Mobileciti Pty Limited v Vodafone Pty Limited [2009] NSWSC 899 | Case summary

Mobileciti Pty Limited v Vodafone Pty Limited [2009] NSWSC 899 | Case summary | Zoe

[12]

4 The following facts are uncontested or easily found. 5 Aaron Huang ("Huang") is the principal of Mobileciti. From 2000, Mobileciti operated two shops, one in Blacktown and one in Church Street, Parramatta. In November 2004, by agreement with Vodafone, Mobileciti moved its Blacktown shop to a Westfield Centre in Parramatta and closed the Blacktown shop. Huang worked as manager and generally spent part of the day in each of the three shops whilst it was open. Mobileciti employed two to four staff in each of the shops. 6 The parties' contractual history was somewhat convoluted and involved three separate agreements. 7 On 17 March 2000, Mobileciti entered into the Vodafone Dealer Agreement ("the VDA") directly with Vodafone. Under the VDA, Mobileciti was appointed to be an exclusive dealer in Vodafone's services for a period of four years with an automatic option for two years. It was paid a connection bonus for each service of which it arranged the connection, together with an air time commission of 10% on call charges billed by Vodafone to customers introduced by Mobileciti. 8 On 29 April 2004, Vodafone entered into a Distribution Manager Partner Agreement, making Look Mobile its distribution manager ("the DMP Agreement"). Thereafter, Look Mobile became Vodafone's intermediary between Vodafone and its dealers. 9 However, at the time of the DMP Agreement, the VDA between Mobileciti and Vodafone was still in force. Accordingly, the new arrangements could not apply to Mobileciti until Mobileciti had entered into a Look Dealer Agreement ("the LDA") with Look Mobile and a Transition Deed with Vodafone to effect the transition to the new arrangements. The LDA was entered into on 6 July 2005. On 22 July 2005 the Transition Deed was signed. As a result, from 22 July 2005, the LDA came into effect and the DMP Agreement applied to Mobileciti. 10 Under the DMP Agreement, Look Mobile was required to ensure that no dealer used any advertising materials other than materials provided by or approved by Vodafone (clause 10.1(a)) and that each dealer did not conduct any marketing campaign or promotion unless Look Mobile obtained Vodafone's prior written consent (clause 10.2(a)). The DMP Agreement also provided: " 3.3 Vodafone may require removal of a Dealer (a) Vodafone may, by notice to [Look Mobile], and on reasonable grounds, require [Look Mobile] to terminate the appointment of a Dealer immediately. (b) The reasonable grounds referred to in clause 3.3(a) include, but are not limited to: (1) if [Mobileciti] causes [Look Mobile] to fail to comply in any material respect with any of its obligations under this agreement;

[25]

