divulged" to the world at large, for those reports are publicly accessible. [26] As a matter of interpretation of this clause, it protected only that which was still private. If the information was freely available from an independent, public source (as here) it could not be caught by clause 5. To the very limited extent that disclosure was made, it came from a cat which was already out of the bag.Can Mr Cooper prove and rely upon what was said by Mr van Heeren at the 24 March meeting, as a breach of the Deed?[27] It was common ground that this meeting was what lawyers refer to as a "without prejudice" settlement meeting. It involved an attempt to dispose of the whole of the unfortunate litigation which has arisen between Mr Kidd and Mr van Heeren in New Zealand and South Africa. [28] The law strongly encourages exercises of that kind. It is intrinsic to such a meeting that there should be a full and frank exchange of views. In itself that can also be cathartic as the parties struggle to resolve their differences with the assistance of their professional advisors. Hence, it would be surprising if a party to the arrangement was then able to use something said in the course of such an exercise asthe basis of a claim for a breach of contract, although the law has had to allow some exceptions to this proposition. [29] Mr Cooper's difficulty under this head can be shortly stated. To succeed on this cause of action he has to be able to plead and prove what was said in the course of this meeting. We think Mr Hodson and Harrison J were correct to say that New Zealand law will not allow him to do this. The statements are absolutely privileged. [30] Mr O'Callahan advanced a determined argument that the without prejudice status of this meeting protects only any "admissions" that were made. [31] Harrison J took the view that restricting the protected category of information only to admissions would not be in keeping with the purpose of the rule (which is to encourage the free exchange of information with the objective of settling). The Judge further said, "it would be artificial, if not impossible, to isolate out an admission from a statement which was preparatory, incidental or otherwise related to it" (at [44]). [32] This view had also been taken by Robert Walker LJ in Unilever plc v The Procter & Gamble Co [2001] 1 All ER 783 (CA), in which case his Lordship said at 796:Whatever difficulties there are in a complete reconciliation [of the older authorities], they make clear that the without prejudice rule is founded partly in public policy and partly in the agreement of the parties. They show that the protection of admissions against interest is the most important practical effect of the rule. But to dissect out identifiable admissions and withhold protection from the rest of without prejudice communications (except for a special reason) would not only create huge practical difficulties but would be contrary to the underlying objective of giving protection to the parties.[33] This is not the first time Mr O'Callahan has endeavoured to run this argument. He did so in Covington Group Holdings Ltd v Zhong (2004) 17 PRNZ 819 (HC). In that case, Allan J rejected the argument, for the same reasons as were given by Robert Walker LJ.[34] Counsel did not refer us to a recent decision of the House of Lords: Bradford & Bingley plc v Rashid [2006] 4 All ER 705. That was a case in which a letter containing an acknowledgement of a debt which would have started time running again for the purposes of the Limitation Act 1980 (UK) was inadmissible because it was part of a without prejudice negotiation over time to pay. [35] The case was thought by their Lordships to be one of some difficulty. As Lord Hoffmann put it, it was necessary in that case "to find a principle which would preserve the acknowledgement rule without doing damage to the without prejudice rule" (at [9]). In the result their Lordships held that the correspondence was not protected by the without prejudice rule because there was no dispute to be compromised. To put it another way, the amount of the debt had been acknowledged; the discussion was as to how to meet it. [36] Lord Hoffmann said that in his view "the Unilever case was rightly decided" (at [18]). Lord Walker of Gestingthorpe, as he by now was, did not find it necessary to depart from the views he had expressed in the Court of Appeal in Unilever, and Lord Mance referred to the passage we have cited (above at [32]) in Unilever with apparent approval. [37] At the level of first principle, Bradford & Bingley plc v Rashid demonstrates that the without prejudice rule is not impregnable. At common law the areas of exception are those described by Robert Walker LJ in Unilever (at 791 – 793). But Mr O'Callahan's argument that Unilever was wrongly decided faces the formidable obstacle of recent House of Lords authority that it was not in error. [38] Mr Hodson reminded us that the Evidence Act 2006 has now been enacted in New Zealand, although it is not yet in force. Whatever questions there might have been relating to Unilever in New Zealand appear to have been substantially laid to rest by s 57 of that statute, which provides as follows:Privilege for settlement negotiations or mediation(1) A person who is a party to, or a mediator in, a dispute of a kind for which relief may be given in a civil proceeding has a privilege in respect of any communication between that person and any other person who is a party to the dispute if the communication –(a) was intended to be confidential; and (b) was made in connection with an attempt to settle or mediate the dispute between the persons. (2) A person who is a party to a dispute of a kind for which relief may be given in a civil proceeding has a privilege in respect of a confidential document that the person has prepared, or caused to be prepared, in connection with an attempt to mediate the dispute or to negotiate a settlement of the dispute. (3) This section does not apply to – (a) the terms of an agreement settling the dispute; or (b) evidence necessary to prove the existence of such an agreement in a proceeding in which the conclusion of such an agreement is in issue; or (c) the use in a proceeding, solely for the purposes of an award of costs, of a written offer that – (i) is expressly stated to be without prejudice except as to costs; and (ii) relates to an issue in the proceeding.