21st Century Promotions Australia Pty Ltd v Telstar Corporation Ltd

[2000] SASC 353

21ST CENTURY PROMOTIONS AUSTRALIA PTY LTD v TELSTRA CORPORATION LIMITED
[2000] SASC 353

Civil

1. WICKS J          Prior to April 1998, the defendant Telstra Corporation Limited (“Telstra”) provided certain telecommunications lines to Network Digital Australia Pty Ltd (“NDA”).  NDA had been established for approximately three years as an internet service provider.  It provided internet services to eight or so distributors and in addition provided such services directly to retail customers.  At all material times, Mr Paul Dabrowski was the sole director of NDA.  Mr Justin Maine was the only witness for the plaintiff.  He described himself as the Office Administrator of the plaintiff and also as the Office Administrator of NDA. I think it is reasonably clear that in his dealings with the defendant, Mr Maine was representing both NDA and the plaintiff.

2. In June 1998, NDA had a small staff comprising four personnel.  Staff members were Messrs John Atwell, Paul Dabrowski, David Masters and Justin Maine.  At the time Mr Maine gave his evidence in November 1998, staff members had reduced to Messrs Dabrowski and Maine.

3. In his evidence, Mr Maine said that the plaintiff was a wholly owned subsidiary of The Ritz Corporation Pty Ltd and that, in turn, the shareholders of The Ritz Corporation were his mother and sister and a company known as the Tato Corporation Pty Ltd. He was unable to say who were the shareholders of Tato Corporation Pty Ltd.

The OnRamps

1. In connection with its business as an internet service provider, NDA made application to the defendant on 28 November 1997 for the installation of an “OnRamp” service at the premises occupied by NDA at 157 Bayswater Road, Croydon, Victoria.  This comprised two telecommunication lines of a special kind which were an essential piece of equipment in the establishment and operation of the business of an internet service provider.  Where an OnRamp is involved, two lines are installed and the installation is generally known as an OnRamp duo.  The OnRamp numbers concerned were 03 9724 4444 and 03 9725 9152 being applicable to the OnRamp service at Croydon Victoria.  The first of these was for the principal line known as the Prime OnRamp.  Following the application, the Croydon OnRamp service was granted to NDA.

2. An application in respect of a further OnRamp service was signed on behalf of NDA on 9 January 1998 and submitted to the defendant for consideration.  In the date on the application the year is shown as 1997.  From the facsimile imprint on the first page of the application, there would appear to be no doubt that the correct year was 1998 and not 1997 as shown in the application.  This OnRamp duo was situated at 12 Wedge Street, Werribee, Victoria.  The communications lines used were 03 9731 0571 and 03 9731 0675.  The first of these was for the principal line generally referred to as the Prime OnRamp.  Following the application, the Werribee OnRamp service was also granted to NDA.

Outstanding accounts in the name of Network Digital Australia Pty Ltd

1. In early 1998, NDA had a number of accounts with the defendant in respect of which some tens of thousands of dollars were alleged by the defendant to be outstanding.  Amounts in dispute extended over a period of eight months or so.  In his evidence, Mr Maine referred to the fact that two meetings to discuss the accounts were arranged at the defendant’s offices in Melbourne, although he did not elaborate on these meetings and they were not mentioned at all in evidence given by the defendant’s witnesses.  A further meeting to discuss the outstanding accounts with the defendant was arranged for 19 February 1998 at NDA’s premises at Croydon, Victoria.  The meeting was attended by Mr Maine (representing NDA) and also by Mr Trevor Easey and Mrs Christina Quirk (representing the defendant).  There is a difference between the parties attending the meeting as to the time occupied.  I do not think, however, that it is necessary to resolve this issue as nothing of significance turns on the point.

2. At the meeting, a number of issues were considered.  Mrs Quirk noted the matters which were in fact discussed and followed them up on her return from the meeting.  She sent a facsimile to Mr Maine at NDA in which she indicated some nine items in respect of which credits and other adjustments had been made.  The investigation of the accounts took some time and Mrs Quirk did not reply to Mr Maine on the matter until 2 April 1998.  A facsimile was sent by her to NDA on that date.

3. In early 1998, NDA got into financial difficulties and as result made arrangements with the plaintiff whereby it would take over the business of an internet provider carried on by NDA.  As a result of these arrangements, NDA decided to transfer to the plaintiff a number of telephone lines including the Croydon OnRamp duo.  For reasons which are not entirely clear, the Werribee OnRamp duo was not included amongst the lines to be transferred.

