CREATIVE DEVELOPMENT SOLUTIONS LIMITED v CHORUS NEW ZEALAND LIMITED [2021] NZCA 178

CREATIVE DEVELOPMENT SOLUTIONS LIMITED v CHORUS NEW ZEALAND LIMITED [2021]NZCA 178 [13 May 2021]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA652/2019[2021] NZCA 178BETWEEN CREATIVE DEVELOPMENTSOLUTIONS LIMITEDAppellantAND CHORUS NEW ZEALAND LIMITEDRespondentHearing: 20 and 21 October 2020Court: French, Brown and Goddard JJCounsel: M B Wigley for AppellantJ B M Smith QC and V L Heine for RespondentJudgment: 13 May 2021 at 11.00 amJUDGMENT OF THE COURTA The appeal is dismissed.B The appellant must pay the respondent costs for a standard appeal ona band A basis and usual disbursements. We certify for second counsel.____________________________________________________________________Table of ContentsPara NoIntroduction [1]Factual background [6]Funding of broadband services in remote areas [6]The initial meeting [12]The Confidentiality Agreement [13]The second meeting [19]The provision of information and engagement on Chorus'swithdrawal from RBI2 [20]The third meeting [24]The fourth meeting [27]The Creative claim as now confined [31]Second cause of action: breach of the Agreement [31]Fourth cause of action: estoppel [33]Split trial [34]The High Court judgment [35]The nature of the parties' relationship [35]Breach of the Confidentiality Agreement [37]Estoppel [41]Issues on appeal [46]Was the information provided by Creative capable of protectionas "confidential information" under the proper construction ofthe Agreement [47]Did Chorus breach the Agreement by using confidentialinformation [65]Did Chorus make a sufficiently clear and unequivocalrepresentation to Creative that Chorus would not be submitting itsown bid for RBI2+ funding [79]Did Creative rely on such representation, if it was made, and wassuch reliance reasonable? [90]To what extent is Creative required to prove detriment in order toestablish an estoppel at a liability trial? [96]Did Creative rely on the representation to its detriment? [99]Result [110]REASONS OF THE COURT(Given by Brown J)Introduction[1] The appellant, Creative Development Solutions Ltd (Creative), operates as anadviser and consultant on the provision of telecommunications services. It initiateddiscussions with the respondent, Chorus New Zealand Ltd (Chorus), concerning theconjoint provision of rural broadband services in more remote parts of the regionadministered by the Marlborough District Council (the Council). Creative requiredChorus to execute a confidentiality agreement1 prior to supplying information relatingto its Smart Services Infrastructure initiative (SSI) described as:21 Referred to throughout the High Court judgment as a non-disclosure agreement (NDA).2 This description is sourced from Creative's statement of claim. an initiative that pivots around telecommunications broadband services tounderserved rural and remote regions and end-users, based on a broadercollaborative and partnership approach aimed at larger social and economicobjectives.[2] Public funding for the expansion of broadband services was available througha Crown entity known as Crown Infrastructure Partners (CIP). Creative contemplatedthat funding would be available for the project from the CIP rural broadband initiative.Creative was aware that Chorus had previously been awarded such funding butunderstood Chorus had withdrawn from further participation. In response to a specificinquiry from Creative, Chorus confirmed it had withdrawn.[3] Following those two events Creative provided its SSI information to Chorus.However, at the invitation of CIP, Chorus subsequently resumed participation in therural broadband initiative tender process. In doing so it allegedly utilised confidentialinformation supplied to it by Creative.[4] The High Court dismissed Creative's claims against Chorus for breach offiduciary duty, breach of both contractual and equitable obligations of confidentialityby Chorus's use of SSI information, and estoppel arising from Chorus's responseconcerning its participation in CIP's current rural broadband initiative funding.3[5] Creative appealed that judgment, save in respect of the asserted equitable dutyof confidentiality which the Judge ruled was precluded by the contractualconfidentiality obligation.4 In the course of the hearing Creative abandoned itschallenge to the dismissal of the first cause of action for breach of fiduciary duty.Hence the appeal is now confined to Creative's challenge to the rejection of its claimsfor breach of a contractual obligation of confidentiality and equitable estoppel.5Chorus supports the decision on other grounds, contesting some of the Judge'sconclusions.3 Creative Development Solutions Ltd v Chorus New Zealand Ltd [2019] NZHC 2959 [High Courtjudgment].4 At [208].5 The second and fourth causes of action respectively.Factual backgroundFunding of broadband services in remote areas[6] The cost of the infrastructure required to provide broadband services in moreremote areas of New Zealand is recognised to be greater than can feasibly provide aneconomic return. Consequently the progressive extension of broadband servicesrequired significant government subsidisation. Government involvement inpromoting the expansion of broadband services was undertaken by CIP.6[7] The broadband network programme which commenced in 2010 evolved intoa first round of contracts, namely the Ultra-Fast Broadband initiative and the RuralBroadband Initiative which became known respectively as UFB1 and RBI1.7 Choruscontracted for approximately 70 per cent of UFB1 and a substantial proportion of theRBI1 tender.[8] The UFB programme expanded to a second round which was tendered andnegotiated in two tranches known as UFB2 and UFB2+ in which Chorus was againa successful participant. However, when in early 2017 CIP tendered RBI2, Choruswas offered less than the minimum amount specified in its tender bid. Hence Choruselected not to pursue RBI2 further. A letter from CIP to Chorus dated 30 August 2017recorded:Chorus advised [CIP] on 08 August 2017 that it did not wish to conclude anagreement with [CIP] for RBI2 Grant Funding based on the scope proposedby [CIP]. [CIP] and Chorus discontinued negotiations accordingly.[9] In March 2016 Creative undertook a scoping and feasibility study for theCouncil to establish its requirements for delivery of region-wide digital technologyinfrastructure including better and more extensive broadband and cellular coverage.In March 2017 Creative and the Council responded to CIP's request for proposals forRBI2, proposing services for areas within the Council's region. Although that bid was6 Formerly known as Crown Fibre Holdings Ltd (CFH). For clarity, in this judgment we refer to itby its current name of CIP.7 RBI1 was tendered by the Ministry of Business, Innovation and Employment (MBIE), not CIP.unsuccessful, Creative contemplated making a bid for a further round (RBI2+) whichwas an extension of RBI2.[10] As the Judge explained8 the context in which Creative approached Chorus wasthat CIP had not achieved all of the coverage it had contemplated in RBI2. It wasindicating to those who had bid in that round the availability of further funding forextensions to the areas of coverage that would be achieved with RBI2. Havingwithdrawn from the RBI2 round, Chorus was not among those whom CIP approached.[11] Creative initiated contact with Chorus with a view to co-operate with Chorusin providing enhanced coverage in the Marlborough region. The events relevant tothis appeal occurred between February and May 2018 which included four meetingsbetween Creative and Chorus personnel.The initial meeting[12] The first of four meetings between Creative and Chorus personnel was held inChorus's Wellington office on 8 February 2018. It was described by the Judge asfollows:9[38] Mr Phillips was most concerned to receive an acknowledgementfrom Chorus that Creative/MDC would be making disclosures ofconfidential and commercially sensitive information to Chorus, and thatChorus would agree to receive it subject to the terms of an NDA,completion of which was required by Creative. His evidence was that, inreliance on the Chorus representatives' assurances that it would completean NDA, he disclosed valuable information about Creative's approach todesigning and analysing the financial viability of broadband services inthe Marlborough region. Mr Phillips treated his contributions to themeeting as revealing to Chorus an innovative way of combiningtechnologies and providers, in particular maintaining open andco-operative dialogue with WISPs. Creative treated its work as alsoapplicable to devising solutions for extending coverage in other parts ofNew Zealand where similar challenges arose.[39] Mr Phillips stated that the Chorus representatives respondedappreciatively to these new insights, acknowledging the value of theconcepts on which Creative and MDC had worked. He acknowledgedthat he advised Chorus that Chorus was one of a number of potentialsuppliers/partners with whom Creative and MDC intended to have8 High Court judgment, above n 3, at [117].9 Mr Dayal Phillips was a shareholder and director of Creative and a designer oftelecommunications systems.discussions. The minutes of the meeting that Mr Phillips produced areconsistent with his evidence about what transpired at it.The Judge observed that from comments at this meeting Chorus inferred the Councilhad access to funding separate from any grants which might be obtained from CIP.10The Confidentiality Agreement[13] A Confidentiality Agreement (the Agreement) was executed by Chorus(described as the "Supplier") on 13 February 2018. As the Judge observed,11 it isa prolix document which included under the heading "Integration" an entire agreementprovision.[14] The confidential information to which the Agreement extended, although notparticularised, was described in the second recital in this way:WHEREAS, in connection with the Purpose, both parties have developedor possess certain confidential and proprietary information of a sensitivenature (collectively in all its forms and manifestations, hereinafter the"Confidential Information") to which the parties will have access,become familiar with, and come into possession of, the improperdisclosure or exploitation of which by either party, inconsistent with theterms of this Agreement, would cause material and irreparable businessand economic harm to the other party.