John Tumminello v TAB Limited [2011] NSWSC 1639 | Case summary

Supreme Court of NSW|2011-12-21|Before: Slattery J

EX TEMPORE Judgment 1The plaintiff, Mr John Tumminello, operates two TAB Limited agencies for the defendant, TAB Limited. On 9 December this year the plaintiff's occupation of those agencies was terminated. 2The plaintiff commenced proceedings in this Court on Tuesday this week, 20 December 2011, seeking interlocutory relief to have him restored to occupation of the agency premises and for him to resume operation of the agencies pursuant to the agreements that he has with TAB Limited. The proceedings have been brought on urgently. On at least one view there may only be a short period of time for these two agency agreements to run. But first some background is needed.

Mr Tumminello 3The plaintiff originally trained as a butcher. He only came to work in TAB agencies later in life. He says that in about 2001 he started working part-time on an unpaid basis at Epping TAB to learn how to operate a TAB agency. He followed the manager on duty and learned the business on the premises. 4In early 2002 he applied to be a TAB agent and in July 2002 was appointed as the TAB agent at Lalor Park in suburban Sydney. In February 2004 he was appointed the TAB agent for Stanhope Gardens, one of the agencies the subject of these proceedings. Over subsequent years he was appointed as an agent at Lane Cove, an agency he later surrendered in order to focus on the Strathfield North agency, the other agency the subject of these proceedings. He was appointed acting agent for Strathfield North in September 2010. He has managed the Stanhope Gardens agency from its inception in February 2004. 5Before the events the subject of these proceedings the plaintiff had received a number of awards for customer and community service from either TAB Limited or the companies associated with it. Many of these were awarded in the years 2009 and 2010. The evidence demonstrates that until recently there does not seem to have been any substantial issue about the quality or standard of Mr Tumminello's operations of the various agencies with which he was associated.

The Stanhope Gardens and North Strathfield TAB Agreements 6The starting point for the current litigation are the two agreements that Mr Tumminello has with TAB Limited, one agreement for the Stanhope Gardens agency and the other for the Strathfield North agency. The agreements differ slightly in material respects. The terms of the agreements are fundamental for the issues to be decided on this interlocutory application. I will deal with the Stanhope Gardens agreement then the North Strathfield agreement. 7The Stanhope Gardens agreement provides for a commencement date of 1 September 2008 and a term which was agreed to conclude, subject to the terms of that agreement, on 31 December this year. That term could be modified by clause 2.3 of the agreement which provides:- "(a) subject to clause 2.3(b), the term of this Agreement will be from the Commencement Date until 31 December 2011, unless terminated earlier in accordance with this Agreement. (b) If Tabcorp does not give notice to the Agent, at least 30 days before the end of the period specified in clause 2.3(a), this Agreement will not expire until it is terminated: (i) by either party in accordance with this Agreement; or (ii) under this clause by Tabcorp giving the Agent not less than 60 days' prior written notice. (c) For the avoidance of doubt, Tabcorp has no liability to pay the Agent compensation under clauses 11.3 or 13.4 if this Agreement is terminated either by notice given under clause 2.3(b) at least 30 days before the end of the period specified in clause 2.3(a) or by notice under clause 2.3(b)(ii). (d) The Agent acknowledges and accepts that Tabcorp makes no representations regarding: (i) any extension of this Agreement under 2.3(b); or (ii) any future agreement in respect of an appointment to operate the Agency following the termination or expiry of this Agreement." 8In summary clause 2.3 provides firstly for continuation of the operation of the Stanhope Gardens agency until the end of the term unless otherwise terminated in accordance with the agreement (clause 2.3(a)). 