In clause 1.1, the Transition Period is defined to mean the period of time commencing at the commencement of the Transition Deed and terminating on, inter alia, the date on which there ceases to be a current and effective DMP Dealer Agreement in the dealer's name. By clause 8.3, no Transition Payments are payable after the termination or expiry of the Transition Period. By clause 8.9, Vodafone may set off against any Transition Payments any amounts due to Vodafone. 15 On 20 July 2004 Vodafone announced, and on 2 August 2004 launched, its $79 Super Cap plan. Dealers who got customers to subscribe to this plan would receive $140 commission per connection; but this commission would be "clawed-back" if the customer disconnected within 90 days. 16 An important marketing differentiator of this plan (as of other Vodafone plans) was that there were no "lock in" contracts whereby customers were "locked in" for minimum periods. This feature was a key selling point for Vodafone, on which Vodafone ran extensive advertising campaigns. It distinguished Vodafone's plans from the plans of other mobile phone operators like Telstra and Optus. From the time the Super Cap plan was launched, Huang was aware that there were no "lock in" contracts; that this was a major benefit to customers; and that Vodafone regarded this as a key selling point. 17 Whilst it would appear that Mobileciti had been running advertisements in 2004 and earlier in 2005 containing material of which Vodafone now complains, the present proceedings are focused on advertisements published by Mobileciti after 22 July 2005, when the LDA came into effect. Central to the issues in this dispute are Mobileciti's advertised "cash backs" to customers who purchased a $79 Super Cap plan and remained connected for a certain period (originally three months, later four months or six months of usage). By offering such "cash back" deals, Mobileciti minimised the risk of customers disconnecting within 90 days of connection and thereby avoided the clawback of commissions. 18 There is in evidence a Cash Back Record kept by Mobileciti that recorded details of "cash back" payments made to customers. There were a large number of such payments. 19 In this way, Mobileciti passed most of its commission payments from Vodafone on these deals back to its customers, but in return it enjoyed benefits including: cash upfront paid in effect as a returnable, interest-free bond; a growing number of new customers, all of whom entitled Mobileciti to new payments from Vodafone; and a growing number of return customers, who would cancel existing plans after a few months and sign up for new plans (thus entitling themselves and Mobileciti to new payments from Vodafone). The evidence shows that there were a large number of customers who cancelled services after the minimum periods specified and received "cash back" rebates, but immediately reconnected on fresh contracts containing the cash rebate term. Many of these customers in fact cancelled and reconnected on more than one occasion. 20 The advertisements by Mobileciti of "cash back" rebates to which objection is taken were all published in Chinese community newspapers. The advertisements were partly in English and partly in Chinese. On the evidence, no such advertisement was published in an English language publication. There is no suggestion on the evidence that there was any written approval by Vodafone or by Look Mobile of this practice of advertising and offering cash rebates after a minimum period of connection to a Vodafone plan. 21 Vodafone did not offer any plans with cash rebates or cash refunds. What Mobileciti was in fact doing by entering into contracts in the advertised terms was attaching its own collateral contracts with customers to plans entered into between customers and Vodafone. These additional conditions were personal collateral contracts between the customer and Mobileciti. 22 There are in evidence a number of advertisements published during the period from August to October 2005. It may well be that they contain various different misrepresentations. However, as already noted, the central misrepresentation complained of is that Mobileciti was selling a plan or plans offered by Vodafone incorporating as a feature a promise of a cash rebate after a period of usage. 23 Despite the number of advertisements in evidence, I propose to set out as a sample the terms of only one. A copy of that advertisement, partly in English and partly in Chinese is annexed to this judgment. Attached to it is a translation into English of the contents in Chinese of the advertisement. The other advertisements in evidence are generally similar. The advertisement annexed was published in the Australian Chinese Weekly for the week 6-12 August 2005. I draw attention to the following material features of the advertisement. 24 The advertisement, as contained in the annexure, is in black and white only. But the advertisement as published prominently featured the colour red. Red was used by Vodafone in its publicity and the evidence is that the staff of the Mobileciti shops dressed in red. The advertisement in its top right hand corner refers to Mobileciti, giving its telephone number and location. That reference is against the background of a large quotation mark, turned on its side. The quotation mark was a Vodafone logo. The advertisement contains numerous references to Vodafone. At the foot of the left hand column on the second page of the advertisement, containing "Terms & Conditions" set out in English, is a Vodafone card and again the large quotation mark. 25 In the "Terms & Conditions" it is stated that connection to a Vodafone mobile service is required. In a prominent position on the first page of the advertisement, under the reference to Mobileciti, there is a heading "No Contract, no change of phone number", together with reference to existing Vodafone customers. In the bottom left hand corner of that page, is a reference to the Vodafone Super Cap plan. On the second page of the advertisement, in the large box second from the top, the following appears: " Special price for access with BYO handset

[29]