[15] Some degree of definition was added by cl 2:2. Scope of the Definition of "Confidential Information".Confidential Information made available in written form by either partywill be clearly marked "Confidential" or with an equivalent conspicuouslegend. Confidential Information made available orally or visually byeither party to the other will be identified as Confidential Informationprior to such disclosure.Confidential Information received from either party or to which eitherparty may have access during the course of its relationship with the othershall not be deemed confidential or proprietary within the meaning of thisAgreement if the receiving party can conclusively prove that suchinformation:a) was in its possession at the time of receipt or disclosureand was not acquired directly or indirectly from the otherparty;10 At [40].11 At [144].b) was at the time of disclosure by the other party lawfullyin the public domain as evidenced by printed publicationor otherwise;c) at any time after its disclosure by the other party becomespart of the public domain by publication or otherwisethrough no fault or act of the receiving party;d) was obtained from a third party with good legal titlethereto and without breach of this Agreement;e) was independently developed by it without anyutilization whatsoever of the Confidential Information.[16] The "Purpose" of the Agreement, which was referred to both in the definitionof Confidential Information and the obligations assumed in respect of it, was describedin the first recital in this manner:WHEREAS, Creative Development proposes conducting discussions andexchanging information with SUPPLIER, wherein Creative Development willtherewith provide to SUPPLIER an in-depth understanding of various of theadvanced technologies owned and controlled by Creative Development or itsclients, said discussions, exchange, and provision to be regarding the businessplans, intellectual property, methods, apparatus, algorithms and softwarepertaining collectively and individually to the Creative Development businesshereinafter and generally known and described as follows: _________Creative Development Business Products _________(hereinafter collectivelyreferred to as "PRD"), and thus create both a technical and business evaluationopportunity for SUPPLIER regarding said PRD, this for the purpose ofSUPPLIER being able to decide in as informed a manner as possible, whetherSUPPLIER is then thereafter interested in any further involvement withregarding said PRD or any portion thereof, on any basis whatever, as mightarise, be portrayed or proposed during the course of said discussion, andexchanges, or which might otherwise come about thereafter, (hereinafter the"Purpose");[17] The obligations assumed under the Agreement were detailed in the first clauseas follows:1. ConfidentialitySUPPLIER and Creative Development each acknowledge that all items ofConfidential Information are and shall at all times remain valuable special andunique assets of the disclosing party, the improper or unauthorized disclosure,conversion, exploitation or use of which, by the other party, could causesubstantial and irreparable injury to the disclosing party and result in the lossof profits corporate opportunities and goodwill for which there is no adequateremedy. Accordingly, except as required by law or in the course of eachparty's relationship with the other, and acting solely for the benefit and onbehalf of the disclosing party, both SUPPLIER and Creative Developmenthereby undertake and agree:a) To keep and procure that its directors, employees, agents andconsultants keep in strict secrecy, confidence and in safe custodyany and all Confidential Information of whatsoever nature, toinclude without Limiting the foregoing, all information,knowledge, data, drawings, know-how and other materialsdisclosed to it by the other party;b) Not to use, nor allow the use of, any Confidential Information forany reason other than the Purpose;c) Not to reproduce or copy the Confidential Information acquiredby or to which either party may have access during the course oftheir relationship with each other, except strictly for their owninternal and limited use for the Purpose;d) To limit access to the Confidential Information to those of itsdirectors, employees, agents and consultants on a "need to know"basis who reasonably and necessarily require such informationfor the Purpose, to inform each such director, employee, agent orconsultant of all the restrictions contained herein as toconfidentiality, disclosure and use of such ConfidentialInformation and to ensure that each of them shall observe suchrestrictions and, in the case of each such agent and consultant,shall procure that all its personnel of whatever nature observesuch restrictions;e) Not (without the prior written consent of an authorized boardmember or director of the other party) to:- i) release any pressstatement or issue any other publicity regarding the arrangementswhich may exist between the parties; or - ii) disclose to any thirdparty the identity of the other party either on a client list of thereceiving party or otherwise.[18] The Agreement provided that the obligations were to be binding for the longerof a period of seven years from the date upon which either party communicated inwriting to the other its decision no longer to pursue a relationship or until the partydivulging the confidential information ceased to use it as part of their respectivebusiness activities.The second meeting[19] A second meeting was held at Chorus's Auckland office on 21 February 2018which the Judge described in this way:1212 Mr Brendan Burns was a shareholder and director of Creative and a former journalist, mediaadviser and Member of Parliament. Mr Michael Lott was the head of innovation at Chorus.The Judge observed that Mr Lott was to the forefront of dealings between the parties: at [28].[45] At the second meeting, Mr Burns emphasised the importance ofthe political aspects of presenting a regional development proposal andcollaborative approach. During the one and a half hour meeting, therewere exchanges about the needs of the Marlborough region and the rangeof technologies that might possibly be deployed. In notes of the meetingprepared by Mr Phillips, he attributed Chorus representatives withacknowledgements of the importance of aspects emphasised on behalf ofCreative and that Chorus recognised the possibilities for looking atdifferent technologies. The notes recorded Mr Lott commending theapproach of Creative as very thorough, saying that the whole-of-regionapproach was unique and not something he had seen before, andcommenting that he needed to understand the design and the mapping ofpotential solutions.The provision of information and engagement on Chorus's withdrawal from RBI2[20] On 27 February 2018 Mr Phillips emailed a briefing note to Chorus, thepurpose of which was to "[s]et the stage for further engagement with Chorus asa potential supplier under the [Council's] RFP for RBI2 deployment in Marlborough".It stated that if Chorus was happy to engage with the Council as a potential supplierand collaborative partner, then a range of information could be provided quickly.Mr Lott's response of 2 March 2018 thanked Mr Phillips for the briefing note andstated: we're keen to further understand what's possible.Really looking forward to getting your high level design so we can test itagainst our early thinking.[21] On the previous day Mr Phillips had telephoned Mr Linstrom of Chorus andinquired whether Chorus had "pulled out" of the RBI2 round rather than not beingawarded anything. Mr Linstrom advised Mr Lott by email on 2 March 2018 of thefact of this communication. It is common ground that Mr Lott subsequentlytelephoned Mr Phillips and stated that Chorus had pulled out of RBI2.[22] Prior to sending the more detailed information that had been foreshadowed,Mr Phillips emailed Chorus on 12 March 2018 stating:We confirm our understanding that Chorus has withdrawn from the RBI2Crown Funding RFP bid process for a variety of reasons. If this is notthe case, would you please advise immediately.In cross-examination Mr Lott expressed the view that this email was sent followingtheir telephone conversation. Later that day Mr Phillips emailed a link to a slide packcontaining an initial tranche of Creative documents to Mr Lott.13[23] In an email the following day Mr Lott confirmed that he and Mr Rogers14would attend a further meeting proposed by Mr Phillips and advised that they had highlevel plans which they had prepared to discuss with the Council and Creative.However that email did not engage with the statement in Mr Phillips's 12 March 2018email that Chorus had withdrawn from the RBI2 bidding process.The third meeting[24] On 16 March 2018 Mr Phillips provided an agenda for a further meeting on19 March 2018, together with briefing notes which continued to emphasise work inadvancing the SSI on the basis of collaboration between stakeholders and providers.With reference to this meeting the judgment stated:15[56] Minutes of the meeting prepared by Creative record positive andcomplimentary observations by Chorus about Creative's network design,and an acknowledgement that Chorus had calculated a smaller number ofeconomic end users (EEUs) than in the work done by Creative and MDC.Comments were attributed to Chorus such as:• Council had developed an outstanding model which hadcreated opportunities, not previously considered.• We like the approach and benefits of what Council isproposing; it is a full regional economic developmentapproach.• Great initial design. Submit to CIP on what you have. Chorushad a different plan; MDC SSI more of a Regionaldevelopment model. If Shane Jones says, What can I get ina year, let's do this.[57] During the meeting, Chorus disclosed its own design and provided anexplanation of it. Importantly for Chorus, the MDC chief executive advised at themeeting that MDC had spent [Redacted] sums developing their design, and that itwould not be spending any more money on it.13 These comprise items 1 to 23 of the specified list of documents pleaded as containing confidentialinformation in Creative's statement of claim.14 Mr Kurt Rogers was a network strategy manager at Chorus with experience as atelecommunications engineer.15 High Court judgment, above n 3.