ANZ NATIONAL BANK LTD AND ANOR V TOWER INSURANCE LTD AND ANOR CA CA194/2009

ANZ NATIONAL BANK LTD AND ANOR V TOWER INSURANCE LTD AND ANOR CA CA194/2009 25 June 2010IN THE COURT OF APPEAL OF NEW ZEALAND CA194/2009 [2010] NZCA 267BETWEEN ANZ NATIONAL BANK LIMITED First Appellant AND ING (NZ) LIMITED Second Appellant AND TOWER INSURANCE LIMITED First Respondent AND VERO INSURANCE NEW ZEALAND LIMITED Second Respondent Hearing: 30-31 March 2010 Court: William Young P, Glazebrook and Hammond JJ Counsel: J E Hodder SC and B A Davies for Appellants C T Walker and M C Smith for First Respondent S A Armstrong for Second Respondent Judgment: 25 June 2010 at 10 amJUDGMENT OF THE COURT A The cross-appeal is dismissed. B The appeal is allowed, in part. C We make a declaration: (i) that the Bank is entitled to delivery up (by Tower) of the information set out in [132] of this judgment, in the manner contemplated by [137] of this judgment; and(ii) the Bank may pass that information to Vero. D We remit the proceeding to the High Court, for such further hearings and orders as may be required to give effect to C(i), above. E Both in the High Court, and in this Court, each party has enjoyed a real measure of success. There will be no order for costs in either court.REASONS OF THE COURT(Given by Hammond J)Table of ContentsPara NoIntroductionThe end of a lucrative commercial relationship [1]Characterising the former relationship [7]The outcome in the High Court [9]The issues on the appeal [12]Issue 1: was the Bank's letter to the first respondent of 7 August 2008 a valid notice of termination under the ANZ agreement?Chronology and further background [14]The arguments [22]Discussion [33]A postscript: estoppel [37]Issue 2: is Tower entitled to renew bank-branded policies?Introduction [40]The relevant contractual provisions: the National Bank agreement [45]The relevant contractual provisions: the ANZ agreement [56]The novations [71]The High Court judgment [73]Discussion1. Introduction [76]2. The textual arguments [81]3. The scheme of the agreements [85]4. The arguments from commercial context [87]5. Conclusion [106]Issue 3: the extent of the Bank's entitlement to information held by Tower about bank-branded policies and policy holdersIntroduction [108]The agreements [109]The orders sought [111]The High Court judgment [112]The broad arguments for the parties [114]The agreements in more detail [117]Discussion [140]The effect of the Privacy Act 1993 on ANZ's entitlement to and use of information1. Introduction [141]2. Purpose for which the information was collected [145]3. No 'Disclosure' [152]4. Authorisation [156]5. Breach of confidence [161]6. A fall-back argument [162]7. Conclusion [163]Issue 4: Disclosure to, and use by, Vero of the information yielded up [168]Conclusion [173]IntroductionThe end of a lucrative commercial relationship[1] A feature of modern banking practice is that of "cross selling". In addition to the traditional practices of taking deposits and making loans, a bank will sell to its customers financial "products" such as insurance, credit cards, KiwiSaver accounts, travel products and the like. The aim is to offer customers a single point of service that can meet all their financial needs. [2] From 1993 ANZ National Bank Ltd (the Bank), through its now constituent banks, ANZ Banking Group (New Zealand) Ltd (ANZ) and National Bank of New Zealand Ltd (National Bank), sold to its customers Bank-branded insurance policies written by Tower Ltd (Tower). These were insurance products for largely domestic purposes, for example: motor vehicles, homes, contents and travel. These kinds of offerings by banks are known in the industry as "bankassurance". [3] The commercial relationship between the Bank and Tower was governed by two master agreements, one between ANZ and Tower (the ANZ agreement), and one between National and Tower (the National Bank agreement). There were also twoDeeds of Novation, again between each of ANZ and National Bank, and Tower. These deeds were entered into in 2005 and 2006 after the merger of the two banks into the appellant Bank. [4] On 7 August 2008, the Bank purported to terminate the agreements. It entered into a new relationship with Vero Insurance New Zealand Ltd (Vero), as the underlying insurer. We say "purported" because, although the High Court held there was a valid termination, Tower, as the first respondent, cross-appeals on the point. [5] These proceedings concern who gets what out of the profitable joint enterprise, now that the former business partners are no longer commercially aligned. At stake are some 196,000 policies held by some 110,000 customers. Revenue from the premiums has been in the region of $70 million per annum. [6] In practical terms, the Bank wants a "clean break" on the divorce. It says it is entitled to the Tower insurance "book" of Bank customers and to eventually transfer the book to its new preferred insurer, Vero. Tower on the other hand wishes to continue its insurer-insured relationship with customers signed up to Bank-branded insurance policies under the former joint enterprise by retaining the right to renew annually each extant policy, if the policy holder so chooses.Characterising the former relationship[7] Under the arrangements that it had entered into, the Bank sold to its customers Bank-branded insurance policies with Tower. The commercial advantage to the Bank was revenue from commission on insurance premium receipts and a profit share. It thereby leveraged its relationship with existing customers to add value to its business with them. The advantage to Tower was access to a new customer base and the profit of the underwriting business less administration costs, commissions and profit share. [8] Given that the now estranged businesses are fighting to retain the value gained by them in their former relationship, it comes as no surprise that each seeks to establish that it was the senior partner in the enterprise. For its part, the Bankemphasises that "it is the bank's customer relationship, good will and brands which are the prominent features of this business". Tower, on the other hand, says it is clear from the agreements "that Tower is the principal and the Bank is the agent, and that the book of insurance belongs to Tower, not the Bank." The Bank was simply a sales agent for Tower products. These divergent characterisations very much colour the respective interpretations each party seeks to advance in respect of the contractual arrangements.The outcome in the High Court[9] The High Court judgment is ANZ National Bank Ltd v Tower Insurance Ltd.1[10] For introductory purposes it is sufficient to note that the Judge held that valid notice of termination of the agreements had been given and that, with effect from 1 March 2009, those agreements had come to an end. But the Bank was refused certain declarations, which would effectively have declared what the Bank sees to be its rights. [11] This appeal and a cross-appeal then followed. The point about the invalidity of notice on the cross-appeal is, with respect, a very long bow. The appeal is really about what rights each party has under these agreements, in a post-termination context.The issues on the appeal[12] The parties helpfully submitted a joint list of issues to be determined on the appeal. We simplify them as follows: (a) Issue 1: Whether the Bank's letter to Tower of 7 August 2008 was a valid notice of termination under the ANZ agreement. (That valid notice of termination of the National Bank agreement was given is not challenged on the cross-appeal.)1 ANZ National Bank Ltd v Tower Insurance Ltd HC Auckland CIV-2005-404-7271, 11 March 2009.(b) Issue 2: If so, whether Tower is entitled to renew existing Bank- branded insurance policies written by it, prior to termination of the agreements. (c) Issue 3: The extent of the Bank's entitlement to information held by Tower about Bank-branded policies and policy holders, post- termination. (d) Issue 4: Whether the Bank is entitled to disclose such information to its new underwriter, Vero. [13] It will be convenient to deal with the High Court findings, and the submissions of counsel on each of these issues, under the above heads.Issue 1: was the Bank's letter to the first respondent of 7 August 2008 a valid notice of termination under the ANZ agreement?Chronology and further background[14] It is necessary to add some further facts for this issue. Tower's relationship with the National Bank began in 1993. A series of "Master Agency Agreements" governed that relationship. The current Master Agency Agreement, already referred to as the National Bank agreement, is dated 1 October 1999. [15] Tower's relationship with ANZ began in 1994, and was similarly governed by a series of "Master Agency Agreements". The current Master Agency Agreement, already referred to as the ANZ agreement, is dated 1 October 2000. [16] In 2004 these two banks merged to form the appellant Bank. The Bank became the counterparty to the respective agreements just described. In December 2005 and May 2006 the Bank transferred via two Deeds of Novation (the deeds) its obligations and liabilities under the agreements to ING (NZ) Ltd (ING), the secondappellant. 2 ING and the Bank are engaged in an incorporated joint venture. The National Bank and ANZ agreements were varied in some respects by these deeds, but the deeds primarily served to affirm the continuation of the joint enterprise between Tower and the Bank. [17] On 1 February 2008, the Bank, seeking to grow and expand the insurance side of its business, made a request to underwriters for proposals to partner it in that business. Although Tower submitted a proposal, Vero was appointed the new insurer. The Bank was not satisfied Tower was a partner capable of facilitating that growth. [18] On 7 August 2008 ING wrote to Tower giving notice of termination with effect from 28 February 2009. For present purposes, nothing turns on the fact that it was ING that sent the letter. The notice was hand-delivered to Tower's head office at Fanshawe Street, Auckland. Tower disputes the validity of the notice given. [19] Nevertheless, on the day notice was given, in an announcement to the New Zealand Stock Exchange, Tower said:... revenue sharing arrangements have resulted in Tower incurring an ongoing underwriting loss from the venture. The decision has now been made to discontinue this relationship between Tower and ANZ/National which will therefore cease with effect from 1 March 2009.