EMClarity Pty Ltd v BSO Network Inc & Anor [2022] QCA 177 [2022] 38 QLR

SUPREME COURT OF QUEENSLAND CITATION: EMClarity Pty Ltd v BSO Network Inc & Anor [2022] QCA 177 PARTIES: In Appeal No 11321 of 2021: EMCLARITY PTY LTD ACN 139 128 180 (appellant) v BSO NETWORK INC (first respondent) APSARA NETWORKS INC (second respondent) In Appeal No 10237 of 2022: BSO NETWORK INC (first appellant) APSARA NETWORKS INC (second appellant) v EMCLARITY PTY LTD ACN 139 128 180 (respondent) FILE NO/S: Appeal No 11321 of 2021 Appeal No 10237 of 2022 SC No 12112 of 2019 DIVISION: Court of Appeal PROCEEDING: General Civil Appeals ORIGINATING COURT: Supreme Court at Brisbane – [2021] QSC 73 (Ryan J) DELIVERED ON: 16 September 2022 DELIVERED AT: Brisbane HEARING DATE: 10 and 11 March 2022 JUDGES: McMurdo and Bond JJA and Flanagan J ORDERS: 1. In appeal number 11321/21: a. Allow the appeal by: i. setting aside order number 3 of the orders made by the primary judge on 31 August 2021; and ii. varying paragraph 4(a) of those orders by deleting the following: -- 1 of 33 -- 2 “(i) Dr Stephane Tyc, Dr Robert Meade, Mr Timothy Boyle or Mr Paul Kennard; or (ii)” b. Otherwise dismiss the appeal. 2. In appeal number 10237/22: a. Allow the appeal by: i. varying paragraph 6(d) of those orders by adding the words “limited to damages for breach of the W-Band Development Agreement”; ii. declaring that EMClarity Pty Ltd breached the 2019 Agreements by not delivering the radios by 20 July 2020; b. Otherwise dismiss the appeal. 3. Dismiss the cross-appeal. 4. Direct the parties to provide written submissions as to the costs of the proceedings in this Court, and of any order which should be made to vary the order for costs made on 31 August 2021, within 21 days from the delivery of this judgment, such submissions not to exceed five pages in length. CATCHWORDS: CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – PARTIES – where the appellant designs, produces and supplies radio technology – where the first respondent provides IT and telecommunication services – where the second respondent is a wholly-owned subsidiary of the first respondent – where in 2018, the appellant entered into an agreement for the development of radio products with the first respondent (“2018 agreement”) – where the 2018 agreement was partly performed – where in 2019 the appellant issued to the respondents at large quotations for the supply of radio products – where the second respondent responded to the quotations – where a contract or contracts for supply was formed (“2019 agreements”) – whether by the 2019 agreements the appellant contracted with the first respondent or the second respondent CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where the 2019 agreements do not refer to the 2018 agreement – where the 2018 agreement was a development agreement while the 2019 agreements were referable to a contract or contracts for supply – where the 2019 agreements did not depend on further development of the radio products – where the parties to the 2018 agreement are different to the parties to the 2019 agreements – where by its -- 2 of 33 -- 3 participation in the negotiations and the steps by which the 2019 agreements were made, the first respondent evinced an intention to displace the 2018 agreement – where the payment terms of the 2019 agreements negate the suggestion that those agreements were conditional upon the satisfactory development of the radio products – whether the 2019 agreements constituted variations to the 2018 agreements – whether the 2019 agreements displaced the operation of the 2018 agreement CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – IMPLIED TERMS – GENERALLY – where the primary judge found that the 2019 agreements contained an implied term that the radio products would be supplied by the appellant within a “reasonable time” – where this finding was not challenged on appeal – where what constitutes a reasonable time must be assessed by reference to what is fair to both parties – where the appellant led no evidence that a delay in its delivery of the products was caused by “circumstances which actually exist” and which had not been caused or contributed to by it – where pre-contractual estimates given by the appellant had evidentiary value as probative statements by the appellant of the time which would be required to fulfil its obligations under the 2019 agreements – whether a reasonable time had elapsed by the date of trial CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH – REPUDIATION AND NON- PERFORMANCE – where by the 2019 agreements the appellant agreed to supply radio products to the second respondent – where the appellant subsequently implemented a “quality review” which resulted in an indefinite delay in the delivery of the radio products – where the appellant also cancelled orders for component parts of the radio products – whether the appellant demonstrated an absence of a willingness to perform going to the root of the 2019 agreements – whether the appellant’s conduct was repudiatory EQUITY – GENERAL PRINCIPLES – equitable obligation of confidence – where, after the 2019 agreements were made, a competitor company of the respondents acquired the appellant – where the appellant disclosed certain materials to the competitor company – where the appellant argued that the disclosure was purely an internal communication of the materials to the appellant’s governing minds – where some of the materials disclosed represented sufficiently large transactions that they were a proper subject for the attention of the appellant’s board – whether the appellant breached an equitable duty of confidence -- 3 of 33 -- 4 Byrne v Australian Airlines Ltd (1995) 185 CLR 410; [1995] HCA 24, cited Creswick v Creswick & Ors; Tabtill Pty Ltd & Ors v Creswick [2011] QCA 66, cited Hick v Raymond & Reid [1893] AC 22; [1892] UKLawRpAC 51, applied Kestrel Coal Pty Ltd v Construction, Forestry, Mining and Energy Union [2001] 1 Qd R 634; [2000] QSC 150, cited Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61, cited Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623; [1989] HCA 23, cited Maynard v Goode (1926) 37 CLR 529; [1926] HCA 4, cited Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414; [1984] HCA 73, cited Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537; [1982] HCA 29, cited Postlethwaite v Freeland (1880) 5 App Cas 599; [1880] UKLawRpAC 27, cited Sequel Drill & Blast Pty Ltd v Whitsunday Crushers Pty Ltd [2009] QCA 218, cited Telina Developments Pty Ltd v Stay Enterprises Pty Ltd [1984] 2 Qd R 585, cited COUNSEL: D G Clothier QC, with D E F Chesterman, for the appellant/respondent D O’Brien QC, with F Lubett, for the respondents/appellants SOLICITORS: Ashurst Australia for the appellant/respondent Johnson Winter & Slattery for the respondents/appellants [1] McMURDO JA: The appellant, which I will call EMC, is a Brisbane based company which designs, develops, produces and supplies microwave and millimetre-wave radio technology. [2] The first respondent, which I will call BSO, is a company which provides IT and telecommunication services. Since December 2017, the second respondent, which I will call Apsara, has been one of its wholly owned subsidiaries. The group headed by BSO provides wireless network services to the New York Stock Exchange, the NASDAQ and the Chicago Board Options Exchange, which operate in the area described as the New Jersey Equity Triangle. [3] In 2018, BSO contracted with EMC for EMC to develop and supply what it described as W Band radio equipment to BSO (the 2018 agreement). At the trial, BSO’s principal case was that it entered into this agreement on its own behalf, and not as an agent. Its alternative case was that it did so as the agent of Apsara. The trial judge found that BSO then contracted as a principal, a finding which neither side challenges. [4] The 2018 agreement was partly performed on each side. Extensive development work was undertaken and progress payments were made. The complaints underlying this proceeding, which were brought by the respondents against EMC in the Trial Division, mainly relate to an agreement or agreements made between EMC and either -- 4 of 33 -- 5 BSO or Apsara in May and June 2019. I will call these agreements the 2019 agreements. They provided for the supply by EMC of W Band radios, as well as what are described as E Band radios. [5] Almost as soon as those agreements were made, a competitor of BSO, McKay Brothers, became aware that EMC was undertaking a project for the supply of W Band radios. McKay Brothers was also a customer of EMC, and mistakenly, EMC had sent to an individual at McKay Brothers an invitation to a meeting to discuss what was in fact the BSO/Apsara project. Within days, McKay Brothers approached EMC proposing to acquire it which McKay Brothers did in late September 2019. In early October 2019, EMC told BSO and Apsara that it had been acquired by McKay Brothers. At the same time, it informed them that EMC had decided to undertake a “Quality Review” of all of its processes and products, with the consequence that there would be a “pause” on all shipments of radios. [6] When the primary judgment was given in April 2021,1 EMC was yet to supply any radios to BSO/Apsara, and it had cancelled orders for parts which were required to build them.2 [7] This proceeding was commenced by an originating application filed in November 2019. By an amended originating application, BSO and Apsara sought, as final relief: (a) the specific performance of the 2019 agreements; (b) alternatively, a declaration that EMC had repudiated the 2018 agreement and the 2019 agreements; (c) damages for breach of the 2018 and 2019 agreements; (d) an injunction restraining EMC from taking any steps to deliver or supply to McKay Brothers (or any of its related entities) the W Band radio which was the subject of the 2018 agreement; (e) an injunction restraining EMC from disclosing anything about the 2018 agreement and the 2019 agreements to McKay Brothers or its related entities; (f) equitable compensation for the disclosure of information by EMC in breach of its duty of confidence owed to BSO and Apsara. [8] Another judge ordered that there be a trial of the issues of “liability” ahead of the trial of other issues, and the parties then settled some 19 issues for that prior determination. [9] In extensive reasons for judgment, the trial judge (Ryan J) answered those questions, concluding, most importantly, that the 2019 agreements were made between EMC and Apsara, and that EMC had repudiated them by manifesting an intention to perform them only “if and when” it suited it to do so. Her Honour accepted that it was an implied term of the 2019 agreements that the radios were to be supplied within a reasonable time, but that she was not satisfied that such a time had expired by the commencement of the trial in July 2020. Consequently, she rejected the claim that EMC was in breach of contract for failing to supply under the 2019 agreements. [10] As to the claims for misuse of confidential information, the judge accepted that some information, which was confidential to BSO and Apsara, had been disclosed to 1 BSO Network Inc & Anor v EMClarity Pty Ltd (No 2) [2021] QSC 73 (the Judgment). 