4. On 2 April 1998 Mr Justin Maine, on behalf of NDA sent a facsimile to the defendant requesting that it release certain numbers to the plaintiff.  The note read in part:

   "Please release the following numbers to our administration company as of the 01/04/98. 

   The new company is 21st Century Promotions Australia Pty Ltd ACN 062 747 775."

1. Then followed a list of numbers including some with a prefix of 1300, some with a prefix of 1800, some with the prefix 0500, a number of standard lines and in addition the Croydon OnRamp duo to which I have earlier referred.  The telephone lines and the Croydon OnRamp duo are together referred to as “the Transferred Lines”. 

2. The letter concluded in the following terms:

   "Please total our bill for these lines as of the 31/3/98 to account number 4791064300 transfer these the legal ownership of these lines[sic] to 21st Century Promotions Australia Pty Ltd.  Please make sure that we receive only one bill for all the above listed services and that our long distance remains with Telstra.

   The other lines left on account number 4791064300 are to remain connected as these lines are Network Digital Australia Pty Ltd internet lines.

   Could you please confirm this has been done by fax [phone].”

1. I understand the plaintiff and NDA to be under the same ultimate control and to be managed essentially by the same persons.  The precise relationship of NDA to the plaintiff was not made clear from the evidence.

2. On 20 April 1998, Mr Maine rang the defendant about his request contained in the facsimile of 2 April 1998 and spoke to Ms Terrie Ryan in the Melbourne Office.

3. Ms Ryan’s version of events on that occasion was that she spoke to Mr Maine regarding the changing of the telephone numbers to a new company in the name of 21st Century Promotions Australia Pty Ltd.  Ms Ryan said that the lines could not be taken over because of the outstanding debt.  However, she agreed to transfer the lines if Mr Maine were to obtain a written guarantee signed by the directors of NDA that all outstanding debts for the numbers concerned would be paid by NDA.  Mr Maine asked what was needed to be in the directors’ guarantee and what she wanted him to write.  She explained that she could not tell him word for word what to write.  It had to be in his words.  Ms Ryan was asked whether payment was discussed in the context of whether the service could be transferred or not.  She said that the outstanding debt could be paid and that Mr Maine could then take the numbers for the lines in question.  Alternatively, new numbers could be assigned to the transferred lines on the supply of a directors’ guarantee.  At this, Mr Maine became somewhat heated and abusive.  According to Ms Ryan, he said that he would come down and kick the doors in.

4. Ms Ryan prepared a file note of her conversation with Mr Maine as follows:

   "Spoke with Justin Maine regarding changing phone numbers over to a new company name in the name of 21st Century Promotions.  I agreed to do this on the provision that any outstanding debt for those nos[sic] on the acct[sic] for Network Digital be paid by that company and I also requested a written guarantee that Network Digital would accept the liability for those numbers for the debt remaining on the old invoice.  Justin has sent a letter stating that they will pay the debt apart from any disputed amount.  I have now referred the orders to Mark Campbell from telesales to do the orders."

1. In evidence, Mr Maine denied that Ms Ryan required a directors’ guarantee.  He said that she requested a letter from NDA “which we gave her and, in effect, the numbers were transferred” to the plaintiff.  He said that Ms Ryan agreed to stay on the line while Mr Maine and Mr Dabrowski prepared a letter in the following terms:

   "That all services as per my earlier fax that are transferred to 21st Century Promotions Australia Pty Ltd any undisputed amount will be paid by Network Digital Australia Pty Ltd."

1. The letter in question was dated 3 April 1998 and sent by facsimile on NDA letterhead that day.  It was Mr Maine’s evidence that he asked Ms Ryan to dictate the letter which she required and that he would obtain Mr Dabrowski’s signature.  According to Mr Maine, she said: “No, you have to write the letter”.  Messrs Maine and Dabrowski wrote the letter and Ms Ryan stayed on the telephone until it was sent by facsimile.  On receipt of the letter, Mr Maine said Ms Ryan was happy with it and indicated that the lines in question would be transferred to the plaintiff.  Mr Maine does not admit to acrimonious behaviour on his part in the telephone conversation with Ms Ryan.  His evidence on the point is vague and falls far short of an outright denial.  He was not able to be cross-examined on the point. 

2. On 3 April 1998, Mr Mark Campbell, the business account manager of the defendant responsible for the accounts of NDA and the plaintiff, sent a facsimile to Mr Maine on behalf of NDA in the following terms:

   "Attached are the applications to transfer ownership of both the 1300 and 1800 services in the name of 21st Century Promotions Australia Pty Ltd.  These need to be signed by the authorised representative of the new company eg Paul Browsky or Diane Gregory.  There is a $20 fee for transfer of ownership.  You can fax the completed forms direct to me on 1800-055-000."