9But the term could continue beyond 31 December 2011 unless 30 days prior to the end of that period TAB Limited gave notice that the agreement would be brought to an end (clause 2.3(b)). It is acknowledged that TAB Limited did not give such notice in this case, therefore and subject to the operation of its other provisions, the Stanhope gardens agreement would continue after 31 December 2011. Clause 2.3(b) also provides for termination otherwise in accordance with the agreement or by the TAB Limited giving 60 days written notice of termination. 10Despite the fact that no notice to bring the Stanhope Gardens agreement to an end on 31 December was issued, which would have terminated it in less than two weeks from now, it is still possible for the agreement to be terminated. This could be done either with immediate effect (clause 13) or by TAB Limited giving 60 days written notice of such termination (clause 2.3(b)). The heart of the argument in this case is about the operation of those two termination provisions. 11Other terms of the Stanhope Gardens agreement are of importance. Clause 2.4 provides that no relationship of partnership, joint venture, lessee or lessor or of employment is created by the Stanhope Gardens agreement. The agreement is expressed as one setting up between its parties the relationship of principal and agent. None of the terms of the agreement are inconsistent with that declared relationship. 12The principal obligations of the parties under the agreement are for TAB Limited to pay fees and commissions in accordance with the agreement, and to provide premises, communications and information to the agency for its efficient operation. No doubt, in part, due to the industry in which it operates, the Stanhope Gardens agreement imposes special obligations upon the agent over and above those that might be found among agents in many industries. The agreement imposes a common obligation that might be found in many business agreements for the agent to conduct the operations efficiently. But in addition the agent must remain of good character (clause 5.2) and comply with the manuals provided from time to time by TAB Limited (clause 5.5). 13Other relevant provisions of the Stanhope Gardens agreement provide for its suspension and termination. Clause 12.1 gives TAB Limited a right to suspend the agent where its computer systems raise suspicion of irregular betting activity or where TAB Limited reasonably believes the circumstances exist which would permit it to terminate the agreement under clause 13. 14This brings the Court to the terms of clause 13 which are of particular importance. This termination provision is structured to provide for notice to remedy (clause 13.1) permitting TAB Limited to issue what is in effect a notice to show cause to an agent. Clause 13.1 allows Tabcorp, if the agent has committed a breach of the agreement, to provide seven days prior written notice of the agency's default and notice of TAB Limited's intention to terminate the agreement. If the default is not remedied within the notice period, TAB Limited may terminate the agreement by written notice with immediate effect. 15The remedy provided to TAB Limited under clause 13.2 is more summary. In the circumstances enumerated in that clause, which include engaging in credit betting, betting while on duty, the knowing giving of permission to either its own personnel or others to engage in illegal gambling or wagering on the premises and other specified matters TAB Limited has the power to terminate the agreement by written notice with immediate effect. 16If those circumstances are made out, and TAB exercises its right to terminate under clause 13.2 the cross default provisions of this agreement may be activated (clause 13.3). Indeed, that is what occurred here. An investigation took place principally in respect of the operations of the Stanhope Gardens agency, TAB Limited has purported to terminate that agency agreement and has now called upon the cross default provisions in respect of the Strathfield North agency. 