35 In the third letter, the plaintiff's solicitors required Optus to remit payment of the clawback amount pending resolution of their dispute following, amongst others, Optus providing copy of its "Fraud Investigation Report" in respect of each service to which the clawback amount related. The letter went on to state that if Optus refused to remit payment the plaintiff would invoke the dispute resolution procedure in the Agreement. Clause 31 is entitled Resolution of Disputes and provides a pre litigation dispute resolution mechanism which commences with the service of a Notice of Dispute.
36 On 28 June 2010, the plaintiff's solicitors served a Notice of Dispute.
37 On 30 June 2010, the plaintiff's solicitors wrote to Optus, amongst others, again asking for copy of the "Fraud Investigation Report".
38 On 1 July 2010, Optus wrote to the plaintiff's solicitors as follows:
Solution 1 Pty Limited
I refer to your facsimile dated 1 July 2010 which was sent to Phillip Wise and your facsimile to me dated 30 June 2010.
Please ensure that all future correspondence in respect of your client is sent to me. I assume it is requirement of legal practitioners in Victoria, as it is under the Solicitors Rules in NSW, that they not contact another legal practitioners' client directly.
In respect of your facsimile of 30 June 2010:
1. I confirm that particulars in respect of the clawback will be provided shortly.
2. Optus does not intend to provide you or your client with any internal investigation reports.
3. You have requested details of your client's PIG Representative. I am instructed that the process of electing a PIG Representative has ceased. Optus would be content for your client to attend with the principal of another OBD Channel Partner of its choosing.
4. I note you have not provided a copy of the document entitled "Commission Clawbacks - Rules of Engagement" as I requested. I assume your client no longer presses its claim in respect of that document.
In respect of your facsimile of 1 July 2010 and your earlier letters dated 25 June 2010:
1. We note your client's position with respect to clause 2(a) of the letter from Optus dated 18 June 2010. Optus does not currently press its request that your client deregister www.optussolutions.com.au .
2. Optus did not minute the meeting held on 26 May 2010.
3. I note your request for "particulars" of the allegations contained in paragraphs 2(b), (c), (d) and (e) of Optus' letter of 18 June 2010. You have referred to the decision of Justice Brereton in Aura Enterprises Pty Limited v Frontline Retail Pty Limited . I note that this is a judgment with respect to the Franchising Code of Conduct. Your client is not a franchisee
and therefore the Franchising Code of Conduct does not apply. In any event your client is well aware of the particulars you request, as is its previous legal representative.
Yours faithfully
Lynette Rieper
Corporate Counsel
39 On 2 July 2010, the plaintiff's solicitors wrote to Optus, amongst others, responding to the facsimile of 1 July 2010, in the following terms:
Our facsimile of 1 July 2010
We are instructed to respond as follows (adopting the numbering in your fax for ease of reference)
1 Thank you. Our client will proceed on the basis that Optus has withdrawn its allegation that our client's registration of the domain name www.optussolutions.com.au was a breach of our client's obligations to Optus.
2 Noted.
3 Your interpretation of Aura Enterprises Pty Limited v Frontline Retail Pty Ltd [2006] NSWSC 902 (" Aura Decision ") and its application to Optus' letter dated 18 June 2010 is misguided in that regard, we refer you to
a the numerous cases cited in the Aura Decision in respect of the particulars required to be provided where a 'breach' notice is served and in respect of the 'reasonable recipient' test for the construction of contractual notices. Those cases were not confined to franchise agreements, and
b Whitegum Petroleum Pty Ltd v Bernadini Pty Ltd [2010] WASC 108 (at para 19).
Our client and its previous legal representative are not " well aware " of the particulars that have been requested.
Also, we confirm that Counsel who appeared on behalf of the plaintiff in the Aura Decision has been briefed by our firm in respect of this matter.
Finally, we are instructed that if Optus seeks to rely on its alleged right of termination as foreshadowed in its letter of 18 June 2010, without having first provided our client with proper particulars in respect of Optus' letter of 18 June 2010 and no fewer than 15 days to respond after receipt of those particulars, our client will immediately apply to the NSW Supreme Court for urgent interim relief.
