Clause 6
22 Whatever may be the manner in which the same or a comparable phrase may be construed in different statutory contexts or in different commercial agreements, the present issue dividing the parties is to be resolved by reference to:
the proper characterisation of the ambit of the dispute between Telstra and each of the First to Third Respondents; and
the proper construction and application of cl 6 of the Facilities Access Service Terms.
The ambit of the issues dividing the parties was considerably narrowed by there being agreement between Telstra and the First to Third Respondents that:
the variations notified by Telstra to each of the First to Third Respondents was a variation within the constraints imposed by cl 6.3; and
the dispute which each of the First to Third Respondents was simply that the quantum of the increase was "too high", albeit a variation within the constraint imposed by cl 6.3.
No question arose as to the variation sought to be exacted by Telstra not being a variation imposing an increase which was not sufficiently "certain" so as to be not a proper exercise of any contractual power to vary the charges to be imposed.
23 The construction of cl 6 advanced by Telstra was that it conferred a unilateral power to vary the Charges specified in the Price List, provided the variation did not exceed the amount calculated in accordance with cl 6.3. That power, according to Telstra, was a power conferred upon it by agreement with each of the First to Third Respondents. Within the ambit of the Agreement, the only limitation upon the power was that imposed by cl 6.3. That clause was sought to be characterised as a "cap" upon the maximum amount of any variation. Each of the Customer Relationship Agreements, upon this approach, was an agreement as to terms and conditions and, within each of those Agreements, was a means whereby those terms and conditions could be varied. Having agreed to those terms and conditions and the means whereby those terms and conditions could be varied, it was said on behalf of Telstra that there could - thereafter - be no failure to agree where any variation was within the range of increases previously agreed. Clause 6.4, upon this approach, was obviously accepted by Senior Counsel for Telstra to be directed to "disputes … under clause 6.1". But it was sought to confine the "disputes", there referred to as "disputes" as to such matters as (for example):
a mistake as to the "Charge specified in the Price List";
a failure to give "2 months written notice";
a mistake as to the calculation of "the aggregate of the CPI Change plus 4%"; or
a mathematical mistake erroneously recording the place of the "decimal point" in any process of calculation.
24 That construction of clause 6 is rejected.
25 Clause 6.1, it is concluded, does not confer any unilateral and unchallengeable power upon Telstra to vary the "the Charge(s) specified in the Price List(s)" subject only to the constraints imposed by cl 6.3.
26 Clause 6.1, clearly enough, confers a power to vary those Charges. But it is a power to vary subject to the right of an Acquirer to "dispute" the variation. The contractual agreement reached between Telstra and Vocus Fibre in June 2011 (for example) was an agreement to pay the amounts initially set forth in the Agreement and an agreement that Telstra could later vary those Charges subject to the right of Vocus Fibre to "dispute" the variation. The Agreement recorded in the June 2011 contract was not an agreement confining Vocus Fibre to an entitlement to "dispute" the mere application of the terms of that clause to the facts. The Agreement recorded in June 2011 was, accordingly, an agreement:
as to the initial terms and conditions upon which services were to be provided
including an agreement that:
Telstra "may" vary the charges up to the "cap" imposed by cl 6.3; and
Vocus Fibre could "dispute" the variation.
The June 2011 Agreement, not surprisingly, does not record any agreement whereby Telstra could vary the charges in an amount in excess of the "cap". Any variation which purported to impose a variation in excess of that which had been agreed, would simply not be authorised by the terms of the Agreement; but even within the limited range of authorised variations, both parties recognised the contractual right to "dispute" the variation. Until that "dispute" was resolved, albeit a dispute as to the quantum of a variation within a limited range, the parties had failed to reach agreement.
27 Any confined construction of that which may constitute a "dispute" for the purposes of cl 6, is only further made less tenable when attention is focussed upon the phrase employed in cl 6.4, namely a dispute "(whether under the Agreement or otherwise)". A purported variation to charges in excess of the "cap" set by cl 6.3 may be variously described as a "dispute" arising "under the Agreement", or (perhaps more accurately) as a "dispute" arising "otherwise" than under the Agreement; a variation within the range set by the "cap" may properly be described as a dispute arising "under the Agreement". Of present importance is the width of the language employed in cl 6.4 and a recognition mutually agreed upon that a "dispute" may arise both as to the application of cl 6.1 "or otherwise". The fact that Vocus Fibre may seek to "dispute" a variation to the charges, albeit a variation within the range agreed upon, does not deny to the subject-matter of that dispute the character of a failure to agree.
28 That construction of cl 6, it is respectfully considered, follows from the simple meaning of the words employed in the clause itself. No other construction of that clause, it is considered, is reasonably open. No question thus arises as to the Court being confronted with alternative and equally viable constructions such that the Court should apply that construction which best achieves commercial common sense.
29 Senior Counsel for Telstra nevertheless submitted in the written Outline of Submissions that the construction being advanced by each of the Respondents would "lead to dramatic and 'surprising results'": Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 108. Gibbs J there observed:
…It is immediately apparent that the construction for which the appellant contends will lead to surprising results.