[20] Tower wrote to the Bank that same day disputing the validity of the notice. Tower continued to dispute the validity of the notice and the Bank and ING commenced proceedings. On 26 February 2009, the Bank issued a second "without prejudice" notice of termination to take effect from 26 August 2009.The arguments[21] The issue here is a narrow, and technical one. Although it is a cross-appeal point it is sensible to deal with it first.2 For the sake of simplicity, where the agreements and deeds refer to ING, we instead refer to the Bank.[22] Tower disputes that the notice was a valid notice of termination of the ANZ agreement, on the basis that it was not delivered or sent to the address stipulated in the ANZ agreement for hand-delivery. Tower has not disputed the validity of the second notice issued in March 2009, without prejudice to the validity of its earlier notice, pending the High Court judgment. As noted, the second notice was expressed to take effect – contingently – in relation to the ANZ agreement from 26 August 2009. [23] In the High Court Wylie J rejected Tower's argument that the termination of the ANZ agreements was invalid. The Bank both supports the High Court judgment in this regard and advances further submissions in support of it. [24] The ANZ agreement provided that notices "may" be delivered by hand, pre- paid post or by facsimile, to the addresses specified in the agreement. By cl 29.1(a) notice was, when hand-delivered, deemed given upon delivery. The address given was to a post office box number in Takapuna. At the time the agreement was executed Tower's physical location was also in Takapuna. [25] Wylie J considered that the language describing how notice was to be given was directory rather than mandatory. 3 He held further that Tower had, by failing to specify a physical address for service, acknowledged that notice could be given by hand-delivery to any one of Tower's offices. 4 ING had done so and it had therefore given valid notice. [26] Tower's cross-appeal relates both to the delivery address used by the Bank (Tower's registered office), and the mode of delivery chosen (hand-delivery). The argument for Tower appears to be that the failure of the parties to state their addresses for hand-delivery means that the parties must be taken to have excluded hand-delivery as a mechanism for serving notice. The Bank on the other hand argues that both on the plain wording of the ANZ agreement and given the purpose of the notice deeming provision this cannot be the case.3 At [40].4 At [40].[27] In support of its position Tower appealed to a number of factors. First, the ANZ agreement by cl 20.1(a) gave each party a unilateral right to terminate without cause but on notice. Tower maintains that such a power is to be construed strictly: the "drastic and far-reaching consequences" of termination rights requires that this be so. [28] Mr Walker cited Weight Watchers International Inc v Hansells (NZ) Ltd5 andBrown & Doherty Ltd v Whangarei County Council6 in support of this proposition. He also referred to Lord Hoffman's dictum in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd that: 7If the clause had said that the notice had to be on blue paper, it would have been no good serving a notice on pink paper, however clear it might have been that the tenant wanted to terminate the lease. But the condition in clause 7(13) related solely to the meaning which the notice had to communicate to the landlord.[29] With respect, his Lordship's speech does not stand for the principle seemingly endorsed in this passage, cited out of context. Much of his Lordship's speech is devoted to criticising the strict construction of notice clauses. Indeed, in that case, a notice not strictly complying with the literal words of the contract was held valid because it clearly and unambiguously communicated the required message. 8[30] Mr Walker also referred to Harrison J's interpretation of a notice provision inProgrammed Maintenance Services (NZ) Ltd v Witters. 9 There the word "may" merely indicated the ability to choose between two available means of giving notice. [31] Mr Hodder maintained that as a matter of "modern contract interpretation" there has been a shift in relation to termination notice disputes from a strict interpretation of matters concerning when termination can occur and the format of5 Weight Watchers International Inc v Hansells (NZ) Ltd HC Auckland CP 60/93, 22 November 1993.6 Brown & Doherty Ltd v Whangarei County Council [1988] 1 NZLR 33 (HC).7 Mannai Investment Co Ltd v Eagle Star Life Assurance Co. Ltd [1977] AC 749 HL at 776B.8 See also per Lord Steyn at 932 and 964.9 Programmed Maintenance Services (NZ) Ltd v Witters HC Auckland CIV 2006-416-193, 29 March 2007.notices of termination to a more common-sense interpretation, guided by commercial reality, of the content and mode of service of such notices. [32] Mr Hodder referred to Mannai per Lord Steyn 10 and Lord Clyde, 11 and he also referred to Lord Hoffman's speech. The approach in Mannai has been applied by this Court in Bryers v Harts Contributory Mortgages Nominee Co Ltd12 andShanks v Media 1 Ltd.13 In Bryers, this Court endorsed a common-sense approach, asking whether, on an objective reading in the context in which the notice was given, the notice complied with the requirements by conveying the required message. In that case the requirements were statutory, under s 92 of the Property Law Act 1952. Mr Hodder also submitted that academic writing supports the approach he contends for. 14Discussion[33] We consider that it is an available reading of the relevant terms of the contract that hand delivery to the head office of the intended recipient is sufficient, notwithstanding the specified Post Office box number. [34] Further, in our view the notice provisions (as distinct from the substantive termination provision) as set out in the ANZ agreement were there for the purpose of convenience. They were to prevent either party from evading service. The Judge was right to regard the machinery provisions as "directory". [35] Then too, the modern appellate authorities are clear that where actual notice has been received, notice deeming provisions in contracts are not intended to displace proof of the actual receipt of written notice at a Head Office. Tower does not dispute that it received actual notice of termination in that manner.10 At 767.11 At 782.12 Bryers v Harts Contributory Mortgages Nominee Co Ltd [2002] 3 NZLR 343.13 Shanks v Media 1 Ltd [2008] NZCA 77.14 Hugh Beale (ed) Chitty on Contracts (30th ed, Sweet & Maxwell, London, 2008) at [22-049] and [22-051]; K Lewison The Interpretation of Contracts (4th ed, Sweet & Maxwell, London, 2007) at [16.13] distinguishes between substantive conditions and conditions relating to communication in termination options. Substantive conditions (those giving rise to a power to terminate) are to be considered strictly, but the ordinary principles of construction apply to whether conditions of communication have been complied with. These principles must include contextual considerations.[36] The cross-appeal on this point is therefore dismissed.A postscript: estoppel[37] Before we leave this issue, it is necessary to say something, shortly, about an estoppel argument which was run at some length. We record that Tower has abandoned its cross-appeal against the finding in the High Court that Tower is, by its post-notice conduct, estopped from claiming that the Bank notice is invalid in relation to the National agreement. 15 The estoppel finding in the High Court was based on Tower's notice to the Stock Exchange that the relationship between Tower and the Bank was to be discontinued and would cease with effect from 1 March 2009. Wylie J considered it would be unconscionable for Tower to now be allowed to resile from the representation it made by its statement to the New Zealand Stock Exchange. The Judge said Tower could not both approbate and reprobate. [38] There was something of a skirmish before us over estoppel, in that Mr Hodder sought to take advantage of this finding as being equally applicable to the Bank notice under both the National and ANZ agreements. Mr Walker complained that the Bank had not pleaded estoppel in the first place and did not even argue for an estoppel in the High Court, in opening or closing. He said the High Court did not find an estoppel in respect of the ANZ agreement (even if logically it should have). He suggested the Bank should have given notice of intention to support this part of the judgment on other grounds. [39] In the end, given the views we have expressed, the estoppel arguments do not now matter. The notice was in our view valid, and that is the end of this point.Issue 2: is Tower entitled to renew bank-branded policies?Introduction[40] The Judge held that Tower is entitled to renew the existing Bank-branded policies under which it is the insurer.15 ANZ National Bank Ltd v Tower Insurance Ltd HC Auckland CIV-2005-404-7271, 11 March 2009 at [39] and [42].[41] Mr Hodder argued that:given the fundamental fact of ownership of the goodwill and branding of the business, it follows that, on termination of the agreements, it is the Bank that is entitled to offer renewals [through its new insurer, Vero].[42] If Tower is entitled to renew the extant policies, the Bank says the effect is that Tower gains unregulated use of the Bank-branded policies, possibly in perpetuity. It says that Bank customers taking up bank-branded insurance policies become Tower customers "only in a limited legal sense. From the customer point of view it is the trusted Bank branding relationship that is important." [43] The Bank's characterisation of the nature of the commercial relationship between the Bank and Tower strongly informs its preferred interpretation of the various contractual provisions. It says that overall, viewed with the understanding that the underlying value of the "bankassurance" business is driven by the Bank's branding, it is "commercially unreasonable" for Tower to retain the right to renew Bank-branded policies, post-termination. The Bank says it loses control over "policy premiums, terms and conditions, or communications with policy holders and it loses rights to information from Tower", yet it remains associated through its brand with those policies. [44] Tower on the other hand, characterises the relationship between it and the Bank as that of principal and agent. It says this makes "perfect commercial sense". The Bank introduces its customers to Tower, and the Bank receives a commission on each successful sale and renewal. Tower gets the profit as underwriter, and keeps the book post-termination, in "run-off" (as Tower puts it). Tower says the Bank's denial of Tower's right to renew amounts to unilateral termination of individual policies. Further, Tower points to the potential hiatus that many policy-holders would face if Tower were unable to renew individual policies post-termination. It says that policies would begin expiring before the Bank and Vero could begin offering alternative policies, meaning policy holders would be uninsured in the meantime.The relevant contractual provisions: the National Bank agreement[45] Clause 10 of the National Bank agreement provides for termination of the agreement. Clauses 10.1-10.5 set out cause for termination by either party. [46] Clause 10.6 sets out what is to happen post-termination. Under clause 10.6.1 profit-sharing arrangements cease. Clause 10.6.2 then states:[Tower] shall pay the Bank the Commission at the rates set out in the Schedule only for so long as the Bank continues to service the relevant National Bank Insurances as required under Clause 4.3 except sub-clauses 4.3.1, 4.3.2, and 4.3.3 which shall continue in effect notwithstanding the termination of this Agreement PROVIDED ALWAYS THAT the National Bank Insurances introduced by the Bank to [Tower] (including any renewals, variations or replacement policies in respect of them) remain current in the books of [Tower] and PROVIDED FURTHER that all premium amounts are paid up to date at all relevant times...