Telecom Vanuatu Ltd v Optus Networks Pty Ltd

Telecom Vanuatu Ltd v Optus Networks Pty Ltd - [2009] NSWSC 33 - NSWSC 2009 case summary — Zoe

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Application to Re-Open 5 The plaintiff had made a claim during the trial that if the Court found that agreement at US$0.10 per minute for rogue traffic had been reached, it only applied to rogue traffic disclosed to Mr Hall at the time the agreement was reached. In this application it was submitted that this claim was overlooked. 6 The plaintiff submitted that the expression "all rogue traffic" in paragraph [175] of the Judgment did not make clear whether it was the rogue traffic that had been disclosed to Mr Hall at the time the agreement was struck or all rogue traffic irrespective of disclosure at the time of the agreement. Paragraph [174] of the Judgment includes the following: There was never any communication from Mr Hall or TVL to Mr Bragg or Optus during the period 2000 to 2002 that the agreement in relation to the 10 cents per minute for the MDC traffic was only in relation to the traffic that TVL knew about, and that TVL wished to reserve its position to negotiate for a higher or different rate for other traffic. 7 The plaintiff's submission that the US$0.10 agreement related only to the rogue traffic disclosed to Mr Hall was not overlooked. This part of paragraph [174] makes reference to it, albeit inferentially. As indicated during submissions on this application, the expression "all rogue traffic" means all rogue traffic, irrespective of disclosure to Mr Hall at the time. In those circumstances, the claims by the plaintiff on this application are: (a) Mr Kunc did not make the concession referred to in paragraph [175] of the Judgment; (b) even if what Mr Kunc said justified a conclusion that he had made the concession referred to in paragraph [175], he made a mistake and should be granted leave to withdraw the concession and to re-open the plaintiff's case; and (c) if leave is granted, the issue of whether all the rogue traffic has been paid for at the agreed rate of US$0.10 should be determined prior to the entry of final orders. (a) Was a concession made? 8 Mr Kunc submitted that he did not make the concession referred to in paragraph [175] of the Judgment. The issue of whether the plaintiff had been paid for all the rogue traffic at US$0.10 was certainly the subject of pleadings and the Agreed Questions for Determination (the Agreed Questions) produced during the trial. 9 Paragraph 15(p) of the defendant's Fourth Further Amended Commercial List Response contended: (p) …further or alternatively, on or about 29 November 2000, TVL agreed with Optus that TVL would receive a rate of US$0.10 per minute of international audiotext traffic generated by Interwest and MDC to the Vanuatu Number Ranges; Particulars (i) Email dated 27 November 2000 from Richard Hall to Samantha Bicknell and John Bragg (cc Thierry Milard). (ii) The agreement was partly express and oral, and partly to be implied. Insofar as it was oral, it was constituted by a telephone conversation between John Bragg and Richard Hall on or about 29 November 2000, the substance of which was to the effect alleged. Insofar as it was to be implied, it was to be implied by the course of dealing between the parties. Optus subsequently paid a termination charge to TVL…calculated at a rate of US$0.10 per minute of international audiotext traffic. Until the commencement of these proceedings, TVL never took any steps to question or dispute the rate applied or the payment received. 10 The plaintiff's Amended Commercial List Reply (the Reply) filed on 1 August 2008 contended:

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21 In the present application the defendant conceded that this concession was arguably wrong in light of the inclusion of paragraph 14 in the Reply, however it was submitted that it reflected the reality of the way that the case had been conducted by the plaintiff, namely, that it had never attempted to run a case based on what had been pleaded in paragraph 14 of the Reply and expressed in question 9 in the Agreed Questions. Alternatively it was submitted that the Court would conclude that Mr Kunc ultimately elected not to press that claim, and conceded that if the Court found that the 10 cent agreement applied to all rogue traffic then that was the end of the matter. 22 The exchange that occurred at page 621 of the trial transcript extracted above is a little curious. In the first part of that extract Mr Kunc submitted that if there were to be a finding of an agreement at US$0.10 per minute that would be "the end subject to some extra minutes". This submission was consistent with the submission at page 532 of the trial transcript in which Mr Kunc was referring to the circumstance of a positive answer to question 8 (whether there was an agreement between Mr Hall and Mr Bragg at US$0.10 per minute for the rogue traffic) and a claim for "minutes that we have not been paid for" that would be dealt with in a schedule then under preparation. In the latter part of the extract at page 621 of the trail transcript Mr Kunc submitted that he was not "that pessimistic" that the finding of an agreement at US$0.10 was the "end of the case" and submitted that a finding would have to be made that the "agreement was in relation to all of the unauthorised traffic". Mr Kunc then referred to such an agreement not extending to the minutes that had not been disclosed to Mr Hall at the time the agreement was made. 23 On a reasonable reading of this extract and notwithstanding the earlier reference to the "extra minutes", Mr Kunc may be taken to have conceded that if the US$0.10 agreement extended to all rogue traffic, disclosed and undisclosed, the matter was "at an end". At this point of the submissions, the plaintiff's position was that the application of any US$0.10 per minute agreement was limited to the disclosed minutes and that there would need to be further argument in respect of the volume of undisclosed minutes and the rate that should be applied to those undisclosed minutes. However the matter became crystal clear at page 629 of the trial transcript when Mr Kunc submitted:

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…as we had occasion to point out recently in State Rail Authority of New South Wales v. Codelfa Construction Pty. Ltd. (42), the circumstances in which this Court will reopen a judgment which it has pronounced are extremely rare. The public interest in maintaining the finality of litigation necessarily means that the power to reopen to enable a rehearing must be exercised with great caution. Generally speaking, it will not be exercised unless the applicant can show that by accident without fault on his part he has not been heard. 31 The final paragraph of the Judgment recorded the conclusion that the "plaintiff's claims will be dismissed" and set a date for the bringing in of orders reflecting "this outcome". The order in this case has not been "perfected" or "entered". As a matter of principle the Court has power to rehear or review the case. The reality of the plaintiff's application is to advise the Court of the mistaken or erroneous concession and seek to correct the mistake or, put another way, withdraw the concession. It is not an application to change substantive reasoning. 32 The "fault" was not that of the plaintiff but of its counsel agreeing with the erroneous proposition put by the defendant's counsel. Cognisant of the caution suggested by the High Court I am however of the view it would be inconsistent with the dictates of justice for the orders to be entered perfecting a judgment that was based on a concession that was infected by error and, I accept, was not intended. I am satisfied that I should exercise my discretion in the plaintiff's favour. I will allow the plaintiff to withdraw the concession and to re-open its case. (c) Consideration of the plaintiff's claim for payment of additional minutes. 33 Mr Kunc indicated that the plaintiff did not intend to call any additional evidence in respect of its claim for payment for alleged outstanding minutes of rogue traffic pursuant to the US$0.10 agreement. Mr Jackman submitted that it is futile to consider the plaintiff's claim in this regard by reason of the following evidence given by Mr Milard (tr 209):

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Q. You are aware, aren't you, that Optus did make payments to TVL for the so-called rogue traffic at the rate of numeral 10 cents per minute? A. There has been payments which have been made to TVL, yes. Q. And you knew that they were made at the rate of 10 cents per minute? A. To my - to what I remember, we did not receive any details of such payments. Q. But there had been a payment of some $81,000 in March 2000, hadn't there? A. There have been - yes, in March 2000 before I arrived there has been a payment which we rejected, yes, that's right. Q. And then you later accepted that when a settlement with Gilsan was imminent, correct? A. After we accepted another payment, this is right. Q. And then there was another payment of $313,000 made by Optus to TVL, correct? A. That's correct. Q. And there were some payments made directly by some of the audio text service providers that you regarded as generating rogue traffic? A. Yes. Q. And you knew, didn't you, that those payments were made at the rate of 10 cents a minute? A. There was no details with that but we suspected that they may have been based on that rate, yes. 34 There was no further evidence in relation to the amount of the payments that were made directly to the plaintiff by some of the audiotext service providers referred to in Mr Milard's evidence, nor was there any evidence identifying the source of the funds. Mr Jackman makes the obvious point that whatever those amounts were, they have not been brought to account in the plaintiff's Schedule. Indeed Mr Jackman submitted that in the absence of any further evidence, a process that has been eschewed by the plaintiff, it would be futile to give any consideration to the plaintiff's claim for payment of allegedly outstanding minutes. 35 The plaintiff claims that it should have been paid for 5,046,775 rogue minutes but was only paid for 3,958,190 rogue minutes. Applying the agreed rate of US$0.10 per minute it applies that the plaintiff claims that the defendant still owes it an amount of US$108,858.50. 36 The defendant also submitted that the plaintiff could not simply have judgment entered in its favour for any unpaid traffic because the Court would have to find: (a) that the plaintiff had proved that it was not paid for all rogue traffic at 10 cents per minute; and (b) if it were proven, the Court would need to determine on what basis the number of minutes of rogue traffic for which it had not been paid should be computed. It was submitted that prior to any entry of judgment in favour of the plaintiff in respect of any minutes that had not been paid at the agreed amount, consideration would have to be given to these further matters. It will be necessary for the plaintiff to prove: (a) the particular traffic was rogue traffic; and (b) it had not been paid for by Optus or the service providers. 37 The defendant concluded its case at trial on the mistaken understanding that there was no claim by the plaintiff for additional minutes payable at the rate of US$0.10 per minute. Mr Kunc's submissions in relation to the Schedule extracted earlier do not contain detail identifying the minutes as rogue traffic for which the plaintiff is seeking additional payment at USD0.10 per minute. Nor do those submissions do not identify or take account of any direct payments from the service providers. Having regard to the difficulties that have occurred in this case, I think the most prudent course is for the plaintiff to file submissions referring to the evidence upon which it relies to establish the claim for payment for additional minutes pursuant to the agreement at US$0.10 per minute and for the defendant to respond to that submission. Costs and interest 38 I should say at the outset of the consideration of the issue of costs and interest that the plaintiff accepts that the maximum it could achieve, should it be successful in obtaining an order for payment of any outstanding minutes at US$0.10 per minute, is US$108,000, plus interest. 39 The defendant makes a claim for indemnity costs based on a number of Calderbank letters. The law relating to Calderbank letters is not in controversy: Leichhardt Municipal Council v Green [2004] NSWCA 341; Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 at [20]-[21]; and Commonwealth of Australia v Gretton [2008] NSWCA 117 at [44]-[47]. The first letter upon which the defendant relies was dated 15 September 2006 and contained an offer to pay US$900,000 plus costs for all of the claims that were originally brought in the proceedings. The offer in the letter of 15 September 2006 was better than the result the plaintiff may ultimately achieve. 40 The plaintiff's solicitors rejected that offer in terms that included the following:

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