26 After the LDA came into operation, Daniel Yung ("Yung") and Andrew Kerr ("Kerr") principally dealt on Look Mobile's behalf with Mobileciti. Yung was Kerr's superior. Yung gave evidence on behalf of Vodafone and Kerr on behalf of Mobileciti. It is clear from the evidence of Huang, Yung and Kerr that Yung from the start expressed opposition to and disapproval of "cash back" advertisements, which were being used not only by Mobileciti but by other dealers. However, Yung's evidence was that at an early time, he told Huang, in Kerr's presence, to stop the advertisements, whereas, it is Huang's evidence that Yung did not in fact prohibit Mobileciti from engaging in such advertising until later instructed to do so by Vodafone. 27 In late August or early September 2005, Yung showed a Mobileciti "cash back" advertisement to Michelle Crothers ("Crothers"), who was the Channel Development Manager of Vodafone, in charge of liaising with Look Mobile. In late September 2005, Vodafone decided to commence an investigation regarding the conduct of a number of dealers, including Mobileciti. On 26 September Belinda Dwyer conducted a statistical analysis for Vodafone of Mobileciti's connection and disconnection rates between March and September 2005. In early October 2005, Vodafone established a special project team. Among other things, this team conducted a telephone survey of a considerable number of Mobileciti customers concerning their "contracts" with Vodafone. However, the answers as recorded were elliptical and there was no evidence of the questions actually asked or of the customers' actual answers or any surrounding conversation. This led to the rejection of the survey material when tendered: Mobileciti Pty Limited v Vodafone Pty Limited [2009] NSWSC 891. I also rejected evidence of records, kept by Vodafone in a system called "Gemini", of phone calls by customers seeking to disconnect services, again because of the unsatisfactory form of the material: Mobileciti Pty Limited v Vodafone Pty Limited [2009] NSWSC 892. 28 After the conclusion of Vodafone's investigation, Vodafone on 30 November 2005 wrote to Look Mobile in the following terms:

[56]

43 The representation is alleged to arise from the contents of the letter of 30 November 2005. It contained the following paragraph: "Vodafone's investigation into the activation activities of this dealer has now been completed. The investigation has revealed that this dealer has been engaged in making material misrepresentations regarding Vodafone's Super Cap plan to a substantial number of customers." 44 The representation on which Mobileciti seeks to rely as arising from this passage is that Mobileciti had been engaged in making material misrepresentations regarding Vodafone's Super Cap plan to a substantial number of customers. 45 During a large part of the trial, Vodafone relied on two propositions in answer to this allegation of a representation. The first was that the letter merely reported the outcome of the investigation and did not represent that Mobileciti had engaged in material misrepresentations. In other words, this was a situation where Vodafone was merely passing on third party information without making a comment as to its veracity: see the majority judgment in Yorke v Lucas (1985) 158 CLR 661 at 666. The second proposition was that the representation was not of the fact of material misrepresentations but only of a belief in their existence. 46 In final address, Vodafone in fact withdrew reliance on those two propositions and conceded that the letter of 30 November 2005 contained a representation that Mobileciti had been engaged in making material misrepresentations regarding Vodafone's Super Cap plan. It may be added that Vodafone also conceded that the letter of 30 November 2005 caused Look Mobile to send its letter of 2 December 2005 terminating the dealership, although this finding would in any event have easily been made. 47 It is clear from the fact that the evidence reveals an extensive campaign of advertising in Chinese community newspapers that the material misrepresentations that were made were made "to a substantial number of customers", as alleged in the representation set out in the letter of 30 November 2005. It is therefore clear that the material misrepresentations were not only made, but were made to a substantial number of customers. (2) What was the content of the material misrepresentations alleged? 48 It is necessary to answer this question, as it is only on the basis of the content of the material misrepresentations that answers can be given to question (3) as to whether the misrepresentations referred to in Vodafone's letter of 30 November 2005 were material misrepresentations and to question (4) as to whether the representation made by Vodafone in the letter was untrue. 49 A great deal of time was taken up during the trial in attempting to prove through the survey material gathered by Vodafone and the customer communications recorded in its "Gemini" system that customers had been deceived or confused concerning the Super Cap plan by Mobileciti. Essentially, this arm of Vodafone's case failed by reason of the exclusion of the survey evidence and the "Gemini" evidence as recorded in [27] above. However, there was a significant body of other evidence available to establish the content of misrepresentations made by Mobileciti that could base findings as to whether or not the misrepresentations were material and whether or not the representation made by Vodafone in the letter of 30 November 2005 was true. 50 This evidence consisted principally of Mobileciti's advertisements in Chinese community newspapers of "cash back" offers to customers who purchased, through Mobileciti, Vodafone's Super Cap plans and remained connected for a specified period, as set out in [17] above. A sample of those advertisements is adverted to in [23] above and set out in the annexure to this judgment. 51 There are various types of misrepresentations that Vodafone asserts were made by Mobileciti in those advertisements. Most of them relate, either directly or indirectly, to the offering of "cash backs" - paying customers a sum of money if they maintained their connection for a specified period of time. 52 Vodafone's case is based on the assertion that, although the offer in the advertisements was by Mobileciti to sell the contracts or packages to customers, any reasonable reader of the advertisements would get the erroneous impression that the incentives or restrictions offered and, in particular, the offer of the "cash back" payments were a part of the contract or package actually being offered by Vodafone. 53 The sense in which a representation would be understood by a reasonable person in the position of the representee is the sense relevant to the question of whether the representation is false: see the judgment of the majority in Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 at 576-577. Thus, the relevant question before the Court is whether, on a fair reading of the advertisements, a reasonable person would believe that Vodafone was making these offers. 54 Recently, in ACCC v Harris Scarfe Australia Pty Ltd [2009] FCA 54, Mansfield J said at [53]: "Where printed advertising is under consideration, it is appropriate to consider not simply the words or images depicted but also their relative emphasis (whether by print size, location, colour or other manner of presentation) to determine whether the asserted representation has been made in its overall context."

[59]

"6.a. Of serious or substantial import; significant, important, of consequence." 60 It is clear in the context that the person to whom the misrepresentations must be material is Vodafone, which is entitled to rely on them as justifying a requirement for Look Mobile to terminate the contract. In other words, they must be misrepresentations that are of substantial import or of consequence to Vodafone. This is borne out by what was said by Tobias JA in the Court of Appeal concerning the expression "material breach" in Waters Lane v Sweeney (2008) Aust Contract R ¶90-287 at [163]. As his Honour said, for the breach to be material it was required to be of particular significance to the relevant parties. However, it must be borne in mind that in that case the relevant expression was "material breach" and not "material misrepresentations". 61 From the facts stated in this judgment under the heading "Factual Background", it is plain that Vodafone regarded it as important that its various plans be offered by dealers to the public in the form in which Vodafone formulated the plans and without alteration or incorporation of other terms by the dealers: see 11. As part of ensuring the implementation of this policy, dealers were not to conduct any marketing campaign or promotion without Look Mobile's prior written approval: see 11. In relation to the Super Cap plan in particular, it was important that there not be any suggestion of a "lock in" period and Vodafone regarded this as a key selling point of that plan (as well as others): see [16]. I conclude from these matters that the misrepresentations were of substantial import or of consequence to Vodafone and therefore were material misrepresentations. 62 Mr Marcus Young, of counsel for Mobileciti, submitted that, for the misrepresentations to be material, they must have caused financial damage to Vodafone. He submitted that there was no evidence of financial damage and, alternatively, to any extent that there was, the financial damage was not caused by the misrepresentation that the cash rebates were part of Vodafone's scheme or emanated from Vodafone, but was caused by the fact that cash rebates were offered at all, although they were in fact offered and paid by Mobileciti. 63 I do not accept that there is in the concept of materiality, as discussed above, any necessary element that the representation should be the cause of financial damage. It may well be that, in the light of the evidence referred to in [19] above, it is to be inferred that Vodafone did suffer financial damage through customers taking a connection, keeping it for long enough to render Mobileciti free of the "claw back" arrangements, cancelling it and then taking another connection, obliging Vodafone to pay Mobileciti a further connection commission. It seems to me that, if this damage is established, it is caused by the inclusion in the advertisements of the "cash back" offer and it does not matter by whom the "cash back" payment was to be made. However, as I have already observed, in my view it is not necessary to show financial loss to establish that the misrepresentations were material. 64 It is my view that once it is established that the representations made in the advertisements were representations that Vodafone was making available to the public a plan under which a "cash rebate" was offered and that there was, if not a contractual "lock in", an advantage offered in the form of a "cash rebate", if a connection were maintained for a specified period, it is clear that the representation was a material representation, and, if untrue, a material misrepresentation, being as to a matter that in ordinary language was of substantial import or of consequence to Vodafone. 65 Mr Young submitted for Mobileciti that, to the extent that there were any misrepresentations, because the evidence showed that any Vodafone plan would be discussed by Mobileciti's staff with the customer prior to connection, the misrepresentations would be cured by the time of connection and would, therefore, no longer be material. 66 However, this assertion assumes that the staff in discussion with customers did in all cases correct the misrepresentations and the Court is not entitled to make that assumption. The evidence on which this was based was evidence by Huang that he instructed the staff to do this. However, it is clear that he did not overhear the vast majority of conversations between the staff and customers. None of the relevant staff members (14 in number) was called to give evidence in the case. In my view it is not established on this evidence that the misrepresentations were corrected with all or most of the customers. 67 But, even if all the misrepresentations were addressed with the customers and therefore "cured" by the time a customer entered into a contract, this could not render Mobileciti's misrepresentations as made immaterial. Thus, it has been held that a contravention of s 52 of the TPA cannot be cured by evidence that the true state of affairs will be revealed before contract: St Lukes Health Insurance v Medical Benefits Fund of Australia Ltd (1995) ATPR ¶41-428; Minister for Health and Aged Care v Harrington Associates Ltd (2000) 107 FCR 212; and Medical Benefits Fund of Australia Ltd v Cassidy (2003) 205 ALR 402. (4) Was the representation contained in the letter untrue, so as to be a misrepresentation that constituted misleading or deceptive conduct?