2 Judgment [46]. -- 5 of 33 -- 6 McKay Brothers, which whilst not breaching EMC’s contractual duty of confidence, had breached EMC’s equitable duties in relation to that information. [11] After publishing her reasons, the judge subsequently made orders in the nature of declarations and injunctions. [12] It was declared that: (a) the 2018 agreement was terminated at or by the time of entry into the 2019 agreements; (b) EMC had repudiated the 2019 agreements; (c) EMC had breached its equitable duty of confidence by disclosing certain material to McKay Brothers on 27 September 2019. [13] By the injunctions, EMC was permanently restrained from: (a) further disclosing certain documents to McKay Brothers, with the proviso that this would not restrain: o disclosure of information already in the public domain, or which came into the public domain (other than by breach of the order); o further disclosure of the content of the reasons for judgment to a certain named individual in accordance with her undertaking; o disclosure of the contents of those documents to that individual on the terms of the same undertaking, or to another director, officer or employee of McKay Brothers for the purposes of the proceeding; (b) using certain documents other than in accordance with the 2018 agreement or to the extent necessary for the purpose of this proceeding. [14] The other claims made against EMC were dismissed. [15] In essence, EMC’s appeal and the respondents’ appeal and cross-appeal raise five questions, namely: 1. Whether the 2019 agreements constituted variations to the 2018 agreement, or whether, as the judge held, they were agreements which displaced the operation of the 2018 agreement. 2. Whether the judge correctly identified the parties for the 2019 agreements as EMC and Apsara. 3. Whether EMC repudiated the 2019 agreements. 4. Whether EMC breached a duty of confidence. 5. Whether, by July 2020, EMC was in breach of the 2019 agreements for failing to supply the products within a reasonable time. The 2018 agreement3 [16] The 2018 agreement was made in writing. It was expressed to be an agreement between BSO as “the Customer” and EMC. 3 ARB 693. -- 6 of 33 -- 7 [17] The parties defined the “Project” to involve the development and the provision of a production batch of a new radio for use by the Customer to provide communications services. The “target specification” for this radio was described in a schedule to the agreement. [18] The agreement provided that the Project would be conducted in three stages, namely: • Stage 1, which would involve the preliminary design; • Stage 2 (if the customer did not elect to terminate the agreement after Stage 1) in which EMC would develop and test the modem and W Band converters and conduct certain compliance testing; • Stage 3 (if the Customer did not elect to terminate the agreement after Stage 2) in which EMC would build 10 production radios for delivery to the Customer for installation by the Customer in a commercial application. [19] The agreement specified seven milestones, the first being the signing of the agreement and the last being the final acceptance on delivery of the production units. It provided for certain payments, in varying amounts, as each milestone was reached. [20] The fourth milestone was described as the successful design review of the final design, when a payment of $75,000 was to be made which would result in payments totalling $250,000 having been made for the development of the product. The payments to be made for milestones 5, 6 and 7, within the production phase, totalled $500,000. [21] Further provision was made for the termination of the agreement within clause 5. EMC agreed that the Customer might terminate the agreement at any time, for any or no reason, upon 30 days’ notice and upon payment of the amount specified for the next milestone. It contained provision by which the Customer might terminate the agreement up to the end of milestone 4. It was further agreed that the Customer could terminate the contract prior to making the payment for milestone 4, with the consequence that it would forfeit the payments it had made for milestones 1, 2 and 3. If the Customer did not do so, production was to commence, and the Customer was required to accept the achievement of milestone 4 and make that payment of $75,000. [22] Milestone 5 was defined as the placement of a production order for 10 radios and required a payment of $300,000. Milestone 6, for which a payment of $150,000 was required, would be reached by the successful testing of the radios. [23] The agreement anticipated further sales upon successful completion of the project. EMC agreed that it would sell to the Customer any product ordered by the Customer, where that order was accepted by EMC, on what were defined to be the Sale Terms. [24] The agreement provided, in the event of a termination of the agreement or its expiry, for the parties’ entitlements to what was referred to as Confidential Information, which was defined to mean information of the terms of the agreement, including any pricing information, and “Customer Material”, which was defined to mean: “[A]ny material provided by or to which access is given by Customer to EMC for the purposes of this agreement …”. [25] By clause 5.8(b), the parties agreed that on termination or expiry of the agreement: -- 7 of 33 -- 8 “[E]ach party must deliver to the other party any of that party’s Confidential Information or other property in the party’s care, custody or control, provided however that the returning party may retain copies of the Confidential Information solely for archival purposes and/or to the extent necessary to comply with such party’s document retention policies and, provided further, that any Confidential Information retained for such purposes shall remain subject to the confidentiality and non-use provisions hereof for so long as such Confidential Information is retained.” [26] Clause 7.3 provided that each party might use and disclose Confidential Information of the other party only with the prior written consent of the other party or: “(b) to that party’s directors, agents, professional advisors, employees, contractors and permitted sub-contractors solely for the exercise of rights or the performance of obligations under this agreement; or (c) to auditors, lenders (or potential lenders), investors (or potential investors) of such party.” [27] Importantly, by this 2018 agreement, the parties acknowledged that the outcome of the project could not be guaranteed and that “[d]esign activity including simulation modelling and the use of other methods will identify potential critical points of failure which can then be designed out.” Performance of the 2018 agreement [28] In accordance with this agreement, the invoice for the payment upon milestone 1 was issued to BSO. The person who was nominated within the agreement as the representative of the Customer then asked that the invoice be addressed instead to Apsara, which it then was, and that invoice was paid in early August 2018. EMC then began work on the project. [29] Milestone 2 was defined as the submission of a preliminary design report. That occurred in November 2018. [30] Work towards milestone 3 occurred in a period from November 2018 to January 2019. There were problems with the development of the product which need not be discussed here. The invoice for milestone 2 had not been paid, but that invoice, and the invoice for milestone 3, were paid by Apsara on 12 March 2019. [31] By the end of January 2019, BSO’s representative was urging upon EMC’s representative that “we really do need to accelerate this programme and start getting product in the field” and he asked “[w]hat is the current timeline for deliveries?”.4 In reply, EMC’s representative acknowledged that the project had not progressed as had been expected, but gave the assurance that the preliminary design work had been completed and that “we have a solid design specification to achieve good network performance which has been modelled”, and that the product cost was known.5 In the same email, EMC’s representative said: 4 Judgment [117]. 5 Judgment [119]. -- 8 of 33 -- 9 “Realistically, if BSO confirms the design specification and the accurate costs then we are looking at another three months to complete the development. …. Once we have a design completed, the nominal lead time on production units is three months from order. This doesn’t necessarily have to be sequential with the design phase as certain of the longer lead time parts can be ordered in advance.” (Emphasis added.) In the same email, EMC’s representative suggested, as an alternative course (“out of left field”) that in the circumstance of another customer of EMC not having renewed its contract for the exclusive provision of E Band radios, BSO might wish to consider those radios for its network. [32] As the trial judge remarked, nothing in that email from EMC suggested any doubt that the successful development of the W Band radio or its production would occur.6 Thus began the communications between the parties which resulted in the 2019 agreements. The making of the 2019 agreements [33] The judge found that on 7 or 8 February, Mr McGowan of BSO and Dr Baines of EMC had a telephone conversation, in which Mr McGowan said that he was only considering purchasing E Band radios on the basis that they could be immediately deployed, or in other words, that they would require no further development.7 [34] On 8 February 2019, Dr Baines emailed Mr McGowan saying, amongst other things:8 “We’ve been thinking about the timelines and believe that we can have working product of both W-band and E-band in about three months if we push the go button now. We’ve been working out how we can do both converter developments in parallel … We normally advise that production orders can be filled in 3 to 4 months from receipt of order. In the past, we have normally completed development then the customer has placed their production order, so the development and production timelines add together. With your interest in purchasing devices … early, then we could build the quantity of pre-production units you need for the first path in the design phase so when development is completed and they have passed compliance testing we can ship these units to you for deployment, saving a lot of time. … We suggest we get this all under way now by advancing to the final design stage.” He attached to that email invoices for milestones 2 and 3 under the 2018 agreement. [35] On the following day, Mr McGowan replied: 6 Judgment [120]. 7 Judgment [129]. 