[47] Clause 4.3 imposes duties on the Bank under the agreement. Sub-clauses 4.3.1, 4.3.2 and 4.3.3 relate to the promotion of the insurances subject to the National Bank agreement. The Bank claims this clause does not substantively address the renewal issue. Tower says the significance of this clause is that the Bank continues to receive commission after termination. In other words, the Bank retains the benefit of the joint enterprise even after the relationship is over. [48] The Judge determined that under cl 10.6.2 Tower was required to pay commission on renewed policies post-termination.16 This finding relied on the reference to "renewals" in the clause itself. The Judge rejected the argument that "renewals" referred only to those policies on foot at the time of termination as a result of renewals prior to termination. In short, the Judge considered that cl 10.6.2 contemplated perpetual renewals. The Bank however still maintains the clause refers only to renewed policies current at the time of termination, that is, policies which will expire during the year following termination.16 At [83]-[84].[49] Clause 10.7 is an "anti-churn" provision, preventing Tower from switching customers from Bank-branded insurance policies to its own products within two years of the date of termination. [50] Clause 10.8 prevents Tower from making:... any direct or indirect marketing approaches to customers already holding National Bank Insurances ... for the purpose of representing or promoting similar products offered by another underwriter.The Bank cites this clause as contemplating a change in insurer post-termination. [51] Clause 11 concerns the effect of termination. Under cl 11.1 if the Bank "defaults" in the manner contemplated by cl 10.3 (which includes the Bank's insolvency, liquidation, or unauthorised use of Tower's brands), it must on Tower's request deliver to Tower "all documents, records and other information" and facilitate the transfer of the obligations under the agreement to another person. [52] Clause 11.2 provides that the Bank acquires the same right in the event of Tower's default, but the Bank's right also applies if the agreement is terminated by mutual agreement, or by unremedied breach by Tower. In those cases, the Bank says, this amounts to the Bank getting the insurance book. In the Bank's submission, this is consistent with the "commercial context of the Bank's ongoing and express brand ownership". [53] Clause 5.6 of the National Bank agreement is also relevant here. It required Tower to provide at its own cost an 0800 number for customers. The clause went on to provide that:... in the event of termination ... [Tower] will not use the 0800 Number to promote, market, sell or support insurances other than the National Bank Insurances and its ongoing use after the termination shall be as agreed between the parties.[54] The Judge thought the clear implication was that Tower could continue to use the 0800 number to promote, market, sell or support National Bank insurances post- termination.[55] The Bank says the use of the 0800 number is limited to the point in time when all policies have expired, which would be up to one year after termination. It says such a service is common sense, and does not add weight to the perpetual renewals interpretation.The relevant contractual provisions: the ANZ agreement[56] Clause 20 of the ANZ agreement covers the means and consequences of termination. Under cl 20.1(a) either party may terminate without cause on giving six months' notice. [57] Clause 20.2 provides:Notwithstanding that ANZ is an agent of TOWER, TOWER acknowledges that ANZ has provided access to its customer base17 to TOWER for the purposes of conducting the business contemplated by this Agreement and accordingly TOWER further acknowledges that the primary goodwill of the business remains with ANZ.[58] The Bank submits the reference to and meaning of goodwill "strongly suggests that the Bank, not Tower, is entitled to renew the Bank-branded insurance policies post-termination". [59] The Judge found that this clause was concerned only to protect the value in the Bank's brands, which value was recovered by the Bank through commission post-termination, not to imply that the insurance book belongs to the Bank. 18[60] Clause 20.3 provides:Tower undertakes not to solicit or attempt to deal directly with ANZ's customer base following termination or expiry of this Agreement without the prior written approval of ANZ other than to fulfil legal requirements or at the specific request of clients or where such solicitation occurs incidentally as part of a general canvassing for business without the use of Client information with the exception of those persons who were customers of Tower prior to the commencement of this Agreement. For the purposes of this clause, ANZ's customer base means ANZ Policy Holders.17 A line is drawn through the words "customer base" on the copy provided to the Court, although no indication was given why or what the significance of this is.18 At [93] and [95].[61] The Bank contends the plain meaning of this clause is that Tower is not entitled to renew policies post-termination without the Bank's written consent. [62] Tower emphasises the word "directly", suggesting that it implies that Tower may deal with customers indirectly, that is, through an agent or medium other than the Bank. [63] The Judge held 19 that the effect of the clause "is that Tower cannot directly seek to do new business with Bank customers". (Emphasis added) It did not prohibit any dealings with customers post-termination, and did not preclude dealings with existing customers. [64] Clause 20.4 provides that upon termination:... Tower shall immediately provide to ANZ a schedule of all policies written under this Agreement including those current at the time of termination...[65] In the Bank's submission this is again consistent with its contention that it, not Tower, is entitled to renew policies. [66] Clause 20.5 provides that Tower shall continue to "administer" the policies post-termination. The Bank argues that "administer" falls short of "renew". [67] The overall effect of cl 20, according to the Bank, is to provide a "coherent and sensible post-termination regime whereby the Bank effectively takes back over the running of its insurance business as policies come up for renewal". Tower merely administers those policies until their expiry. [68] The Judge placed considerable weight on cl 17.8 in the agreement, in holding that Tower could renew policies. Clause 17.8 provides:Following termination or expiry of this Agreement, ANZ shall continue to be entitled to receipt of all renewal Commissions for which purpose the Commission payment period or periods adopted during the final 12 months preceding termination or expiry shall be adopted.19 At [96].[69] Under schedule 1 to the agreement ANZ is "entitled to a renewal Commission Credit in respect of a Policy upon each anniversary of the Policy commencement date provided that the Policy is in force on that anniversary". The Judge said "the clause is stated and intended to survive termination". 20 The clause "compels the conclusion that Tower is entitled to renew the policies". 21[70] The Bank argued at trial, and maintains on appeal, that cl 17.8 is merely a machinery provision ensuring that ANZ continues to receive commissions on renewed policies (as opposed to fresh policies signed up in the period before termination) until their expiry post-termination. The starting point should be the termination provisions, which it says are the fundamental provisions. It says the Judge mistakenly considered cl 17.8 in isolation, and his Honour's conclusion as to its effect then coloured his interpretation of cl 20.The novations[71] The Bank does not place much weight in its appeal on the renewal point on the Deeds of Novation. The deeds are substantially identical. Broadly speaking, cl 6 provides for the effective continued operation of the joint enterprise despite the Bank retiring from the agreements. Tower points to this clause as support for its position that the enterprise may in effect run on past the point where the Bank ceases to be involved. [72] However, the Bank does point out the reference to the Bank's ownership of its brands (cl 6.1.(d)) and seeks to minimise the significance of the reference to "ongoing maintenance" in cl 6.1.(g), which provides that Tower must discontinue use of the Bank's brands in the event of termination, except to the extent necessary for its ongoing maintenance of extant policies.20 At [91].21 At [90].The High Court judgment[73] Wylie J held that Tower is entitled to continue renewals on extant policies, following termination. He acknowledged that, as a matter of law, each renewal of an annual insurance policy creates a new contract of insurance. But the Judge found that the language of "renewals" in the agreements refers to the "process" of general policies of insurance, current for one year, falling due for "renewal"; not the "general proposition that each renewal creates a new contract of insurance." [74] In interpreting the volume of contractual material, in relation to the National agreement the Judge: (a) noted a number of clauses which apply notwithstanding termination that refer to "renewals" (as opposed to National Bank insurances "introduced by the bank the company"), services to be provided by the bank and references to Tower "promoting, marketing and selling" National Bank insurances in a post-termination context, which the High Court said could only have meaning if Tower is permitted to renew policies post-termination. 