[61]

70 Two breach of contract claims were pursued by Mobileciti, one against Look Mobile for breach of the LDA and the other against Vodafone for breach of the Transition Deed. Breach of contract by Look Mobile 71 As to the claim against Look Mobile, the relevant contractual provisions are set out in [38] and [39] above. The breach of contract alleged against Look Mobile is that its purported termination of the LDA by its letter of 2 December 2005, set out in [29] above, was invalid. This was on the basis that Look Mobile had no right at that time to terminate the LDA, because Vodafone had no reasonable grounds for requiring Look Mobile to terminate the LDA. 72 On the face of it, this submission must fail because of the findings that I have made that Mobileciti had in fact engaged in making material misrepresentations regarding Vodafone's Super Cap plan to a substantial number of customers (see [46], [47] and [64] above), thereby providing Vodafone with reasonable grounds for requiring Look Mobile to terminate Mobileciti's dealership. 73 On this basis, it must be concluded that there was no breach of contract by Look Mobile as alleged by Mobileciti, because Vodafone had reasonable grounds on which it required Look Mobile to terminate Mobileciti's dealership. 74 Two other matters need to be dealt with. 75 The first is that it was argued, arising from the affidavit and oral evidence to which I referred in [31] above, that, even if a breach of contract by Mobileciti is established (as I have found that it is), Look Mobile was not entitled to rely on this breach to found a termination of Mobileciti's dealership. This was because, by reason of its prior knowledge of the facts constituting the breach and its failure to take any steps in relation to it, Look Mobile must be taken to have elected to continue with the contract. 76 If any party is to rely on election (or any form of waiver) the onus is on that party to establish the election or waiver relied on. I have already indicated that the affidavit and oral evidence referred to was diffuse, confused and inconclusive and it is difficult to come to any positive conclusion based on it. 77 But there is one matter in that evidence that requires a specific finding. 78 Both Kerr and Huang gave evidence by affidavit that Huang gave Kerr copies of the advertisements published in Chinese community newspapers, although after rather than before their publication. As I have already said, there is no question of any written approval of any advertisement, but Kerr's evidence, in paragraph 12 of his affidavit of 25 November 2008, was that he told Huang that he had shown the advertisements to Crothers and said to Huang that "they have no problems with your ads". This evidence was admitted on the basis that it was available to prove the making of the statement by Kerr to Huang, but not the truth of the statement. Huang, in paragraph 17 of his affidavit of 25 November 2008, also gave evidence of that conversation in terms that Kerr had said to him that Crothers "later told me that she was fine with" the advertisements. A limitation was sought on the admission of Huang's evidence to this effect, in the same terms as the limitation imposed on Kerr's evidence. This application for the imposition of a limitation was reserved and has not to date been formally determined. I now impose the same limitation on Huang's evidence, namely, that it may not be used to prove the truth of the statement said to have been made by Kerr to Huang. 79 The evidence that Kerr said words to this effect to Huang is not contradicted, since there were no other witnesses to the relevant conversation. It should be noted that the effect of what was alleged to have been said was that Crothers raised no objection to the advertisements, not that they were or had been approved by Look Mobile. 80 Although it was not contained in his affidavit evidence, Huang did assert for the first time in cross examination that he did in fact have prior approval from Look Mobile for the advertisements. However, he was unable to produce any written evidence of this alleged prior approval or any other corroboration of it. Bearing this in mind, together with the very late introduction by Huang of this evidence, I do not accept his evidence to this effect. 81 It was submitted by Mr Young that in view of the lack of contradiction of the evidence of Kerr and Huang concerning Kerr's statement that Crothers had raised no objection to the advertisements, the Court must or at least will accept that this was said. 82 Furthermore, he submitted that, because there was no direct cross examination of Kerr or Huang on this evidence, the principle in Browne v Dunn (1893) 6 R 67 compels its acceptance. 83 The proposition that the Court must accept evidence if it is not contradicted is not correct. Uncontradicted testimony may be rejected where it is opposed to general human experience, is inherently improbable or is put in question by other circumstances appearing in the case: per Campbell J in Jerke v Delmont State Bank 54 SD 446; 223 NW 585 (1929), quoted in 9 Wigmore on Evidence (3rd ed, 1940) par 2495. 84 Turning to the rule in Browne v Dunn, the central purpose of the rule, with the concept of notice at its heart, is to achieve fair play at a trial. It was said by Hunt J in Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1 at 16C-E, that there are two aspects of the rule:

[64]

This passage was cited with approval by Heydon JA in Knight v Maclean [2002] NSWCA 314 at [34]. See also per Spigelman CJ in Vines v Australian Securities and Investments Commission (2007) 62 ACSR 1 at [60], [61] and [409]. 87 In my view, the rule in Browne v Dunn does not apply in this case. It was not necessary to put to Kerr and Huang that the statement concerning lack of objection from Crothers was not made (almost certainly to be met by their rejection of that proposition), when it was clear on the pleadings, on the whole body of evidence and from the conduct of the case generally that even subsequent oral approval of the advertisements by Look Mobile was contested. 88 I turn now to whether the evidence by Kerr and Huang that Kerr told Huang that Crothers had no objection to the advertisements should be accepted. Kerr's evidence was the subject of heavy attack as to credit. 89 Not only was his creditworthiness challenged generally but, in relation to this evidence, evidence was led from Crothers that she denied that she had been shown the advertisements and offered no objection to them. Furthermore, Yung deposed that he had told Huang in or about July or August 2005 in Kerr's presence to stop the advertisements. Kerr and Huang conceded that Yung expressed disapproval of the advertisements, but denied that he required at that time that they be stopped. 90 Attack was also made on Kerr's evidence on the basis that Mobileciti's solicitor, Mr Junn, interviewed him and Huang together concerning their evidence. There is no doubt that this is a most undesirable practice: Day v Perisher Blue Pty Ltd (2005) 62 NSWLR 731. The evidence as to whether and to what extent the witnesses were interviewed together is most unclear. I do not find that both were present at the whole of the relevant conferences, although I cannot exclude the possibility that they were present together during some discussion of the evidence. However, I should say, in fairness to Mr Junn, that I completely reject the suggestions that were put that he deliberately gave untrue evidence or manufactured diary notes to support his evidence. 91 The long and short of the matter is that, despite the concurring evidence of Kerr and Huang, I do not find it established, on the whole body of evidence, that Kerr told Huang that he had shown the advertisements to Crothers and that she had offered no objection to them. 92 That takes us back to the necessity to determine, on the body of diffuse, confused and inconclusive evidence to which I have already referred, the question of whether Look Mobile could be said to have affirmed the contract despite the breach by Mobileciti referred to in [72] above. 93 The law to be applied in considering whether there has been an election to affirm a contract may be found in two decisions of the High Court: Sargent v ASL Developments Ltd (1974) 131 CLR 634 and Immer (No 145) Pty Ltd v The Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26. Essentially, in these cases it was held that, for there to be an election to affirm a contract, there must be two elements established: first, that there is knowledge of at least the facts giving rise to the right to terminate; and, secondly, that there is unequivocal conduct consistent only with a choice to continue the contract. 94 As to the latter element, Stephen J said in Sargent at 646: "The words or conduct ordinarily required to constitute an election must be unequivocal in the sense that it is consistent only with the exercise of one of the two sets of rights and inconsistent with the exercise of the other."