8 ARB 846. -- 9 of 33 -- 10 “I think I’ve missed something. What E-Band development? I thought this was off the shelf.” [36] On 13 February 2019, in response to an email from Dr Baines asking for his “thoughts on proceeding with the W-Band development”, Mr McGowan said “We’re going ahead with W-band,” and told him that he had submitted the invoices for processing and payment. [37] On the following day, Dr Baines provided a quotation for 16 E Band radios on terms that 50 per cent of the price would be paid on order, 30 per cent on factory acceptance testing and 20 per cent on acceptance of delivery. Mr McGowan then asked Dr Baines to provide a quotation for the W Band equipment in the same format, which Dr Baines did on 26 February 2019, providing a quotation which contained payment terms of 60 per cent of the price on order, 30 per cent on factory acceptance testing and 10 per cent on delivery. [38] As noted earlier, the invoices for milestones 2 and 3 were paid on 12 March 2019. This followed a meeting in Brisbane between Mr McGowan and Dr Baines in which they discussed the progression of both the W Band and E Band radios. On 14 March 2019, Dr Baines sent another quotation which was described as a “Network Equipment Quote”. It was for the cost of EMC purchasing equipment for the development of functional prototypes of the W Band and E Band radios. In his covering email, Dr Baines said that because there was a 12 to 14 week lead time for some of the necessary parts, there was an advantage in EMC ordering them at that time so that “we will be able to start production (having already received all parts) immediately after the design and prototypes are finished.” [39] Over the following weeks, the parties continued to discuss the supply of both W and E Band radios, by reference to the respondents’ new strategy (referred to by the primary judge as the “Alternative Strategy”) to upgrade its services in the New Jersey Equity Triangle in four phases, which would require certain E Band radios and W Band radios at different times. Dr Baines emailed Mr McGowan on 26 April 2019, providing EMC’s “most up to date thoughts on timing of deliveries”. He gave the following estimates: “Timing Estimates These assume that we complete the contractuals and you place your orders next week. Phase 1 Delivery : 9 Weeks – 1-July-2019 Phase 2 Delivery : 9 Weeks E-Band – 1-July-2019, 22 Weeks W-Band (After design complete) 30-Sep-2019 Phase 3 Delivery : 22 Weeks W-Band (After design complete) 30-Sep- 2019 Phase 4 Delivery : 22 Weeks W-Band (After design complete) 30-Sep- 2019 … We expect the development of the prototype W-band 64QAM to be finished in 8 weeks. We could build an extra prototype link and then you could install that one. -- 10 of 33 -- 11 … If we can confirm everything next week then the way we will arrange production is to build all of the W-Band MODEM halves at the same time as building the E-Band links then with the W-Band design complete building the W-Band components and adding to the unit. I’m also working on the contractuals as I promised Michael and Emmanuel. I will give you a new quote reflecting what you have put below on the phases, and also a contract containing all the terms we have collectively been discussing.”9 [40] On 2 May 2019, Dr Baines provided a further quotation. It was addressed to Mr McGowan of “BSO Networks”. (In fact there was no company of that name.) In his covering email, Dr Baines wrote, by reference to the respondents’ four phases for its proposed upgrade of services:10 “Timing - Assuming orders are placed this week These assume that we complete the contractuals and you place your orders next week. Phase 1 Delivery : 9 Weeks - 1-July-2019 Phase 2 Delivery : 9 Weeks E-Band - 1-July-2019, 1 Weeks W-Band 15-July-2019 (To hit this I need you to order all phases this week because I will order a number of the expensive 90GHz PAs so we can cherry pick to get the best performing radio) Phase 3 Delivery : 22 Weeks W-Band (After design complete) 30-Sep- 2019 Phase 4 Delivery : 22 Weeks W-Band (After design complete) 30-Sep- 2019 Note on Phase 2 W-Band delivery. We expect the development of the prototype W-band 64QAM to be finished in 8 weeks. We will be building an extra prototype link to achieve this timing for Phase 2 and you can install that one. We will have to be confirm [sic] by 8 May Aus time (7 May in USA) with our suppliers on the high value long lead time items. If we had to delay or re-order then we go back to standard lead times, meaning an additional 7 weeks. This impacts the delivery of the E-band units and the first W-band link. No problem with taking amendments on the order for MAH - SEC. They might result in a change to the timing of the delivery of that phase but hopefully not. It really depends on how radical the changes might be. Given our lead times and wanting to get this delivered for you as soon as possible, receipt of your order will be the trigger to build. That’s 9 ARB 1634. 10 ARB 1071. -- 11 of 33 -- 12 when we will have to commit with our suppliers. Usually our trigger to ship is passing FAT [Factory Acceptance Testing]. Is that what you had in mind? …” [41] The quotation included these terms and conditions: “4) No agreement for supply exists between EMClarity and customer until (1) EMClarity has received an official purchase order from Customer, (2) EMClarity has returned a purchase order confirmation to customer and an invoice for the first part payment, and (3) the customer has paid the first part payment into EMClarity’s bank account in accordance with the invoice. 5) Payment Terms. 50% due on orders, 50% due on January 31st , 2020. … 12) Exclusivity / First Right of Refusal. In return for ordering all the items for the full project together and making payment for the overall project according to 5) above, BSO shall have first right of refusal as follows: a) Product. 64QAM W-band radio with latency less than one micro second. b) Application. Ultra-low latency networks used for Financial Services. c) Territory. New Jersey, Chicago, Toronto, Sydney. d) Start. The date on which the last W-band link ordered in this overall project is commissioned in the production network and accepted as functioning according to specification. e) Period. Up until 12 months after the Start. … g) Right. BSO shall have the right to order the equivalent equipment as on the Competing Order on substantially the same terms and conditions as on the Competing Order and in return EMClarity shall not accept the Competing Order.” [42] On 10 May 2019, EMC sent an amended quotation which was relevantly upon the same conditions except that it added a new exclusivity provision, numbered 12(f), as follows:11 “Exclusivity. BSO shall have exclusive access in a given calendar year to the Product in the Application in the Territory while the total of all purchases from EMClarity exceed [a certain dollar figure] in that calendar year.” 11 ARB 1105. -- 12 of 33 -- 13 [43] On 11 May 2019, McGowan emailed two purchase orders. They were in the name of Apsara and on its letterhead. They were orders for what had been quoted for phases 1 and 3 of the respondents’ planned upgrade. He wrote to Dr Baines that the proposal for phase 2 was “on hold”. However, on 16 May 2019, Mr McGowan did send a purchase order for phase 2 and he sent an order for phase 4 on 7 June 2019. Again, those orders were placed in the name of Apsara. [44] EMC issued invoices to Apsara in response to the purchase orders, which required immediate payment, according to the quotation, in the amounts of 50 per cent of each order, and the other 50 per cent on 31 January 2020. [45] On one view, a single contract was thereby made in 2019. The trial judge referred to four contracts (one for each phase). The effect of the 2019 agreements [46] The respondents’ case is that by the 2019 agreements, EMC became unconditionally bound to deliver the radios and the other equipment specified within them. EMC’s obligation to deliver was not conditional upon the successful development of the radios. If for any reason the radios could not be successfully developed, so that they could not be supplied, EMC would be in breach of contract. The parties thereby contracted upon a different basis from that used in the 2018 agreement, in which by clause 1.4 of that agreement, the parties had acknowledged and agreed that the outcome of research projects such as that the subject of the agreement could not be guaranteed. On the respondents’ case, there was no such term of the 2019 agreements. [47] EMC accepts the respondents’ primary position that in 2018 it contracted with BSO as a principal. However EMC says that the 2019 agreements were also made with BSO, and not with Apsara. It says that the practice which developed under the 2018 agreement, by which Apsara was invoiced and made the payments, was to continue under the 2019 agreements without Apsara itself being a party to the contract. Further, EMC argues that the 2019 agreements did not have the effect of terminating the 2018 agreement; rather, they constituted a variation of it. Consequently, EMC says, its obligation to supply equipment under the 2019 agreements remained conditional upon its successful development of the radios. [48] EMC submits that the trial judge was wrong to find that the 2019 agreements were made with Apsara in circumstances where: (a) the parties to the 2018 agreement were EMC and BSO, and in that agreement BSO was defined as the “Customer”; (b) EMC’s quotation also used the term “Customer”, and the quotation was addressed to BSO and referred specifically to BSO in some of the conditions; (c) those conditions included clause 12 which conferred rights of exclusivity in several locations, including Chicago, Toronto and Sydney which were outside the New Jersey Equity Triangle where the subject radios were to be used; (d) Apsara was a wholly owned subsidiary of BSO; (e) under the 2018 agreement, invoices were addressed to Apsara whilst BSO remained the contracting party; -- 13 of 33 -- 14 (f) the purchase orders were issued by Apsara, but they were issued in response to the quotation which was addressed to BSO; (g) the purchase orders were approved and signed by an individual who was BSO’s CEO and who had signed the 2018 agreement in that capacity. [49] It is further submitted for EMC that the case accepted by the trial judge would leave the status of the 2018 agreement uncertain. It is said that because only the parties to the 2018 agreement could bring it to an end, if BSO was not a party to the 2019 agreements then the earlier agreement could not have been displaced by them. [50] The circumstances which are relied upon by EMC are not misstated, but they do not represent the complete picture. Most importantly, they do not have regard to the conditions of the quotation which provided for the way in which a binding agreement would be concluded. [51] Clause 4 of the quotation provided that no agreement for supply would exist between EMC and the Customer until EMC had received a purchase order from the Customer, EMC had returned a purchase order confirmation and an invoice for the first part payment and the Customer had made that payment in accordance with the invoice. There was no question that each of the purchase orders had been sent by Apsara, that EMC had issued invoices addressed to Apsara and that it was Apsara which paid the invoiced amounts. [52] Further, as the judge took into account,12 BSO described Apsara as the “operating company” which owned the assets for the New Jersey Equity Triangle network, and Apsara was the intended end user of the developed product. It may be accepted that BSO, as the holding company of Apsara, caused Apsara to respond to the quote as it did. But it was telling that the products to be supplied were ones which would be used by Apsara in Apsara’s business. [53] The circumstance that the rights of exclusivity conferred by clause 12 of the conditions were rights which referred specifically to BSO, and were rights which could be exercised in several locations outside the New Jersey Equity Triangle, was a significant but not determinative factor. The judge was correct to find that when EMC issued its quotation, it was expressing a willingness to contract with BSO and its subsidiaries, including Apsara.13 In responding to the purchase orders as EMC did, EMC was agreeing to contract with Apsara according to the conditions of the quotation as if any reference to BSO was a reference to Apsara. The consequence may have been that the exclusivity provisions of clause 12 went further than may have been required for Apsara’s business. There was no finding to that effect, but assuming that to be the case, it is not such a critical circumstance as to displace the unambiguous terms of the quotation as to how and when a concluded agreement would be made and the conduct of Apsara in proceeding according to those conditions. [54] Of course, EMC is correct to say that the further performance of the 2018 agreement was a matter for EMC and BSO. By early March 2019, BSO had paid for milestone 3. The next milestone would have been reached by a “successful review of the finished design”. BSO had to accept milestone 4 prior to work starting on the production 12 Judgment [260]. 