17The final part of clause 13 of relevance and the subject of considerable debate between the parties, is the termination for convenience provision (clause 13.4) which provides: "13.4 Termination for convenience (a) Without limiting clauses 2.3, 13.1 or 13.2, Tabcorp may terminate this Agreement at any time for any reason by giving 60 days' prior written notice to the Agent. If the Agreement is terminated under this clause 13.4 during the Term then Tabcorp must pay to the Agent on the date of termination the lesser of: (i) the amount calculated in accordance with the formula set out in Schedule 5: and (ii) $75,000. (b) Payments provided under this clause 13.4 will only be made by Tabcorp in the following circumstances: (i) If the Agent is not a Multi-Agent, the Agent has been an Agent of Tabcorp under this Agreement, or an agent of Tabcorp under a similar previous agreement for at least the three (3) years immediately prior to termination under this clause 13.4; or (ii) If the Agent is a Multi-Agent, the Agent has been an Agent of Tabcorp under this Agreement, or an agent of Tabcorp under a similar previous agreement, at the same premises for at least the twelve (12) months prior to termination under this clause 13.4. (c) Clause 15 will apply to the agencies no longer operated by the Agent by reason of termination under this clause 13.4." 18In summary, clause 13.4 provides that TAB Limited "may terminate this agreement at any time for any reason by giving 60 days prior written notice to the agent". It then provides a formula for the payment of monies in the circumstances of such a termination for convenience. 19Before leaving the Stanhope Gardens agreement, attention is required to the definition of the word "manuals" in clause 31. The important obligation upon the agent under clause 5.5 includes a requirement to comply with the manuals issued by TAB Limited from including manuals as amended from time to time. The power to amend them is provided by clause 28. The subject of that power of amendment is wide. In clause 31 "manuals" are defined as meaning " any communications manual, retail operations manual, policy manual, compliance manual, or training notes or any other manuals or instructions or directions issued by Tabcorp to its agents from time to time which may be amended by Tabcorp as provided by clause 28 ". Thus TAB Limited's "manuals" include a wide scope of possible instructions to an agent, one which TAB Limited has deployed in argument in this case against Mr Tumminello. 20The Strathfield North agency agreement was similar as to much of the relevant content of the Stanhope Gardens agreement. But its commencement date was 13 September 2010 and its termination provisions were different. 21Clause 2.3 of the North Strathfield agreement provided as follows:- "2.3 Term (a) Subject to clause 2.3(b), the term of this Agreement will be from the Commencement Date until 31 December 2011, unless terminated earlier in accordance with this Agreement. (b) If Tabcorp does not give notice to the Agent, at least 30 days before the end of the period specified in clause 2.3(a), this Agreement will not expire until it is terminated: (i) by either party in accordance with this Agreement; or (ii) under this clause by Tabcorp giving the Agent not less than 60 days' prior written notice. (c) For the avoidance of doubt, Tabcorp has no liability to pay the Agent compensation under clauses 11.3 or 13.4 if this Agreement is terminated either by notice given under clause 2.3(b) at least 30 days before the end of the period specified in clause 2.3(a) or by notice under clause 2.3(b)(ii). (d) The Agent acknowledges and accepts that Tabcorp makes no representations regarding: (i) any extension of this Agreement under 2.3(b); or (ii) any future agreement in respect of an appointment to operate the Agency following the termination or expiry of this Agreement." 22Importantly, the North Strathfield agreement did not have a fixed termination date but, in effect, a commencement date and a floating termination arrangement which was available that "either party may at any time in their absolute discretion and by providing 30 days written notice terminate this agreement". 23Thus, in summary, the situation that obtained with respect to termination for convenience, and subject to argument about the validity of these clauses was: at Stanhope Gardens the agency agreement was terminable by TAB Limited with 60 days notice; and at North Strathfield by either party on 30 days notice.