1. Although the OnRamp duo situated at Croydon was not referred to in this facsimile, it would appear from the pleadings that it was common ground that the defendant had agreed to the transfer of that OnRamp duo along with the other numbers to which I have referred.  I note that from par 4 and par 7 of the statement of claim (which, with one immaterial exception, are admitted by the defendant), NDA requested the defendant to release the Transferred Lines to the plaintiff and the defendant granted that request.  The statement of claim avers that the Transferred Lines were transferred into the name of the plaintiff on or before 23 April 1998 and that appears to have been admitted by the defendant in its defence.

Events leading to the disconnection of the Werribee OnRamp Duo

1. At the request of Mr Maine, on 21 April 1998, the defendant prepared and sent to NDA a consolidated account in respect of all services provided to NDA.  The consolidated account claimed a total amount of $39 285.40 of which $17 869.48 was claimed to be overdue and payable immediately and of which the balance was payable on 11 May 1998.

2. On 28 April 1998, Mrs Christina Quirk on behalf of the defendant wrote to Mr Dabrowski on behalf of NDA claiming that an amount of $39 285.40 was due by NDA in respect of the outstanding account referred to earlier in these reasons.  The letter was sent by facsimile on 30 April 1998.  It threatened disconnection unless payment was made to the defendant before the close of business on 6 May 1998.  It pointed out that if lines were disconnected, they would be restored only on full payment being made and a reconnection fee of $50 per line.

3. On 4 May 1998, Mr Trevor Easey of the defendant’s Business and Government Section of its Credit Management Department sent a facsimile to NDA for the attention of Mr Dabrowski in which he said that Mr Maine had telephoned on Friday 1 May 1998 requesting that a consultant from the defendant visit to discuss NDA’s phone account.  Mr Easey continued:

   "As Christina Quirk and myself have already had a meeting with Justin and have since addressed all of his queries, you will need to send a facsimile to Telstra Billing Enquiries (03 9638 5281) listing your new concerns.  This amount will be placed in dispute until it can be fully investigated.  The remaining balance will need to be paid by the close of business 06/05/98 to avoid the inconvenience of your service being disconnected."

4. On 4 May 1998, Messrs Hale and Wakeling, solicitors acting for NDA, on instructions from Mr Maine, wrote to the defendant.  The letter pointed out that a significant portion of the bill totalling $39 285.40 was disputed by NDA.  It pointed out that Mr Maine was currently undertaking investigations to clarify details of the disputed amount, including having a certified practising accountant peruse all the accounts.  The letter drew attention to the fact that the outstanding amount claimed by the defendant was due on 11 May 1998 according to the bill and that the proposed disconnections on 6 May 1998 were to be suspended pending further investigation.  In the letter, the solicitors made an offer on behalf of NDA of $5 000 to be paid by 11 May towards the outstanding bill.  This amount was never paid.  The reason given by Mr Maine was that the payment would serve no purpose as the defendant would disconnect NDA’s lines any way.

5. Mrs Christina Quirk responded to the solicitors’ letter by facsimile dated 5 May 1998.  The text of the facsimile was as follows:

   "In reference to your correspondence sent on 4 May 1998 on behalf of Justin Maine of Network Digital Pty Ltd, Telstra has granted your client an extension to advise us details of the disputed amount by close of business 12 May 1998.

   Should the services be disconnected on 13 May 1998 they will not be restored unless full payment of the outstanding amount is made.  A fee of $50 per line will be charged for reconnection of the services.”

6. At the commencement of the trial, two Lever Arch files containing the documents relevant to the case were admitted into evidence by consent of the plaintiff and defendant.  Included among these papers is a memorandum dated 6 May 1998 in respect of a telephone conversation between Ms Grace Galtieri on behalf of the defendant and Mr Justin Maine.  In that conversation Ms Galtieri pointed out that Mr Maine was required to pay $5 000 by 11 May as previously arranged.  Also, she stressed that Mr Maine would need to have listed all disputed amounts by 15 May 1998.  The defendant would then need five days to work through and would then get back to Mr Maine with the outcome.  Ms Galtieri drew attention to the fact that the services affected would be discontinued unless action was taken within the time limits mentioned.