13 Judgment [316]. -- 14 of 33 -- 15 build, but it was entitled to discontinue further work prior to making the payment for milestone 4 in which event it would forfeit the payments for milestones 1, 2 and 3. In other words, BSO was then entitled to unilaterally terminate the 2018 agreement. Whilst it did not do so in any formal way, by its participation in the negotiations and the steps by which the 2019 agreements were made, unequivocally BSO evinced an intention to displace the 2018 agreement by the agreements which it caused Apsara to make in 2019. [55] The conclusion that EMC contracted with BSO in 2018, but not in 2019, is sufficient to dispose of the argument that the 2019 agreements were a variation of the 2018 agreement. In any event, the terms of the 2019 agreements would lead to the same result, had the contracting parties been identical. [56] EMC’s argument criticises some of the reasoning of the trial judge as being an impermissible reference to the pre-contractual negotiations in considering the effect of the 2019 agreements. It is said that the proper approach is to ascertain the objective intention of the parties by construing the agreements themselves. That may be accepted; the respondents’ case appears to have been that the 2019 agreements were made wholly in writing. Accepting that to be so, the terms of the 2019 agreements, contained within the quotation, contain no indication that they are variations of the 2018 agreement. [57] The first thing about the terms of the quotation is that they make no reference to the 2018 agreement. Rather than referring to an existing contractual relationship between EMC and BSO, EMC’s terms and conditions set out in its quotation provided that there would be “no agreement for supply” which would exist between EMC and the Customer until there had been a purchase order which had been returned by EMC with an invoice, and that invoice had been paid. [58] Secondly, the quotation was referrable to a contract or contracts for the supply of radios and other equipment. Condition number 6 did refer to EMC’s test plans for Production Factory acceptance testing. But on its face, that provision was a reference to the product being tested “to specification”, meaning that it was to be tested to see if it complied with the specification rather than this being a step in the development of the product as the 2018 agreement had provided. [59] Thirdly, and related to that second point, EMC’s terms and conditions contained no reference to the further development of the products, or to a possibility that the products might not be able to perform to the specification and be fit for the Customer’s purposes. [60] Fourthly, the terms of payment, namely 50 per cent on order and 50 per cent on 31 January 2020, negate the suggestion that the 2019 agreements were conditional upon the satisfactory development of the product. Just as nothing was said in the terms and conditions as to the possibility that the products could not be supplied, so too was nothing said as to whether, if the products could not be supplied, the part payments could be retained by EMC, or would have to be returned. In the same way, the final payments were due on a fixed date, rather than by reference to a date on which the products had been developed, or they were developed and produced and ready for delivery. -- 15 of 33 -- 16 [61] Further, in construing the terms of the quotation, it is legitimate to have regard to the context in which the quotation was provided and the agreements were concluded. The context was that an agreement had been made in the previous year between EMC and BSO, which was performed on each side to the conclusion of milestone 3. Most of the work involved in the development of the W Band radios, measured in dollar terms at least, had been performed.14 The 2019 quotation was made in the context of a common understanding that at least most of the development work for the W Band radios had been undertaken. [62] In addition, the quotation was furnished in a circumstance where the E Band radios had become available because another customer no longer required them. Despite a passing reference, some months prior to the quotation, to the development of the E Band radios,15 the parties proceeded on the common understanding that the E Band radios would require no development. Significantly, phase 1 of the overall project involved the provision of only E Band radios. It could not have been thought that an agreement to supply E Band radios was conditional upon some further development of that product. Nor could it have been thought that an obligation to supply E Band radios was conditional upon the successful development of W Band radios. [63] In summary, the terms of the quotation were unambiguous in providing for the supply of radios and other equipment, with no condition precedent to EMC’s performance that any further development of any of these products be successful. Further, if it were necessary to do so, recourse to the context of the parties’ common understanding that the W Band radios had been developed to the third milestone of the 2018 agreement would confirm that effect of the quotation. [64] Therefore quite apart from the difference in the identity of the party which contracted with EMC, the terms of the 2019 agreements do not bear a construction of a variation of the 2018 agreement. This was a new contract or contracts, evidently intended to displace the 2018 agreement. It was unnecessary for the 2018 agreement to be formally terminated; its displacement by the 2019 agreements was so obvious as to go without saying. [65] The trial judge declared that the 2018 agreement, made between BSO and EMC, “was terminated at or by the time of entry into the 2019 agreements … between [Apsara] and [EMC]”. The judge was correct to do so and EMC’s appeal in that respect must be dismissed. Repudiation [66] On 8 October 2019, Dr Baines told Mr McGowan and others that McKay Brothers had acquired EMC. In the same telephone conversation, Dr Baines told them that McKay Brothers was beginning a project described as a quality review of EMC’s products, in consequence of which all shipments of radios had been stopped and it was not known for how long. [67] On 18 October 2019, Dr Baines told Mr McGowan that the board of EMC had resolved to confirm the pause of all shipments of radios pending the review of EMC’s products and production processes. 14 The total payments for milestones 1 to 3 amounted to $175,000 of a total development cost of $250,000. 15 See [33]-[35] above. -- 16 of 33 -- 17 [68] At this time, EMC had begun the building of a prototype for the W Band radio. Within EMC there was a view that the quality review, so far as this product was concerned, could be most successfully pursued after the building of the prototype. However the development of the prototype ceased.16 [69] In an affidavit by Dr Baines, there was evidence that after McKay Brothers acquired EMC, the EMC Board asked Dr Baines to review, and cancel if possible, orders for component parts which had not been supplied and to determine whether it was possible to return any inventory which had been acquired and which was not likely to be used in the final design “based on the findings of the Quality Review”.17 There was evidence that orders for parts had been cancelled, under the direction of EMC’s board, on 16 January 2020,18 and again on 9 March 2020.19 [70] In his affidavit dated 11 June 2020, Dr Baines said that the quality review of EMC’s work on E Band and certain other radios was progressing and that he believed that it was likely that the review of “E Band issues could be completed by around the end of 2020”. His evidence in that affidavit was that this quality review would also “progress the development” of W Band radios. [71] The trial judge concluded that the 2019 agreements “were straightforward agreements to supply certain products within a reasonable period of time”, and that they “did not contemplate an indefinite delay in the development or delivery of products whilst a Quality Review – genuine or otherwise – of an indefinite duration was undertaken.” Her Honour held that the defendant’s conduct in – • implementing the quality review which contemplated a review of W Band products as its lowest priority and for which there was no end in sight; • ceasing the development of a W Band prototype; • ordering an indefinite pause on shipments of products; and • cancelling orders for component parts, viewed objectively, would convey to a reasonable person that EMC had repudiated its obligations under the 2019 agreements by manifesting an intention to perform those agreements only if and when it suited EMC.20 [72] EMC challenges the trial judge’s finding of a repudiation of the 2019 agreements. But it does so upon the premise that her Honour’s conclusion, that EMC’s obligation to supply was unconditional, is overturned.21 Consequently, EMC’s challenge to the finding of repudiation must fail. [73] It may be added that, had EMC established that the 2018 agreement was varied by the 2019 agreements in the way for which it contended, EMC would have been obliged to continue to develop a W Band radio, and the same conduct would have been repudiatory. By its conduct, EMC demonstrated the absence of a willingness to perform, going to the root of the 2019 agreements, or alternatively, to the contract for which EMC contends.22 16 Judgment [235]. 17 Judgment [237]. 18 Judgment [239]. 19 Judgment [240]-[241]. 20 Judgment [429]. 21 Appellant’s outline of argument paragraph 28. 