22(b) Noted use of the present tense in language referring to Bank-branded policy holders more than one year after termination, by when policies current on termination would have expired.23(c) And adopted an interpretation of "ongoing maintenance" of National Bank insurances as expressly including future renewals for other references to renewals and anti-churn provisions to make sense. 24[75] In relation to the ANZ agreement: (a) The Judge relied on the reference to the Bank's ongoing entitlement to renewal commissions post-termination. It gave weight to the ongoing22 At [84].23 At [85].24 At [87].payment of commissions post-termination in exchange for the goodwill owned by the Bank in circumstances where the Bank customers were now also Tower customers in their own right.25(b) He rejected arguments that it is commercially unreasonable for Tower to continue renewals post-termination, due to the ongoing payment of commissions in exchange for brand use, some particular instances of past industry experience, and the relationship of policy-holders directly with Tower. 26Discussion 1. Introduction[76] This issue is of course a contest between competing constructions of the relevant contractual provisions, in their particular commercial context. [77] The Bank has advanced an argument heavily reliant on the commercial context it says underlines the agreements. That is, one in which it is the senior partner owing to the value and importance of its brands in the enterprise. The contracts are to be construed, it says, on the premise that the Bank's interest in its brands and the commercial goodwill inherent in those brands is the primary consideration post-termination. [78] Tower says the words of the contracts speak for themselves, but that nonetheless a proper appreciation of the commercial purpose supports that plain meaning. [79] During the course of the hearing we had occasion to remark on the unhappy state of the drafting of these agreements, at least in relation to the issues we have had to consider. Counsel had to troll through the agreements looking for those items and constructions which would best support their respective positions in this dispute.25 At [93].26 At [98]-[102].That is perfectly understandable, and appropriate. But in the absence of a definitive resolution in the agreements themselves, the Court, while paying due regard to the language, in a sense has also to rise above it and to articulate, in legal terms, the conceptual framework of these agreements and the features of them which would point in one direction rather than the other with respect to the issue of the ownership of the book of insurance. [80] Hence in our view, the construction of the point at issue turns on three things: the textual arguments; the discernable scheme of the agreements; and their commercial context. We take each in turn.2. The textual arguments[81] To take the textual issues first, there is no definitive language in the agreements on this issue. We have already noted the unhappy state of the drafting. This dispute would likely not have been before the Court if there was a more distinct answer. [82] The arguments for each side really reduce to these. For Tower, cl 10.6.2 of the National Bank agreement does expressly refer to "renewals, variations or replacement policy." And in that respect, commissions are going to have to be paid to the Bank post-termination, although the profit-sharing ceases. Clause 17.8 of the ANZ agreement ([68], above) is even stronger. [83] For the Bank, it can be said that there are non-solicitation clauses which explicitly operate post-termination: cl 10.8 of the National Bank agreement ([50], above), and clause 20.3 ([60], above) of the ANZ agreement. Then there are the various clauses rehearsed above requiring the provision of information by Tower to the Bank (or its new insurer) on termination; and the telephone clause (see [55], above) which also supports the idea of no-contact, post-termination. [84] Hence the precise textual passages that appear to bear on this issue are hardly beyond doubt. But it can be said that, to the extent there is direct language, that is, referring to renewals as such, the language supports the position taken by Tower.3. The scheme of the agreements[85] Given that difficulty, are there things in the scheme of the agreements – conceptually – which may assist? The fundamental "elements" or "features" of these agreements which strike us as being most important are these: (i) Unquestionably each agreement is described as an "agency agreement". (ii) There are express provisions in the recitals to both agreements that Tower appoints the Bank as its agent to sell Tower's insurance products. Indeed the National Bank agreement specifically provides in cl 4.3.3 that the Bank shall advise customers that it is acting as Tower's agent. (iii) Then there is the question of the allocation of duties and responsibilities. As one would expect to find in an insurance sales agency relationship, the Bank is required to promote the products, the Bank is limited in its power to bind Tower, and Tower is given absolute control of underwriting and claims. (iv) The revenue arrangements between the parties sees Tower receive the premiums. The Bank receives a commission and a share of the underwriting profit, which would normally reflect the positions of, respectively, underwriter and sales agent. (v) The allocation of costs is important in commercial agreements of this kind. Under these agreements Tower is solely responsible for the cost of the underwriter material, whereas the marketing costs are borne by the Bank (in the National Bank agreement) or shared (in the ANZ agreement). (vi) There is a limitation on the Bank's rights to information for the purposes of verifying sales and commission payments and theperformance of Tower's obligations under the agreement. Indeed, under the ANZ agreement (cl 26.1) Tower has an express right to withhold from the Bank specific policy holder information, claims history, and other private or confidential information of policy holders. (vii) There are express confidentiality obligations which prevent the Bank from passing information about Tower's business, the insurance books, policy holders or policies to a third party including other underwriters. (viii) There is no provision in both agreements for the assignment of the insurance policies to a new underwriter. (ix) There is no provision in the agreements for either the Bank or Tower to obtain the insured's consent to being transferred to a new underwriter or to have their confidential and private information disclosed to a new underwriter. (x) There are no mechanical provisions which require Tower to collate and store information in some sort of format which would be suitable for transfer to a new underwriter. [86] The essential features or scheme of the agreements tends to favour the position taken by Tower and the Judge.4. The arguments from commercial context[87] It is well settled that the commercial context of a contract may help to assess the objective intention of the parties. 2727 Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101; Prenn v Simmonds [1971] 1 WLR 1381 (HL).[88] The utility of reference to the commercial context has recently been articulated this way by Tipping J in the Supreme Court of New Zealand: 28As a matter of policy, our law has always required interpretation issues to be addressed on an objective basis. The necessary inquiry therefore concerns what a reasonable and properly informed third party would consider the parties intended the words of their contract to mean. The Court embodies that person. To be properly informed the Court must be aware of the commercial or other contexts in which the contract was made and of all the facts and circumstances known to and likely to be operating on the parties' minds. (Emphasis added.)[89] Both parties pointed to various commercial considerations as being of distinct importance in relation to the construction of these agreements. [90] The Bank complains that it is commercially unreasonable for Tower to be able to continue as of right to provide Bank-branded policy renewals to bank customers, post-termination of the agreements. [91] The High Court however considered that there was something in such an arrangement for both parties – Tower would have to continue to pay commissions to the Bank in exchange for Bank-brand use and access to Bank customers, who would have become Tower customers. [92] Mr Hodder said that in the context of the agreements this was to deny the fundamental significance of the Bank's ownership rights in the goodwill of the business and the Bank-brands (which were agreed to by Tower in the novations). The Bank's brands and goodwill are said to have endorsement power and influence. It is true that on termination of the agreements, the Bank ceased to endorse Tower as an underwriter. The Bank says to allow for continued use by Tower of the Bank brands for renewals is "misleading, inherently confusing, and commercially unreasonable". [93] There is also the problem of the Bank losing total control over Tower's use of the Bank branding and customer relationship, post-termination. The Bank would no longer have any say under the agreements over policy premiums, terms and28 Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5, (2010) 9 NZBLC 102,874 at [19].conditions, or communications with policy holders, or rights to information from Tower. Mr Hodder said:Effectively, the High Court has handed Tower unregulated use of the bank- branded policies in perpetuity without Tower having to account to, or share any of the profits with, the bank ... .[94] The arguments running the other way appear to us to, for Tower, fall into three categories. [95] First, Mr Walker said that the Bank's conception of the commercial agreements makes no commercial sense at all for Tower. If the Bank were right, Tower would have no incentive to build up a book of business, since its sales agent could appropriate the underwriting value of that book at any time by giving a unilateral notice of termination and either keeping the book for itself or selling it to a new underwriter. Indeed, the Bank would be free to time its termination for exactly when the insurance book became profitable for the underwriter. There is no mechanism to compensate Tower on termination, including for unrecovered costs expended in building the book. [96] Secondly, the Bank's account of the deal takes no account of the customer's rights or interests. The Bank had placed great stress on the importance of its brands and on providing full customer service. It had claimed a technical right to bar around 110,000 customers from renewing the 196,000-odd policies of bank-branded insurance and from maintaining their relationship with Tower, without any agreement of the customers or even any warning that this might occur. Those customers would have their private and confidential information handed to Vero, without their knowledge or consent, to put Vero in a position to offer replacement policies. Customers would either have to accept the new insurer chosen by the Bank or look elsewhere. [97] Ms Stirrat, the Bank's own Head of Insurance, recognised that there is a real risk that substantial numbers of customers will become uninsured:In the event that the plaintiffs are successful in their claims, Tower will be unable to offer renewals to [Bank] customers from 1 March 2009, or more practically, from the date of the court decision. If [the Bank] itself is not in aposition to offer renewals from that time, customers whose insurance expires may be left uninsured. Many of [the Bank's] customers are not aware when their insurance expires and rely upon renewal letters generated by [the Bank] to alert them.[98] That evidence of course assumes that customers would agree to take a Vero policy in place of their Tower policy. However, there is no reason to think that customers necessarily want Vero as their insurer. [99] The third consideration, which the panel itself took a close interest in during the oral hearing, relates to the Bank's conception of the practicalities of a transition to a new underwriter. Ms Stirrat used the term "renewals" to describe what we understand to in fact be new policies offered by a different insurer. The Bank, it appears, would like this to be an arrangement in which the Bank insures its customers, using whatever insurance provider the Bank chooses from time to time. And the Bank clearly would like a seamless transition between insurers in the event of a change of relationship. [100] Real care in the use of the term "renewal" is required. Characterising a Vero policy as a renewal is only accurate if the Tower policy is assigned to Vero, so that it is the same policy. But the Bank accepts that it has no right to demand anassignment. Therefore, the Bank is compelled to argue for a third rate alternative, whereby it: (a) prevents its customers in Tower from renewing their existing insurance policy; (b) hands Tower's and its customers' information to whichever new underwriter it chooses; and (c) encourages its new customers to enter into a new insurance contract with that new underwriter. [101] The practicalities of the Bank's alternative mechanism seem at best problematic, and at worst utterly impractical. There was uncontested evidence that downloading all of the information which Vero would require would take between 50 and 80 working days, that is, up to four months. It would then take up to three months for Vero to load the data on to its computer system. The notice period is only six months. So even assuming that Tower started downloading information as soon as it received a notice of termination, Vero might well not be in a position to start assessing what offers of insurance it was prepared to make these customers until at least a month after the agency relationship had terminated. To that would have tobe added the time necessary to process the information, make its decisions about what insurance it was prepared to offer, and it would then have to make those offers. The Bank's own evidence was that renewal notices are typically sent out four to six weeks before the insurance expires. [102] In the result it was said there could easily be a three-month gap in which customers whose policies come up for renewal are left uninsured. On a pro rata basis, that could be in the region of 27,500 customers holding 49,000 policies. And that does not take any account of customers who do not agree to enter into contracts of insurance with Vero, and have to look elsewhere. [103] The Bank claims that it was the parties' common intention that the Bank itself could take over as insurer or that the Bank could simply terminate all of its customers' insurance policies without sourcing any replacement cover. It is difficult to see any basis on which it can be said that the parties intended that the Bank would take over from Tower as the insurer. One simple question to ask is: why would the agency agreements have been entered into at all if the Bank was capable of underwriting its own insurance? Banks cannot be insurers, so as a matter of strict technicality, the argument is not correct. It is true that the Bank has subsequently acquired an insurance capability by entering into a joint venture with the insurer ING in 2002. But in any event that cannot possibly be relevant to the interpretation of agency agreements entered into in 1999 (the National Bank agreement) and 2000 (the ANZ agreement). [104] We have to say that we think it quite implausible that the parties would have agreed that the Bank would have a unilateral right simply to terminate the insurances of 110,000 customers in one fell swoop, without their agreement, and the possibility of many of them being left uninsured. And this was advanced for a Bank which claims to want to protect its brands and to earnestly serve its customers' interests. [105] It might usefully be pointed out at this stage that the ultimate test of a customer's loyalty, whether to the Bank or to their insurer, would be to fully inform them of the change in the Bank's underwriter and to provide them the choice of underwriter as the policies come up for renewal. This might well also be thepreferable solution, on market principles of consumer choice. However, the litigation has been conducted on an all-or-nothing basis, and we have had to deal with it that way.5. Conclusion[106] We think the appeal point – that the Bank owns the insurance book and that there should be a clean break – is not made out. Although it is not clear cut, we think the textual analysis of the agreement tends to favour the position of Tower as does the scheme of the agreements. The commercial context – in particular the difficulties which arise on the Bank's argument – heavily favours the position taken by Tower. [107] Given that the consequence is that there is not a "clean break" principle in favour of the Bank in operation, as in so many divorces these parties are left with a somewhat messy asset clean-up. It is to those issues which we now turn.Issue 3: the extent of the Bank's entitlement to information held by Tower about bank-branded policies and policy holdersIntroduction[108] The Bank sought orders for the delivery up of information held by Tower about the bankassurance policies and policy holders. It says that that information is necessary in order for the Bank to offer renewals, or new policies and moreover it is information the Bank is entitled to under the Deeds of Novation.The agreements[109] Clause 6.1(h) in both of the Deeds of Novation state that Tower:... acknowledges that any information contained on its database about customers of [the Bank], collectively or individually, that is or has been:(i) collected or obtained by [the Bank] and/or [ING] and passed to [Tower]; or (ii) derived by [Tower] pursuant to the agreement; is and remains at all times the property of [the Bank]. (Emphasis added.)[110] An additional sentence at the end of this clause in the National Bank novation provided that Tower is entitled to retain such information as is required for it to fulfil its obligations under the agreement and its obligations as an insurer.The orders sought[111] The precise orders sought (as amended at trial) are:2.(d) the defendant shall extract all information about current [Bank]- branded policies from its NIMS system and provide that information to the first plaintiff as early as practicable, but in any case within 15 working days of judgment: (i) in an electronic format enabling the first plaintiff to electronically search, manipulate and upload the data; (ii) with a data dictionary, detailing the descriptions and meanings of any tables or fields (known as data schema) and an exhaustive list of all known codes for each field (validations) and any relationships between tables and fields and any explanations required by the first plaintiff to understand the information; (e) on a monthly basis, the defendant shall extract updated information on all ANZN-branded policies due for expiry, and provide that information to the first plaintiff no later than six weeks before they are due for expiry; (i) in an electronic format enabling the first plaintiff to electronically search, manipulate and upload the data; (ii) with a data dictionary, detailing the descriptions and meanings of any tables or fields (known as data schema) and an exhaustive list of all known codes for each field (validations) and any relationships between tables and fields and any explanations required by the first plaintiff to understand the information; (f) the first plaintiff may provide the information referred to in (d) and (e) above to Vero, subject to (h); (g) the first plaintiff and the defendant shall together, within five working days of judgment, using all reasonable endeavours:(i) identify the fields that are to be extracted. As a first step, within two working days of judgment, the defendant is to provide the first plaintiff with: (A) a list of all fields held in NIMS; (B) a list of all of the fields in (A) that the defendant does not propose to extract and reasons why the defendant believes them to be proprietary; (ii) agree on the most efficient modification of existing extractor programs to achieve the full extraction: (A) as a first step, the defendant shall identify the options and estimated timeframes for each; (B) once the parties have agreed on the most efficient method, the defendant shall provide a work program detailing timeframes and steps required for that process; (iii) agree on the most efficient modification of existing extractor programs to achieve the monthly updated extraction: (A) as a first step, the defendant shall identify the options and estimated timeframes for each; (B) once the parties have agreed on the most efficient method, the defendant shall provide a work program detailing timeframes and steps required for that process; (iv) identify any information that is agreed to be proprietary in nature; (h) upon receipt of extracted information, the first plaintiff will remove any proprietary information, or reformat the information if it is in a proprietary format, before it is provided to Vero; (i) the first plaintiff shall provide the defendant with a list of their employees and agents who will have access to the extracted information, in order to remove any proprietary information; (j) the first plaintiff will obtain from