November - December 2011 24We now come back to the background that led to the issues before the Court. As I have already indicated up until about November this year Mr Tumminello received positive reinforcement about his operations of these two agencies and his other connections with TAB Limited. Then on 11 November this year he received a letter inviting him to participate in an interview on 15 November 2011 about aspects of his performance at the Stanhope Gardens TAB agency. He attended. An interview took place that has been tendered in evidence. As a result, it seems of that interview, a decision was taken within TAB Limited to issue a letter of 9 December 2011 to Mr Tumminello which was headed "Notice of Termination". The letter is a document that purports to identify two legal approaches to what it says are identified breaches of the Stanhope Gardens agreement. 25TAB Limited's 9 December 2011 letter sets out a number of matters. Five in particular are said to be the product of TAB's Audit Investigation Manager, Mr John Graham's recent investigations of operations at the Stanhope Gardens agency. "* Very high EBT deposit activity at the Agency for the period 4/2/10 to 10/11/11. This activity, which involved numerous small note deposits, occurred predominantly through Account 428359 belonging to Karina Tumminello and resulted in improper deposit commission earned of $3,520 (Improper Commission);

Operational responsibilities not being fully discharged, including using the EBT while customers were waiting to be served;
Accepting bets from punter's club members over the telephone and transacting these bets via Karina Tumminello's account;
Betting account withdrawals being processed while on duty and in the absence of the relevant account holder; and
Depositing money into a customer's account in the absence of the relevant account holder." 26The letter then sets out two legal courses which are on their face puzzling. "Under clause 13.1(a), by way of this letter TAB gives you 7 days written notice of what it considers to be your numerous and material breaches of the Agreement, including clauses 5.2, 5.4, 5.5(a)(iv), 5.10(a)(A), 5.19(a), 5.26(o) and 5.26(p) (Breaches). These clauses are set out below." 27The first invokes clause 13.1(a) of the agreement which is the notice to show cause provision. 28As my previous survey of the agreement has shown, the notice to show cause provision operates to provide TAB Limited a right to terminate the agreement if the agent fails to remedy the default. By necessary implication that means that seven days must lapse before termination in accordance with clause 13.1(a) can occur. 29To the extent that the letter refers to clause 13.1(a), it is internally consistent. The Termination Rights state:- "Your breaches are serious. Under clause 13.2(b), TAB hereby notifies you of its intention to terminate the Agreement with immediate effect. Under clause 12.3 of the [Agreement to Appoint Acting Agent to Provide Wagering Services in New South Wales dated 13 th September 2010 between you and TAB pursuant to which you provide Wagering Services at the North Strathfield agency (North Strathfield Agreement)], TAB hereby notifies you of its intention to terminate the North Strathfield Agreement with immediate effect. If you feel there are any mitigating factors that TAB should take into consideration please address these in writing to Paul Carew at the address indicated within 7 days of the receipt of this letter." 30But a problem with the letter is that it also purports to exercise rights under clause 13.2 immediately and indicates its intention to terminate the North Strathfield agreement with immediate effect, not something that in either case is warranted by clause 13 without allowing the expiry of the agent's opportunity to remedy provided under clause 13.1. But TAB Limited locked Mr Tumminello out of both agencies on 9 December 2011. There may in my view be considerable debate at final hearing about whether this letter has the legal effect that it claims to have in relation to the Stanhope Gardens and the North Strathfield agreements. 31Messrs Carneys Lawyers, who act for Mr Tumminello responded to this letter quickly. Their reply took issue with TAB Limited's allegations of his breaches of the Stanhope Gardens agreement. I have now heard considerable evidence in these proceedings about those allegations of breach. None of this evidence has been tested on either side. The effect of the evidence at this interlocutory stage is that the issue of breach is one which it could fairly be said is in considerable contest. 32It is not the purpose of an interlocutory decision on an application such as this to make findings deciding these contested allegations of breach. Although one of the tasks of a court, even at this stage, can be to evaluate the prospects of success of a party at final hearing on the issues tendered, especially where the result of the court's decision may be to affect the rights of the parties on a final basis: Kolback Securities Limited v Epoch Mining NL (1987) NSWLR 533. But I will now say more about TAB Limited's allegations and the nature of the contest in relation to them. 33TAB Limited says in its first allegation is that there is very high EBT (a form of electronic cash deposit system) deposit activity at the Stanhope Gardens agency for a period starting in February 2010 and going through until November 2011, involving numerous small note deposits. These particular deposits were being made through an account apparently belonging to Mr Tumminello's wife, Karina. The deposits are said to have resulted in Mr Tumminello earning improper excessive deposit commissions. 34Carney's fielded a response to that allegation on 15th December, which response Mr Tumminello has since maintained in evidence in the contest before me. The response was that such activity was authorised by a former employee of TAB Limited, a Mr Ben Thomas, who is said to have stated on TAB Limited's behalf that it was acceptable practice at the agencies to open an account under an agent's spouse's name for the purposes of operating and facilitating the operation of a punters club. Indeed the evidence supports an inference that through Mr Thomas, TAB Limited encouraged the establishing of such punters' clubs to promote custom at TAB agencies. The case Mr Tumminello also puts is that it was acceptable practice, according to Mr Thomas, for punters club members to phone through bets. 35An aspect of this first allegation is that Mr Tumminello is said to have deposited excessive numbers of small notes this way. TAB Limited's contention is that the higher the frequency of notes deposited the greater the commissions generated to the agent; therefore, it is said that Mr Tumminello's use of small denominations was to his advantage. But on close analysis, even the defendant's own evidence does not show, in my view, the use of a particularly excessive number of small notes. 36But there are other allegations. The next one is that Mr Tumminello was not discharging his operational responsibilities properly and was using the EBT while customers were waiting to be served. He denies this. The evidence about it is somewhat ambiguous. It is partly based upon camera surveillance footage, which itself is incomplete, but there is a clear contest about that. 37In respect of the other allegations of betting account withdrawals being processed while on duty, depositing money into a customer's account in the absence of relevant account holders and accepting bets from punters club members over the telephone, the general defence to that is again the authorisation of Mr Thomas. 38A problem for the plaintiff's case is that Mr Thomas is no longer employed by TAB Limited and these instructions are now some years old. But the strength of the plaintiff's case in this respect is that there is some indication in a statement of evidence from Mr Thomas that his testimony, were he called at final hearing, will support much of what the plaintiff says. 39Messrs Carneys took the matter further last Friday, 16 December 2011, foreshadowing the commencement of these proceedings and foreshadowing the seeking of an interim injunction restoring Mr Tumminello to possession of both of the agencies. The letter sought confirmation by 5pm by Monday 19 December that Mr Tuminello's possession would be restored. 40On 19th of December 2011, Messrs Carneys further indicated that the alleged improperly earned commission in issue (a sum of $3,520) would be paid into Carneys' trust account and held pending the outcome of the dispute. I understand that has now been done. 41True to its word, Messrs Carneys on behalf of the plaintiff commenced these proceedings on 20 December. The matter came before the court that day, some two days ago. At the commencement of the hearing I was told that the tactical ground had just changed somewhat. TAB Limited had served another letter giving notice of termination of each of the agency agreements. This new letter for the first time deployed clause 2.3 of the agreements, the 60 day notice clause for Stanhope Gardens and the thirty day notice clause for Strathfield North. This new letter soon became an important ground of contest. Applicable Legal principles 42Evidence was given on both sides in affidavit form. I did not permit cross-examination to occur. This was a normal interlocutory hearing where such cross-examination would not be appropriate. The case was conducted on the Tuesday and Wednesday of this week, if I may say so, very efficiently on the part of the legal representatives of both sides, which has enabled me to give the detailed judgment today that I am. 43The issue before the court is whether or not a mandatory interlocutory injunction should be granted in the plaintiff's favour in these circumstances. The test in relation to the granting of such injunctions is not in dispute. There was a time when it was thought that the granting of a mandatory interlocutory injunction was tested by considerations that were different from an ordinary prohibitory interlocutory injunction and, in a colourful latin phrase Meagher, Heydon & Leeming, Meagher Gummow & Lehane's Equity Doctrines & Remedies, 4th edition paragraph, (2002) Butterworths, [21 395], describe it as