Wedo Media Beta Pty Ltd v Chanlor Pharmaceutical Pty Ltd

Category: Principal judgment

Parties: Wedo Media Beta Pty Ltd (Plaintiff)
Chanlor Pharmaceutical Pty Ltd (Defendant)

Representation: Counsel:
Y Araki (Plaintiff)
V Bedrossian SC (Defendant)
Solicitors:
Longton Legal (Plaintiff)
Amberlake Lawyers (Defendant)

File Number(s): 2024/183911

Publication restriction: Nil

JUDGMENT

Introduction

1. The Plaintiff, Wedo Media Beta Pty Ltd (Wedo), claims the amount of $330,000 plus interest from the Defendant, Chanlor Pharmaceutical Pty Ltd (Chanlor).

2. Wedo is a marketing agency. Chanlor sold, amongst other things, skincare products. It wished to advertise skincare products at Sydney International Airport (SIA).

3. Wedo and Chanlor entered an agreement dated 27 March 2023 (the Agreement). The Agreement concerned 52 weeks of advertising at SIA. Ultimately, advertising of the Chanlor products at SIA occurred over eight months.

4. Wedo secured the advertising by entering a contract with JCDecaux Australia and New Zealand (JCD) on 27 March 2023.

5. Wedo issued an invoice to Chanlor on 28 March 2023 (the Invoice). Chanlor refused to pay the Invoice.

6. Wedo alleges Chanlor breached the Agreement by failing to pay the Invoice. Alternatively, Wedo makes a claim in quantum meruit.

Issues

7. Chanlor narrowed its defence at the hearing from that identified in its filed Amended Defence. In particular, Chanlor abandoned any defence based on a failure by Wedo to perform the Agreement, either because:

(a) The placement of the advertising was inadequate; or (b) The advertising spanned only 8 months and not 52 weeks.

8. The issues joined by the Parties at the hearing were:

(a) The proper construction of the Agreement insofar as it concerned Wedo’s obligations. Wedo asserted that its obligation was only to “procure” advertising but not provide advertising. Chanlor asserted that Wedo’s obligation was to provide advertising and not merely to procure it; (b) Whether Chanlor terminated the Agreement, and if so, when? (c) If Chanlor terminated the Agreement, what were the consequences of that termination? (d) If relevant, did Wedo fail to mitigate its loss? (e) If Chanlor failed on its contract claim, did it have a quantum meruit claim upon which it could succeed?

Evidence

9. For Wedo:

(a) An affidavit of Mr Feng Lin was read in the proceedings, and he was cross-examined; and (b) Two affidavits of Ms Diya Ye, who worked for Wedo, were also read and she was cross-examined.

10. The affidavit of Mr Lin primarily concerned his dealings with the sole director of the Defendant, Ms Yahan Wang, prior to and after entry into the Agreement, and his dealings with JCD.

11. Ms Ye’s affidavit evidence was primarily directed to the issue of the placement of the advertising and the question of Chanlor’s approval of that placement. Whether or not Chanlor approved the placement of the advertising was not advanced as an issue by Chanlor at the final hearing. She was cross-examined on matters going to the mitigation issue and the termination issue.

12. Whilst both Mr Lin and Ms Ye had some difficulties recalling events, I make no adverse credit findings in relation to either witness. I accept that in their evidence they were seeking to be truthful, however, I have assessed their evidence against the objective material arising from the contemporaneous documents in evidence.

13. Chanlor did not call any witnesses in its case.

14. Numerous documents were tendered in the proceedings, primarily contained in exhibits to the affidavits of Mr Lin and Ms Ye. The exhibit to Mr Lin’s affidavit contained numerous messages between him and Ms Wang on the communications application, “WeChat”.

Facts

15. Between 10 January 2023 and 27 March 2023, Mr Lin and Ms Wang communicated primarily on, “We Chat”, and in person. Mr Lin was at the time, and is, the sole director of Wedo. Ms Wang was, and is, the sole director of Chanlor.

16. The communications concerned Ms Wang’s desire to have Chanlor skincare products advertised at SIA, amongst other locations. She particularly wanted the advertising to be placed at a location where Chinese tourists typically arrived at SIA.

17. It was clear from what Mr Lin told Ms Wang, that Wedo was communicating with a third party to arrange advertising at SIA and that the cost of such advertising was being conveyed to Wedo by that third party.