[25] On 23 March 2018 Mr Lott provided Creative with a signed letter of support,intending it to be used by Creative and the Council to support a funding bid to CIP.The letter expressed Chorus's support for delivery of the Creative/Council project andstated that Chorus was keen to work with the Council in the future, especially withany future RBI extensions or Provincial Growth Fund applications.16[26] On 28 March 2018 the Council lodged its response to CIP for RBI2+, includingprovision of Chorus's letter of support.The fourth meeting[27] The judgment described the fourth meeting on 10 April 2018 at Chorus'sAuckland premises in this way:17[61] Creative took statements made by the Chorus attendees as evincingan intention to use confidential information Chorus had learned from Creativefor Chorus's own purposes, outside the SSI initiative on which Creativetreated Chorus as working collaboratively with them.[62] Minutes of the meeting prepared by Creative attributed to the Chorusrepresentatives statements acknowledging the benefit Chorus had gained fromaccessing Creative's information and that Chorus would adopt a new approachin considering further infrastructure in the rest of the country.[28] On 15 April Ms Young18 sent Messrs Lott and Rodgers minutes of the third andfourth meetings seeking confirmation as to their correctness. On 28 April 2018Mr Lott confirmed the minutes were correct. Shortly thereafter on 8 May 2018Creative's solicitors wrote a warning letter to Chorus about misuse of confidentialinformation. Further correspondence was exchanged until commencement of theproceedings in July 2018.[29] In the interim on 18 May 2018 Chorus submitted to CIP a proposal forparticipation in the RBI2+ round. While the evidence did not eliminate the prospectthat Chorus personnel might have initiated that re-engagement with CIP, the Judgeruled that more would have been required than was available to Creative to displace16 Some changes to the letter requested by Mr Phillips were made by Mr Lott on 27 March 2018.17 High Court judgment, above n 3.18 The chief information officer at the Council.the quite credible evidence that the re-engagement was a CIP initiative and notChorus's.19[30] As it happens neither Creative nor Chorus was successful in securing a contractwith CIP for the provision of services in the RBI2+ round.The Creative claim as now confinedSecond cause of action: breach of the Agreement[31] Although some limited confidential information is said to have been providedto Chorus at the initial meeting on 8 February 2018, it was only subsequent to theexecution of the Agreement that Creative provided the confidential information listedin sch A to the second amended statement of claim. That list comprised 32 items,including documentation relating to the SSI initiative, the Council maps, and briefingnotes for and file notes of various meetings, including the four meetings betweenCreative and Chorus personnel.[32] The unauthorised use by Chorus of Creative's confidential information wasparticularised as follows:(a) as a result of becoming aware of the position as to CIP seeking RBI2+proposals, that being part of the Confidential Information, whether ornot other Confidential Information was used by Chorus, Chorus took,and continues to take, steps to assess, prepare for, and engage withCIP, other agencies including Ministers and officials with officials inthe Ministry of Business, Innovation and Enterprise ("MBIE"), andwith other Ministers and officials (particulars of which will beprovided following discovery and interrogatories);(b) the Confidential Information comprising knowledge of theopportunity to bid for CIP RBI2+ funding has been used by Chorus,so that it was able [to] seek to enter the bidding when it would nototherwise have done so;(c) considering and evaluating how the approach referred to in theConfidential Information (including SSI) can be used for doing therest of the country, such as in providing telecommunications servicesoutside Marlborough (and then implementing same);(d) use of the Confidential Information to develop an approach thatenabled Chorus to enter RBI2+ and PGF bidding, that information19 High Court judgment, above n 3, at [132].providing a basis for Chorus to render RBI2+ and PGF fundedservices as viable (when they were not previously seen as viable);(e) use of Confidential Information ranging from detailed design andEEU counts (whether or incorporated in material that went to CIP andMBIE) through to strategic and stakeholder engagement information(which also was not necessarily incorporated in communications withCIP and MBIE);(f) developing the plan for all of Marlborough;(g) asking and assessing how to get the right infrastructure to do so;(h) picking up on the model in the Confidential Information (includingSSI and as to working with WISPs and other parties);(i) using the Confidential Information, including to give it to Bill Murch,the Chorus Investment Manager, and the Chorus planners, and toinstruct Bill Murch and those planners because of use of thatConfidential Information, in order for Chorus, Bill Murch and theplanners to be able to assess and plan options including finding gaps,Chorus assets, and situations where Chorus does not have assets.20(j) being stimulated into a wider regional economic development model;(k) developing projects Chorus can implement across the country;(l) planning how to deliver across New Zealand including as to seekingand obtaining RBI2 and PGF funding, and executing same;(m) re-stimulating and refining Chorus's thinking on how to deliver acrossNew Zealand;(n) as a result of being engaged by [the Council] and [Creative], and theConfidential Information obtained as a result, altering its approach inrural New Zealand in the manner outlined in this paragraph, whetheror not Government funding is involved;Fourth cause of action: estoppel[33] The cause of action in estoppel was pleaded in this manner:89. Chorus made statements that it had withdrawn from bidding for RBI2funding.20 Mr William Murch was the investment manager (physical works) at Chorus. He was an engineerwith 45 years' experience at Chorus and its predecessors, New Zealand Post Office and Telecom.Particulars(a) In a discussion with Mike Lott of Chorus on 12 March,Mike Lott confirmed to Dayal Phillips that Chorus hadwithdrawn from bidding for RBI2;(b) In [Creative]'s email of 12 March 2018 to Chorus, advisingthat access to the Confidential Information would beprovided, [Creative] noted that Chorus had confirmedwithdrawal from the RBI2 funding bid, stating "We confirmour understanding that Chorus has withdrawn from the RBI2Crown Funding RFP bid process for a variety of reasons.If this is not the case, would you please advise immediately."Chorus replied by email to that email but made no mention ofthis statement.(c) Mike Lott and Kurt Rodgers of Chorus also confirmedwithdrawal from the RBI2 at their meeting with [the Council]and [Creative] on 19 March 2018;90. Chorus thereby created a belief and expectation that it would not bidfor RBI2 Extension funding.91. [Creative] reasonably relied upon those statements, belief andexpectation, by providing Confidential Information to Chorus and bycontinuing to involve Chorus in SSI, when it would not otherwisehave done so.92. [Creative] has suffered and will suffer detriment due to such reliance,for the reasons in the preceding paragraph.93. [The Council] and [Creative] would not have supplied theConfidential Information to Chorus absent those statements.94. The supply of the Confidential Information to Chorus has led and willlead to the loss and damage pleaded above.95. It is unconscionable for Chorus to depart from the belief andexpectation created by Chorus.Split trial[34] Approximately one month before trial the parties agreed that the hearingshould be confined to liability issues, with matters of quantum adjourned for a laterhearing, depending on the outcome of the liability hearing.2121 High Court judgment, above n 3, at [6].The High Court judgmentThe nature of the parties' relationship[35] Mr Wigley's submissions for Creative in this Court commenced by identifyinga "unifying aspect" of the case, namely whether the parties' relationship wasa collaborative partnership or similar. The Judge's rejection of that portrayal of therelationship was conveniently captured in his concluding observations on costs:[239] The conduct of both parties was characterised by substantialposturing. For Creative, Mr Phillips exaggerated the "collaborativepartnering" character of the relationship that Creative and MDC consideredthey were fostering with Chorus. Once the relationship soured, Creative mademore than it was entitled to of self-serving assertions about the character ofthe relationship to assert fiduciary and equitable obligations owed by Chorusin what was an exploratory, non-exclusive, pre-substantive contractualcommercial relationship.[240] For Chorus, Mr Lott and others engaged in grossly misleading flatteryto encourage MDC to contract with Chorus, during the period in which Choruswas under the impression that MDC had substantial funding ("[Redacted]") tocommit to the cost of extending infrastructure.[241] A consequence of Chorus's flattery is that Creative would haveassessed its prospects for these proceedings by treating Chorus as havingconfirmed its own belief in the substantial value to Chorus of Creative'sintellectual property. Because I have found that Chorus was not genuine inthe assessments it conveyed to Creative of the value of Creative's intellectualproperty at the time, those expressions of view have not been determinative inassessing Creative's causes of action. However, they provide a substantialmeasure of justification for Creative to embark on proceedings, articulatingclaims in the terms that it has.