(b) Was a termination effected in December 2007?
44 In the light of my conclusions about the entitlement to terminate it is not strictly necessary to decide whether a termination was in fact effected in December 2007. Lest I am wrong in my earlier conclusions I will consider this issue. Involved in this consideration is the matter of the payments made after December 2007.
45 The learned Magistrate makes no finding on this issue, in particular, she does not address either the question whether an oral termination was effective or, if it was, whether the conversation amounted to a termination. The only inference that is available from her reasons, and particularly from her conclusion that the Defendant was entitled to terminate, and that the continuing payments made after that time did not mean it had not terminated, is that the Magistrate considered that the conversation of December 2007 was effective to terminate.
46 It was only the Perth Agreement that contained detailed terms about the right of the parties to terminate the Agreement. It is clear, however, that under that Agreement written notice had to be given in any circumstance that entitled a termination. It was the only Agreement that enabled termination prior to the expiry of the minimum term where no breach by the party was involved.
47 The Defendant submits that an insistence on a written notice to terminate was a term which restricted the Defendant's right to terminate contrary to s 68 Trade Practices Act and s 40M(1) Fair Trading Act. In my opinion, the term requiring written notice was not a term that offended those provisions. Section 68 only contained a provision that (inter alia) restricted the exercise of a right conferred by a provision in Div 2 of Pt V of the Trade Practices Act. That Division does not give a right to terminate for breach. Rather, it implied into contracts various undertakings, conditions and warranties which can conveniently be summarised as provisions which ensured that the consumer obtained what the consumer intended to obtain and in proper and suitable working order. It is Divisions 2A and 3 of Pt V and Pt VI which provide the remedies available for the breaches of those provisions. The exception to that is a rescission under s 75A (found in Div 3) but such a rescission requires a notice in writing signed by the consumer giving particulars of the breach.
48 The Defendant also submitted that the breach relied upon was not a breach referred to in cl 17.1 of the Perth Agreement. That is because, the Defendant submits, what the Magistrate found, impliedly, was that the breach was a breach of a warranty imported into the contract by s 74 Trade Practices Act. The result is, the Defendant submits, that the mechanism in cl 17.1 did not have to be complied with particularly because the opening words of the clause say "a party may …".
49 It certainly appears that the Magistrate based her decision on the breach of what she has called express or implied warranties (see the first paragraph of her judgment that I have set out in para [22] above). Ordinarily, a breach of such a warranty would result in a right to damages and not a right to rescind: Arturi v Zupps Motors Pty Ltd (1980) 33 ALR 243 at 246 and Amann Aviation Pty Ltd v Commonwealth of Australia (1990) 92 ALR 601 at 606. Further, as was said in Amann Aviation (at 607), the parties to the contract having agreed to a procedure in relation to termination including a termination for breach, it is that procedure which ought to be followed.
50 The Magistrate seems to accept that no notice to terminate was given in writing but does not seem to draw a conclusion adverse to the Defendant in that regard, notwithstanding that she set out the provisions of cl 17.1 earlier in her judgment. In my opinion, written notice was necessary to effect a termination of the Perth Agreement.
51 Because a written notice was required, and because no such written notice was given the termination in respect of the Perth contract was not effected. The Magistrate was wrong in her conclusion that it had been and she failed to provide reasons for that conclusion which has to be inferred from the overall result.
52 The Melbourne and Brisbane Agreements required written notice after the expiry of the minimum term without any cause being needed. Termination for breach is allowed for but only for breach on the part of the customer and not on the part of the Plaintiff (cl 12.3). In the absence of the requirement for writing when terminating for breach by either party it must be inferred that an oral termination was possible.
53 The question becomes, therefore, whether what was said by Ms Miles in the conversation amounted to unequivocal words evincing an election to terminate the contract: Carter & Harland, Contract Law in Australia, 4th ed (2002) Butterworths at 735. Mr Horowitz of counsel who appeared for the Plaintiff, in the course of his very careful and thorough submissions argued that what had been said by Ms Miles did not constitute unequivocal words. Rather, he submitted, she was expressing a desire or an intimation that the Defendant wanted to terminate the contract. That, he said, was not sufficient to evince an election to terminate. Mr Horowitz also points to the fact that what was undetermined was the payout figure and that this was an indication that termination had not been effected.
54 The Magistrate does not refer to these conversations in her judgment and makes no express finding that the Defendant terminated the arrangements. However, it is implicit in her conclusions and discussion about the subsequent payments that she regarded the contracts as terminated.
55 Although on one view the language used by Ms Miles in her conversations of 10 and 14 December 2007 (particularly the latter) appears to state that the Defendant is terminating the contracts, the matter cannot be viewed independently of the ongoing discussions about what payment would be due from the Defendant if a termination was effected. This, of course, is a further indication that the Defendant was not purporting to terminate for breach by the Plaintiff of the Plaintiff's obligations. Rather, it is an indication that the Defendant thought that it was entitled to terminate the contracts subject to the payment of some amount of money (cf cl 18.3 in the Perth Agreement).
56 So, for example, in the first conversation of 10 December 2007, Ms Miles asks Ms Morcom to get back to her about the payout figure because "we want to terminate the service immediately". Then, after receipt of the email of 13 December 2007, Ms Miles rings Ms Morcom to complain about the payout figures. Certainly, when asked, she said that Mr Varker-Miles was very dissatisfied with the level of service provided and that was why the Defendant was terminating the arrangement. However, there was then a further conversation about what would have to be paid to bring about the termination, a matter inconsistent with the Defendant asserting a right to terminate or that it was doing so there and then. Once again, the position at the end of the conversation was left where the payout figure was still not agreed and Ms Morcom was to ring Mr Varker-Miles to discuss it.
57 The Plaintiff continued to send monthly invoices which, after Mr Mindag rang Ms Billing to ask for duplicates, were all paid by the Defendants.
58 In my opinion, the continuing issue of what any payout figure would be together with the request for duplicate invoices and their subsequent payment, are all indications that there was no termination of the Agreements by the Defendant in December 2007.
59 In the evidence there is no explanation or justification of these payments which, on their face, suggest that notwithstanding what Ms Miles had told Ms Morcom on 10 and 14 December 2007, the Defendant did not believe that it had terminated in December and intended to continue with the contract until the expiry of the minimum period.