18. The third party that Wedo was dealing with to organise the advertising was JCD. It is less clear that Ms Wang knew the third party was JCD. In his WeChat messages to Ms Wang, Mr Lin referred to the party he was dealing with to organise the advertising variously as “the airport billboard side”, “the airport side”, and “the airport”. In more than one message, he included a picture of a billboard at SIA which contained JCD’s name and branding. Mr Lin’s affidavit suggests that he spoke to Ms Wang about JCD by name, however the WeChat messages to which he referred in his affidavit to support his evidence do not bear that out. I do not consider it material whether Ms Wang knew it was JCD with whom Mr Lin was dealing or whether she thought he was dealing directly with SIA (or another third party). Either way, it was clear to Ms Wang that Wedo did not have the infrastructure on which the advertising would appear but was organising the advertising through another party.

19. Mr Lin conveyed to Ms Wang the price he said he was obtaining for the advertising. He obtained that price from JCD. He initially quoted a price of $450,000 plus GST for 1 year of advertising. Ms Wang urged Mr Lin to obtain a better price. On 13 March 2023, Mr Lin messaged Ms Wang and informed her that he had negotiated a price of $330,000 inclusive of GST for 1 year of advertising which consisted of 48 weeks of electronic advertising at the arrivals section of SIA, and 4 weeks of advertising on a lightbox, also in the arrivals section.

20. When Mr Lin conveyed to Ms Wang the final negotiated price of $330,000, he told her that the “contract” must be signed within a week. At that time, Ms Wang was in China. Mr Lin told her that she could sign an agreement first and “deal with the money when” she came back. At this point, no contractual document had been conveyed to Ms Wang or Chanlor. Over the next few days, Mr Lin continued to urge Ms Wang to proceed with a contract given the risk, as he put it, that the advertising space may be given to another entity. As no contract had been provided to Ms Wang at this point, I infer that Mr Lin was in fact seeking Ms Wang’s confirmation that she wanted to go ahead with advertising at SIA for the quoted price.

21. On 23 March 2023, in response to Mr Lin’s urgings, Ms Wang said in a message to Mr Lin: “And we are paying for advertising, so they should follow our time”. That message indicates that Ms Wang understood that the time pressure was being imposed by the relevant third party (here, JCD).

22. Ultimately, on 24 March 2023, Mr Lin sent Ms Wang the Agreement. On 27 March 2023, Ms Wang signed the Agreement on behalf of Chanlor and Mr Lin signed it on behalf of Wedo.

23. On 27 March 2023, Mr Lin, on behalf of Wedo, also signed an Outdoor Advertising Order with JCD (the JCD Order) for the advertising of Chanlor’s skincare product with a commencement date of 10 April 2023 and an end date of 2 June 2024. The JCD Order had terms and conditions forming part of a contract between Wedo and JCD. The terms and conditions included terms to the following effect:

(a) Wedo was relevantly defined as the Client notwithstanding it was also an Agent as defined in the contract (being an advertising agency); (b) The contract was for the period referred to above. Wedo could not cancel the contract without JCD’s consent which was at JCD’s discretion. If Wedo did cancel the contract, it was liable to pay any losses suffered by JCD for any advertising space that it could not sell for any period otherwise covered by the contract; (c) Wedo was the party obliged to pay JCD under the contract regardless of whether it received payment from the advertiser (here, Chanlor); (d) The amount due under the contract was $284,697.93 inclusive of GST which was payable in monthly instalments at a rate set out in the contract.

24. The fees payable under the JCD Order were set out on its front page which also included the words, “Agency Rebate/Fee: 10%”. I infer that under this contract, JCD would rebate 10% of its fee as a form of commission to Wedo.

25. After the Agreement was entered, Ms Wang expressed dissatisfaction with respect to the proposed placement of the advertising. Mr Lin indicated to her that her dissatisfaction only arose after entry into the Agreement and that it was not likely that the positioning could change.

26. Further messages were exchanged in June 2023. In summary, Mr Lin conveyed to Ms Wang that if she did not want to proceed, she should not delay as “they” could resell the space. Mr Lin said, “Otherwise, if you keep holding the billboard, you will be charged every day”. Mr Lin further explained that although “they” will sell the space if Ms Wang did not proceed, “they will trace the cost of” any period during which the space was not re-sold. Ms Wang responded, “We won’t pay”. In these messages, Mr Lin sought to convey that if JCD imposed charges because of a cancellation of the advertising at SIA, Chanlor would be the party required to pay for any losses suffered by JCD.

27. Ms Wang and Mr Lin continued to exchange messages relating to Ms Wang’s dissatisfaction with the positioning of the advertising. These messages are important to the question of whether Chanlor terminated the Agreement. I will detail the material evidence in this regard when I deal, below, with the question of termination.