a particularly " rara avis " (rare bird) . But it is now accepted that the same considerations apply to interlocutory mandatory injunctions as to other interlocutory injunctions. Even though the relief being sought is of a mandatory nature, the court weighs the potential consequences of granting mandatory relief just as it does the granting of prohibitory relief, if it later has to be undone, which is a matter that is often very telling in the court's consideration of the balance of convenience: Businessworld Computers Pty Limited v Australian Telecommunications Commission (1988) 82 ALR 499 at 503, 504 per Gummow J. 44The appropriate test in relation to the granting of an interlocutory injunction has often been stated. The High Court of Australia has recently stated the principle in Australian Broadcasting Corporation v Lenah Game Meats (2002) 22(1) UQLJ 138. A convenient statement of the relevant consideration in the grant of an interlocutory injunction of whether damages are an adequate remedy, is that of Brereton J in Goyal v Chandra (2006) 68 NSWLR 313: "[42] It is sometimes said in applications for interlocutory injunctions that one consideration is whether damages would be a sufficient remedy. Properly understood, the real question is whether final injunctive relief would be declined because damages would be a sufficient remedy; if it can be seen at the interlocutory stage that that would be so, then an interlocutory injunction would be declined." 45But, like all such cases, this is ultimately a case of the court assessing whether, in accordance with the Lenah Game Meats test, there is a serious question to be tried and to assess whether the balance of convenience favours the grant of an interlocutory injunction. A Serious Question to be Tried - the 9 December Notice. 46On the question of a serious question to be tried, the issue is multi-layered. By the time the court has now come to decide this question the ground had shifted somewhat from where it was when the proceedings commenced. When Mr Williams SC, Dr Peden and Carneys came to court they were simply facing TAB Limited's notice dated 9 December 2011. A notice which, if I may say so, on its face was not particularly well crafted and about which there was a real underlying debate about the questions of breach of agreement that it raises. But, by the time the matter came to be argued yesterday, and after service of the notice of 20 December 2011, the ground had shifted to a different issue. The new issue was: if a mandatory injunction were granted upon the basis that there were problems with the validity of the notice of 9 December 2011 and debate about whether breach of particularly the Stanhope Gardens agency agreement had occurred, what would be the effect of the notice of 20 December 2011? 47In a sense, for the reasons that I have already given about the 9 December 2011 notice and the underlying allegations of breach, it can be readily inferred in my view that there is a serious question to be tried in relation to the validity of that earlier notice and the allegations of breach that underlie it. 48The defendant sought to deploy a number of contentions against that conclusion, as it was entitled to do. It pointed to evidence said to have been an admission against Mr Tumminello's interests in the record of interview which he gave to a Mr Graham and other witnesses whose evidence that TAB Limited has read to the court. But, when one looks at the text of the record of interview, in most places it seems to me really to generate further debate about the true nature of the alleged admissions contained within it. So in my view there is a serious question to be tried in relation to the 9 December 2011 notice and Mr Tumminnello's exclusion from both agencies based on that notice. A Serious Question to be Tried - the 20 December Notice 49It is now necessary to examine the parties' contentions about the later notice of 20 December 2011. The TAB Limited contention ultimately came down to one that the true serious question to be tried is the issue of the validity of the 20 December notice. TAB Limited says that even if the 9 December notice had its problems, if the 20 December letter is legally unexceptionable, even if mandatory relief were granted, the plaintiff would still be required to vacate the Stanhope Gardens premises in sixty days from the 20 December and, in respect of North Strathfield, thirty days from that date. If Mr Tumminello's case against the 20 December notice is weak this issue would loom very large in the balance of convenience. TAB Limited says that on the balance of convenience it would clearly not be the right course to restore the plaintiff to either agency in circumstances where he could be legitimately removed such a short time afterwards. In my view, subject to some matters to which I will come, that is a telling consideration in this case. So the prominent question now is what is the strength of the plaintiff's argument to challenge the 20 December notice. 