[36] The Judge described the misleading flattering tone of approval by Chorus ofCreative's intellectual property throughout a period when Chorus's genuine view wasnegative and dismissive as a most unusual dynamic.22 Although it is no longernecessary to focus on the reasons for the rejection of the fiduciary duty allegation, wenote that, in concluding that the parties' relationship was quite distinct from one inwhich each depended on and trusted the other, the Judge viewed the relationshipdisclaimer provision in the Agreement as antithetical to a relationship involvingfiduciary obligations.2322 At [242].23 At [141]–[142].Breach of the Agreement[37] The Judge heard evidence from experts for each party. Creative's expert,Dr Arasaratnam Sathyendran, is a consultant with a PhD in electrical and electronicengineering and a graduate diploma in business administration. Chorus's expert,Mr John Emanuel, is an engineer whose experience included RBI policy and RFPdevelopment work for the Ministry of Business, Innovation and Employment as wellas contract negotiation and administration. He had worked specifically on policydevelopment for RBI2. As noted below they adopted different approaches to the issuesraised by the claim for breach of the Agreement.[38] Having considered the evidence of the experts, the Judge made findings on theexistence of confidential information in this way:[168] In applying the contractual terms, I have regard to the prospect thata collocation of information or ideas reflecting individual items, some ofwhich are in the public domain or were known to Chorus prior to its dealingswith Creative, but which in combination are not publicly available, may resultin such a collocation being recognised as confidential information.[169] Chorus's engagement with Creative and MDC exposed it to theirdefinition of the needs Creative/MDC sought to address, and the networkdesign they had developed to deliver on the identified needs. The interactionstimulated Chorus to revisit work it had previously done for RBI2, with theintention of demonstrating to MDC how Chorus would deliver the servicesMDC sought, within the budget that Chorus then perceived MDC had, orcould procure, to develop the network.[170] Creative perceived its confidential information as reflecting smarterand more innovative technologies than Chorus would use, but I accept theevidence for Chorus that the so-called innovative solutions were not news toit. Much of the information came within the exclusions cited at [145] above,and therefore fell outside the definition of confidential information in theNDA. To the extent that the collocation of information facilitated Chorus inrevisiting its previous work on design of infrastructure for broadband in theMarlborough Sounds, that collocation was capable of providing a springboardfor Chorus's next round of that work. The real issue is to what extent Chorusused it as such.(Footnote omitted.)[39] The Judge noted that there was no direct evidence such as of copyingCreative's design or direct application of confidential information conveyed. In thosecircumstances he considered it relevant to test Chorus's denial of use of confidentialinformation by considering whether the information it had received had value to it.24The Judge accepted the evidence for Chorus that the detail in the disclosures up to12 March 2018 would have been of little utility for Chorus in designing a network anydifferently than it would have done from its own accumulated knowledge andexperience. What Chorus had done was to produce a plan showing how it would buildthe infrastructure for the area which it knew from initial discussions that the Councilwished to service. It maximised the use of fibre but extended the fibre cabling furtherthan its previous proposals because Chorus anticipated that new funding, beyond thatavailable for RBI2, would be available to pay for it.25[40] His ultimate conclusion on the question of use was expressed in this way:[203] Standing back, as Mr Elliott urged me to do, I accept that theexchanges of information between Creative and Chorus between February andApril 2018 did contribute to the evolution of Chorus's mode of responding toCIP. In a minor incremental way, Chorus used the work it undertook in dealingwith Creative as an influence on the evolution of its own thinking and its modeof dealing with CIP. However, the inarguably dominant influences on thatevolution in thinking were independent of any use of Creative's confidentialinformation. It was not sufficient to characterise any use as a springboard.Accordingly, it is not use that breaches the terms of the NDA.Estoppel[41] The Judge's analysis reflected the statement of the elements of estoppel by thisCourt in Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd:26(a) A belief or expectation by [the plaintiff] has been created orencouraged by words or conduct by [the defendant];(b) To the extent an express representation is relied upon, it is clearly andunequivocally expressed;(c) [The plaintiff] reasonably relied to its detriment on the representation;and(d) It would be unconscionable for [the defendant] to depart from thebelief or expectation.24 At [158].25 At [182]–[183].26 Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] NZCA 407, [2014] 3 NZLR 567at [44].Because we address the detail of the Judge's reasoning in the context of ourconsideration of the individual issues, we confine ourselves here to a summary of thefindings.[42] The Judge accepted that the reference to non-participation in the "RBI2 bidprocess" included RBI2+ (the extension part of RBI2 that was then on foot), reasoningthat there would be no relevance in merely confirming the historical circumstance thatChorus had indicated to CIP in August 2017 that it would not further negotiate on theprospect of being allocated funding in the original RBI2 funding round.27 The Judgewas satisfied that there was a representation in terms sufficiently clear to found anestoppel arising in circumstances where it was reasonable for Creative to rely on it.28[43] The Judge rejected arguments advanced by Chorus first to the effect thatrecognition of an estoppel in the circumstances would harm the orderly regulation ofa commercial relationship29 and secondly that interpreting the representation as anarrangement between competitors not to compete would risk contravention of theCommerce Act 1986.30[44] In the circumstances where the provision of confidential informationproceeded primarily in reliance on the contractual confidentiality constraint but thecontractual claim had failed, the Judge considered that a discrete analysis was requiredas to the detriment arising from Creative's reliance on Chorus's representation. Giventhat neither party enjoyed any success in the RBI2+ round of bidding, the Judgeappears to have accepted Chorus's contention that Creative could have suffered nodetriment through Chorus's participation having harmed Creative's prospects ofsuccess.31[45] The proposition that Creative had suffered detriment in the form of the loss ofthe economic value of relaxation of the estoppel was viewed by the Judge as inviting27 At [217].28 At [226]29 At [222]–[223], citing Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 (CA)at 586.30 At [224]–[225].31 At [228]–[229].analogy with Wrotham Park damages.32 This envisaged that, had Chorus soughtrelease from the constraint it had acknowledged in favour of Creative as representee,then an objective assessment assuming reasonable approaches to valuation of theconstraint would lead to a quantification that would compensate Creative for releasingChorus from the constraint created by the estoppel.33 However, in the absence ofevidence as to how a notional negotiation of the value of the relaxation would occur,the Judge ruled that Creative was unable to establish any material detriment.34Issues on appeal[46] In respect of the two remaining causes of action the agreed issues are:Breach of the Agreement(a) Was the information provided by Creative capable of protection as"confidential information" under the proper construction of theAgreement?(b) Did Chorus breach the Agreement by using confidential information?Equitable estoppel(c) Did Chorus make a sufficiently clear and unequivocal representation toCreative that Chorus would not be submitting its own bid for RBI2+funding?(d) Did Creative rely on such representation, if it was made, and was suchreliance reasonable?(e) To what extent is Creative required to prove detriment in order toestablish an estoppel at a liability trial?(f) Did Creative suffer detriment as a result of any such reliance?32 Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798 (Ch).33 High Court judgment, above n 3, at [230].34 At [235].(g) If the estoppel is established, are negotiating damages available as aremedy?Was the information provided by Creative capable of protection as "confidentialinformation" under the proper construction of the Agreement?[47] Save for two points, Creative did not take issue with the High Court'sconclusions on the construction of the Agreement. Its notice of appeal recorded thatat [170]35 the Judge rightly found that a collocation of information facilitated Chorusin revisiting its previous work and was capable of providing a springboard for Chorus'snext round of work.[48] The two qualifications arose from the Judge's observations on Chorus'sinfrastructure plan as follows:[201] In preparing its own plan for new infrastructure, Chorus wasresponding to what it saw MDC – as a potential customer – wanted to achieve.The network design it provided to Creative was its own work, but that workwas done in response to disclosures by Creative/MDC of what MDC soughtto achieve as a facilitator of UFB services within its territory. In denying anyresort to Creative's information, Mr Murch overlooks that Chorus wasresponding to indications from Creative/MDC as to where they wantedextended services to be made available. In the context of this relationship,I am not satisfied that Creative can claim that MDC's wish list of what itwould want Chorus to provide has status as confidential information protectedby the NDA.[202] As Mr Phillips acknowledged, a better outline of where MDC washoping to provide services is distinguishable from the substantial work thathad been done on how Creative recommended that could be achieved.The latter category of information is entitled to protection, but in thecircumstances of this relationship I am satisfied that the former was not. I donot accept that the process of Chorus producing its own design of how it wouldprovide infrastructure to meet MDC's needs, and then sharing that design withthem, gave Creative/MDC any right to claim that Chorus's design becametheir joint property.