7. On the same day Mrs Christina Quirk also spoke to Mr Maine on the telephone advising him that the cancelled lines would not be re-allocated due to the amount owing.  She recorded that Mr Maine understood.  Mr Maine advised that his accountant would be away on a conference and that an extension of time in relation to disconnection notices would be needed from 13 May to 15 May.  On that occasion, Mrs Quirk explained to Mr Maine that he had had many opportunities to dispute outstanding amounts with the defendant but that he did not avail himself of them.

8. On 6 May 1998, Mr Philip Jones, an accountant acting for NDA, sent a facsimile to Mrs Quirk at the office of the defendant in the following terms:

   "Our client is in receipt of your last telephone bill and disconnection notice of $39 285.40.

   Our client has requested that I review the amount as they believe $11 000 is incorrect.  This will take the minimum of five days to work through.

   Please note that our client will pay Telstra $5 000 as a gesture of goodwill on Monday the 11 May 1998."

9. On 19 May 1998, by facsimile to NDA, the defendant notified NDA that it had received no list of complaints from NDA’s accountant and that the disconnection of services would take place on 20 May 1998.

10. Notices threatening cancellation of various services were sent out to NDA on 17 and 18 May 1998.  These notices were for varying amounts, the largest being $12 387.05.  Each notice advised that the service in question had been temporarily disconnected due to the non‑payment of a bill in respect of Account No 479 1064 300 and that the service would be cancelled unless further payment of the overdue amount plus a reconnection fee is received immediately.

11. Services in the name of NDA were disconnected by Mrs Christina Quirk on 20 May 1998.  This included the Werribee OnRamp duo which as that date was still connected in the name of NDA.

The telephone calls to Mr Matthew Quirk in May 1998

1. According to Mr Maine’s evidence, he had a number of conversations on the telephone with Mr Matthew Quirk, an employee of the defendant, in respect of the transfer of telephone lines.  In particular, he recalled two telephone conversations in May 1998 in which he discussed the transfer of telephone lines from NDA to the plaintiff.  In the first of the two conversations referred to, Mr Maine initially spoke to Mrs Christina Quirk, Mr Quirk’s wife who transferred the call to her husband.  Mr Quirk worked in the sales section of the defendant.  That occasion took place in the earlier part of May 1998.  According to Mr Maine’s evidence, in respect of that occasion, Mr Quirk said that he would arrange the transfer of the telephone lines and the OnRamp service.  It is not clear from Mr Maine’s evidence to whom the transfer was intended to be made.  No reference in the relevant part of the evidence is made to the plaintiff.  There is, however, a reference in the evidence in question to Australian National Cellular Communications Pty Ltd (“ANCC”) receiving at least some of the lines to be transferred from NDA.  This company was associated in some way with NDA, although the nature and extent of the association was not made clear by Mr Maine’s evidence.

2. In the conversation which took place between Mr Maine and Mr Quirk in the earlier part of May 1998, according to Mr Maine, Mr Quirk said that while he would arrange for the transfer of the telephone lines and the OnRamp, the numbers might not be able to be kept in the light of the outstanding debt on the part of NDA to the defendant.  Mr Maine replied in saying it did not matter if the same numbers were not used.  Mr Quirk responded by indicating that he had to “send a fax and that was okay”.  There is no evidence that the facsimile referred to was ever sent.  When asked what OnRamp he was referring to, Mr Maine indicated the number 9731 0571 which was at the time the number of the OnRamp located at Werribee.

3. Mr Quirk provided a somewhat different version of this telephone conversation.  He said that it was concerned with the transfer of analogue lines only and that no OnRamp service was included.  On the occasion in question, Mr Quirk was requested to transfer various analogue lines from NDA to the plaintiff.

4. Mr Maine’s evidence became confused by the introduction of ANCC into the conversation.  After referring to the sending of a facsimile, Mr Maine was asked whether he had ever had any dealings with ANCC.  He said that he had and that those dealings were at about the same time as the dealings referred to in evidence.  His evidence continued:

   "Q...... Did you ever mention the name of that company to Matthew Quirk.

   AI believe so.

   Q...... In what circumstances was that, did you speak to Matthew Quirk about Australian National Cellular Communications.

   AThey were taking over some of our telephone lines.

   Q...... The conversation with Matthew Quirk that you have been just talking about where you asked for the transfer of the telephone lines and the Prime OnRamp.

   AYes.

   Q...... Was that the same occasion as when you told Matthew Quirk of the company Australian National Cellular Communications and your request for lines to be transferred to that company.

   AI believe so.

   Q...... I’m talking lines here, not numbers.

   AThat’s right, we couldn’t keep the numbers.

   ...

   QI want you, to the best of your ability ... to try and recall the conversation about the transfer of lines with Matthew Quirk that we have been talking about ...

   A...... I know that he said that we couldn’t keep the telephone numbers because there was an outstanding debt on the telephone numbers, which is Telstra’s usual practice, but he said we could connect new numbers on the telephone lines.

   QAnd were you content with that.

   A...... Yes.  We were very happy with that, when he allocated new numbers, and they are still working today.

   QWhere were those numbers allocated to.

   A...... Both in Croydon and in Werribee.

   QBut not in the name of Network Digital, are they.

   A...... No.

   QIn what name are they in.

   A...... ANCC Pty Ltd

   QWhat does ‘ANCC’ mean.

   A...... Australian National Cellular Communications.

   QI want you, still thinking about that conversation, you’ve mentioned the telephone lines, can you remember what you said to him about the Prime OnRamp connection.

   A...... ‘Don’t forget our OnRamps’.

   QAre they the words you used.

   A...... Yes.

   QAnd what was his response.

   A...... I’m unsure.  I might be getting my days mixed up a little bit, that’s all.  Because at one stage he was just going to take them over and he said it was his mistake that it hadn’t happened and then another occasion he said we had to fill out some forms."

1. On 29 May 1998, Mr Maine became aware that the Werribee OnRamp was not working.  On that occasion, he telephoned Mr Quirk to complain.  It was five minutes to five in the evening when Mr Maine rang.  He recalls this because Mr Quirk said that he would have to get hold of someone in his data area in Sydney before they left work for the day in order to re-connect the OnRamp.  He managed to have someone in Sydney make the reconnection.  The OnRamp service is a specialised one and is handled in Sydney.  Mr Maine kept Mr Quirk on the telephone on hold while the reconnection in Sydney was being made.  Mr Quirk explained why the OnRamp went down.  He said that the OnRamp had gone down because he hadn’t transferred it.  He said, “My mistake, I’ll get it fixed”.

2. According to Mr Maine’s evidence, he was asked on 29 May 1998 to complete two application forms for the supply of OnRamp services, one application for the supply of such a service in the name of the plaintiff at Croydon and the other for the supply of a similar service at Werribee.  These forms were duly completed on or about 29 May 1998 and sent by facsimile to Mr Quirk at his office in Melbourne.  This was done.  Mr Quirk said that once the OnRamp applications were returned, credit checks and cabling checks would need to be made.  Mr Quirk said that he took the orders to the defendant’s provisioning department and handed them in and thereafter he had no further involvement in the processing of the applications.  Mr Maine rang to enquire progress and was advised that Mr Quirk would submit the order to be processed at the provisioning department.  Mr Quirk denied in evidence that he said anything to the effect that the OnRamp service would be transferred to the plaintiff.

3. According to Mr Quirk’s evidence, he had some history of the previous dealing when he transferred the analogue lines.  This may refer to the telephone conversation between Messrs Maine and Quirk which Mr Maine said took place earlier in May 1998.  This issue was not pursued further in the evidence of either witness.

4. Counsel for the plaintiff concluded his examination in chief of Mr Maine in relation to his dealings with Mr Quirk.  While counsel for the defendant cross examined on a number of topics, he did not get to the conversations between Mr Maine and Mr Quirk before Mr Maine fell ill and was unable to give further evidence.  Mr Maine has since died.

5. I summarise the evidence relating to the letter of 2 April 1998 and to Mr Maine’s telephone conversations with Mr Quirk as follows.  While the evidence relating to the telephone conversations between Mr Maine and Mr Quirk in May 1998 is difficult to follow at times, I think the position was that Mr Maine sent a facsimile to the defendant on 2 April 1998 requesting a transfer of various telephone lines to the plaintiff.  This included the Croydon OnRamp.  The Werribee OnRamp was not mentioned in the facsimile.  No explanation for that was forthcoming.  The telephone conversation in early May 1998 was a follow up on the April facsimile and included reference to the Croydon OnRamp because it was mentioned in the facsimile.  The reason why the Werribee OnRamp was not included remains a mystery.  It may be that when Mr Quirk took the call in early May 1998, he was unaware of the facsimile of 2 April and indeed, may have been unaware altogether of Mr Maine’s dealings with the defendant.