50The plaintiff deployed two main contentions against the 20 December notice, one as to their issue and one as to their legal underpinning in the agency agreements. As to the challenge to the issue of the 20 December notice, the plaintiff relied upon principles relating to the issue of termination notice in good faith in certain circumstances, and pointed to statements in cases such as Burger King Corp v Hungry Jack's Pty Ltd (2001) NSWLR 558. The plaintiff's alternative contention was to challenge, not the notice themselves but to challenge clause 2.3, their claimed legal foundation. 51This second contention was the more important one to the plaintiff. Even if Mr Tumminello were to successfully challenge the notice issued on 20 December, because there was some taint over their issue (due perhaps to their proximity to the other contentious 9 December notice), yet if clause 2.3 in both agreements was nevertheless a valid part of the agreements, TAB Limited could still now issue further valid thirty and sixty day notices and could issue them from time to time in the future. So the plaintiff's case really depends on him being able in effect to upset the validity of clause 2.3 of both agreements. 52In my view, the case the plaintiff seeks to make about the 20 December notice does not present to the court a serious question to be tried. In fairness the issue about the 20 December notice was certainly not one which was at all obvious to the plaintiff's side at the time the proceedings were commenced. 53In relation to Mr Tumminello's first contention about the issue of the notice itself, he says that the issuing of the notice is a breach of an implied term of good faith under the agreement. I do not think in the circumstances demonstrated that this is seriously arguable for several reasons. First, the width of clause 2.3 in my view in both agreements in the context of an agreement such as this one, makes the implication of such a term difficult. Particular features of this agreement are the provisions in clause 5 about character and conduct. Because of these provisions TAB Limited could quite legitimately and consistently with the exercise of good faith, take into account and act upon a very wide range of relevant considerations in deciding to terminate an agency agreement. It goes without saying that I am not by these comments making any adverse finding against the plaintiff or his character. 54It is open in my view, for the defendant to exercise its rights under clause 2.3 of either agreement, even if it only has a reasonable suspicion that some misconduct or breach of agreement has occurred. In any event the powers are expressed in clause 2.3, particularly in respect of the North Strathfield agreement, in quite absolute terms that would not readily allow the implication of a term that would limit the occasions for the exercise of the clause 2.3 power to terminate. 55The authorities require that the implication of the obligation of good faith and reasonableness must be both reasonable and necessary, that the obligation must operate in aid of explicit terms of the contract, and that it will not operate so as to prevent or hinder action to protect the commercial interests of a party. Generally speaking, if a contract contains a requirement that the parties act in good faith and not capriciously or unreasonably, that does not require the party to subordinate that party's legitimate interests to other contracting parties: Sundararajah v Teacher's Federation [2011] FCA 1031, at [62] to [70] Foster J. The plaintiff has also referred the court to Kellogg Brown & Root Pty Limited v Australian Aerospace Limited [2007] VSC 2000, a case which in my view is not precisely apposite in present circumstances. 56But even if the 20 December 2011 notice were to be set aside because it was issued contrary to an implied term to exercise the clause 2.3 power in good faith, another notice could be issued tomorrow. This would be so unless, of course the plaintiff could show that by the application of some available statutory or equitable remedy the court could remove or modify these clauses. Were it to be shown that there was a serious question to be tried that the court would at final hearing to exercise a power to remove these clauses or vary them in some way from the agency agreements, then an interlocutory injunction of the kind the plaintiff seeks may well be granted. 57In my view, the plaintiff has not made out such a serious question to be tried on a case at the interlocutory stage. The plaintiff's case is that the 30/60 days notices are unconscionable because there were representations made that the plaintiff's two TAB agency agreements would continue. Mr Tumminello points to evidence of conversations between a TAB Limited employee, Mr Fraser Mexted and Mr Tumminello about his good performance and the high chances that he would continue in operations. 