[49] Paragraph 3(d)(iv) of the Creative notice of appeal stated:the Learned Judge (rightly) found at [201] that Creative could claim thatMDC's wish list of what it would want Chorus to provide has status asconfidential information protected by the NDA but erred in portraying suchinformation as a "wish list";35 At [38] above.[50] We accept Chorus's submission that in that paragraph Creative misstated thefinding at [201]. In fact the Judge concluded that he was not satisfied that Creativecould claim that the Council's wish list of what it would want to provide had the statusof confidential information protected by the Agreement.[51] Secondly, para 3(d)(v) of the notice asserted that the Judge erred at [202] infinding that, having shared its design with Chorus, Creative had no rights in the jointwork product comprising such design. However we did not hear argument in supportof the joint ownership proposition. That may reflect the fact that Dr Sathyendran'sanalysis led him to the view that Chorus had not copied Creative's network design.36[52] The primary impetus for the first agreed issue is the challenge by Chorus to thefinding that even some information conveyed was in fact confidential. The two limbsto this argument were expressed in the notice of support in this way:1 The learned Judge held (correctly) that there was no use by therespondent of the appellant's information. He considered theinformation's confidentiality and concluded (Judgment at[168]-[170]) it may have been or was confidential. He ought to haveheld that the information was incapable of protection as confidentialinformation as it was not "confidential information" within the properconstruction of the NDA or according to the law of equity. Under theNDA and/or the law of equity the appellant's information wasrequired to possess but lacked novelty, specificity and value in orderto be protectable.2 To the extent not encapsulated in paragraph [1] above, the Judgedecided (Judgment at [170]) that a "collocation" of information(meaning a compilation of public information which by virtue of thework and effort expended in making or arranging it rendered thecompilation confidential) was capable of providing a springboard forChorus' later work. That decision was not available on the evidenceirrespective of the fact that the Judge (rightly) decided the collocation(compilation) was not used.[53] Chorus contended that to attract protection information needs to objectivelypossess the necessary qualify of confidence,37 which will be absent if the informationis "useless"38 or is already public knowledge.39 The proposition advanced was asfollows:36 High Court judgment, above n 3, at [162].37 Citing Coco v A N Clark (Engineers) Ltd [1969] RPC 41 (Ch) at 47.38 Citing Attorney-General v Guardian Newspapers (No 2) [1990] 1 AC 109 (HL) at 282.39 Citing Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203 (CA) atWhether in contract or equity (although the appeal now restricts theconfidentiality cause of action to a contractual basis), a claim for breach ofconfidence has three elements. They are that the information is confidential,is subject to an obligation of confidence, and it is used in a manner which isnot authorised.[54] While that statement is accurate in the context of the equitable duty ofconfidence, as the Master of the Rolls observed in Saltman Engineering Co Ltd vCampbell Engineering Co Ltd the requirement that the information be confidential is"apart from contract".40 As Gurry on Breach of Confidence explains, express termsmay theoretically go further than equitable obligations in prohibiting the use anddisclosure of information that is no longer confidential.41 The point was explored inmore than a theoretical context by this Court in Attorney-General for England andWales v R where Tipping J addressed the implications of a contractual obligation ofconfidentiality:42Interpretation of contract[91] In the High Court there was argument about the true meaning of thecontract. R contended it should be construed as covering only confidential orsensitive information, whereas the appellant argued that is plain words shouldnot be read down and that accordingly "any information" meant literally anyinformation relating to the work of, or in support of, the UKSF. The Judgehad to deal with some collateral issues with which we are not concerned andexpressed his conclusion in these words at para [56]:"[56] The question is, whether these references and the backgroundto the requirement to sign the contract justify the submission that thewide words used should be read down. I have concluded that they donot. Although the purpose may be to ensure that sensitive orpotentially damaging information is not disclosed, the method ofensuring that that is so, adopted by the agreement, is a completeprohibition on the disclosure without prior consent of any informationas described in para 1 of the contract. It is also clear that thatobligation is a lifelong one."[92] For those reasons the Judge held the contract had the effect for whichthe appellant contended. By way of cross-appeal R challenged thatconclusion. He argued that the parties could not have intended the words "anyinformation" to cover information already in the public domain. In additionit was argued that a so-called confidentiality contract should not be held toapply to information which was not confidential.215; and O'Brien v Komesaroff (1982) 150 CLR 310 at 326.40 At 215.41 Tanya Aplin and others Gurry on Breach of Confidence: The Protection of ConfidentialInformation (2nd ed, Oxford University Press, Oxford, 2012) at [4.17].42 Attorney-General for England and Wales v R [2002] 2 NZLR 91 (CA).[93] To accept those arguments would involve a rewriting of the way inwhich the contract is expressed. R agreed to keep confidential anyinformation, meaning in context all information, of the kind described.The question of when the Ministry might consent to disclosure is a completelyseparate matter. I have considered the various arguments advanced on R'sbehalf but find myself in the end driven back to the fundamental point that theparties must be taken to have intended what they have clearly said. No amountof debate about the correct way to interpret contracts can justify a departurefrom that basic proposition.[55] The argument for Chorus similarly involves a rewriting of the way in whichthe Agreement is expressed. The obligations in cl 1 extend to information which wasprovided and suitably identified as such in the manner specified in cl 2.43 While theinformation protected by the Agreement does not extend to information demonstratedto be in the public domain, the effect of cl 2 is to reverse the onus. It is not for Creativeto show that the information is not in the public domain. Rather Chorus, as thereceiving party, assumes the burden of establishing that the information is in the publicdomain.[56] Hence the proposition advanced by Chorus44 must be read subject to themechanism which the Agreement provides. The Judge clearly recognised thesecontractual implications, stating:45[167] In this case, the obligations of confidence are governed by the termsof the NDA, which contains specific definitions of what is, and importantlywhat is not, to be treated as confidential information.We are satisfied that the Judge's interpretation of the mechanism in the Agreement wascorrect.[57] Mr Emanuel analysed the information provided by Creative to Chorus in sixcategories:(a) Creative's business proposition;(b) service descriptions;43 At [15] and [17] above.44 At [53] above.45 High Court judgment, above n 3.(c) end user data;(d) Creative-supplied network plan;(e) proof of concept plans; and(f) implementation approach[58] The Judge recorded that Mr Emanuel assessed much of Creative's informationto have been in the public domain or comprised information that would already havebeen known to Chorus at the time.46 He accepted the evidence for Chorus thatCreative's so-called innovative solutions were not news to Chorus, concluding thatmuch of the information came within the exclusions in cl 2.47[59] However, some information was identified by Mr Emanuel as not in the publicdomain, for example:(a) In respect of the end user data, the sorting undertaken by Creative wasits own work resulting in a data set not in the public domain.48(b) In respect of the proof of concept plans, the SmartMaps anda spreadsheet provided by Creative containing base station site locationand radio system data specific to the project were not in the publicdomain.49[60] Dr Sathyendran started from the premise that the Creative/Council informationwas confidential and valuable. He did not undertake the same topic-by-topic analysisas Mr Emanuel because his initial instruction involved a comparison of Creative'sconcept design with that produced for the Marlborough area by Chorus.5046 At [148].47 At [170].48 At [152].49 At [154].50 At [163].[61] In its written submissions Chorus acknowledged that some of the informationCreative provided, in particular the Creative network planning information, was not inthe public domain. However it relied on Mr Emanuel's evidence that the compilationof information had little value and none for Chorus. As the Judge noted:[156] Assessed overall, Mr Emanuel likened what Creative provided toChorus to similar accumulations of information he had seen prepared as localor regional solutions for other areas in New Zealand. His overall assessmentwas that the combined impact of the information had little or no value.In particular, he considered that, because of Chorus's pre-existing industryknowledge, it had no value to Chorus.[62] However the value of information divulged is not a matter which theAgreement recognises in cl 2 as a basis for excising such information from the ambitof the Agreement. The Judge did not take account of that factor in his considerationof whether the information was the subject of the obligations under the Agreement.