All of our client's rights are expressly reserved.
40 On 7 July 2010, Optus wrote to the plaintiff providing particulars of the clawback amount and the reasons why Optus considered it was entitled to withhold commissions. The letter made reference to the allegedly fraudulent transactions.
41 On 13 July 2010, the plaintiff's solicitors responded, at some length, to Optus' letter of 7 July 2010. The plaintiff disputed Optus' entitlement to the clawback. The letter required Optus, by 10.00am on 16 July 2010 to refund the clawback amount, withdraw its allegations, pay $10,000 on account of interest foregone on the clawback amount and confirm in writing that it would not give effect to any future clawback otherwise than in accordance with the terms of the Agreement and the plaintiff's rights. The letter foreshadowed action to recover the amount plus interest and costs without further delay.
42 On 16 July 2010, the plaintiff's solicitors wrote to Optus' Corporate Counsel seeking confirmation that she had instructions to accept service.
43 On 23 July 2010, Optus sent the Notice to the plaintiff. It is in the following terms:
Dear Sir
Optus Business Direct Channel Partner Agreement
1. Termination of Optus Business Direct Channel Partner Agreement
I refer to the Optus Business Direct Channel Partner Agreement between Solution 1 Pty Limited ACN 063 307 639 ( Solution 1 ) and Optus Networks Pty Ltd ACN 008 570 330, Optus Mobile Pty Ltd ACN 054 365 696 and Optus Internet Pty Ltd ACN 083 164 532 (together Optus ) executed on or around 19 February 2008 ( Agreement ).
Optus hereby notifies you that as a result of your client's recent non-compliance with the Agreement it is exercising its right to terminate the Agreement immediately in accordance with clauses 27.3(b) and 28.2(a) of the Agreement. Pursuant to clause 28.2(a)(i) the amount which is payable to Solution 1 is $0.00 ( Termination Fee ). Please note that in accordance with clause 28.2(b) Solution 1 has no right to any payment from Optus as a result of the termination except for the Termination Fee and that the Termination Fee is Solution 1's sole and exclusive remedy as a result of the termination.
Pursuant to clause 28.1 of the Agreement the appointment of Solution 1 to provide Marketing Activities is now terminated and after today Solution 1 will have no entitlement to Commission, nor for the avoidance of doubt will Solution 1 have any entitlement to the ongoing payment of Trailing Commission in respect of Customers Activated by Solution 1 prior to the date of termination.
2. Obligations on Termination
In accordance with clause 28.3 of the Agreement, Solution 1 must:
(a) cease carrying out Marketing Activities;
(b) cease using any Optus trademarks including the Approved Business Name;
(c) promptly return any Confidential Information and all other materials provided to Solution 1 by Optus; and
(d) immediately return any unsold Products.
Please contact me if you have any questions.
Yours sincerely
Optus Mobile Pty Limited, Optus Internet Pty Limited and Optus Networks Pty Limited
THE PROCEEDINGS
44 By Summons sued out of this Court on 26 July 2010, the plaintiff obtained ex parte injunctive relief restraining Optus from giving effect to the Notice. The proceedings were adjourned to 29 July 2010. On that date the injunction was without contest extended until further order and the proceedings were stood over to 30 July 2010. On 30 July 2010 the proceedings were transferred to this List and were set down for final hearing to commence on 6 September 2010. On 12 August 2010, the plaintiff filed a Commercial List Statement and on 19 August 2010, Optus filed a Commercial List Response. On 1 September 2010, the plaintiff filed an Amended Summons.
45 The hearing took place over two and a half days. Mr D B Studdy SC with Mrs C Champion of counsel appeared for the plaintiff. Mr J A C Potts of counsel appeared for Optus.
46 By its Amended Summons the plaintiff seeks as final relief:
a a declaration that the Notice is invalid;
b a declaration that Optus, in serving the Notice and seeking to give effect to it acted contrary to its duty to act in good faith; and
c an order that Optus, whether by its servants, agents or otherwise, be permanently restrained from seeking to give effect to the Notice.