22 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 at [44] per Gleeson CJ, Gummow, Heydon and Crennan JJ. -- 17 of 33 -- 18 [74] The trial judge declared that by the conduct which I have set out above at [71], EMC repudiated the 2019 agreements between EMC and Apsara. The appeal against that order must be dismissed. Duties of confidence [75] The judge made a declaration that EMC breached its equitable duty of confidence to the respondents by disclosing the quotation of 10 May 2019 and the purchase orders submitted by Apsara to certain individuals on 27 September 2019. [76] That order represented only a partial success on the respondents’ pleaded case. They alleged a breach of both a contractual duty or obligation of confidence and an equitable duty. The contractual duty was derived from the 2018 agreement. [77] By clause 5.8, the 2018 agreement provided that on termination or expiry of the agreement, each party was to deliver to the other any of that party’s “… Confidential Information or other property in the party’s care, custody or control, provided however that the returning party may retain copies of the Confidential Information solely for archival purposes and/or to the extent necessary to comply with such party’s document retention policies and, provided further, that any Confidential Information retained for such purposes shall remain subject to the confidentiality and non-use provisions [of the 2018 agreement].” The term Confidential Information was defined to mean the terms of that agreement, including any pricing information, and to include “Customer Material”, a term itself defined to mean any material provided by or to which access was given by the Customer to EMC for the purposes of the agreement. [78] By clause 7.1 of the 2018 agreement, each party agreed to keep confidential, and not to use or disclose other than as permitted by the agreement, any Confidential Information of the other party provided to or obtained by that party before or after entry into the agreement. By clause 7.3, each party was entitled to use and disclose Confidential Information of the other party to that party’s directors, agents, professional advisors, employees, contractors and permitted sub-contractors solely for the exercise of rights or the performance of obligations under the agreement or to investors or potential investors of that party. [79] The trial judge confessed to some difficulty in interpreting the present respondents’ pleaded case and arguments upon the breach of confidence case. However her Honour was able to distil the respondents’ case to three instances of disclosure of information by EMC to McKay Brothers. They were – • EMC’s (unintentional) sending of an invitation to Mr Boyle of McKay Brothers, to the W Band Project meeting and emails which passed between Mr Boyle and Dr Baines following that invitation; • EMC’s provision of redacted copies of the 2018 agreement, the quotation of 10 May 2019 and the purchase orders to Mr Boyle during a period in which McKay Brothers was undertaking due diligence towards acquiring EMC; • EMC’s provision of unredacted copies of those documents to EMC’s directors, who were affiliated with McKay Brothers (being the four individuals named in the declaration which was made) on 27 September 2019 after McKay Brothers had acquired EMC. -- 18 of 33 -- 19 [80] The respondents’ case was that the disclosures in the first category involved a wrongful disclosure to McKay Brothers that EMC was developing a W Band radio for BSO. The case in relation to the other categories was that EMC wrongly disclosed to McKay Brothers that EMC was developing a W Band radio for BSO as well as the content of BSO’s 2019 strategy for the provision of its services in the New Jersey Equity Triangle as detailed in the four phases represented by the four purchase orders. [81] The trial judge recorded EMC’s case as being that its contractual obligations of confidence were qualified here by clause 7.3 of the 2018 agreement, and that any co- existing equitable obligation of confidence was subject to the same constraint.23 [82] The judge accepted that information as to the existence and content of the W Band project, the terms of the 2018 agreement and Customer Material under the 2018 agreement were confidential and within the definition of Confidential Information in the 2018 agreement.24 She was also of the view that BSO’s 2019 strategy, as revealed by the quotation and purchase orders, was confidential, although not falling within the definition of Customer Material under the 2018 agreement. There is no challenge to those findings. [83] The judge was not persuaded that the first instance of information provided to Mr Boyle constituted the disclosure of confidential information. She accepted that it was careless for EMC to send the invitation to Mr Boyle and unprofessional of Dr Baines to say anything more about the W Band project to him. However the judge was not persuaded that the recipient of that information would have concluded that the Customer to whom Dr Baines was referring was “very likely” a competitor of McKay Brothers.25 The judge referred to evidence about EMC’s customers and that its E Band and W Band radios were also supplied to “military and defence forces” and “telecommunications companies”.26 The judge was not persuaded on the evidence that EMC’s primary work was the production of radios for use in the New Jersey Equity Triangle high frequency trading market.27 [84] As to the second instance of disclosure, the trial judge found that a disclosure of the redacted version of the 2018 agreement had disclosed that BSO had asked EMC to develop a W Band radio with certain specifications and that there was then an expected timing for the production of those radios.28 However “with some hesitation”, her Honour concluded that the provision of redacted copies of the quotation and purchase orders, while coming “very close” to disclosing BSO’s 2019 strategy, “fell just short of doing so”.29 [85] As to the third instance of disclosure, the judge had no difficulty in finding that BSO’s 2019 strategy was disclosed by the provision of the unredacted quote and purchase orders to the McKay Brothers’ affiliated directors of EMC, and noted that EMC did not suggest otherwise.30 [86] The trial judge found that EMC was under an equitable duty of confidence not to disclose the unredacted “Alternative Strategy, the Quote and the Purchase Orders”.31 23 Judgment [446]-[447]. 24 Judgment [449]. 25 Judgment [459]. 26 Judgment [460]. 27 Judgment [462]. 28 Judgment [465]. 29 Judgment [474]. 30 Judgment [475]. 31 Judgment [538]. -- 19 of 33 -- 20 Her Honour cited the judgment of Deane J in Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2), who said:32 “It is unnecessary, for the purposes of the present appeal, to attempt to define the precise scope of the equitable jurisdiction to grant relief against an actual or threatened abuse of confidential information not involving any tort or any breach of some express or implied contractual provision, some wider fiduciary duty or some copyright or trade mark right. A general equitable jurisdiction to grant such relief has long been asserted and should, in my view, now be accepted (see The Commonwealth v John Fairfax & Sons Ltd). Like most heads of exclusive equitable jurisdiction, its rational basis does not lie in proprietary right. It lies in the notion of an obligation of conscience arising from the circumstances in or through which the information was communicated or obtained. Relief under the jurisdiction is not available, however, unless it appears that the information in question has the “necessary quality of confidence about it” (per Lord Greene M.R., Saltman) and that it is significant, not necessarily in the sense of commercially valuable … but in the sense that the preservation of its confidentiality or secrecy is of substantial concern to the plaintiff …” (Footnotes omitted.) [87] She concluded that EMC breached its equitable obligation of confidence when it disclosed the unredacted copies to the four individuals.33 She added: “ [547] I appreciate that EMClarity’s board, post the McKay Brothers’ takeover, may have had a legitimate reason for wishing to understand EMClarity’s contractual obligations. But there were ways in which EMClarity could provide relevant information to its board – including its new members – while at the same time abiding by its equitable duty of confidence insofar as the Alternative Strategy was concerned. Those ways included providing the board with redacted documents, or engaging an independent third party to summarise them in such a way as to protect the confidentiality of the Alternative Strategy.” [88] EMC argues that the judge was wrong to conclude that this was a breach of an equitable duty of confidence, for two reasons. The first is that assuming that the 2019 agreements were distinct contracts from the 2018 agreement, the respondents could have had no reasonable expectation of a duty of confidentiality beyond that which BSO would have had under the regime which the parties had put in place in 2018. Secondly, it is said that the disclosure to these individuals was purely an internal communication of the documents within EMC, to EMC’s governing minds, so that it did not involve a disclosure by EMC. Neither of those arguments was advanced at the trial. [89] That first argument is unpersuasive. Not only were the 2019 agreements distinct from the 2018 agreement, they were made with a different customer, Apsara. There was no basis for constraining EMC’s duty of confidence according to an agreement which 32 (1984) 156 CLR 414 at 437-438. 33 Judgment [546]. -- 20 of 33 -- 21 was made with another party, albeit Apsara’s parent company, and which agreement was terminated. [90] The second argument, however, has more substance. In the passage which I have set out, her Honour discussed ways in which EMC might have avoided a disclosure of the unredacted documents to the four individuals. Nevertheless, these agreements constituted a sufficiently large transaction for EMC that it was a proper subject for the attention of EMC’s board. By September 2019, of course, the agreements had been made. But the allocation of resources towards EMC’s performance of the agreements, in the context of EMC’s other transactions, was the subject warranting the supervision and guidance of the directors. [91] A use of the information by any of the individuals, other than in discharging his duty as a director of EMC, was another matter. The potential misuse of the information in that way was the basis for a part of the injunctive relief granted by the judge, which I am about to discuss. But as to whether the disclosure of the unredacted material to the individuals, without more, constituted a breach of duty, the argument for EMC should be accepted. Consequently, EMC’s appeal should be allowed to the extent of setting aside the third of the declarations which were made, namely the declaration that EMC breached its equitable duty of confidence by disclosing the quote and the purchase orders to those individuals on 27 September 2019. [92] It was submitted for EMC that in that event, the Court should set aside the injunctions granted within paragraph 4 of the orders. In essence, the argument was that absent a finding of an actual breach of the duty of confidence, there could be no basis for granting quia timet injunctions. The argument focussed upon that part of the order which was in these terms: “The Defendant, whether by its directors and officers, servants, agents or otherwise, be permanently restrained from: (a) any further disclosure of those documents that disclose the contents of the Alternative Strategy, being those documents listed in Annexure A to these orders, to: (i) [the four individuals]; or (ii) any director, officer or employee of McKay Brothers LLC (McKay Brothers) or any direct or indirect affiliate of McKay Brothers, other than EMC, …” There was ample evidence from which to find that there was a sufficient basis for an apprehension of damage in the event that such an injunction was not issued.34 [93] The judge discussed the basis for the respondents’ apprehension of a breach of the equitable duty of confidence by reference to what the parties had agreed was issue number 18 for determination, namely whether the respondents held a belief that EMC would, in the future, breach the confidentiality provisions of the 2018 agreement or the equitable duty of confidence, and whether that belief was reasonable. Her Honour was satisfied that the respondents did hold that belief. 34 See Kestrel Coal Pty Ltd v Construction, Forestry, Mining and Energy Union [2001] 1 Qd R 634 at 640-642 [22]-[27] and the cases there discussed. -- 21 of 33 -- 22 [94] The judge discussed evidence from Mr Boyle (who is one of the four affiliated directors). Mr Boyle’s evidence was to the effect that McKay Brothers became interested in acquiring EMC to ensure a continuity of supply and support for its own radios which EMC was supplying, described as LMDS radios. Mr Boyle said that McKay Brothers moved quickly to acquire EMC because of a concern that there was a potential buyer for EMC’s then parent company, EM Solutions. His evidence was that he had no interest in the respondents’ material and that McKay Brothers was not interested in W Band technology. The trial judge said that this evidence was self- serving and of little weight. She repeated an earlier comment in her judgment that Mr Boyle was an unimpressive witness. She said that Mr Boyle’s evidence that McKay Brothers had no interest in the W Band technology was contrary to his emails to Dr Baines. [95] Her Honour found that McKay Brothers was “happy to take whatever advantage it can” from the circumstance that, by reason of the so-called quality review, the performance of the 2019 agreements had been stalled.35 She referred to the advantage to be gained by McKay Brothers in requiring EMC to prioritise the quality review in so far as it related to the LMDS radios over anything else.36 She found that it was reasonable to assume that McKay Brothers wished to obtain or maintain dominance in the New Jersey Equity Triangle market for its network services, and that if the LMDS radios were not successful as McKay Brothers claimed, it would be reasonable to assume that McKay Brothers would explore alternatives which would include matters touching upon the products to be supplied to Apsara.37 Consequently, she concluded, in the circumstance where EMC was controlled by the McKay Brothers affiliated directors, EMC was at risk of breaching the duty of confidence owned to the respondents.38 [96] There is no basis for disturbing those findings. Consequently, there is no basis for disturbing the injunction granted by paragraph 4(a)(ii). [97] Paragraph 4(a)(i) is a permanent injunction restraining EMC from further disclosure of the documents to the same four individuals. Given my conclusion as to Apsara’s case in that respect, the injunction should be amended by deleting from paragraph 4(a) of the orders, subparagraph (i). Delivery within a reasonable time [98] One of the agreed issues for the judge’s determination was whether the 2019 agreements (or the 2018 agreement as varied) contained an implied term that the E Band and W Band radios would be supplied within a reasonable time. [99] The judge noted that there was no submission by EMC against the implication of such a term, in the event that the 2019 agreements were found to be unconditional agreements to supply the equipment, including the radios. She said that at least the primary challenge to the implication of such a term was based upon the premise that the 2018 agreement had been varied by the 2019 agreements, such that its development stage remained in place.39 35 Judgment [575]. 36 Ibid. 37 Judgment [576]. 38 Judgment [577]. 39 Judgment [333]. -- 22 of 33 -- 23 [100] The judge considered that the term ought to be implied into the 2019 agreements.40 There is no challenge by EMC to the judge’s resolution of that issue. [101] The further issue, which was the subject of extensive argument before the judge and this Court, is whether, at least by the commencement of the trial on 20 July 2020, that reasonable time had elapsed. [102] On this issue, EMC was successful. The judge was not persuaded that a reasonable time for delivery had elapsed by the date of the trial. Her Honour said that whilst it was “tempting” to conclude that it had elapsed by then, she was concerned that such a conclusion would involve “some speculation on my part.”41 [103] It is necessary to say something of the documents filed by BSO and Apsara by which that conclusion is challenged. By their amended originating application (the AOA), BSO and Apsara claimed, within paragraph 6, damages for breach of the 2018 agreement and the 2019 agreements. In her orders made on 31 August 2021, the judge, by order 6(d), dismissed the application which was made by paragraph 6 of the AOA. [104] BSO and Apsara challenged order 6(d), not by a notice of appeal, but by a notice of cross appeal. Rule 754 of the Uniform Civil Procedure Rules 1999, by which a respondent to an appeal may cross appeal, applies where the respondent intends to contend that the decision appealed from should be varied. Therefore, because EMC did not appeal from order 6(d), the cross appeal was incompetent.42 However this irregularity was remedied at the hearing, by a notice of appeal which contends that the judge ought to have found that EMC breached the implied term by failing to deliver the radios by 31 January 2020, or alternatively 20 July 2020. No point was taken as to that notice of appeal being filed out of time. At the hearing, the Court gave leave to amend the notice of cross-appeal in certain respects, and extended the time to file the notice of appeal.43 [105] At the trial, the case for BSO and Apsara was that a reasonable time for the supply of the W Band radios had elapsed by 31 January 2020 (the due date for the final payments for the equipment), or by 6 May 2020 (the date upon which the Amended Statement of Claim was filed), or (at the latest) by the commencement of the trial. In the case of the E Band radios, they submitted that a reasonable time had elapsed by any of those dates or, indeed, by 30 November 2019. [106] BSO and Apsara argued to the primary judge that she should assess what constituted a reasonable time by reference to the various estimates for delivery which had been given by EMC before the 2019 agreements were made. Her Honour summarised the evidence as to those estimates as ranging from the delivery of the E Band radios as soon as 1 July 2019 and the W Band radios as soon as 30 September 2019, with more conservative estimates that the E Band radios would be shipped by mid-October and the W Band radios would be shipped by early November 2019.44 Her Honour referred to evidence from Dr Baines to the effect that those estimates were carefully considered ones, and her Honour considered that EMC was in a position to give reliable estimates.45 The judge also referred to evidence from Dr Baines that EMC’s 40 Judgment [336]. 41 Judgment [382]. 42 Creswick v Creswick & Ors; Tabtill Pty Ltd & Ors v Creswick [2011] QCA 66 at [11]. 43 Transcript 2-2. 44 Judgment [343]. 45 Judgment [344]. -- 23 of 33 -- 24 usual practice was to require final payment upon delivery and that the date of 31 January 2020 was selected because EMC anticipated that delivery would be completed by that date.46 [107] The judge noted EMC’s argument that its estimates were of little use in resolving this question, because they were too optimistic and unguarded.47 EMC argued that a basis for relying upon the estimates, in the calculation of a reasonable time, had not been established because the assumptions upon which EMC had given those estimates had not been identified or proved by EMC’s adversaries.48 The judge noted EMC’s further submissions that a reasonable time had not yet elapsed having regard to the ongoing nature of the so-called quality review, the unavailability of parts and the existence of supplier delays and what was said to be the risks associated with any development of new technology. [108] The judge’s consideration of the arguments began with a summary of the principles which she stated as follows: • what constitutes a reasonable time is a question of fact, the answer to which depends upon the circumstances including the context in which the contract was made;49 • the relevant considerations which govern the reasonableness of the time taken must be determined as at the date of the contract;50 • what is a reasonable time will be assessed by reference to the circumstances as at the date on which, it is said, the obligation should be performed, viewed in context of the contract as a whole;51 • a party is not entitled to justify its delay by relying upon the materialisation of a risk which that party was contractually obliged to bear;52 • the circumstances which are relevant in determining a reasonable time do not include those which were under the control of the party performing the services;53 • what constitutes a reasonable time is determined by reference to what is fair to both parties;54 • a relevant fact is any delay by the party complaining about the lapse of time.55 [109] Those principles were correctly stated and are not in dispute. [110] After a consideration of two cases which the judge thought provided particular practical guidance, namely Hick v Raymond & Reid and Maynard v Goode,56 she 46 Judgment [345]. 47 Judgment [347]. 48 Ibid. 49 Judgment [350] citing Hick v Raymond & Reid [1893] AC 22. 50 Judgment [351] citing Telina Developments Pty Ltd v Stay Enterprises Pty Ltd [1984] 2 Qd R 585 per Connolly J and Sequel Drill & Blast Pty Ltd v Whitsunday Crushers Pty Ltd [2009] QCA 218 at [17] per Fraser JA. 51 Judgment [352] citing Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 450. 52 Judgment [352] citing Sequel Drill & Blast at [17]. 53 Ibid. 54 Judgment [353] citing Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 at 567-8. 55 Judgment [353] citing Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 638-9. 56 (1926) 37 CLR 529. -- 24 of 33 -- 25 described the relevant circumstances which existed when the 2019 agreements were formed, namely:57 • the parties knew that the building of the W Band and E Band radios “would take some time”; • they knew that there might be delays in the supply of component parts for the radios, adding to the build time; • they knew that there was a need for “development” of W Band radios (but not the E Band radios) before they could be built; • consistently with her conclusion that the agreements to supply were not conditional upon the successful development of the W Band radios, EMC was obliged to carry the risk that there would not be a successful development of W Band radios. [111] As to the estimates of time which had been given by EMC, her Honour found them to be “reliable and considered” and based upon assumptions about “ordinary” development/build times and “ordinary” supplier delays.58 She proceeded on the basis that the starting point for the calculation of a reasonable time for the delivery of the E Band and W Band radios, assuming “ordinary” “conditions”, was the most conservative estimate given – that is, the date for the payment of the balance of the invoices, 31 January 2020.59 [112] The judge found that EMC acted with “reasonable despatch” in the months immediately after the 2019 agreements were made, until the company was acquired by McKay Brothers. Until then EMC was reasonable in its attempts to develop the W Band radio and in building the E Band radios, she held.60 [113] The judge considered that EMC had disclosed no issues with the development of the W Band radios which had “impacted upon the build” such that “there could be no postponement of the date upon which [a] reasonable time would elapse for that reason”.61 [114] Her Honour then referred to evidence which, in her view, established that there was a delay with delivery of a certain part, which could not be shipped to EMC until 16 December 2019. That had the consequence, her Honour found, that the radios could not be delivered by 31 January 2020.62 [115] Her Honour then reasoned as follows: “[380] I am prepared to proceed on the basis that there was an extraordinary delay in the delivery of these components, for reasons outside EMClarity’s control, and that EMClarity acted, at least at this point, with reasonable despatch in response to this supplier delay (even though they did not cancel that order and seek out another supplier). I am therefore prepared to proceed 57 Judgment [364]-[365]. 