[63] While accepting that much of the information was excluded by cl 2, the Judgeconcluded that the collocation of information recognised at [168]51 was confidentialinformation capable of providing a springboard for Chorus's next round of work forthe design of infrastructure for broadband in the Marlborough Sounds.[64] Given the terms of the Agreement, that was the correct approach. Furthermorethat conclusion was plainly available given not only the testimony of Mr Emanuel butalso Chorus's acknowledgment.Did Chorus breach the Agreement by using confidential information?[65] The Judge viewed the extent of use by Chorus of Creative's confidentialinformation as the real issue on the second cause of action.52 His summary of hisanalysis of that issue concluded:[203] Standing back, as Mr Elliott urged me to do, I accept that theexchanges of information between Creative and Chorus between February andApril 2018 did contribute to the evolution of Chorus's mode of responding toCIP. In a minor incremental way, Chorus used the work it undertook indealing with Creative as an influence on the evolution of its own thinking andits mode of dealing with CIP. However, the inarguably dominant influences51 At [38] above.52 High Court judgment, above n 3, at [170].on that evolution in thinking were independent of any use of Creative'sconfidential information. It was not sufficient to characterise any use as aspringboard. Accordingly, it is not use that breaches the terms of the NDA.[66] The Judge explained his approach to the determination of the issue of Chorus'suse of Creative's confidential information in this way:53[171] In assessing whether Chorus made use of Creative's confidentialinformation, it is unnecessary for Creative to prove use in the direct sense thatChorus has directly applied an idea or information in an identifiable instance.It will be sufficient if I find Chorus has taken a material advantage fromexposure to the confidential information, using it as a springboard to advanceits work in a way that it could not have done at that time, without undertakingfurther work of its own.(Footnote omitted).[67] Creative did not take issue with that approach. However it contended that theJudge proceeded to err in several respects, including by failing to address or notaccepting that there was sufficient evidence of breach of the Agreement so that theonus of proof of the absence of breach passed to Chorus and was not discharged.Mr Wigley submitted that there was ample evidence against Chorus, even though thespecific information used was not identified, which he said was often the case.[68] In support of that submission Mr Wigley cited Norbrook Laboratories Ltd vBomac Laboratories Ltd, a case involving a secrecy agreement, where Norbrook hadaccepted that the burden of proving a breach lay on it. Delivering the judgment of thePrivy Council Lord Bingham explained the nature of the shifting evidential burden:54In such a case [where a party seeks to establish a breach of contract] the legalburden of proof lies on the plaintiff and never shifts. But if the plaintiffadduces evidence from which, in the absence of any adequate explanation oranswer, an inference of breach may properly be drawn, an evidential orprovisional burden falls on the defendant, as explained by Lord Denning inBrown v Rolls Royce Ltd [1960] 1 WLR 210. Thus if A entrusts B inconfidence with secret proprietary information not publicly available, and Bis precluded by contract from using that information for its own purposes, andthe relationship between them ends, and B puts on the market a product whichcould not ordinarily be made without using A's secret information, a claim byA for breach of contract is likely to succeed unless B shows that it obtainedthe information from another legitimate source, or as a result of independentresearch, or in some other manner not involving misuse of A's information.53 Citing Aquaculture Corp v New Zealand Green Mussel Co Ltd (1985) 5 IPR 353 (HC) at 384.54 Norbrook Laboratories Ltd v Bomac Laboratories Ltd [2006] UKPC 25 at [31].This is an approach to decision-making which depends not on abstruse legaldoctrine but on the application of common sense.[69] In response Mr Smith QC for Chorus emphasised that the prerequisite fora transfer of the provisional burden is the existence of evidence creating an inferenceof breach and the absence of any adequate explanation. Observing that had notoccurred here, he submitted that through discovery Creative was presented with a fulldescription of what Chorus did which precluded any assertion that the Chorus networkdesign was derived from Creative. That response derived support fromLord Bingham's further observation:55It is, however, an approach which has little bearing on a case such as thepresent in which discovery has been given and evidence heard at length onboth sides. The question then is whether, in the light of all that evidence, theplaintiff has proved its case on the balance of probabilities [70] Mr Smith drew attention to the evidence of Mr Murch, a veterantelecommunications engineer with many years of experience with Chorus and itspredecessors including the New Zealand Post Office, to the effect that he and his teamhad produced Chorus's network plan for the Marlborough Sounds prior to seeing mostof the information which Creative supplied. His evidence was accepted by theJudge:56[181] Mr Murch was in charge of the production of the Chorus plan.His evidence was that his plan, completed by 6 March 2018, did not dependon information conveyed to Chorus by Creative. The core of the work hadbeen done in preparing Chorus's bid for RBI2 in 2017. I found Mr Murch astraightforward and honest witness, and accept his unequivocal evidence thatChorus's work in producing its own plan for the Marlborough Sounds did notrely on any confidential information provided to Chorus by Creative.[182] I accept Messrs Murch and Emanuel's evidence that the detail in thedisclosures up to 12 March 2018 would have been of little utility for Chorusin designing a network any differently than it would have done from its ownaccumulated knowledge and experience.[71] Recognising the difficulty he faced in challenging that finding, Mr Wigleyplaced emphasis on the parties' different foci, submitting:4.2 Chorus and Creative had different cases on confidential information.Chorus focussed on network design and Creative on the overall55 At [31].56 High Court judgment, above n 3.information particularly the information underlying the design outputssuch as the commercial, financial, opportunity and strategic aspects.It is submitted the judgment erred in focussing on the Chorus casearound network design.4.3 Chorus are the experts on network design and implementation; that iswhy they were brought in by Creative/MDC. Their designs can beexpected to have substantial and dominant components developed bythem and to be better developed and more suited than the initialdesigns by Creative, including remedying any errors. Chorus'scriticisms need to be seen in this context, as they focus on theirexpertise, without regard in this context to the underlying commercial,financial and strategic work underpinning what led to the design. AsChorus admitted, this type of initiative is new to them.[72] Mr Wigley criticised Mr Emanuel for picking apart the work of Creative ona component by component basis, which he said tended not to address the combinationof components representing the relevant confidential information. He submitted thatthere had been use of the underlying information provided by Creative. He took as anexample the analysis of the numbers of EEUs. EEU is an acronym for EligibleEnd-User which means premises identified by CIP as eligible for funding.[73] The Judge had accepted Chorus's argument that the detail supportingCreative's view of much larger numbers of EEUs was not information used by Chorusbecause its subsequent dealings with CIP still required 100 per cent funding.57However Mr Wigley submitted that the judgment addressed only one of two uses ofincreased EEU numbers which would be of benefit to Chorus. He identified a secondpurpose in the form of the provision of a justification for revenue and profit in rollingout services into otherwise marginal and unprofitable areas. While it is not apparenthow this proposition avoids the fact that Chorus drew on its own knowledge ofaddresses from public data, we consider that Mr Wigley's submission is answered byChorus's submission that extending a network to a more widespread and sparsenumber of addresses results in diminishing returns and that, even with the additionaladdresses, the market in the Marlborough Sounds is not commercially viable to serve.[74] We also do not consider that there is substance in two further matters advancedfor Creative as affording evidence sufficient to infer misuse of confidentialinformation. The first concerns three additional upgraded sites, said by Creative on57 At [187].the face of it not to be viable, which were added to Mr Murch's plan for the purposeof the third meeting on 19 March 2018. Mr Wigley says these were likely added dueto information shared by Creative, including about adjacent marine farms. Chorusresponds that those sites were existing Chorus sites which could be upgradeddepending on funding, and regardless marine farms would not justify any upgrades asthey would not be customers of Chorus. We accept this submission.[75] Finally Mr Wigley referred to the evolving interest of Chorus in what wasdescribed as "the last 1%", suggesting a change in Chorus's approach to the mostremote areas through a greater willingness to co-ordinate extensions to itsinfrastructure with WISPs. Chorus's rejoinder was that such a proposition was notonly factually incorrect but was also addressed in the judgment.58[76] As noted above, the onus was on Creative to prove on the balance ofprobabilities that there was a breach of the Agreement by Chorus with reference to thelimited subject matter which was held to be governed by the Agreement, namely thecollocation of information discussed in the judgment at [168].59 The Judge recognisedthe prospect that, to the extent that the collocation of information facilitated Chorus inrevisiting its previous work on design infrastructure for broadband in the MarlboroughSounds, it was capable of providing a springboard for Chorus's next round of thatwork.60 However for the reasons discussed the Judge concluded that, while in a minorincremental way that information may have had an influence on the evolution ofChorus's thinking, it was not sufficient to characterise any use of it as a springboard.[77] Creative did not persuade us to a contrary view or cause us to consider that theJudge's conclusion on the use of confidential information was in error. Consequentlythe appeal against the finding on the second cause of action must fail.[78] In these circumstances it is unnecessary for us to consider the further points insupport of the judgment on this issue contained in Chorus's notice of support.58 At [188]–[190].59 At [38] above.60 At [170].Did Chorus make a sufficiently clear and unequivocal representation to Creativethat Chorus would not be submitting its own bid for RBI2+ funding?[79] It will be recalled that the statements which Creative attributed to Chorus wereto the effect that it had "withdrawn from bidding for RBI2 funding".61 Chorusadmitted that it had made the factual statement that it was not participating in RBI2,emphasising that the statement was correct. The relevant part of its statement ofdefence stated:89.1 in August 2017 Chorus had advised CIP that it did not wish to pursuenegotiations in relation to RBI2 funding;89.2 in March 2018 Chorus advised CDS that it was not then pursuing anynegotiations with CIP for RBI2 funding and says further that Chorusdid not make any representation that it would not seek funding fromor otherwise engage with CIP at some point in the future;[80] Creative filed a reply asserting in response to para 89.2 (as well as to otherparagraphs) that:(a) Chorus made two representations that it was not pursuing negotiationswith CIP for RBI2+ funding; and(b) Chorus did thereby represent that it would not seek funding from orengage with CIP at some point in the future (or alternatively it wouldinform MDC and CDS before seeking to do so).[81] The Judge accepted the first of Creative's propositions, namely that Chorushad made a representation but only to the extent of the RBI2+ tender round.62[82] In its notice of support Chorus contended that the Judge was in error inconcluding that it was reasonable for Creative to treat the statements and conductattributed to Chorus as a representation that Chorus would not be submitting its ownbid for RBI2+. Chorus viewed the estoppel claim as an attempt by Creative toaugment its contractual arrangements with Chorus. It made the point that Creativecould have sought, but chose not to seek, an express promise from Chorus that it wouldnot compete for further Government funding, observing that such would have requiredCreative to expressly identify the scope of the non-compete obligation that it wishedto obtain.61 At [33] above.62 High Court judgment, above n 3, at [221].[83] From Chorus's perspective the pleading attempted to transform a correctexpress statement of fact, that Chorus was not participating in RBI2, into an impliedrepresentation as to future conduct. Chorus submitted that the Court should benaturally cautious in finding that such an implied representation was sufficiently clearand unequivocal to found an estoppel.[84] Chorus further submitted that if a promise is objectively capable of more thanone interpretation, or if there is uncertainty about the scope of the right or the periodto which it applies, then an estoppel ought not to arise. In its view, if a representationis not clear enough to support a contractual obligation, then it is difficult to see how itcould be clear enough to support an estoppel.63 It amplified the submission byexploring the range of potential interpretations:107 Here, while the possibility of further Government funding waswell-known, the precise vehicle and nature of that was unclear. In theabsence of any specific engagement on the scope of the restraintwhich CDS says was created, it is unclear whether it covers:(a) further RBI funding rounds, whether related to RBI2 or not; (b)the entire country or just Marlborough; (c) UFB or specific fibreinitiatives (such as fibre to Haast), whether in rural areas or not; or (d)Provincial Growth Fund funding, whether administered by CIP or not.[85] These submissions reflected the tenor of Mr Lott's response to the propositionput to him in cross-examination that it was clear from the question in Mr Phillip'semail of 12 March 2018 that he had a concern about the future and that he was notconcerned about "spilt milk". Mr Lott replied:There was, the process that was ongoing that we have withdrawn from. Itdoesn't suggest are you – will Chorus ever go If you wanting to be clearwith the meaning you're talking about he would have had to ask would Chorusever apply for any further government funding. Because that's I think whatyou're implying and that isn't what that means to me. He has asked – he isconfirming his understanding that Chorus had withdrawn from the RBI2Crown funding and RFP bid process. That's a formal process that we havegone through and negotiated potential contracts and supplies and was quitea formal involved process that ran through 2017. We had withdrawn from it.Mr Lott had earlier responded that the statement in the email was completely correctin that Chorus had withdrawn from the bid and had no plans to re-enter. However he63 See Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741(HL) at 757–758.also acknowledged that he could understand why Mr Phillips might be concernedwhether Chorus was "either with them or against them".[86] The construction of a representation, as Mance LJ said in PrimusTelecommunications Plc v MCI WorldCom International Inc:64 must be judged objectively according to the impact that whatever is saidmay be expected to have on a reasonable representee in the position and withthe known characteristics of the actual representee Where the representation is said to be implied in what is expressly stated, the Courthas to consider what a reasonable person would have inferred was being implicitlyrepresented by the representor's words and conduct in their context.65[87] In our view that context was spelled out with clarity in the Judge's conclusionthat the representation was confined to RBI2+:66[221] I accept that the representations could not reasonably be interpretedas indefinitely committing Chorus to not participating in all subsequent CIPbidding processes. However, as a matter of context, both parties were focusedduring that period in March 2018 on the prospects of obtaining funding fromCIP in its next round. I consider it was reasonable for Creative to treat thestatements from Chorus representatives, and the absence of an answer to the12 March 2018 email enquiry on the topic, as a representation that Choruswould not be submitting its own bid for RBI2+ funding. The relevant contextincluded the prospect of Chorus providing critical components of theinfrastructure that Creative/MDC were intending to bid for, to service moreremote parts of the Marlborough region. The Chorus representatives dealingwith Creative can reasonably be expected to have appreciated that as being thereason why Mr Phillips sought clarification about the point, and ought also tohave given them an appreciation of the relative importance of their answer toCreative.[88] To those matters might be added the fact that Chorus was to provide (and didon 23 March 2018 provide) a letter headed "Chorus support for MDC ConnectivityBid" which was annexed to the Council's resubmission of its April 2017 RFP pricingtogether with technology and delivery enhancements.6764 Primus Telecommunications plc v MCI WorldCom International Inc [2004] EWCA Civ 957at [30].65 Raiffeisen Zentralbank Österreich AG v Royal Bank of Scotland plc [2010] EWHC 1392 (Comm),[2011] 1 Lloyd's Rep 123 at [83], citing IFE Fund SA v Goldman Sachs International [2006]EWHC 2887 (Comm), [2007] 1 Lloyd's Rep 264 at [50].66 High Court judgment, above n 3.67 See [25] above.[89] In this situation, with the focus being on funding going forward, a reasonableperson in Creative's position would have inferred Chorus was referring to futureconduct. We therefore answer this issue in the affirmative: Chorus did makea sufficiently clear and unequivocal representation.Did Creative rely on such representation, if it was made, and was such reliancereasonable?[90] The Judge viewed the effect of Creative's pleading as being that Creativedivulged its confidential information to Chorus in reliance on two factors:68(a) Chorus's commitment to the Agreement; and(b) representations by Chorus to the effect that it would not compete withCreative/the Council by submitting its own bid to CIP.[91] The actual finding of reliance is embedded in the Judge's rejection of Chorus'scontention that recognition of an estoppel would distort a commercial relationship:69[223] The response to this is that reliance on the representation founding anestoppel is an alternative basis for Creative to seek relief for the harm it allegeswas caused by Chorus, irrespective of whether Creative can make out misuseof confidential information. Creative embarked on the relationship to theextent it did, and exposed itself to the risk of misuse of its confidentialinformation about the design of UFB services for Marlborough, believing thatChorus would not compete with it. The reality is it subsequently found thatChorus has done so. [92] Notwithstanding the formulation of the fourth issue as one addressing both thefact of reliance and whether reliance was reasonable, it was apparent that only thelatter point was in issue. The relevant part of Chorus's notice of support criticised thefinding in the judgment that "[Creative's] reliance on that representation wasreasonable". Chorus's written submissions were similarly focussed. The absence ofchallenge to the fact of reliance was unsurprising given the acknowledgement byMr Lott in cross-examination that it was clear to him that, if Mr Lott did not advise68 High Court judgment, above n 3, at [211].69 We construe the statement at [216] noted by Chorus to be merely a record of Creative's argument.Mr Phillips immediately in relation to the statement in the 12 March 2018 email,Mr Phillips would rely on that assurance.