[39] This provision, as Richard Mahony has said, "would probably be accepted by most of us as a good general definition of the common law privilege protecting settlement negotiations" ([2006] NZ Law Review 717 at 728) albeit that the exceptions stated seem to be narrower than those set out in Unilever. However alarming this might be as an argument against near-codification stultifying the common law, there is no doubt that our Parliament has endorsed the Unileverapproach. [40] It is true that the Act is not yet in force. It is to come into force on a date to be prescribed by Order in Council. But it is highly likely that the Act would be in force by the time that Mr Cooper's claim could be heard on the merits. [41] We are not disposed to recast Unilever in the manner suggested by Mr O'Callahan when the underlying conceptual issue has very recently been resolved by the House of Lords, and our Parliament. Both on the existing understanding of the law, and the new legislation, the distinction sought to be established by Mr O'Callahan has not been recognised.[42] Mr O'Callahan then sought to deflect the possible application of these new provisions by arguing that there would be the possibility of waiver under s 65 of the new Act. However, the waiver argument was dealt with by Harrison J, in [46] of his judgment, and disposed of on the facts. We are not persuaded that there was any error by the Judge in that respect.The utility of the claim[43] In the course of argument, there was some discussion of the issue as to whether, as a matter of discretion, a court would grant relief of the character sought in this case. In the light of the view we have taken on the liability issue, it is unnecessary for us to burden an already lengthy judgment with further discussion of this issue.Conclusion[44] The Judge was correct to strike out this claim. The appeal is dismissed. [45] In this Court, Mr van Heeren will have costs of $6,000 and usual disbursements. [46] The designated sealed package on this court file is not to be searched save with the leave of this Court.CHAMBERS J[47] I agree with the formal judgment of the court as proposed by Hammond and Ellen France JJ.Clause 5 of the Deed[48] Both causes of action are based on alleged breaches of clause 5 of the Deed dated 23 December 1998. Although Hammond J, in his reasons, has set out clause 5 in full, I do so again because I want to add (in italics) certain additional comments, which, I hope, will aid understanding of the discussion which follows:[The mutual promises]The terms and conditions of this Deed and all information relating to the Proceedings [namely, HC AK CP62/95 and HC AK CP216/98] and relating directly or indirectly to the Proceedings and this Deed shall be absolutely confidential between the parties and their legal advisors and shall not be divulged to any person whatsoever provided that:[Exception 1]should they be required to do so, the plaintiffs shall be permitted to disclose the terms of the Deed to relevant and competent tax authorities on a confidential basis.[Exception 2]In particular (but not by way of limitation), no statement shall be made by any party or its advisors to any representative of the news media save to confirm the fact that settlement has occurred in response to any inquiry concerning the Proceedings.[Exception 3]For the avoidance of doubt, nothing in this clause 5 shall be construed as inhibiting the ability of the parties to give evidence relevant to the commercial disputes between Mr van Heeren, Mr Michael David Kidd and/or Enterprise Nationale de Siderugie SPA,[Qualification to exception 3]save that no party shall be entitled to: 1. Accuse another party of or refer to a. extortion; b. intimidation; c. the tortious acts claimed in the proceeding; or d. any like act or acts. 2. Refer to the events at Antwerp on 24 June 1994, the events in New Zealand on 8 July 1994 and 5 & 6 October 1994, nor make anyallegation concerning any of the Defendants in respect of the circumstances under which certain files obtained by Cooper were misplaced or went missing when in the custody of the New Zealand police. 3. Divulge the terms of settlement.[49] The structure of the clause is that it begins with the mutual promises each party to the Deed made to the others. There are then three exceptions to those promises. The third exception is qualified. [50] Mr Cooper's pleading with respect to both causes of action was based on the qualification to exception 3. In the course of argument before us, Mr O'Callahan accepted this pleading was wrong. Exception 3 is concerned with parties' evidence in litigation. Neither cause of action involves the giving of evidence. That concession means that the statement of claim as currently drafted is unsustainable. [51] It is, however, well recognised that the courts will not strike out a pleading "which is deficient but is capable of effective repair": Marshall Futures Limited v Marshall [1992] 1 NZLR 316 at 324 (HC). Mr O'Callahan advised that Mr Cooper would instead rely on the mutual promises, and in particular the mutual promise to keep confidential and not to divulge information