those employees and agents confidentiality undertakings prior to commencement of that work; (k) upon completion of the work, the defendant will be given access to the information, prior to its provision to Vero, for the purposes of verifying that it contains no proprietary information. The defendant will be allowed one full working day to provide verification. If the defendant fails to provide verification or detailed reasons for any objection, verification will be deemed to have been given; (l) pending completion of the process described at (d) – (k) above, the defendant will continue to generate the renewal file (though not tooffer to or actually renew policies) each month, and will provide that file to the first plaintiff no later than six weeks prior to the expiry of the relevant policies; (m) the first plaintiff and defendant shall together, within five working days of judgment, using all reasonable endeavours, identify any information that is agreed to be proprietary in nature in the file described at (l); (n) upon receipt of the file, the first plaintiff will proceed as at (h)(K); (o) at the conclusion of (n) the first plaintiff may provide the information to Vero; (p) paragraph 12 of the plaintiffs' undertakings dated 18 December 2008, and appended to the joint memorandum of counsel seeking revised directions of the same date, is rescinded; (q) leave is reserved for the parties to come before the Court on an urgent basis, if the parties are unable to reach agreement on any aspect of these orders.The High Court judgment[112] The High Court Judge held that under the agreements the relevant information "catches": 29• information given by customers to the Bank, subsequently passed on and held by Tower, when applying for a policy;• information derived by Tower pursuant to the agreements, including effective dates and expiry dates, items insured, premium, agency and commission, re-insurance information;• information used by Tower for rating and analysis such as the location of the risk, the type of car insured, and the existence of a no claims bonus;• sales information, such as whether customers' criminal records, whether they had previously been declined insurance cover, and claim histories;• claims information;• debtor's information;• records of client interaction including correspondence.29 At [160].[113] The Judge held that Tower could be required to deliver up the information specified in cl 6.1(h) of the Deeds of Novation, which he saw to be as per [112], above. However, the Judge declined to make the orders sought as the prayer for relief was expressed in broader terms in respect of the scope of the information than the agreements allowed; and also because Tower's disclosure of such information would breach the Privacy Act 1993 and the general law of confidence. 30The broad arguments for the parties[114] The Bank maintains that this information is the Bank's "property", and therefore that it has a prima facie entitlement to it. 31 However, the Bank says that the Judge imposed "practical" and "legal" restrictions on this entitlement, rendering its proprietary interest in that information practically worthless. [115] By its cross-appeal, Tower says that it is not required to deliver up the information. Tower says that the provisions relating to Tower's obligations to retain data and provide information on request are limited to the extent expressly provided for. These do not suggest a unilateral right to demand delivery up of all of the information. The designation of the information as "property" did not elevate those obligations to a duty to transfer all of the contemplated information on the Bank's demand. Rather, this designation signified that the information was not Tower's to do with as it wished. In any event, if the information "belonged" anywhere it was to the customers. [116] If, contrary to these arguments, delivery up is required, Tower says there is nothing in the agreements which compels it to deliver the information in the format required by the Bank (which would require Tower to write and test an extraction programme converting data on its NIMS system into a different electronic form).30 At [203].31 At [161].The agreements in more detail[117] Our discussion under this head falls under the general rubric of issue 3, and also covers the ground mapped by issues 3.2, 3.3, and 3.5 in the joint list of issues. [118] In the case of the National Bank agreement and deed the relevant clauses,32as amended by the deed, provide:[Tower] undertakes and agrees that during the term of this Agreement it will: ... 5.3.1 keep full, proper, appropriate and up-to-date books of account and records showing clearly transactions relating to this Agreement and will allow authorised representatives of [the Bank] to have, during normal business hours and upon reasonable notice, access to the said books and records and to take such copies thereof as they may require; ... 5.3.4 if so requested by [the Bank], [Tower] agrees to provide to [the Bank], at mutually convenient times and by mutually convenient means, such data about the National Bank Insurances as [the Bank] may lawfully request, and [the Bank] agrees to pay for the reasonable costs of Tower complying with [the Bank's] request ... 11. EFFECT OF TERMINATION ... 11.2.1 [Tower] shall, upon request by [the Bank], deliver to [the Bank] or to any person nominated by [the Bank] all documents, records and other information, and any Materials, held by it or on its behalf relating to the National Bank Insurances and/or to the performance of the duties and obligations of [Tower] under this Agreement, and [the Bank] shall bear [Tower's] reasonable costs associated with fulfilling [the Bank's] request.[119] As to the ANZ agreement, cl 6.1(f) made Tower responsible for:Ensuring that the Application forms used by Tower authorise it to disclose to [the Bank] and its employees and agents such information as [the Bank] may reasonably require for marketing purposes including Client contact details, Policy details, payment frequency, people covered, payment details, history and commission details and also details of business written by each Sales Personnel...32 The deeds insert ING as the Bank's assignee. However, for simplicity we to refer to the Bank in reproducing those clauses.[120] Under cl 20.4 in the ANZ agreement Tower is required on termination of the agreement to:Immediately provide to [the Bank] a schedule of all policies written under this Agreement including those current at the time of termination in the form of a computer tape or printed listings as required by [the Bank]. Such schedule shall include such particulars of each Policy as are reasonably requested by [the Bank] including the information described in clause 6.1(f) of this Agreement. [The Bank] agrees to meet the reasonable costs incurred by Tower in fulfilment of this clause.[121] Wylie J held that the information to be transferred under cl 6.1(f) was limited to that falling within cl 6.1(h) of the novation. However, this is problematic, in that the language of that part of the clause is inclusive. Clause 6.1(f) is primarily concerned with restricting Tower's use and storage of the customer information it gathers pursuant to the agreement. It is not sensible to hold that the Bank "owns" the information described in cl 6.1(h) of the novations, yet read down the extent of that information in a provision on the delivery up of that information on termination, especially when the Bank is required to meet Tower's costs in doing so. [122] Mr Hodder's principal argument is that a purposive approach to construction is required in order to give the agreements coherence. Coherence with the commercial purpose of the contracts, the Bank says, requires that the information is delivered to it immediately on termination and "in an electronic form that is searchable, manipulable and able to be uploaded." He argued that in failing to apply such an approach, and therefore reaching a different conclusion, Wylie J failed to give effect to the termination regimes. [123] Mr Hodder cited the authorities already referred to for the proposition that contracts need to be interpreted in light of their commercial purpose. He suggested further, relying on Socimer International Bank Ltd (in liq) v Standard Bank London Ltd33 that courts expect and will enforce co-operative conduct by parties. [124] After considering the quite extensive evidence 34 the Judge held, on the facts, that as to Tower's enterprise data management and reporting systems, requiring33 Socimer International Bank Ltd (in liq) v Standard Bank London Ltd [2008] EWCA Civ 116, [2008] 1 Lloyd's LR 558..34 See [127] – [134].Tower to deliver up information in the manner requested (electronic format, searchable, and manipulable) would effectively require Tower to deliver up its proprietary software, including the computer languages and data dictionaries necessary to interpret the data. 35 The Judge said that was not contemplated by the agreements. Although Tower is required in principle to deliver up the substantive content in the information, it is merely required to provide it either in hard copy, or in electronic form using non-proprietary software. And as we will see, although in principle Tower could be required to deliver up information, the Judge thought Tower to be constrained by legislation or legal principles from doing so.Discussion[125] We will first consider what information Tower is, in principle, required to yield up, and then in what form. We will consider later in this judgment whether there are any external constraints on it so acting. [126] Again, the parties were not particularly well served by the contractual provisions in these agreements. [127] One problem is that the terms "information" (11.2.1 in the National agreement, and 20.4 in the ANZ agreement) and "property" (6.1(h) in the Deed of Novation) are used indiscriminately. But as has been said elsewhere, trying to turn information into "property" is very difficult: 36... to say something gives rise to a proprietary right is at once comforting, convenient and "legal". The attachment of this appellation immediately brings into play a body of established doctrine and remedies painfully evolved over several centuries. Yet the most striking characteristic of information is that it does not fit easily with [even] extended concepts of property. First, sole ownership is vastly complicated in the case of information. The act of theft is often impossible to detect and difficult to prove. A piece of information can be "owned" by two people at the same time without any35 At [162].36 Grant Hammond "Quantum Physics, Econometric Models and Property Rights to Information" (1981) 27 McGill LJ 47 