[71]

However, in this case there is no evidence that would justify a finding that the requirement of writing in clause 29.5 of the LDA had itself been waived. In these circumstances, there is no reason for the Court to do anything other than to give to clause 29.5 its plain and intended effect. 97 I am not prepared to find on the basis of the evidence referred to in [92] above, that it is established that there was any election or waiver that would preclude reliance on the breach of contract by Mobileciti that I have found established. Even if I accepted that Kerr said to Huang that Crothers had no objection to the advertisements, which I do not, I do not think an affirmation of the contract would be established, bearing in mind Kerr's inferior status in Look Mobile and the informal and imprecise nature of what was claimed to have been said. Even if the available evidence included this statement, in my view, what occurred could not be taken to amount to an unequivocal statement or conduct by Look Mobile, affirming the contract. Without the evidence of this statement, the conclusion cannot possibly be reached that there was an unequivocal affirmation of the contract. I have already said that there is no material which could be taken to amount within the principle enunciated in the Canberra Advance Bank case to a waiver of the requirement of clause 29.5 for any waiver to be effected in writing. 98 The second matter that needs to be dealt with is the submission that, even if Look Mobile was not entitled to rely on the ground assigned in the notice for the termination of Mobileciti's dealership, there were other existing breaches of contract by Mobileciti on the basis of which it was entitled to justify the termination: Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 at 377-378 per Dixon J, approved by the majority of the High Court in Concut Pty Ltd v Worrell (2000) 176 ALR 693 at [27]-[29]. Those existing breaches included promoting and obtaining orders for services on terms other than the customer contract terms specified by Look Mobile; the use of advertising or point of sale materials other than those provided or approved by Look Mobile; and the conduct of marketing campaigns or promotions, without Look Mobile's prior written approval. It well may be that on the evidence the existence of those breaches is established and they were available for Look Mobile to rely on, if necessary. However, in light of the above, I do not need to determine these matters. Breach of Contract by Vodafone 99 The breach of contract by Vodafone alleged by Mobileciti is that Vodafone's notice of 30 November 2005 to Look Mobile constituted a breach of an implied term of the Transition Deed that Vodafone would not request Look Mobile to terminate the LDA except on reasonable grounds and that this breach caused loss and damage to Mobileciti. 100 In support of its submission that there was an implied term to the above effect in the Transition Deed, Mobileciti relied on the dictum of Cockburn CJ in Stirling v Maitland (1864) 5 B & S 841 at 852; 122 ER 1043 at 1047 as follows: "I look on the law to be that, if a party enters into an arrangement which can only take effect by the continuance of a certain existing state of circumstances, there is an implied engagement on his part that he shall do nothing of his own motion to put an end to that state of circumstances, under which alone the arrangement can be operative." It was controverted, on behalf of Vodafone, that the alleged term was implied under that dictum. 101 There was also debate as to whether the term alleged could be implied on the basis enunciated in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283, and endorsed in Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 597 at 605-606 and Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 347. 102 However, on the basis of the finding that I have made, that Vodafone's request to Look Mobile to terminate the LDA was made on reasonable grounds, the claim for breach of contract against Vodafone is bound to fail, even if there were an implied term as alleged by Mobileciti. 103 I regard it as gravely doubtful whether such a term was implied. The Transition Deed is part of a network of contractual arrangements that specifically regulate the relations of the parties and expressly provide for the circumstances that will amount to a basis for termination. The rights and obligations regarding this between Vodafone and Look Mobile and between Look Mobile and Mobileciti are clearly expressed and specified. 104 But, in view of my earlier finding, there is no need for me to determine those issues, as this claim for breach of contract against Vodafone clearly fails.

Mobileciti Pty Limited v Vodafone Pty Limited

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Judgment (73 paragraphs)

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Cases Cited (23)

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