28. On 23 October 2024, Ms Ye, on behalf of Wedo, emailed JCD suggesting that it consider temporarily removing the advertising at SIA. She said the reason for that suggestion was that Chanlor “had not yet provided formal confirmation for the advertisement placement”. Ms Ye noted that Wedo understood that it was the contracting party with JCD and it was responsible for fulfilling the terms of that contract. In response, JCD said it would look into reselling the space and if it could find someone to take on the space, it would cancel the advertising campaign.

29. The advertising of Chanlor’s skincare product commenced in April 2023 and continued until around 3 December 2023 at which point JCD cancelled the balance of the advertising campaign. Ultimately, JCD only charged Wedo $130,699.57 (including GST) pursuant to their contract. Although there is no direct evidence on this point, I infer from the fact that JCD said it would seek to resell the advertising space, and from the terms of their contract as identified in paragraph [23(b)] above, that JCD was able to resell the space.

30. Notwithstanding that Wedo was only charged $130,688.57 by JCD for the advertising that actually took place, it seeks payment of its Invoice of $330,000 from Chanlor pursuant, primarily, to the Agreement.

31. There is no evidence that Wedo provided Chanlor with a copy of Wedo’s proposed contract with JCD at any stage prior to entry into the Agreement.

The Agreement

32. The Agreement had the following relevant features and terms:

(a) A recital which stated that the terms and conditions applied to “each booking made by the Client” with Wedo “for the display or publishing of certain advertising as set out in, and through the use of the agreement”. (b) Clause 2(a) stated that: “An invoice for services will be issued to Party A [Chanlor] …. payment of an invoice is due within 30 working days after the invoice date”. (c) Clause 4(a) was in the following terms:

“Party B [Wedo] endeavors to provide continuous uninterrupted service at all time [sic]. However the service provided is not fault free and relies on factors outside the control of Party B. Party B will not take responsibilities of the technical failure unexpected that is not caused by Party B.”

(d) Clause 6 was in the following terms:

“Party B [Wedo] may stop your service in the circumstances contemplated in this clause, provided that reasonable notice will be given when possible.

a) Technical failure, modifications or maintenance. Under this circumstance Party B will endeavor [sic] to procure the resumption of the service as reasonably practicable.

b) if Party A’s [Chanlor’s] advertisement includes obscene, defamatory or offensive material. In this situation, Party A shall remain liable for all charges due through the period of suspension …”

(e) Clause 8 was in the following terms:

“Either party may terminate this Agreement in the event that the other party breaches a material term of this Agreement, provided that the non-defaulting party has provided notice of the breach and the breach remains unremedied for a period of at least 15 days from the date of the notice or cannot be remedied.

a) In the event that Party A [Chanlor] requests that this Agreement be terminated, Party A must give 4 weeks’ written notice to Party B and must pay all monies due to Party B for all services provided by Party B to Party A up until termination date.”

Principles of Construction

33. The Agreement was a commercial contract.

34. It is well-settled that Australian law applies an objective approach to the construction of contracts. The law does not seek to ascertain the parties’ subjective understanding of a contractual obligation, but what the contractual words convey to a reasonable person in the position of the parties in the circumstances in which the contract is entered into. Evidence of the parties’ subjective intention is usually inadmissible on the question of construction.

35. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd, [1] the High Court stated the applicable principle as follows (footnotes omitted):

[40] This Court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.

36. Further, the High Court summarised the core principles of the construction of commercial contracts as follows in Electricity Generation Corporation v Woodside Energy Ltd (“Woodside”): [2]

[35] … The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean ... [that] require[s] consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract [which] is facilitated by an understanding “of the genesis of the transaction, the background, the context and the market in which the parties are operating” … unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption that the parties intended to produce a commercial result. A commercial contract is to be construed so as to avoid it “making commercial nonsense or working commercial inconvenience”.

37. In resolving ambiguity, a court will seek to adopt a commonsense approach that is in accordance with the apparent purpose of the contract. However, such an approach has no place where there is no ambiguity, and the court will not rewrite the terms of a contract to relieve against harsh or unreasonable terms. As the High Court (Kiefel CJ, Keane, Gordon, Edelman, Steward and Gleeson JJ) recently observed in WorkPac Pty Ltd v Rossato (footnotes omitted): [3]

[63] … It is no part of the judicial function in relation to the construction of contracts to strain language and legal concepts in order to moderate a perceived unfairness resulting from a disparity in bargaining power between the parties so as to adjust their bargain. It has rightly been said that it is not a legitimate role for a court to force upon the words of the parties’ bargain “a meaning which they cannot fairly bear [to] substitute for the bargain actually made one which the court believes could better have been made”. Even the recognised doctrines of unconscionability or undue influence do not support such a course …

38. Orthodox principles of contractual construction will permit a court to add, omit, or correct words in an otherwise unambiguous contract where it is clearly necessary to avoid absurdity, [4] but only where the intended meaning can be discerned. As stated by Leeming JA (with whom Bell CJ and Ward P agreed) in QBT Pty Ltd v Wilson: [5]

[74] If it is unclear how the absurdity is to be resolved, then the principles of construction where there is an obvious error are not available to authorise a departure from the ordinary literal meaning.

What services did Wedo agree to provide?

Each Party’s case

39. An important issue in the proceedings was the nature of Wedo’s obligation under the Agreement. That is, what was the service being provided by Wedo to Chanlor which entitled it to the agreed fee?

40. Wedo’s case is that it was obliged to “procure” advertising for Chanlor, as opposed to providing advertising. In final submissions, Wedo submitted that it procured the agreed advertising by “booking” it with JCD. It did so by entering into a contract with JCD. At that point, Wedo says it fulfilled its obligation under the Agreement and was entitled to the agreed fee. At another point in final address, Counsel for Wedo, Mr Araki, put the position slightly differently by saying that Wedo’s obligation was “to cause, to make the booking, and to facilitate for the airport advertising”. It is not clear that takes the matter much further than the proposition that Wedo’s obligation was to “book” the advertising. Wedo relies on the terms of the Agreement together with the surrounding circumstances at the time of the Agreement. Wedo, in submissions, described its service as “advertising procurement services”.

41. Chanlor’s case is that the relevant service that Wedo was required to provide was the actual provision of advertising. Only upon that provision, was Wedo entitled to a fee for services rendered under the Agreement. It says that Wedo’s entitlement to fees is limited to fees for the advertising actually provided by Wedo. Chanlor says that Wedo’s obligation was not merely to book advertising with a third party. Chanlor says that this is the correct construction of the terms of the Agreement.

Consideration

42. Prior to the Agreement, it was the common knowledge of the Parties that Wedo needed to arrange Chanlor’s advertising with a third party. I have referred to communications between the Parties which establish that fact in paragraphs [17]-[21] above.

43. Accordingly, each Party knew that Wedo, itself, was not the provider of the infrastructure upon which the advertising would appear and that it was seeking to secure an arrangement with a third party so that the advertising could occur on that infrastructure. The infrastructure was a light board, and a billboard at SIA.

44. Further, prior to the Agreement, Wedo conveyed to Chanlor a price for 1 year of advertising (being 4 weeks complimentary on a light board, and 48 weeks on a billboard) that Chanlor understood was provided to Wedo from the third party. As set out in [20] above, Wedo informed Chanlor that the price was $330,000 including GST.

45. In summary, the common knowledge (or at least understanding) of the Parties immediately prior to entry into the Agreement was:

(a) Wedo was arranging advertising through a third party; and (b) The third party would set a price for that advertising.

46. With those surrounding circumstances in mind, it is necessary to turn to the terms of the Agreement. I set out below the aspects of the Agreement that I consider are relevant to determining the service that Wedo agreed to provide under the Agreement.

47. First, the recital of the Agreement, as noted above, referred to “each booking [being] made by the Client [Chanlor] with Wedo … for the display or publishing of certain advertising”. It does not refer to a booking being made by Wedo on behalf of or for the Client.

48. Secondly, clause 2 stated that an invoice for services would be issued by Wedo. It did not identify how the amount of the invoice would be calculated. It did not provide for payment in advance of the stated services. It entitled Wedo to issue an invoice for services. In my view, the ordinary meaning of clause 2 was that Wedo was entitled to issue an invoice for services rendered. I consider that is a business-like construction. The question remains as to what those services involved.

49. Thirdly, the term “service” was not defined in the Agreement. In my view, clause 4 provided an indication of the nature of the service which entitled Wedo to render a fee. By clause 4, Wedo agreed that it endeavoured to provide “continued uninterrupted service at all time [sic]”. It noted that the service provided by Wedo was not fault free and relied on factors outside the control of Wedo. It further provided that Wedo did not take responsibility for technical failure that was unexpected and not caused by Wedo.