[93] As to whether such reliance was reasonable, Chorus emphasised that at thetime the representations were made the parties were merely in the early arm's lengthstages of a possible commercial relationship. Chorus was only a potential supplierand had been given only high level information. Both Creative and the Council knewthat the engagement was non-exclusive and that Chorus had invariably soughtGovernment funding for broadband investment as new funding became available.Chorus's submission asked rhetorically:In those circumstances, how could [Creative] reasonably believe that Chorushas bound itself in [the] future in such a fundamental way?[94] Creative's submissions acknowledged that the relationship between the partieswas at its early stages and, although evolving, fell short of a full relationship such asa joint venture. However it maintained that the context was at least a potentialcollaborative partnership with fiduciary duties applying even if a collaborativepartnership was yet to be concluded. Of course that submission necessarily requiresreassessment in light of the abandonment of the fiduciary duty cause of action.[95] The basis for the Judge's conclusion that Creative's reliance was reasonable isalso to be found in [221].70 We agree with that analysis. Neither the fact that theengagement was non-exclusive nor Chorus's previous track record of seeking toparticipate in new Government funding serve to dilute the reasonableness of Creative'sreliance on the specifically confined representation. As the Singapore Court of Appealobserved in Wee Chiaw Sek Anna v Ng Li-Ann Genevieve the question of reliance isapproached from the perspective of the representee.7170 At [87] above.71 Wee Chiaw Sek Anna v Ng Li-Ann Genevieve [2013] SGCA 36 at [43].To what extent is Creative required to prove detriment in order to establish anestoppel at a liability trial?[96] The focus of this issue is the Judge's concluding observation in the discussionof detriment:72[235] Creative did not present any evidence as to how a notional negotiationof the value of relaxing the constraint would occur. The hearing was limitedto liability issues, but making out detriment was a contested element of thiscause of action. In the end, I am persuaded that relaxation of the constraintwould not attract any more than a nominal value. The consequence is thatCreative is unable to make out any material detriment from reliance on therepresentation as a necessary element in making out its cause of action inestoppel.[97] Mr Wigley submitted that this case highlighted challenges for split trials,including where liability and quantum start and stop. The essence of his submissionwas that all causes of action include components of causation and damages which, ina split trial scenario, are addressed at the quantum hearing. In the context of estoppelit was said that the equivalent of such components is the element of detriment. Hencedetriment should be addressed as part of the causation and damages issue at the"follow-on trial". Consequently proof of detriment is not required at the liability trial.[98] We agree with Chorus's response that, as is apparent from Wilson Parking, theexistence of detrimental reliance — a change of position to the representee's detriment,in reliance on the assurance given — is an essential component of the cause of action.73The role of detriment is not confined to an inquiry as to equitable compensation but isa prerequisite to a determination of liability. Consequently the late decision to holdseparate hearings on liability and quantum did not relieve Creative of the obligationto establish detrimental reliance at the liability hearing.Did Creative rely on the representation to its detriment?[99] The reason why Creative sought to have the issue of detriment deferred toa relief hearing became apparent when the focus moved to the identification ofdetriment. In short, the relief which Creative contemplated was a hypotheticalpayment by Chorus in order to be released from obligations assumed to Creative.72 High Court judgment, above n 3.73 At [41] above.The claimed detriment was in effect the reverse side of the coin, namely Creativehaving been deprived of the opportunity to request such a release fee from Chorus.[100] Relief of that nature was envisaged in respect of all three causes of action but,as Mr Wigley's overview explained, it was particularly addressed in the context of theestoppel claim:In terms of remedies, the primary relief sought is payment of what Choruswould hypothetically pay to be released from its obligations as fiduciary, asconfidee and/or as the representor under the estoppel cause of action. Thereare some nomenclature issues in this evolving area around what are variouslycalled Wrotham Park damages, user damages, licence fees, negotiatingdamages etc. We address this in most detail when dealing with estoppel, usingthe general descriptor, "release fee" to capture the options [101] In Creative's submissions on estoppel the interconnection between the releasefee based relief and the asserted detriment clearly emerged:(b) The damages question is as to what Chorus would hypothetically payas a "release fee" to remove the constraint, so that it could bid inRBI2+ (when otherwise it could not bid). Although not necessarilythe identical question, that also reflects the detriment component inthe estoppel cause of action.(c) It is self-evident, and as night follows day and similar to res ipsaloquitur, that there is real value to Chorus in being released to be ableto bid as it did, by paying something material by way of release fee.Hypothetically it would be prepared to pay a material sum to bereleased from the constraint. That is so clear as to be in the nature ofres ipsa loquitur.[102] The proposition was summarised by the Judge in this way:74[230] Creative has pleaded detriment by way of "loss of the economic valueof relaxation of the estoppel". Its proposition invites analogy with what aregenerally referred to as Wrotham Park damages. That is, had Chorus soughtrelease from the constraint it had acknowledged in favour of Creative asrepresentee, then an objective assessment assuming reasonable approaches tovaluation of the constraint would lead to a quantification that wouldcompensate Creative for releasing Chorus from the constraint created by theestoppel.(Footnote omitted.)74 High Court judgment, above n 3.[103] From the subsequent discussion in the judgment, it is apparent that at trialChorus engaged with Creative's proposition, contending that a notional negotiationwould not attribute anything more than a nominal value to the release from theconstraint.75 The Judge also engaged with the point, concluding that, Creative nothaving presented any evidence as to how a notional negotiation for relaxation of theconstraint would occur, Creative was unable to establish any material detriment.76[104] In our view there is a more straightforward answer to this issue, which wasreflected in Chorus's submissions on the appeal. First, the argument that Creativesuffered detriment because it was deprived of the opportunity to ask Chorus fora release fee is circular. As we have ruled, detrimental reliance is a component of theequitable estoppel cause of action. Creative needs to establish that as a result ofrelying on the representation by Chorus it changed its position in a manner that wouldleave it worse off than it otherwise would have been absent such reliance, in order tojustify the intervention of equity.[105] If the cause of action is established, then equitable compensation in the natureof expectation damages might be available. But the prospect of such relief cannotprovide the basis for establishing the detriment element of the cause of action in thefirst place. Put another way, equitable relief in this context is designed to respond toa detriment resulting from reliance on the relevant representation: failure to obtainequitable relief cannot itself be the relevant detriment.[106] Secondly, as Chorus submitted, Creative's proposition is inconsistent with thisCourt's judgment in Doig v Tower Insurance Ltd.77 The prejudice justifying equitableintervention is not merely the denial of the representation itself but relates instead tosomething done by the plaintiff in reliance on the representation. It is not the fact ofthe unmet expectation that creates unconscionability and provokes the intervention ofequity, but rather the conduct of the plaintiff in acting upon the representation.7875 At [232].76 At [235]. See [96] above.77 Doig v Tower Insurance Ltd [2019] NZCA 107, (2019) 20 ANZ Ins Cas 62-222.78 At [46].[107] In our view it cannot be said that Creative suffered any material detriment bysupplying confidential information to Chorus given the fact that any confidentialitywas protected by the terms of the Agreement. Under the Agreement any confidentialinformation provided to Chorus could not be used by Chorus in a manner that wouldprejudice Creative. So there could be no prejudice to Creative provided that Choruscomplied with the Agreement, as we have held it did. Nor, on the facts, could Creativeclaim that its lack of success in RBI2+ was caused by the unsuccessful participationof Chorus in that extended tender round.[108] Creative argued that the practical risk of misuse of information it provided toChorus was sufficient detriment for this purpose, despite the legal protection providedby the Agreement. However it seems to us that in circumstances where the Agreementprotected Creative's interests provided that Chorus complied with it, and Chorus didin fact comply with the Agreement, there was no detrimental reliance by Creative ofa kind that could justify some further intervention by equity.[109] For these reasons Creative failed to demonstrate that it suffered any materialdetriment as a result of its reliance on Chorus's representation. Consequently theequitable estoppel cause of action was not established. In those circumstances, thefinal issue, which would more appropriately be considered in the context of theseparate relief hearing in any case, does not fall to be addressed.Result[110] The appeal is dismissed.[111] Creative must pay Chorus costs for a standard appeal on a band A basis andusual disbursements. We certify for second counsel.Solicitors:Wigley and Company, Wellington for AppellantChapman Tripp, Wellington for Respondent