His Honour continued:
It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, "even though the construction adopted is not the most obvious, or the most grammatically accurate", to use the words from earlier authority cited in Locke v. Dunlop, [(1888) 39 Ch D 387 at 393)… Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument. Finally, the statement of Lord Wright in Hillas & Co. Ltd. v. Arcos Ltd, [(1932) 147 LT 503 at 514], that the court should construe commercial contracts "fairly and broadly, without being too astute or subtle in finding defects", should not, in my opinion, be understood as limited to documents drawn by businessmen for themselves and without legal assistance…: (1973) 129 CLR 109-110.
In oral submissions it was argued that the construction advanced on behalf of the Respondents would be "absurd". Those submissions are rejected. The Facilities Access Service Terms, it is accepted, should be construed "in order to avoid absurdity or inconsistency": Fitzgerald v Masters (1956) 95 CLR 420 at 426 - 427 per Dixon CJ and Fullagar J. Commercial contracts are to be construed in a "businesslike" manner and in a manner which promotes "business common sense": MIWA Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 297 at [14] per Basten JA (McColl and Campbell JJA agreeing). The "absurdity" which was said to flow from the construction of cl 6 which authorised the Commission to arbitrate the disputes was said to be exposed by the width of the matters that the Commission was to take "into account in making a determination": e.g., Telecommunications (Arbitration) Regulations 1997 (Cth) reg 8. But the width of those powers, it is respectfully considered, exposes no "absurdity". The width of those powers is but the legislative recognition of the ambit of powers necessary to arbitrate a "dispute" as to the terms and conditions of granting access to publicly important telecommunications facilities. If those powers are perceived to be too extensive, that is a matter to be addressed by the Legislature. The courts cannot construe a commercial agreement in a manner so as to avoid what individual judges may or may not perceive to be the conferral of power beyond that which is necessary to resolve a "dispute" which may (on one view) be within a confined ambit. Initially, the identification as to the terms and conditions upon which each of the First to Third Respondents were to be granted access was left to the commercial judgment of those Respondents and Telstra. "Failing agreement" the arbitration regime contemplated by the Legislature thereafter fell to be followed. And such powers as are conferred upon the Commission are thereby enlivened.
30 And there is a failure to agree for the purposes of cls 18(1) and 36(3) of Schedule 1, notwithstanding the terms of cl 10 of the Standard Terms and Conditions. Clause 10 of the Standard Terms to each of the Customer Relationship Agreements provides a regime whereby "General Disputes" are to be resolved, including referral to "one of the processes of alternative dispute resolution…". A "General Dispute" is defined as meaning:
… any dispute, difference or claim arising out of or in connection with this Agreement or the subject matter of this Agreement, including any question about the construction of this Agreement or a party's rights or obligations, which is not a Billing Dispute.
A "Billing Dispute" is also defined but that definition can be left to one side. One submission advanced on behalf of Telstra was that "there is nothing in cl 10 that prevents a party referring a General Dispute to arbitration or seeking to enforce its bargain in the Courts". Indeed, the notification provided by Vocus Fibre to Telstra in July 2013 invoked cl 10. Running contrary to the dispute resolution process envisaged by cl 10 was the fixed regime of cl 6. The construction of cl 6 embraced by the Respondents, it was said on behalf of Telstra, conferred "arbitral jurisdiction on the ACCC by agreement". That characterisation of the operation of the contractual and statutory provisions is, with respect, considered to be erroneous. By the terms of the Customer Relationship Agreements, the parties have agreed for those matters which constitute a "General Dispute" to be resolved in the manner set forth in cl 10. Where there is a price variation to the charges upon which access to facilities is to be granted, the parties can either agree or disagree; but where there has been a failure to agree upon terms and conditions, that dispute may be notified to the Commission. The contractual right to "dispute" a variation is that reserved by cl 6.4. Clauses 18(1) and 36(3) of Schedule 1 thereafter operate according to their terms. Clause 10 of the Standard Terms does not lead to any different construction as to the reach of cl 6.4.
31 A further submission advanced by Telstra in its written Outline of Submissions was that the manner in which the term "dispute" was to be construed as a contractual provision did not necessarily dictate the further conclusion that such a "dispute" satisfied the statutory phrase of "failing agreement" for the purposes of Schedule 1. It was submitted that a "complaint about the application of the price increase mechanism that is a "dispute" under the CRA…does not mean that there has been a failure to agree within the terms of the Act". That further argument is also rejected. Although cls 17(1) and 35(1) of Schedule 1 to the Telecommunications Act refer to the "giving" of access, clauses 18(1) and 36(3) - it is concluded - can nevertheless continue to apply even where there has been an initial agreement as to the terms and conditions upon which access been "given" and where there is agreement as to the power to thereafter vary those terms and conditions. A subsequent "dispute" as to the terms and conditions upon which access is to be provided after the expiration of any initial period of time when prices were fixed, can - it is considered - be properly characterised as a "dispute" as to the terms and conditions upon which access is "given" for the purposes of cls 17(1) and 35(1) of Schedule 1. "Given", it is concluded, can refer equally to the initial terms and conditions upon which access is first "given" and to the terms and conditions upon which access is continued to be "given".