No party contended for (a) or (b). The Dealer began with (c) and ended with (d). Telstra began with (f) and, it seems to me, ended at (e).
51 Construction (f) is too wide. If such an approach were adopted, Telstra could give an instruction having the effect of varying the remuneration arrangements in clause 7 and schedule 5, or could instruct the Dealer to cease business. This cannot be correct.
52 Construction (c) became subsumed in construction (d) in the course of the Dealer's submissions.
53 Construction (d), the one contended for by the Dealer, amounts in my view to a re-writing of the sub-clause. The words of sub-clause 4.1(j) are not limited to issues of an "operational" nature however that might be defined, or to matters dealt with in clause 4. If that construction were to be adopted then, as was submitted by counsel for Telstra, the court would be re-writing the sub-clause or implying limitations into the clause which the words themselves do not express in circumstances where the requirements for the implication of terms have not been established.
54 Construction (e), the one eventually contended for by Telstra, seems to me to be still too wide. One of the principal objects of the contract is the conduct by the Dealer, as an independent contractor with its own staff and premises, of its own business within the entire territory of Australia. This object is particularly reflected in the Dealer's status as a commission representative in clause 2.1(b), the fact that the Dealer is non-exclusive and will compete with other Dealers and with Telstra itself as provided for in clause 2.2, the right and obligation which the Dealer has to promote the sale of the mobile service throughout the whole of Australia as provided for in clause 2.3, and the Dealer's status as an independent contractor as provided for in clause 3. The express provisions in the agreement dealing with premises also emphasise the Dealer's independence. Clause 4.1(c) provides that the Dealer must have "suitable retail premises" but imposes no obligations on the Dealer concerning the facilities or resources which the Dealer must bring to bear, other than that they must be suitable to "adequately promote" the mobile service within Australia. Clause 4.5(c) requires the Dealer to operate at least 12 retail outlets in New South Wales but the agreement otherwise does not expressly regulate the number or location of the Dealer's retail premises within the "Territory", which is the whole of Australia.
55 Clause 4.8 dealing with Telstra's power to unilaterally amend the agreement so as to provide for "voice signature" contracts is of significance. Clause 4.8 provides that such unilateral amendments must not deprive the Dealer substantially of any benefits accruing to it under the agreement or impose any additional substantive obligations on the Dealer. In my view it cannot be that a consequence Telstra cannot produce if amending unilaterally, could be produced by an instruction or order.
56 Telstra's counsel particularly relied upon the obligation which the Dealer has in clauses 2.1 and 2.3 to promote the sale of, and extend the demand for, the mobile service as a whole, being Telstra's entire service not just that aspect of the service referable to the Dealer's own activities. In this respect Telstra also relied upon the latter words of sub-clause 4.1(j) whereby the Dealer is required to act in the manner it reasonably considers to be most beneficial to Telstra's interests, and upon the detailed reporting and other obligations of the Dealer under the agreement.
57 The Dealer's obligation is to promote the service as a whole and act in the manner most beneficial to Telstra's interest, but this cannot mean that the Dealer is not permitted to act in its own interest. The very general terms of this broad obligation must be read consistently with the specific and express terms pursuant to which the Dealer is a commission representative operating an independent business.
58 The agreement should be construed in a commercially sensible manner.
59 In order to construe sub-clause 4.1(j) in a commercially sensible manner in the context of the Dealership Agreement as a whole, the instructions and orders referred to must be instructions and orders, not about any subject, but about obligations which the Dealer has under the Dealership Agreement. They must fill out or give meaning to that which the Dealer has agreed to do.
60 Further, in order to be consistent with the express terms of the Dealership Agreement, an instruction or order cannot deprive the Dealer substantially of benefits otherwise expressly provided for, or impose on the Dealer a substantive obligation not otherwise provided for. I cannot accept that what Telstra has "given" the Dealer by express and specific terms can be unilaterally "taken away" by orders or instructions under the general words of sub-clause 4.1(j).
61 My conclusion is that the correct construction of sub-clause 4.1(j) is that it provides for orders or instructions which fill out or give meaning to the obligations of the Dealer under the Dealership Agreement, but which do not deprive the Dealer substantially of any benefits accruing to it as expressly provided for in the agreement, or impose any additional substantive obligation on the Dealer.
Analysis of the existing dispute and application of sub-clause 4.1(j) and 4.1(p)
62 The requirements which the relevant letters seek to impose, or to which they refer, do not fall under sub-clause 4.1(p). They are not properly characterised as marketing, administrative or practical procedures. No oral submission was made by Telstra in support of the proposition that Telstra's conduct was properly undertaken pursuant to sub-clause 4.1(p).
