This case highlights some important points concerning confidential information. Firstly, the loss suffered (or gain made) as a result of a breach of confidence must directly result from the breach. Secondly, parties must exercise care in disclosing confidential information to government authorities, as there will likely be a breach of confidence unless the disclosure is actually required by law (as opposed to just being useful for the discloser). Finally, this case illustrates the importance of including in confidentiality agreements a clause preserving other legal and equitable remedies to maximise the range of remedies available in the event of a breach of the agreement.
Gold and Copper Resources Pty Limited (GCR) had access to a special induced polarisation surveying technology, and requested the permission of Newcrest Operations Limited and Newcrest Mining Limited (Newcrest) to use the technology on land covered by Newcrest’s mining tenements. Initially, Newcrest expressed an interest in itself using the technology and working with GCR to conduct surveying. A Confidentiality Agreement was signed but Newcrest ultimately elected not to proceed.
Newcrest subsequently applied to the NSW Department of Primary Industries to renew its tenements. Unless it could show special circumstances, it would be required to relinquish half of them. GCR argued that statements in Newcrest’s application that it would be working in conjunction with GCR to conduct induced polarisation surveying over the tenements (Statements) breached the Confidentiality Agreement and, as its negotiations with GCR had ceased, was also misleading and deceptive.
In dismissing GCR’s case, Stevenson J found that:
- as the Confidentiality Agreement made negotiations concerning the surveying technology confidential, the making of the Statements to the Department was a clear breach of that agreement because it impliedly disclosed that Newcrest and GCR had been in, and had concluded, negotiations about the use of the technology;
- Newcrest was neither obliged to renew its tenements nor to disclose all information regardless of its confidentiality (even if it would have assisted it to retain its tenements), and Newcrest was not therefore required by law to disclose the information in the Statements;
- GCR failed to show that Newcrest had profited or GCR had suffered loss (in losing the chance to itself acquire the tenements) as a result of the Statements. It was likely that the Department would have renewed the tenements without the Statements having been made, and in any case, there was no guarantee that GCR would have applied for, or obtained, the tenements;
- as the Confidentiality Agreement contained an entire agreement clause and did not expressly preserve other rights and remedies, it was not appropriate for equity to intervene, and impose an equitable duty of confidence. Accordingly, even if GCR had been able to establish that Newcrest had profited, an account of profits would not have been available; and
- Newcrest did not make the Statements “in trade or commerce” and as such, GCR’s misleading and deceptive conduct claim was unsuccessful.
See the case.