at 54; and see also by the same author "Theft of Information" (1984) 100 LQR 252. See also R v Stewart [1988] 1 SCR 963, agreeing with Hammond that information cannot be stolen under a general theft provision because it is not property.denial of the conventional benefits of ownership. Second, some kinds of information can be infinitely multiplied at low cost. Third, information generally does not depreciate with use and some kinds of information of a theoretical character actually inflate in value with usage. Fourth, unused information is, in general, of no use but the moment information is used it reveals both its existence and content and may actually enter what is conventionally referred to as the "public domain". Fifth, the creation of information is routinely a joint activity and the apportionment of "creativity" is then rendered extraordinarily difficult. Sixth, the creation of technology and information is tending to move on shorter frequencies: commercial advantage is today inextricably intertwined with innovation. Longer- frequency functional vehicles such as the statutory monopolies, are becoming increasingly inapt for this pronounced shift in commercial time- frames. Seventh, the volume of available information has reached overwhelming proportions. Classical economics assumes the possession of complete information about the availability of different goods, estimation of costs and maximization of utility preferences. But more information is not complete information. The disabilities of the individual in relation to the sum of knowledge become progressively more severe as the sum increases. Eighth, in economic terms, public goods are separated from private goods by a principle of exclusion. Although that principle can still apply to information it is routinely invoked only at a considerable cost.[128] Another problem is that the obligations of Tower can be broken down into requirements to maintain that information and then to transmit it (at the reasonable cost of the Bank and/or ING), but the method of transmitting it is not prescribed. In other words, the technological problem is not tackled by the agreements. It is this which, as Mr Walker rightly argued, has led to what he termed the "tortuous [suggested] mechanism" in the amended prayer for relief handed up at trial. And elsewhere in the agreements, broad and loose language is used. For instance, cl 20.4 of the ANZ agreement speaks of the provision of a schedule of policies upon termination "in the form of a computer tape or printed listings as required by ANZ" (emphasis added). We do not have evidence whether that technology is still in use today. [129] All of this said, the particular clauses, 11.2.1 in the National Bank agreement and 20.4 in the ANZ agreement, are unequivocal as to the delivering up of "information" on termination, and the Deeds of Novation (by cl 6.1(h)) confirm Bank's entitlement to it. [130] The first issue here is therefore, what "information" must be transmitted? The Judge's answer is set out in [112] above. We consider that catalogue is toobroad: it would really amount to all of Tower's information, and (if the Bank is correct) in a form readable by the Bank's computers. [131] The best indication of what is required is provided, in the case of the ANZ agreement, by cl 6.1(f): client contact details, policy details, payment frequency, people covered, payment details and history and commission details. In the case of the National Bank agreement, under cl 5.3.4 the phraseology is: "... such data about the National Bank Insurances as [the Bank] may lawfully request" (at [the Bank's] reasonable expense). [132] In our view, the information to be supplied includes at least the following: a) The proposals for any insurance which was written; b) The policy details; c) The client contact details; d) Payment frequency; and any defaults in payment(s); e) Claims history; f) Commission details. [133] We use the expression "at least" advisedly. This will provide the basic information and is consistent with cl 6.1(f). If that information was obtainable under that clause, it is hard to see how, practically, it could be less under the National Bank agreement. [134] It may be that, in a particular case, more detail could reasonably be required in relation to (say) a claim history, but to require the passing over now of all Tower data, in a form "manipulable" by the Bank or its nominee goes far too far. For instance the Judge's holding that the agreements extend to "records of client interaction including correspondence", plainly overreaches. It is difficult to see whatpurpose is served by such an all-embracing holding, which would really amount toeverything.[135] As to the method of transmission, under the ANZ agreement, the Bank is entitled to call for "a computer tape or printed listings" but that provision relates to "all policies written [under the Agreement]". In itself that is a restricted range of information, and it does not require what might be termed a "computer realignment" by Tower. [136] Quite why the appellant over-reached in this aspect of its claim is hard to see. It may be related to its over-arching "proprietary" claim (that: "its all ours"), but that claim flies in the face of the more specific provision of the agreements. [137] We think that the Bank's contractual interests would be adequately served in the first instance by a printed schedule with the information as in [132] and a follow- up exercise on any matters requiring clarification, such as information about claims, which might then need reference to further Tower correspondence or particulars. Obviously we cannot now speculate on what further information might actually become necessary in a given case. [138] We are also not in a position to deal with the "reasonable costs" of such an exercise. Plainly, the proceeding will have to be remitted to the High Court for further directions where they are needed, and such fixing of "reasonable costs" as may be required. [139] Nothing in what we have said involves depriving Tower of the ability to maintain its own records, for its own renewal purposes. [140] The Judge noted that his findings related only to the rights of the parties as between themselves under their contractual relationship. It says nothing about the rights of third parties – in this case primarily the customers – in that information. The next part of this judgment considers those issues.The effect of the Privacy Act 1993 on ANZ's entitlement to and use of information 1. Introduction[141] The discussion under this heading considers what is issue 3.4 in the joint list of issues. That is, what if any impact does the Privacy Act (the Act) have upon the requirement we have found to deliver up the specified information? [142] The Judge said: 37... the evidence makes it clear that both parties have in the course of their business relationship obtained personal information from insured, either at inception when the insurance policies were put in place, or during the term of the policies. That information is prima facie the information of the individual insured.[143] Therefore, the Bank's rights to obtain and use information held by Tower could be constrained by the rights of those the information is about. Accordingly, in the Judge's view the Act intervened to limit the use of the information to the purposes for which it was collected. 38 And, the Act prohibited disclosure of the information unless such disclosure was one of the purposes for which the information was obtained.39[144] In this case, information was collected by both the Bank, when customers provided information in support of their policy applications, and by Tower, during the course of its dealings with insureds.2. Purpose for which the information was collected[145] As to the facts, customers were given, by Bank staff, an authorisation and declaration letter after completed insurance applications were submitted to Tower. It said in part "Tower Insurance is collecting information on this declaration to evaluate your insurance".37 At [170].38 Privacy Act 1993, s 6, principle 10.39 Principle 11.[146] Whenever a customer applied to purchase a policy, the bank staff member processing the sale was required to give a "Privacy Act declaration". The declaration is set out at [177] of the High Court judgment and begins by saying "Weneed to obtain some information from you so that we can evaluate your inquiry" (emphasis added, for reasons which will become clear). The declaration noted the insured's duty of disclosure and the consequence of non-disclosure; noted that the information would be kept on file; informed the customer that reasonable steps would be taken to store the information securely; asked for the customer's... authority to provide the information to other parties including other insurance companies, Tower Group companies, any party with an interest in your policy and the Insurance Claims Register administered by the Insurance Council, or to obtain information from them in relation to your insurance;and informed the customer that the information could be used to market other services, although the customer was able to 'opt-out' of this last aspect. [147] The Judge held at [180] that this information was collected to enable Tower to firstly provide a quotation, and then to decide whether to issue insurance cover. [148] The Bank says that the authorisations and declarations:... would be generally understood by a reasonable customer to encompass any use or disclosure that Tower or the Bank must make of the information in order to facilitate the provision of Bank-branded insurances.[149] It says that customer expectations are relevant in determining the purpose of information collection, and that customers would see the Bank's cross-selling of insurance products as a "normal function" of the Bank and therefore a contemplated purpose of the information collection. 40 It says that the words "to evaluate your insurance enquiry" necessarily imply the authorisation "to provide you with the Bank-branded insurance cover you seek if everything you tell us is in order". In accordance with an exception to principle 10 the Bank considers, it says on reasonable grounds, that this purpose was directly related to the purpose for which40 Citing E Longworth and T McBride The Privacy Act: A Guide (GP Publications, Wellington, 1994) at 209-210.the information was collected. 41 The case notes cited by the Bank tend to support this generous interpretation. 