relating directly or indirectly to the proceedings. [52] I now turn to the correct interpretation of clause 5. There is no dispute before us that the interpretation of a contract is a matter for the proper law of the contract, as Hammond J has noted. Both sides agree that the proper law of this contract is the law of New Zealand. [53] Under clause 5, each party to the Deed made a promise to each other party: that promise was to "[keep] absolutely confidential" and "not to divulge" certain information. I do not think there is any difference between those two promises: each means the same as the other. There are plenty of examples of tautology within this very badly drafted clause. [54] What did they promise to keep confidential/not divulge? First, they agreed to keep confidential "the terms and conditions of this Deed". We can put that to oneside, as there is no suggestion in either cause of action that Mr van Heeren disclosed the terms and conditions of the Deed. [55] The second thing the parties agreed to keep confidential/not divulge was "all information relating directly or indirectly to the Proceedings". "Proceedings" were defined. The proceedings were HC AK CP62/95, in which Mr Cooper was suing Mr van Heeren and others for torts relating to his arrest in New Zealand and in which Mr Hughes was counterclaiming, and HC AK CP216/98, in which Mr Brown was suing Mr van Heeren and others in tort (alleging conspiracy, false imprisonment, misuse of police authority, and other associated torts). Most importantly, "Proceedings" did not cover HC AK CP46/96, in which Mr Kidd was suing Mr van Heeren in New Zealand regarding the breakdown of their business relationship. That proceeding was unaffected by the Deed of Settlement, as Mr Kidd was not a party to the Deed. [56] In my view, the expression "all information relating directly or indirectly to [proceedings CP62/95 and CP216/98]" referred only to confidential information relating to those proceedings; that is, information which reasonably could be expected to be known only by the parties to that litigation and to the Deed. Information about those proceedings which was already in the public domain (for example, the Court of Appeal decision delivered on 10 November 1998 in CP62/95 and subsequently reported in [1999] 1 NZLR 731) could not possibly be regarded as information which the parties were required to keep confidential, as it was not confidential and could not be kept confidential. [57] The promises the parties made were subject to three qualifications. None is directly relevant to the foreshadowed causes of action, but they do have indirect relevance: they confirm that the mutual promises were restricted to keeping confidential matters which were confidential. Exceptions 1 and 2 permitted conditional disclosure of "the terms and conditions of the Deed", clearly a confidential document. Exception 3 made clear that there was no restriction on Mr van Heeren with respect to his outstanding and unresolved litigation with Mr Kidd. That exception is consistent with my interpretation of the mutual promises, and in particular with those promises being restricted to informationrelating directly or indirectly to the proceedings which were settled by the Deed, but not to others. There purports to be a qualification to exception 3, which is probably unenforceable. I say only "probably" as that may be a matter which is governed by law other than New Zealand law. That is not something I need to decide. [58] I turn now to consider the foreshadowed causes of action.First cause of action[59] The first cause of action is based on what Mr Puckrin SC read out in court. It is alleged he read three passages from a reported decision of Smellie J in Kidd v van Heeren (CP46/96). That was not one of the proceedings settled by the Deed. Rather, it was one of the proceedings constituting "the commercial disputes" between Mr van Heeren and Mr Michael David Kidd. Those disputes were expressly declared by exception 3 to be outside the mutual promises. [60] In my view, a party to the Deed would not be required to keep Smellie J's judgment "confidential" for two reasons: (a) It was not information relating to "the Proceedings", but rather related to a different proceeding altogether, a proceeding which had not been settled, and a proceeding which was covered by exception 3; and (b) In any event, it was not confidential information, being information which was already public at the date of the Deed. [61] The foreshadowed first cause of action is, therefore, as doomed as the original first cause of action. Clause 5 did not prohibit any party to the Deed giving a copy of or reading out Smellie J's decision to anyone. [62] It may well be the foreshadowed first cause of action would also turn out to be doomed on other grounds:(a) Mr van Heeren may not have known Mr Puckrin was going to read out passages from Smellie J's judgment; and (b) What Mr Puckrin said may have been privileged. [63] I do not rely on those grounds, however, when agreeing that Harrison J was right to strike out the first cause of action, as it may be those matters turn on South African law. The argument counsel presented on this topic was quite inadequate for a proper determination of what law would be applicable to determine "breach" (assuming what was said was information within the meaning of the mutual promises part of the clause). If South African law is applicable, then there is no evidence before us as to the relevant South African law.Second cause of action[64] I agree the foreshadowed second cause of action, like the original second cause of action, is unsustainable for the reasons given by Hammond and Ellen France JJ.Solicitors: Carter & Partners, Auckland for Appellant Jones Fee, Auckland for Respondent