50. Clause 4 was more naturally directed to events occurring during the provision of the service provided by Wedo. In my view, clause 4 does not sit well with a construction that limits Wedo’s service to the booking of advertising as the conduct of “booking” advertising is discrete, not ongoing. Further, if the service was complete upon the booking of advertising, it is difficult to see what technical failures could have been contemplated by the parties that could have affected Wedo’s continuous service referred to in clause 4.

51. Fourthly, clause 6 stated that Wedo could stop “your service” in the circumstances contemplated by the clause. In my view, the term “your service” must mean the service provided to the Client (Chanlor) by Wedo because the only service otherwise referred to in the Agreement is a service provided by Wedo. That is to be expected given the Agreement is between Chanlor and Wedo. The circumstances in which Wedo could stop providing a service to Chanlor included:

(a) Technical failure. In that circumstance, the clause provided that Wedo would endeavour to procure the resumption of the service as reasonably practicable; (b) If Chanlor’s advertisement was obscene, defamatory or offensive. In such a circumstance Chanlor remained liable for “all charges due” through the period of suspension.

52. Similarly to clause 4, clause 6 was more naturally directed, in my view, to events occurring during the provision of the service provided by Wedo. It provided circumstances pursuant to which Wedo could suspend the service. If Wedo’s only obligation was to procure advertising by booking advertising with a third party, then the notion of a suspension of its services makes little sense, particularly when regard is had to the obligation in some circumstances for the Client (Chanlor) to remain liable for all “charges due through the period of suspension”.

53. Fifthly, the Agreement had a contract price of $330,000 inclusive of GST. That was the cost, as understood by Chanlor, of 52 weeks of advertising at SIA (inclusive of 4 weeks complimentary lightbox advertising). That is, the cost imposed on Chanlor was not directed to agency booking services per se, or the time spent by Wedo in organising advertising, but rather the cost of Chanlor’s advertisement displayed at SIA as disclosed by Wedo to Chanlor prior to entry into the Agreement. That is consistent with the recital which describes the terms and conditions of the Agreement as applying to “each booking made by [Chanlor] with Wedo … for the display or publishing of certain advertising”.

Conclusion on construction

54. Taking into account each of the matters referred to at paragraphs [42]-[54] above, and bearing in mind the principles set out at paragraphs [34]-[38] above, in my view, on the proper construction of the Agreement, Wedo’s obligation was to provide advertising – that is, Chanlor was paying for the actual provision of advertising and not for a service limited to booking advertising with a third party, or a service in facilitating advertising by a third party. The fact that Chanlor was aware that Wedo had to arrange advertising through a third party (and obtain a price from that third party) does not negate this conclusion. It was Wedo’s obligation to provide the advertising; it was a matter for Wedo as tohow it went about fulfilling that obligation.

55. In my view the most compelling indicators supporting that construction are the recital, clause 4, and clause 6, as explained above. The contract price, for the reasons mentioned above, also tends to support such a construction.

56. If Wedo’s obligations were limited to “procuring” advertising, but not the actual provision of advertising, it would have been very easy for the Parties to make that plain in the Agreement.

57. Further, it is relevant that Chanlor had no contractual relationship with JCD, nor was one intended by the Parties. That is, if JCD breached its agreement with Wedo, and for example, ceased advertising after 3 months, Chanlor would have no contractual recourse against JCD. Further, on Wedo’s construction, Wedo would have no contractual obligation to enforce its contract with JCD. On this construction, the risk distribution of a failure of advertising falls squarely on Chanlor with no contractual remedy available.

58. The construction I favour potentially left Wedo exposed to a liability to JCD if, for example, Chanlor validly terminated the Agreement, and the consequence of that termination was that it ceased having any future obligation to pay fees for advertising. However, Wedo was in a position to protect itself by including a clause or clauses in the Agreement to indemnify itself against any liability it incurs to JCD because of such a termination, or to otherwise accommodate that risk in the Agreement or in its agreement with JCD. The Agreement had an indemnity clause, however, it was confined to limited circumstances not relevant to these proceedings. Wedo, during the hearing, expressly disclaimed any claim for damages arising from its liability to JCD under its contract with JCD.

59. Adopting the words in Woodside, in my view, the construction I favour is one which adopts a businesslike interpretation on the assumption that the Parties intended to produce a commercial result.

60. Wedo’s construction, in my view, is also somewhat uncertain. As noted above, Wedo described its services as “advertising procurement services”. However, what it meant by that was not clear. When pressed on what “procuring advertising” meant, its Counsel described the obligation as “to cause, to make the booking, and to facilitate for the airport advertising”. The meaning of “to cause” or “to facilitate” is itself uncertain. The Agreement does not use such words, and there is no basis, in my view, to introduce, by way the application of rules of construction, such concepts into the Agreement.

61. Of course, in this case, Wedo’s conduct did in fact produce advertising at SIA for a period of eight months. As I noted earlier, at the final hearing, no point was taken by Chanlor that eight months was not substantial performance of the Agreement, and no point was taken about the nature of the advertising.

62. As a result, on the issues ultimately joined by the Parties, my conclusion on the question of construction has relevance to the determination of the consequences of a valid termination of the Agreement by Chanlor. If Chanlor validly terminated the Agreement sometime in June 2023, the issue that arises is the identification of the amount, if any, it is obliged to pay Wedo pursuant to clause 8 of the Agreement. That, in turn, depends upon the nature of the service Wedo provided up until the effective date of termination.

63. Accordingly, I now turn to these issues.

Did Chanlor terminate the Agreement, and if so, what are the consequences of that termination?

Facts

64. The following facts, some of which are additional to those set out in paragraphs [15]-[31] above, are relevant to the termination issue.

65. As noted in paragraph [25] above, after entry into the Agreement, Ms Wang expressed dissatisfaction with respect to the positioning of the advertising. After various messages on WeChat, the following messages were sent:

(a) On 12 June 2023, Ms Wang asked for the placement of the billboard to be changed to a better location than Chanlor’s competitor’s position. She said that it is “better not to do it” and that the placement was very embarrassing. She went on to say, “the positions at the airport are really not OK”; (b) On 12 June 2023, Mr Lin replied: “So it’s not going to be done, right? I’ll reply to them [JCD] this week. See what they plan to do”; (c) On 23 June 2023, Ms Wang enquired whether the positions could be changed because she did not like the current positions. She said: “We are lucky this time that we did not take that advertising position. The position is extremely bad. There is basically no advertisement”. The position she was describing was a position towards Exit B at SIA. She further messaged, “We only want A … Otherwise we won’t do it”. Mr Lin replied that that position had been taken up by a competitor and he could not ask the airport to break its contract with the competitor. There was then the exchange referred to in paragraph [26] above; (d) Later on 23 June 2023, having been told that position “A” was unavailable, Ms Wang said that “if we can’t get that one, we won’t do it”, “Leave it to the lawyers from now on”, “We’ll let the lawyers participate in this matter”, “The contract said it could be ended in 4 weeks”. She went on to say that she wanted a position at Exit A, that the position was wrong and “Forget it. Let the lawyers handle it”; (e) Mr Lin ultimately responded to those messages: “Oh well, forget it. Let the lawyers handle it”; (f) The pair exchanged further messages on 23 June 2023 which did not detract from the messages referred to above. The further messages were of a type in which each Party sought to justify their position; (g) The next relevant messages on WeChat between Mr Lin and Ms Wang did not occur until 12 October 2023. They are instructive and I set the relevant parts out here (emphasis added):

Mr Lin: The airport has started to act. Let’s all get ready.

Ms Wang: What?

Ms Wang: Wasn’t it cancelled a long time ago?

Mr Lin: …The airport doesn’t agree to cancel.

Ms Wang: Wasn’t it cancelled long ago?

Ms Wang: It was said long ago that it was not okay.

Ms Wang: Let the lawyers contact. Oh well.

Mr Lin: The contract was signed in March, the advertisement was put up in April, and you said to cancel in June.

66. During cross-examination, Mr Lin was asked questions concerning the issue of termination. He was shown an email from Ms Ye to JCD dated 19 June 2023 (to which reference is made below) and it was suggested that that email acknowledged that Chanlor had terminated the Agreement. Mr Lin gave evidence that, as at 19 June 2023, it was his understanding that Chanlor was merely thinking about terminating the Agreement. The following exchange then occurred between Mr Bedrossian SC and Mr Lin (emphasis added):

Q. Is the only reason you say that Ms Wang had not terminated the advertising contract because she continued to speak to you afterwards? Is that what you're saying?

A. INTERPRETER: No. Because later on, Ms Wang told me clearly that she would terminate the contract and she will not pay for that.

Q. When do you say she said that to you?

A. INTERPRETER: Roughly, it should be either 23rd or 26th, but I cannot recall the exact time.

Q. On that occasion, whenever it happened, she sent you a WeChat message; correct?

A. INTERPRETER: Yes.

67. Ms Ye was taken to her email of 19 June 2023 to JCD during her cross-examination. In that email she said the following:

“I am writing to express our sincerest apologies that our client Cemoy [Chanlor] made their own decision of termination of the airport campaign contract without discussion with us … Regrettably … we were unable to convince the brand to fulfil their contractual obligations due to their dissatisfaction with the advertising placement …”

68. Having been taken to that email, Ms Ye’s evidence was that she wrote that passage in her email because Mr Lin had told her Chanlor had terminated the “advertising contract”.

Legal Principles

69. Absent a contrary contractual requirement, notice of termination need not take any form or use any specific words provided that a clear intention to terminate the contract is expressed. It is the substance of what the notice conveys, rather than its form, that is important. [6]

70. For a communication to be regarded as a notice of termination, what is required is that a reasonable person in the position of the recipient is “‘left in no doubt’ that the right to terminate has been exercised”. [7] The notice of termination may come from a single communication or from a series of communications taken together. [8]

71. Whether a communication or series of communications amounts to an effective notice of termination is assessed objectively, having regard to the commercial purpose of any requirement for termination, and the surrounding circumstances. [9]

Consideration

72. Clause 8 of the Agreement entitled Chanlor to terminate the Agreement on 4 weeks’ written notice. The communications it relies upon to found such a notice are WeChat messages. No suggestion was made that such messages are not written communications.

73. Accordingly, the issue is whether the messages relied upon would leave a reasonable person in the position of Wedo in no doubt that Chanlor had terminated the Agreement.

74. In my opinion, on 23 June 2023, the WeChat messages, sent by Chanlor to Wedo, would make plain to a reasonable person in the position of Wedo that Chanlor was terminating the Agreement. Those messages went beyond messages of complaint. Ms Wang expressly referred to the 4 weeks’ notice period in the Agreement, told Mr Lin to “Forget it. Let the lawyers handle it” and Mr Lin replied similarly, “… forget it. Let the lawyers handle it.” These statements were made in the context of the communications on 12 June 2023 referred to above and the earlier communications on 23 June 2023 referred to above. A reasonable person in Wedo’s position would have had no doubt that Chanlor was terminating the Agreement.

75. I am fortified in my conclusion in this regard by the fact that Mr Lin himself understood those communications as amounting to a notice of termination as he conceded when giving evidence. Indeed, on Ms Ye’s evidence, Mr Lin had told her that Chanlor had terminated the “advertising contract” a few days earlier.

76. For these reasons, I find that on 23 June 2023, Chanlor gave notice of termination of the Agreement. Pursuant to clause 8 of the Agreement, that termination took effect 4 weeks after 23 June 2023.

Consequences of termination

77. Clause 8 of the Agreement provided that upon termination Chanlor was obliged to pay “for all services provided” by Wedo to it up until termination date (being the date 4 weeks after 23 June 2023).

78. I have earlier concluded that on the proper construction of the Agreement, the service provided by Wedo was the actual provision of advertising. Clearly, Wedo did provide advertising pursuant to the Agreement in that period. The complimentary 4-week lightbox advertising commenced in April 2023 and the billboard advertising commenced in June 2023.

79. The Agreement made no provision as to how the contract price of $330,000 inclusive of GST was to be paid. As noted earlier, clause 2 provided that an invoice could be issued “for services”.

80. Given the service to be provided by Wedo was the provision of advertising, clause 8, required Chanlor to pay for the advertising provided up until the effective date of termination.

81. Although the Agreement does not provide a mechanism by which that amount could be ascertained, it would be reasonable to approach the quantification of that amount on a pro rata basis.

82. However, I do not need to determine the manner of quantification pursuant to clause 8 because Wedo made it clear, in final submissions, that it put its case only on the basis that its entitlement was for the full $330,000 and did not bring any alternative contractual claim for a lessor amount calculated on the basis of a valid termination.

83. Accordingly, for the above reasons, I find that Chanlor gave written notice of termination on 23 June 2023, and the termination was effective 4 weeks after that date. Wedo is not entitled to a payment of $330,000 because it is only entitled to be paid for its service. Its service was the provision of advertising which it did for a relatively short period prior to termination becoming effective. Wedo’s contractual claim is singular in the sense that it is a claim for $330,000 and not any other claim.

Mitigation

84. Chanlor raised in its defence an allegation that if Wedo established a breach of contract, it failed to mitigate its loss. On the issues ultimately joined by the Parties, mitigation is not a relevant issue. If Chanlor validly terminated the Agreement, as I have found, then in those circumstances, clause 8 regulates the Parties’ rights and obligations and no question of mitigation arises because there is no breach of contract. If Chanlor did not terminate the Agreement, the Agreement remained on foot and Wedo was entitled to the full contract price. If Wedo’s construction of the Agreement was correct, then it was entitled to the full contract price when it procured the advertising through JCD, and accordingly, there was no future loss to mitigate.