6. The second telephone conversation on 29 May 1998 arose following the disconnection of the Werribee OnRamp by Mrs Quirk on 20 May 1998.  The fact that the Werribee OnRamp was not working would have reminded Mr Maine of his recent communications with staff of the defendant culminating in the disconnection of lines of NDA for the non-payment of charges.  It must have become apparent to Mr Maine that neither the Croydon nor the Werribee OnRamp was operating.  That is so because of the fact that on 29 May 1998, Mr Maine obtained two application forms for the connection of two OnRamps, one for installation at Croydon and one for installation at Werribee.  These applications were made out in the name of the plaintiff and were signed on its behalf by Mr Dabrowski.  It is clear from the copies of the application forms in evidence that a written application was required before a transfer could be effected.  An OnRamp is specialised technology and requires detailed instructions in connection with its installation.  I am unable to reconcile the applications signed on or about 29 May 1998 with the admissions contained in the pleadings to the effect that the Croydon OnRamp duo was included amongst the Transferred Lines.  It is conceded on the pleadings that the Transferred Lines were transferred into the name of the plaintiff on or before 23 April 1998.  It is also clear from the pleadings that the Werribee OnRamp was not among the Transferred Lines.  However, this case must be decided according to the evidence but not the pleadings when the latter differs from the evidence.

Telephone conversation between Mr Maine and Mrs Quirk on 23 June 1998

1. Mr Maine rang Mrs Quirk on 23 June 1998 and said that he requested the lines (not the numbers) to be allocated to the plaintiff.  After speaking to her manager, Mrs Quirk rang Mr Maine. A note made by her of the ensuing telephone conversation is as follows:

   "[e]xplained that the lines Justin is wanting to connect are withheld due to many o/s assoc accts under Justin’s name.  Adv Justin this has been a decision from our general manager of our finance dept.  Justin requested this in writing and faxed to 03 9724 9888."

The injunction

1. On 8 July 1998, Debelle J granted an interim injunction on the application of the plaintiff.  The order, so far as is material, was in the following terms:

   "1....... That until further order Telstra Corporation Limited be restrained and an injunction is hereby granted restraining it from terminating the telephone and telecommunication services provided to the plaintiff in Australia.

   2...... That Telstra Corporation Limited restore telephone and telecommunication services of the plaintiff which it has already disconnected."

2. Paragraph 2 of the order made by Debelle J was amended on 9 July 1998 so that it read:

   "2....... That Telstra Corporation Limited restore forthwith telephone and telecommunication services of the plaintiff which it has already disconnected including the services to the number 03 9731 0571."

1. This number related to the prime OnRamp situated at Werribee.

2. On 29 July 1998, as a condition of maintaining the injunction, Debelle J ordered that the plaintiff pay into Court $10 000 to the credit of an account entitled with the name of this action.  This payment was to ensure that monies would be available to meet the defendant’s charges in respect of the lines affected by the injunction.  On 17 September 1998 a further amount of $10 000 was ordered to be paid into court.  Both of these amounts were duly paid.

3. On 19 March 1999, a further amount of $10 000 was ordered to be paid into Court to the credit of the same account.  The amount concerned was not paid within the seven day period required.  It was indicated that if the amount in question was not paid I would dissolve the injunction.  The amount of $10 000 was not paid and thus the injunction was dissolved on 15 April 1999.

The Witnesses

1. As I have said earlier in these reasons, Mr Maine died at a stage where his cross-examination was incomplete. In the 6th Australian edition of Cross on Evidence, two views were suggested in relation to the admissibility of evidence where a person has died before concluding his evidence. On the one hand it is suggested that the evidence-in-chief of such a person should be disregarded. On the other, the learned authors suggest that the evidence should continue to be admissible though its weight may be diminished: at par 17480. I propose to take the latter course in any case where it may be necessary to deal with conflicting testimony.

2. It is not clear from Mr Maine’s evidence in chief what OnRamp was being referred to at any particular time.  I must say that I found Mr Maine’s evidence in relation to his telephone conversation or conversations with Mr Quirk to be confusing in a number of material respects.  At the time of giving his evidence in the trial of this case, Mr Maine was not well and, on occasions, found it difficult to recollect matters accurately whereas I had no such difficulty with the evidence of Mr Quirk which I found to be clear and to the point.  In making this observation, I do not suggest that Mr Maine was untruthful in giving evidence in relation to his telephone conversations with Mr Quirk or that he was in respect of those conversations attempting to mislead the Court in any way.  Nevertheless, I conclude that I found his evidence to be unreliable in a number of material respects.  His evidence about his conversation with Mr Quirk is the most serious example of where his evidence was found to be unreliable.  I am also mindful of the fact that Mr Maine did not undergo cross-examination on a number of important topics in the case.

3. On the other hand I consider that all the witnesses called on behalf of the defendant gave their evidence well and should be accepted as credible witnesses.

The transferred lines claim

1. By facsimile dated 2 April 1998 Mr Maine on behalf of NDA requested the defendant to release the Transferred Lines to the plaintiff and that request was granted.  The Transferred Lines were itemised in the facsimile dated 2 April 1998.  They comprised lines of various kinds including, as I have said earlier, an OnRamp duo situated at Croydon, Victoria, utilising the numbers 03 9724 4444 and 03 9725 9152.

2. The first claim by the plaintiff against the defendant is a claim for breach of contract in relation to the Transferred Lines.  In the statement of claim, the plaintiff alleges that it was a term of the agreement between the parties governing the provision of telecommunication services to the plaintiff that the defendant is not entitled to disconnect any of the services without notice to the plaintiff.  It is further alleged that the Transferred Lines were disconnected without notice to the plaintiff and in consequence, the plaintiff seeks damages for the alleged breach of contract referred to and an injunction.

3. In order to sustain this claim, it must be established that there was a contract between the plaintiff and the defendant, that a particular term of that contract has been breached and that loss or damage has been sustained in consequence of the breach.

4. In relation to the Transferred Lines, there does not appear to be a straightforward contract to which NDA, the plaintiff and the defendant were parties.  It is reasonably clear that in the circumstances there was a contract between the defendant and NDA in relation to the use of the lines in question.  Also, I think that the formation of a contract on the matter between the plaintiff and the defendant can be inferred from the conduct of the parties.  While there may be no identifiable offer and acceptance in the conventional sense, the parties concerned may nevertheless be taken to have entered into contractual relations in relation to the Transferred Lines.  While there may be no evidence of what was done or said at the time of contracting, the conduct of the parties may nevertheless be consistent only with the fact that an agreement was in fact made by them: Brown v Brown (1905) 5 SR (NSW) 146; Brogden v Metropolitan Railway Co (1876-1877) 2 App Cas 666; Carter & Harland, Contract Law in Australia, 3rd ed, par 205.  In the present case, the plaintiff has on numerous occasions used the Transferred Lines in connection with its business and the defendant has made those lines available for use by the plaintiff and has rendered accounts to the plaintiff.  In other words, the conduct of the parties is consistent only with a contract between them in relation to the Transferred Lines being in place.

5. Also, the transfer of the Transferred Lines to the plaintiff was alleged and admitted on the pleadings.  This fact supports the existence of a contract between the plaintiff and the defendant to provide a telecommunications service in relation to each of the lines in question.  A transfer of the lines on their own and without the provision of a telecommunications service would serve no point.

6. In the absence of evidence to the contrary, a contract between the defendant and a customer of the defendant would be on the defendant’s General Terms and Conditions.  In the present case, however, the parties went further and made formal admissions on the matter.  By these admissions, it was agreed by the plaintiff and the defendant that the General Terms and Conditions tendered and admitted in evidence in the course of the defendant’s case were the terms and conditions of contract which regulate the supply of services by the defendant to the plaintiff for the purpose of this case.

7. Some of the General Terms and Conditions are as set out below.

8. Clause 1.3 provides as follows:

   "1.3... If a customer obtains or seeks to obtain Services from Telstra it does so on these general terms and conditions and the specified terms and conditions in the Standard Form of Agreement unless Telstra and the Customer agree otherwise."

1. So far as is material, cl 4 dealing with payment is as follows:

   "4.1... The Customer must pay Telstra’s charges for the provision of services.

   4.2... Telstra’s records are sufficient evidence of the amount payable by the Customer unless they are shown to be incorrect.

   4.3... Except where Telstra requires payment of a charge in advance, charges for a services are due and payable when the service is provided."

1. So far as is material, cl 5 deals with billing as follows:

   "5.1... Telstra will issue bills for services on a regular basis but may issue an interim bill at any time.

   5.2 - 5.4 ...

   5.5... If a service is cancelled, suspended or disconnected, the Customer remains liable for liabilities incurred before the cancellation suspension or disconnection.

   5.6 - 5.7 ..."

1. Under cl 10.1 a customer may cancel a service by notifying the defendant.  Notice must be in writing unless the service is residential.  Under cl 10.3 the defendant is entitled to suspend, limit or cancel the service on the happening of certain contingencies.  These include:

   "if the Customer notifies Telstra in accordance with cl 10.1;

   if the Customer breaches the Standard Form of Agreement (including any of these General Terms and Conditions);

   if the Customer does not pay a bill by the date for payment."