58 Judgment [375]. 59 Judgment [376]. 60 Judgment [377]. 61 Judgment [378]. 62 Judgment [379]. -- 25 of 33 -- 26 on the basis that this supplier delay postponed the date upon which a reasonable time for delivery would have elapsed beyond 31 January 2020. But, on the evidence, it is impossible for me to nominate a date in the future, at which a reasonable time for delivery would elapse, in any reasoned way. [381] Reasonable inferences about timing, which might have been available to me based on the date upon which components were actually delivered, are not available because the defendant cancelled its orders for relevant components. No other evidence was called on this issue. Nor does the evidence assist me with alternatives to the suppliers originally engaged. Conclusion [382] It is tempting to conclude that a reasonable time for delivery had elapsed by the date of trial, but I am concerned that to so conclude would involve some speculation on my part.” [116] Her Honour there said that EMC cancelled its orders for relevant components. Earlier in her judgment, she recorded that this occurred after the McKay Brothers’ acquisition of EMC.63 [117] The evidence of Dr Baines referred to cancellations on 16 January and 9 March 2020. Correspondence between the parties, upon which the judge relied, showed an initial delay of some two months “due to one of the materials” which was followed by a further delay, advised by EMC to Apsara on 10 October 2019, and resulting in the “ship date” being revised to 16 December 2019, due to the supplier of one of the parts having to perform testing before confirming a date for the delivery of that part.64 [118] The respondents challenge the judge’s finding that there was an extraordinary delay in the delivery of components, for reasons outside EMC’s control, which postponed the date upon which a reasonable time for delivery would have elapsed beyond 31 January 2020.65 It is said that this involved four errors by the judge. [119] First, it is said that it was not open on the evidence to find that the delays in the components needed for the production of the W Band radios were extraordinary or outside EMC’s control. It is said that EMC led no evidence that, by reasonable precautions or exertions, it could not have procured the necessary components elsewhere or earlier and so have avoided the delay which followed. [120] The respondents emphasise the occurrence of the so-called quality review, by which the development of a W Band prototype and the production of Apsara’s radios ceased, and orders for the supply of relevant components were cancelled. From these circumstances, considered together with the estimates of the time required for delivery in the negotiations leading up to the making of the 2019 agreements, they say that there was nothing extraordinary or outside EMC’s control in the component delays. [121] Secondly, it is submitted that any delays in obtaining components to produce the W Band radios were irrelevant to the calculation of a reasonable time to deliver the 63 Judgment [223]. 64 Judgment [220]-[222]. 65 Judgment [380]. -- 26 of 33 -- 27 radios. It is said that such delays were a risk which EMC, by the 2019 agreements, agreed to bear. [122] Thirdly, it is submitted that the judge did not have to determine “with absolute certainty” that a reasonable time had elapsed as at 31 January 2020 (or 20 July 2020). Rather, the judge was obliged to make findings on the balance of probabilities. [123] Fourthly, the respondents point out that Apsara sought separate findings as to what was a reasonable time for the supply of E Band radios, as distinct from W Band radios. However, the judge’s conclusion was based upon a finding that supplier delay had postponed the date which would be a reasonable time for delivery of all products beyond 31 January 2020. [124] In response, EMC submits that the judge’s reluctance to find that a reasonable time had elapsed by the date of the trial was correct. EMC emphasises that the respondents had the onus of proof on this issue. [125] As to the relevance of its estimates of time, EMC submits that the initial estimates were based on assumptions about when orders would be placed which did not materialise. It is said that there was a delay in the orders not being placed until 11 May and 7 June 2019, with the consequence that EMC could not order the components within the time it had expected, and the estimates became unreliable. Further, it is submitted that the estimates could not be relied upon where the respondents had not attempted to identify and prove the basis of those estimates, which they bore an onus to do. [126] EMC emphasises that a reasonable time must include a reasonable allowance for the further development of the technology. Again by reference to the onus of proof, EMC emphasises that there was no evidence led by the respondents as to what would have been a reasonable time for the development of a W Band radio. [127] As to the delay in the supply of components, EMC contends that there is no evidence that EMC had any control over how quickly suppliers would provide the components necessary for the radios. EMC disputes that by the 2019 agreements, it accepted the risk associated with delays in obtaining components. [128] Except for the arguments which I have summarised, neither side contends that the judge misunderstood the evidence, failed to consider some part of the evidence or made errors in finding the facts from which a judgment could be made as to the ultimate question. As should appear, an important point of difference between the arguments is about the absence of evidence of a kind which might have been led in a case involving this issue. EMC’s argument emphasises that the ultimate burden of proof on this issue was upon the respondents, whilst they submit that the absence of that evidence is a consideration which is adverse to EMC’s case. Before discussing that point of difference, it is convenient to discuss some other points of significance. [129] The first is the relevance of the quality review. The judge’s conclusion that EMC repudiated the 2019 agreements was substantially based upon EMC pursuing the quality review, and in a way which prioritised the production of other products over those to be supplied under these agreements. The judge declined to make a finding that the quality review was a “sham”, designed to slow the development and production of Apsara’s radios to achieve a competitive advantage for McKay -- 27 of 33 -- 28 Brothers.66 She observed that, as the respondents had acknowledged, it was unnecessary for her to make a finding about the genuineness or necessity of the quality review to find that EMC repudiated the 2019 agreements.67 Some of that reasoning is challenged by the respondents and I will return to it under the next heading in this judgment. For the present issue, the correctness of that reasoning may be assumed. [130] It does not follow, however, that the pursuit of the quality review was something which extended what would otherwise have been a reasonable time for the performance of these agreements. Let it be assumed that McKay Brothers had a legitimate concern about the quality of EMC’s products, such that it was reasonable for EMC, at its direction, to put on hold shipments of its products and the acquisition of components which were required for their production. From the perspective of EMC, a defect in its processes or standards would be a problem which had to be addressed and the quality review might have been a reasonable course to take. [131] However, what constituted a reasonable time for performance must be assessed by reference to what was fair to both parties.68 That was to be determined upon the premise that EMC was a competent supplier with an existing capacity to supply products of this kind and which were of a merchantable quality. In determining what amounted to a reasonable time for performance, an allowance was not to be made for whatever time EMC might require to review its own capacity and standards, together with its processes of manufacturing, in order to be confident that it could perform the agreements as well as all of its other works. To the extent that the supply of Apsara’s products under these agreements was delayed by the pursuit of the quality review, that was not a delay to be allowed in EMC’s favour. [132] The second point concerns the risk from a delay in obtaining necessary components. The argument for Apsara, that this was a risk which EMC became obliged to bear, cannot be accepted. Instead, a delay in obtaining necessary components from a third party supplier was an event in the light of which a reasonable time was to be determined, if that was not a delay which could have been “overcome by the use of any reasonable diligence” on EMC’s part.69 [133] The third point is that although EMC’s obligation to supply under the 2019 agreements was not made conditional upon the successful completion of the development of the W Band radio, the assessment of whether a reasonable time had elapsed had to allow for the time which might have been reasonably required for that step. That said, the development of the W Band radio was substantially advanced by the time that these agreements were made. Further, under the 2019 agreements, work was to be done in progressing the production of radios before the completion of the development phase. In any case, as the judge found, EMC disclosed “no issues with the development of W Band radios which impacted upon the build.”70 [134] The next and critical point concerns the evidentiary value of the precontractual estimates of the time which would be required for the performance of the agreements. Clearly these estimates had no contractual effect. Although the date within each 66 Judgment [397]. 67 Judgment [387]. 68 See above at [108]. 69 Postlethwaite v Freeland (1880) 5 App Cas 599 at 608 per Lord Selborne LC, in a passage applied by Connolly J in Telina Developments Pty Ltd v Stay Enterprises Pty Ltd [1984] 2 Qd R 585 at 591. 