63 Telstra's requirement that all new premises be approved pursuant to a specified Telstra policy as set out in the letters of 30 May 2005 and 30 September 2005 was unqualified. It seems to me that these letters were founded upon an assumption that Telstra could properly prohibit the opening of new premises for any reason that commended itself to Telstra. That was indeed the substance of Telstra's construction of the Dealership Agreement as originally put to me.
64 The letter of 14 March 2006 purports to withdraw the prior requirements and to impose upon the Dealer an obligation to give Telstra prior written notice in relation to proposed new retail premises and to set out specified details in that notice including a "business case" and "any other information Telstra reasonably requires". More significantly, the letter then advises the Dealer that Telstra's response to the notification may include an instruction that the Dealer is not to open the proposed new retail premises or an instruction that the proposed new retail premises may only be opened on specified conditions.
65 It seems to me that Telstra still asserts a contractual entitlement to impose upon the Dealer an obligation to comply with a procedure specified unilaterally by it before opening new retail premises, and an obligation not to open those premises if Telstra does not approve of them and instructs the Dealer accordingly.
66 Counsel for Telstra submitted that the instruction or order in the 14 March 2006 letter did give meaning to or fill out existing obligations in the Dealership Agreement because of the Dealer's existing obligations to promote the service as a whole and to act in the manner most beneficial to Telstra's interests. Reference was made to clauses 2.1, 2.2, 2.3, 4.1 and 4.6. Telstra's submission also referred to the fact that promotion of the service as a whole, and Telstra's best interests, might be advanced by regulation of the nature and extent of competition between the retail premises of different dealers and its own retail premises.
67 Do Telstra's instructions fill out or give meaning to existing obligations? Do they deprive the Dealer substantially of benefits under the agreement? Do they impose additional substantive obligations on the Dealer?
68 Telstra's submission that its instructions fill out the obligation to promote the service as a whole, could only be accepted if there was evidence establishing a relationship between the instructions and the obligation. No such evidence was led. It might be assumed that Telstra at least sees the instruction as being in its best interests. Again, however, this issue was not the subject of any evidence.
69 When consideration turns to the other questions raised, the position seems to me to be clear.
70 The Dealership Agreement gives the Dealer the right to promote the mobile service throughout Australia as an independent contractor. It does not regulate the number or location of the Dealer's retail premises, save for the requirement that there be 12 premises in New South Wales after the first 12 months. It requires only that they be suitable to adequately promote the service. The Dealer exercises its right to promote the service by operating its own business as an independent contractor with its own staff and other resources.
71 In my view the regime Telstra has sought to impose, in each of its two manifestations, would, if valid, substantially deprive the Dealer of an important aspect of its independence, being its ability to finally decide on the location of its retail premises. Telstra's purported instructions detract from the benefits the Dealer has as an independent contractor as they reduce the Dealer's capacity for independent planning and action on an important issue.
72 Telstra's counsel accepted that absent an instruction or order the Dealer is under no obligation to obtain Telstra's approval before opening a new store. Telstra now maintains that it can, by an instruction, require notice in a specified form of any proposed new premises, and it can then, by a further instruction, prohibit the opening or impose conditions on it. If valid, this regime would constitute a substantial new obligation imposed on the Dealer.
73 My conclusion is that neither the letters in 2005, nor the letter of 14 March 2006, are valid instructions or orders in accordance with sub-clauses 4.1(j) or 4.1(p), and the Dealer did not, and does not, have to comply with them.
Relevance of "matrix" evidence
74 In my view this is a case of generality, requiring construction of the relevant provisions in the context of the agreement, not ambiguity. The extrinsic material is accordingly only of assistance in providing a factual background.
75 If I am wrong, and this is a case of ambiguity, it seems to me that the extrinsic material is of some assistance in that it demonstrates that approval or specification of retail premises is an important issue upon which the parties have negotiated express terms where they saw that to be necessary. It is most unlikely, it seems to me, that their mutual intention would have been that the regulation of such an issue was to be left to the unilateral discretion of Telstra through the use of instructions or orders under sub-clause 4.1(j).
76 The fact that sub-clause 4.1(j) has been present in predecessor agreement between these parties and that it was not the subject of specific negotiation in the Dealership Agreement does not seem to me to assist.
The declaration remedy - The Dealer's claim and Telstra's counterclaim
77 Telstra submitted that the declarations sought by the Dealer ought not to be granted as they would constitute advisory opinions about an event which may never happen, there being no instruction by Telstra at present that the Dealer is not to open any specific store. Telstra also submitted that the factual basis for the declaration was hypothetical.
78 The relevant relief which the Dealer seeks is as follows: