Today the Supreme Court of Queensland formally dismissed a damages claim brought by the State of Queensland against IBM, and ordered the State to pay IBM’s costs of that proceeding on the indemnity basis. The decision followed the Court’s ruling earlier this week that the State of Queensland was required to pay IBM’s costs of enforcing a release given by the State on the indemnity basis.
Shane Doyle QC and Stewart Webster of Level Twenty Seven Chambers represented and advised IBM in relation to the State’s claim, instructed by Jones Day.
In 2007, IBM won a contract to work with the Queensland Government to roll-out a whole-of-government payroll system. Part of the contract involved delivering an interim replacement payroll system for Queensland Health. The implementation of this replacement system was delayed and, once in operation, experienced a range of problems. Thousands of Queensland Health employees were underpaid, overpaid or not paid. IBM and the State disputed who was responsible for these issues. In 2010 IBM and the State entered into a “supplemental agreement” which included a release given by the State for a range of claims against IBM.
In December 2013, the State Government filed a claim for damages against IBM in the Supreme Court of Queensland, alleging misleading and deceptive conduct by IBM. The State served the claim on IBM in late 2014.
In early 2015, IBM applied for a declaration that the damages claim was subject to a release given by the State Government in 2010. The State opposed IBM’s application. A three day hearing was held in August 2015.
On 7 December 2015, the Supreme Court ruled in IBM’s favour and declared that on the proper construction of the supplemental agreement, the State of Queensland had released IBM from the damages claim.
On 4 April 2016 the Supreme Court ruled that in accordance with the terms of the supplemental agreement, the State should pay IBM’s costs of IBM’s application on the indemnity basis.
Today, the Supreme Court formally dismissed the State’s damages claim and ordered that the State pay IBM’s costs of that proceeding on the indemnity basis also.
A copy of the 7 December 2015 judgment can be found here.
A copy of the 4 April 2016 judgment can be found here.