70 Judgment [378]. -- 28 of 33 -- 29 agreement for the final payment was fixed by reference to a date by which EMC expected to perform the agreement, EMC did not promise to do so by that date. The implication of the term (for delivery within a reasonable time) was necessary because EMC was not prepared to promise delivery by a certain date. [135] Nevertheless, the estimates of time had an evidentiary value. The judge found that the estimates given by EMC were reliable and considered ones and based on assumptions about “ordinary” development/build times and “ordinary” supplier delays. [136] The estimates of time had an evidentiary value without Apsara having to prove, if that was possible, the particular assumptions and expectations upon which EMC had provided those estimates. They had a probative value as statements by EMC, an experienced supplier, of the time which would be required for further development, production and delivery, absent an unusual circumstance arising which was beyond its control. [137] I go then to the burden of proof. Clearly, the ultimate burden of proof was upon Apsara. It was required to prove that at least by the trial, a reasonable time had elapsed. The estimates of time which EMC had provided, most importantly those from which the date for the final payments was agreed, were capable of proving that by the time of the trial, a reasonable time had passed, unless there had been circumstances, beyond the control of EMC, which had arisen since the agreements were made and which had caused, or but for the quality review would have caused, a delay. [138] Consequently, although the ultimate onus of proof remained with Apsara, an evidential burden passed to EMC to show that there was sufficient evidence to raise an issue that such an unusual circumstance did arise.71 In the absence of that evidence, the precontractual estimates were capable of proving Apsara’s case. The existence of such circumstances, and their impact upon EMC’s ability to deliver the products within the time which it had represented, would have been things within EMC’s knowledge, and not within Apsara’s knowledge. [139] Dr Baines gave affidavit and oral evidence. His affidavit ran to some 108 pages, with exhibits totalling over 500 pages. His affidavit was sworn on 11 June 2020. He was then the managing director and company secretary of EMC, positions he had held since 26 February 2019. He was also the chief executive officer of the company, having held that position from about January 2019. Prior to then, he held the position of general manager of EMC from around June 2017. His affidavit evidence extended to the subject of the quality review and, to an extent, what were described as “delays with suppliers delivering radio and prototype parts”. His evidence on that subject was as follows. [140] After an email to Mr McGowan on 24 July 2019, in which Dr Baines had provided some expected delivery dates, EMC experienced some delays in the sourcing of parts for the W Band prototype.72 Dr Baines referred to an email from EMC’s Mr White to Mr McGowan on 13 August 2019 which recorded “an additional 1 month delay” caused by one of EMC’s suppliers and that EMC was “jumping up and down on this supplier”. 71 See Cross on Evidence, Australian Edition at [7015]. 72 Affidavit paragraph 157. -- 29 of 33 -- 30 [141] He referred to an email of 3 September 2019, again from Mr White to Mr McGowan, in which Mr McGowan was informed of “some timing issues” with respect to the receipt by EMC from its subcontractor of printed circuit boards which were parts for the W Band prototype.73 [142] Dr Baines deposed that EMC began to order components for the W Band prototype in around late May 2019, and received the first of these components on or around 1 July 2019. He said that the most recent component which it had received for the original design of the prototype was a part which was received on 6 January 2020. He described that part as a necessary part of the prototype.74 [143] Dr Baines referred to parts described as HPAs and SPAs, both of which were required for the construction and testing of the prototype. EMC received a quote for the supply of HPAs in February 2019 and issued a purchase order to that supplier on 29 May 2019. It received a quote for SPAs from another supplier on 3 June 2019 and issued a purchase order to that supplier two days later.75 Dr Baines said that as at early January 2020, EMC had not received delivery of any HPA or any SPA. He said that in that month, the EMC board asked him to review and cancel, where possible, any component orders that were still unfulfilled, and to determine if it was possible to return any inventory that was not likely to be used in a final design based on the findings of the quality review.76 He said that the board then considered it “preferable to issue fresh purchase orders at the time the parts [were] required and the specifications for those parts [were] settled so that the most current parts [were] received at that time and EMC [was] not building up a stock of unused inventory in the meantime.”77 Consequently, the HPA purchase order and the SPA purchase order were cancelled by EMC on or about 9 March 2020.78 [144] He said that in addition to the orders for parts to be used in the prototypes, EMC ordered a “production quantity” of HPAs to be used “in the event that the W-Band design was finalised and production commenced”. He said that this order was cancelled in January 2020.79 [145] That was the extent of EMC’s evidence as to the extent to which any delay was caused by delays in procuring necessary parts. There was no evidence that, at least after the quality review was decided upon, EMC used its best endeavours to procure these parts from the suppliers from which they had been ordered, or from any other source. At least by early January 2020, EMC had decided that it would not purchase the parts and that it would endeavour to return any parts which it had already acquired for the 2019 agreements. [146] More generally, there was no analysis offered by Dr Baines of what might be described as the critical path for the construction of the radios, in order to demonstrate that such delays as there were in the supply of parts made it impossible for EMC to perform the agreements by the date of trial. Instead, Dr Baines explained that the performance of the agreements was put on hold pending the completion of the quality review. 73 Affidavit paragraph 162. 74 Affidavit paragraph 163. 75 Affidavit paragraph 164. 76 Affidavit paragraph 165. 77 Ibid. 78 Ibid. 79 Affidavit paragraph 166. -- 30 of 33 -- 31 [147] From this evidence I would accept, as the trial judge did, that there was an extraordinary delay in the supply of the HPAs and SPAs. EMC proved that those components had not been supplied by 9 March 2020, when EMC cancelled its orders for them. However Dr Baines’s evidence did not extend to any statement that EMC had done all which it could have done to procure the parts earlier. There is no reason to suppose that EMC did so, given the pursuit of the quality review from October 2019. [148] On the state of this evidence, however, I am not persuaded to disturb the judge’s finding that a reasonable time had not elapsed by 31 January 2020. The question then is whether her Honour was correct in rejecting the case that a reasonable time had elapsed by the trial. [149] Her Honour rejected that case because she was concerned that such a conclusion would involve some speculation on her part. As should appear from the above, the evidence offered by EMC on this issue was certainly scant. But in my opinion, her Honour ought to have been persuaded that a reasonable time had elapsed by the trial. [150] The effect of EMC’s case was that there was no evidentiary basis for such a finding, because it was unknown whether the necessary parts could have been acquired within a time that would have enabled it to deliver the equipment by July 2020. But the absence of such evidence was the consequence of EMC’s decision to postpone indefinitely, if not abandon, the performance of its contracts. [151] In Hick v Raymond & Reid,80 Lord Herschell LC said that: “…[t]he only sound principle is that the “reasonable time” should depend on the circumstances which actually exist. … When I say the circumstances which actually exist, I, of course, imply that those circumstances, in so far as they involve delay, have not been caused or contributed to by the [the party]”. EMC led no evidence that a delay in its delivery of the products, at least beyond early March 2020, was caused by “circumstances which actually exist” and which had not been caused or contributed to by it. Its evidence did not displace the probative value of the estimates which ECM gave in 2019. That being the state of the evidence, Apsara proved that by the trial, EMC had breached the 2019 agreements by failing to deliver the equipment within a reasonable time. The quality review: was it repudiatory or an actual breach of contract? [152] Agreed issue number 9 was whether EMC breached the 2019 agreements by subjecting the orders for the W Band and E Band radios to the quality review, or by delaying development and shipment whilst the quality review was pursued. The judge declined to determine that issue, saying that having found that EMC “breached the (2019 agreements) by repudiation”, it was unnecessary for her to do so.81 [153] By their Amended Notice of Cross Appeal, BSO and Apsara contend that the judge ought to have found that the implementation of the quality review was repudiatory conduct, in that the conduct evinced an intention by EMC not to perform the 2019 agreements consistently with their terms. 80 [1893] AC 22 at 29 cited by Connolly J in Telina Developments Pty Ltd [1984] 2 Qd R 585 at 592. 81 Judgment [397]. -- 31 of 33 -- 32 [154] Ultimately however, the Notice of Appeal, which the Court permitted to be filed on the second day of the hearing, abandoned the contentions that (a) the judge should have found that the quality review was not permitted by the 2019 agreements and should have found that the implementation of the quality review was a breach of the contractual duty to cooperate and do all things as were necessary to enable the other party to have the benefit of the 2019 agreements and that (b) the breach of that duty was a breach of a condition, a substantial breach or a sufficiently serious breach of an innominate term. The same document did maintain a contention that the judge should have found that the quality review was conduct which amounted to a repudiation, but that contention was limited to the contingency that this Court accepted EMC’s appeal and found that the 2019 agreements simply varied the 2018 agreement. [155] Consequently there is no issue for this Court to determine as the parties had put to the judge by issue number 9. Did EMC’s breach of contract entitle Apsara to terminate the 2019 agreements? [156] The Notice of Appeal, as ultimately pursued by BSO and Apsara, sought a declaration that the implied term as to a reasonable time was a condition of the 2019 agreements, or alternatively a declaration that the breaches of the implied term were “substantial breaches” or “sufficiently serious breaches” of that term. However, as the submissions for EMC point out, no such relief was sought at the trial. Those issues were not amongst the 19 issues which the parties agreed should be determined by the judge in this trial, and there is no occasion for this Court to determine them. Orders [157] For these reasons I would order as follows: 1. In appeal number 11321/21:82 a. Allow the appeal by: i. setting aside order number 3 of the orders made by the primary judge on 31 August 2021; and ii. varying paragraph 4(a) of those orders by deleting the following: “(i) Dr Stephane Tyc, Dr Robert Meade, Mr Timothy Boyle or Mr Paul Kennard; or (ii)” b. Otherwise dismiss the appeal. 2. In appeal number 10237/22:83 a. Allow the appeal by: i. varying paragraph 6(d) of those orders by adding the words “limited to damages for breach of the W-Band Development Agreement”; ii. declaring that EMClarity Pty Ltd breached the 2019 Agreements by not delivering the radios by 20 July 2020; 82 EMC’s appeal. 83 By the Notice of Appeal filed by BSO and Apsara on 11 March 2022. -- 32 of 33 -- 33 b. Otherwise dismiss the appeal. 3. Dismiss the cross-appeal. 4. Direct the parties to provide written submissions as to the costs of the proceedings in this Court, and of any order which should be made to vary the order for costs made on 31 August 2021, within 21 days from the delivery of this judgment, such submissions not to exceed five pages in length. [158] BOND JA: I agree with the reasons for judgment of McMurdo JA and with the orders proposed by his Honour. [159] FLANAGAN J: I agree with the reasons and orders proposed by McMurdo JA. -- 33 of 33 --