58The plaintiff's evidence shows indications by business development managers about Mr Tumminello's excellent performance, and the correspondence shows new agency agreements were being prepared and it was apparently just a matter of new terms being finalised before the present issues were raised. It seems to me it certainly can be accepted for the purposes of argument that TAB Limited had given strong indications that both agency agreements would continue. Some of these representations are recorded in writing. The plaintiff did seem to be favoured with the likely prospects of a renewal. But taken at its highest none of this evidence seems to me to get to the point of a representation that TAB Limited (1) was going to depart from or not enforce the express terms of its agency agreements and (2) would not, even if the expiring North Strathfield agreement were renewed, exercise its powers under clause 2.3 of either agreement. The evidence contains encouraging statements of a continuing future relationship. But it does not go as far as to raise a serious question to be tried that TAB Limited is now inhibited from exercising its clause 2.3 powers under either agency agreement. 59The plaintiff points out that these agencies are his sole livelihood and that this fact was obvious to the defendant. If I may say so, I think that such inferences can readily be drawn in the plaintiff's favour, given the detailed obligations on the plaintiff in these agreements. It seems to me, that the operation of two agencies, seven days a week, means that such activity must be his sole livelihood. But the contracts between the parties containing as they do, particularly with respect to North Strathfield, an obvious risk as to the maintenance in the future of that livelihood in the form of the 60 and 30 day termination clauses. The mere fact that termination may have the effect of depriving the plaintiff of his present livelihood does not found a case in itself that the contract was unconscionable. 60The other matters the plaintiff mentions are the fact that no compensation was payable of any substantial kind under the termination provision, but I do not think that is itself a particularly powerful indicator of unconscionability. The plaintiff also sought to deploy the Contracts Review Act (NSW) 1980. If it were to be applied it perhaps would have been a more powerful weapon than the plaintiff's other equitable and statutory rights to challenge clause 2.3. But in my view Contracts Review Act (NSW) 1980 does not apply here because of section 6 of that Act. 61So what the Court is now faced with is an action by the plaintiff for an injunction in circumstances where even if the grant of the injunction does restore the plaintiff to the agency premises based upon some defect in the 20 December notice, the restoration of the plaintiff's possession does not appear to be maintainable. The plaintiff could find himself removed again from the premises within 30 days for North Strathfield and 60 days for Stanhope Gardens. The Balance of Convenience 62I now turn to the balance of convenience. The plaintiff deploys a number of arguments on the balance of convenience. The legal test is whether granting or withholding of interlocutory relief carries the lower risk of doing injustice to one party or to the other or a third party: Patrick Stevedores Operations No 2 Pty Limited v Maritime Union of Australia (No 3) (1998) 195 CLR 1 at [41] - [42]. It seems to me that in the circumstances stated above the balance of convenience strongly favours not granting the relief which the plaintiff now claims. 63The plaintiff argues that he will suffer irreparable harm if an injunction were not to be granted. He also says that damages are an inadequate remedy. First as to irreparable harm, the nature of the plaintiff's argument is well understood. There are cases in which a plaintiff should have interlocutory relief because of the irreparable harm which will be occasioned. But in light of my reasoning about the unavailability of arguments to challenge the 20 December notice, the irreparable harm argument is not very persuasive. The plaintiff says that he will suffer irreparable harm to reputation and to future goodwill of the business in circumstances where he will, as the evidence now stands, have to leave these businesses in any event between one and two months from now. In my view, that does not present a powerful argument nor does the question of whether damages can easily be assessed, when those damages are in effect potentially for only one or two months. 64The other side of the coin is detriment. There is no detriment to TAB Limited if the plaintiff has rectified the breaches of which it complains. Curiously, if there is detriment to TAB Limited from the Court restoring the plaintiff to the premises only to have him removed again in thirty to 60 days that really is probably only a matter of minor inconvenience to it. Orders 65For those reasons, I decline to grant the injunction which is sought. 66Therefore the Court orders:- (1)Two thirds of the defendant's costs of this motion for interlocutory relief will be the defendant's costs in the cause, otherwise there will be no other costs. (2)Dismiss the plaintiff's application for interlocutory relief. (3)Adjourn the Summons for further directions to the Registrar's List at 9am on Friday, 3 February 2012

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 January 2012

John Tumminello v TAB Limited

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