42[150] In our view, it is at this point that the Bank's emphasis on its customer relationship comes into play. As to customer expectations, it seems unlikely that customers would be surprised to be offered insurance products through the Bank's new provider, Vero. This is especially the case should such an offer be accompanied by an explanation of the change in provider. On the Bank's argument as to the importance of its customer relationship and brands, many customers would surely be pleased to receive such an offer, tending to suggest they would consider that the information was collected for such purposes. We accept that argument. [151] Accordingly, in our view, again as a matter of principle, we consider that the Bank is able to use the information it has collected for the purposes of marketing, or euphemistically speaking, providing information, to customers about its new Vero provided insurance services.3. No 'disclosure'[152] The Judge found that as the Bank was Tower's agent in collecting the information, it never obtained a right to use the information for its own purposes. 43The information was collected from customers by Tower. According to principle 11 of the Privacy Act therefore Tower was prevented from disclosing that information to the Bank. [153] The Bank argued at trial and maintained before us that delivery up of the information by Tower to the Bank does not amount to disclosure as the Bank collected the majority of information in any case. It cites the Human Rights Review Tribunal decision in Williams v Department of Corrections44 and the Complaints Review Tribunal decision in A v G,45 both specifically considering principle 11, as well as the House of Lords decision in Attorney General v Associated Newspapers41 Privacy Act 1993, s 6, Principle 10(e).42 Citing Case Note 19740 [2002] NZ Priv Cmr 5 and Case Note 13682 [1998] NZ Priv Cmr 4.43 At [193].44 Williams v Department of Corrections HRRT 33/01, 9 March 2004.45 A v G (1999) 5 HRNZ 598 (CRT).Ltd46 and the England and Wales Court of Appeal decision in Bank of Credit and Commerce International (Overseas) Ltd (in liq) v Price Waterhouse47 for the proposition that disclosure means making something known to a party that did not already know it. The Bank says it already knew the "majority of information" owing to its collection on customer applications by bank staff - information communicated to Tower by a computer interface system (WESS). [154] The finer issue becomes therefore whether the bank "knew" the information it collected. Without wishing to throw this issue open to a broad and potentially irresolvable philosophical discussion, there must be questions about how a corporate personality comes to "know" such information. Is it enough that the information passes through the hands of an agent? Or must the information be stored and retrievable in some way, for example through some enterprise system? [155] Regardless, the Bank's argument on this point cannot extend so far as to include information collected by Tower during its course of dealings with insured, for example in dealing with claims and in effecting policy renewals. To access that information it turns to an authorisation argument.4. Authorisation[156] The Bank argues that customer authorisations and declarations as discussed at [97] above mean that customers have authorised the information's disclosure to and use by the Bank. The argument centres firstly on its construction of "we" in the declaration as meaning the Bank, not Tower. As noted above at [146], that declaration provides that "we" are collecting the information to evaluate the customer's insurance inquiry. Its construction makes sense it says because the information is collected by bank staff on Bank-branded forms. The next part of the declaration says:46 Attorney-General v Associated Newspapers Ltd [1994] 2 WLR 277 (HL).47 Bank of Credit and Commerce International (Overseas) Ltd (in liq) v Price Waterhouse [1998] Ch 84.From time to time we may also use your information to provide you with information updating you on the full range of services we offer. If you do not want to receive this communication please contact us.[157] The Bank says that because Tower is contractually prohibited during the term of the agreements from selling its own products, as opposed to Bank-branded products, to customers, "we" can only mean the Bank. [158] Further, the Bank claims it is a party "with an interest" in the terms contemplated by the part of the authorisation reproduced again below. The customer thereby agrees to Tower disclosing the information to the Bank. To repeat, for convenience, that authorisation asks for customers':authority to provide the information to other parties including other insurance companies, Tower Group companies, any party with an interest in your policy and the Insurance Claims Register administered by the Insurance Council, or to obtain information from them in relation to your insurance;[159] This authorisation is expressed in broad terms. Irrespective, the Bank is clearly a party with an interest in the policy. [160] In our view, customers have authorised Tower to disclose the information to the Bank, and we therefore allow the appeal on this point. For similar reasons as already given (at [150] above) relating to the purpose of collection, in our view the Bank has a reasonable expectation that one of the purposes for collection of this information is, especially in light of its contractual arrangements with Tower, to offer customers products underwritten by its new provider.5. Breach of confidence[161] The Judge also found that customers might arguably have a claim for tortious breach of confidence in the event Tower disclosed the information to the Bank. The Bank argues that it is in the reasonable expectation of the parties that the information would be disclosed, for the same broad reasons as apply to its argument on the application of the Privacy Act. We consider the Bank's argument on this point is correct.6. A fall-back argument[162] If it fails on all of these points, the Bank seeks an order that Tower must seek authorisations from customers to disclose the information. It says that such authorisations are necessary for Tower to fulfil its contractual obligations to provide information at the Bank's request or on termination. Such a requirement could not however compel customers to so authorise. Given our holdings, above, we do not need to address this point.7. Conclusion[163] We have determined that the Bank is clearly entitled to most of the information it seeks, and that there are no external constraints – such as the Privacy Act – to its so receiving it. But this still leaves two difficult practical problems. [164] First, as to precisely what information the Bank is entitled to, we considered that, as a starting point, the information in [132] above is required to be passed over, but in particular instances – which we are not in a position presently to identify – more may be required. [165] The second issue, which we are not at all well placed to consider and comment upon, is how that information is actually to be passed from Tower to the Bank. The argument before us was somewhat indeterminate. We do not criticise that, because it descended into largely factual issues which were not resolved by or even addressed before the Judge, as to how the mechanics, timing and costs of such an exercise would fall, or even whether further judicial determination and supervision might be required. [166] Hope springs eternal even in the judicial breast. It may be that with a declaration – which we make, that the Bank is entitled to the information we have designated – the parties will be able to resolve the practicalities of the gathering and transmission of the information, and at what reasonable cost to the Bank.[167] But in case that proves not to be the case, we can see no realistic alternative but to remit this issue to the High Court for such further hearings and directions as may be necessary to give effect to our declaration.Issue 4: Disclosure to, and use by, Vero of the information yielded up[168] We have held that the Bank is entitled to delivery up of the relevant information. Is it also entitled to use that information in order to offer Bank-branded policies underwritten by another provider, and the question arises whether it may accordingly disclose the information to Vero for that purpose. [169] The Bank here essentially relies on its arguments as to the purpose of collection of the information, discussed above, to say it is entitled to pass the information on to Vero. That would naturally hold if that purpose is as broad as it contends. [170] However, the Judge also held that the confidentiality provisions in the agreements between the Bank and Tower prohibit the Bank from providing the information to Vero. [171] The Bank says that if the confidentiality provisions are held to prohibit such disclosure, they effectively amount to a restraint of trade. It asks what other purpose would providing for the transfer of information on termination serve, other than for the Bank to offer, with its new insurer, competing insurance products to consumers. [172] In our view, once the disclosable information is defined, the Bank is entitled to pass it on to Vero.Conclusion[173] As we have already alluded to, the ideal situation from a consumer's point of view and on market principles on the termination of the agreements between the Bank and Tower, would have been for each policy holder to be provided the opportunity to choose his or her preferred insurer. However, the estranged businesspartners have instead sought to keep as much business for themselves as they say is available under the somewhat unhappy contractual arrangements. [174] Given our response to the issues we have been asked to address, the insurance book remains Tower's to the extent that Tower has the opportunity to maintain its contractual relationship on renewals with existing individual policy holders; but the Bank has the opportunity to persuade customers to switch to Vero. For this purpose, the Bank needs, and is entitled to the information we have identified. [175] To give effect to the conclusions we have reached, we make the following orders: A The cross-appeal is dismissed. B The appeal is allowed, in part. C We make a declaration: (i) that the Bank is entitled to delivery up (by Tower) of the information set out in [132] of this judgment in the manner contemplated by [137] of the judgment; and (ii) the Bank may pass that information to Vero. D We remit the proceeding to the High Court, for such further hearings and orders as may be required to give effect to C(i), above. E Both in the High Court, and in this Court, each party has enjoyed a real measure of success. There will be no order for costs in either court.Solicitors: Chapman Tripp, Wellington for Appellants Gilbert Walker, Auckland for First Respondent Russell McVeagh, Auckland for Second Respondent