Conclusion on Wedo’s contract claim

85. For the foregoing reasons, Wedo’s contract claim has failed.

Quantum Meruit

86. In the alternative, Wedo claimed relief by way of quantum meruit.

87. In Mann v Paterson Constructions Pty Ltd (“Mann v Paterson Constructions”), [10] Keifel CJ, Bell and Keane JJ at [16] cited with approval the following statement: “… an essential step in considering a claim in quantum meruit … is to ask whether and how that claim fits with any particular contract the parties have made.” [11] Their Honours concluded at [19] that “in circumstances where the respondent has enforceable contractual rights to money that has become due under the contract, there is no room for a right in the respondent to elect to claim a reasonable remuneration unconstrained by the contract between the parties.” Similarly, at [64], , Gageler J (as his Honour then was) cited with approval the following statement: “[n]o action can be brought for restitution while an inconsistent contractual promise subsists between the parties in relation to the subject matter of the claim”. [12]

88. Here, I have found that Chanlor terminated the Agreement on 23 June 2023 and that clause 8 of the Agreement regulated the contractual entitlement of Wedo to fees for its services. Accordingly, there is no room for a corresponding right in Wedo to reasonable remuneration unconstrained by the terms of clause 8, unless, subsequently to Chanlor’s termination, the conduct of the Parties was such as to entitle relief by way of restitution.

89. Wedo has not established any conduct after 23 June 2023 that could sustain a claim in quantum meruit. As is plain from the facts set out earlier, Chanlor was dissatisfied with the placement of the advertising at SIA and did not wish to proceed with it. Further, Wedo has not established that after termination, Chanlor was aware of, and accepted the benefit of, any advertising at SIA. Indeed, the exchange of messages in October 2023, as set out in paragraph [65(g)] above, strongly suggests that Chanlor was not aware that the advertising occurred post-termination and did not request any such advertising.

90. To the extent advertising occurred after termination, it occurred pursuant to the contract between Wedo and JCD. Chanlor was not a party to that contract.

91. In my view, notwithstanding advertising at SIA did in fact occur until December 2023, Wedo has not established that the advertising post-termination was at the implied request, or acceptance, of Chanlor to ground an entitlement to restitutionary relief. Wedo had bound itself to a contract with JCD and it was not until about December 2023 that JCD agreed to bring that contract to an end. The fact that that contract may have provided benefits to Chanlor is insufficient, of itself, to entitle quantum meruit relief.

Conclusion

92. For the above reasons, the Plaintiff has failed to establish its claim, and the proceedings must be dismissed.

93. The Parties have requested an opportunity to consider any costs application.

94. Accordingly, the orders I make are:

95. The proceedings are dismissed;

96. If a Party wishes to file submissions on costs, then within 7 days, it is:

(a) To file those submissions together with any affidavits in support. Without leave, such submissions to be not more than 5 pages in length; and (b) Indicate whether it requires an oral hearing or whether it is content for the Court to determine costs in Chambers on the papers;

95. If the Parties do not file submissions on costs in accordance with the orders in paragraph [94(2)] above, I propose to order the Plaintiff to pay the Defendants costs of the proceedings.

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Endnotes

(2004) 219 CLR 165; [2004] HCA 52.

(2014) 251 CLR 640; [2014] HCA 7.

(2021) 271 CLR 456; [2021] HCA 23.

Fitzgerald v Masters (1956) 95 CLR 420 at 426-427; [1956] HCA 53 (Dixon CJ and Fitzgerald J).

[2024] NSWCA 114.

Balog v Crestani (1975) 132 CLR 289 at 296-297; [1975] HCA 16.

Masters in Building Training Pty Ltd v State of New South Wales [2022] NSWSC 499 at [307].

Robinson v Becata Pty Ltd [2004] NSWSC 310 at [53]-[57].

JPA Finance Pty Ltd v Gordon Nominees Pty Ltd (2019) 58 VR 393; [2019] VSCA 159 at [50]-[75]; Robinson v Becata Pty Ltd [2004] NSWSC 310 at [53].

(2019) 267 CLR 560; [2019] HCA 32.

Lumbers v W Cook Builders Pty Ltd (in liq) (2008) 232 CLR 635; [2008] HCA 27 at [79].

See also Timis v Mina [1999] NSWCA 140 at [54].

Amendments

10 November 2025

10 November 2025 - Amendment to Solicitor Firm for Defendant