1. Under the General Terms and Conditions, the defendant was entitled to cancel a service at any time if the customer did not pay a bill by the date for payment.  In relation to the Transferred Lines, the bills for payment by the plaintiff were overdue.  In the case of an overdue bill, the defendant had the right to disconnect the line or lines in question without notice and in so doing, was not in breach of its General Terms and Conditions.  The General Terms and Conditions say nothing about notice to the plaintiff before a service is disconnected or cancelled.

2. These proceedings commenced on 8 July 1998 on the application of the plaintiff for an injunction which was granted on the same day.  As at that date a number of accounts in relation to the Transferred Lines were unpaid and overdue.  These were as follows:

Account No	Date of issue of bill	Amount of bill overdue before 8.7.98
216 7065 000	13.5.98	$1 851.70
216 7065 000	13.6.98	$2 097.54
381 1542 600	22.4.98	$   159.95
381 1542 600	22.5.98	$     40.00
377 4387 400	22.5.98	$   154.50

1. In my opinion, the plaintiff had no claim for damages for breach of contract in respect of the services relating to these accounts being the services in respect of the Transferred Lines.  Even if the defendant disconnected the services concerned, I hold that it was entitled to do so at the time, being before the commencement of this action and before the issue and service of the injunction.  Thus, at the commencement of this action the defendant was not in breach of any contract with the plaintiff in relation to the Transferred Lines.

2. A threat by the defendant to disconnect a service in these circumstances would not amount to an anticipatory breach of contract because to carry out the threat would be lawful and in accordance with the terms of the contract. There would be no question of breach involved, anticipatory or otherwise. If a breach going to the heart of the contract were involved, such a breach would give the plaintiff a right to elect to terminate the contract and sue for damages for breach. No such right was ever exercised by the plaintiff. In fact, it went the other way and obtained an interlocutory injunction preserving the status quo.

3. Any breach on the part of the defendant occurring after 8 July 1998 would go towards a fresh cause of action and would require a new set of legal proceedings: Eshelby v Federated European Bank Limited [1932] 1 KB 423. I am mindful of the provisions of r 46.08 which permits a party to plead a matter which has arisen since the commencement of the proceedings. In s 5 of the Supreme Court Act 1935, a “matter” is defined to include every proceeding in the Court not in a cause. A “cause” includes any action, suit or other originating proceedings between a plaintiff and a defendant: Baldry v Jackson (1976) 2 NSWLR 415 and Servcorp (Aust) Pty Ltd v Abgarus Pty Ltd (1995-1996) 38 NSWLR 281. The definitions of “matter” and “cause”, while found in the Supreme Court Act, are nevertheless applicable to the Supreme Court Rules: Acts Interpretation Act 1915, s 14.

4. In Baldry v Jackson (supra), the New South Wales Court of Appeal had to consider a rule which for all practical purposes was identical to Rule 46.08. Samuels JA observed at p 419:

   "The rule looks to events which have occurred after the commencement of the proceedings and thus, where the proceedings have been commenced by statement of claim, after the statement of claim has been filed.  It primarily contemplates a party pleading matter which has arisen after the statement of claim has been filed, but before the time comes to file the pleading in which the matter is to be included.  No doubt all this can be done by amendment after the relevant pleading has been filed.  But an amendment, duly made, takes effect, not from the date when the amendment is made, but from the date of the original document which it amends ...  There is nothing in the rules to displace this principle ...

   It seems to me, therefore, impossible to permit an amendment to this statement of claim which would have the effect of introducing into it a cause of action based upon facts which had not arisen when the statement of claim was filed.  The situation becomes even more curious when one considers that these new facts would be wholly in substitution for the facts already pleaded which do not, of course, disclose any cause of action.  I cannot see how a plaintiff can commence proceedings by statement of claim dated 5th November, 1975 (and that date would remain after amendment) which pleads facts which did not occur until the 1st December, 1975: there is nothing in r 16 to authorize such a course."

1. The meaning of cause of action or cause was discussed by Lord Esher MR in Read v Brown(1889) 22 QBD 128 at 131 where his Lordship said:

   "[A cause of action has been defined to be] every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court.  It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved."

2. In my view s 46.08 has no application to the case presently before the Court.

3. It seems that where damages are to be assessed in respect of a continuing cause of action, recurring breaches of recurring obligations or intermittent breaches of a continuing obligation, damages can be assessed up to the date of assessment including damages for breaches occurring after the proceedings were begun:  Supreme Court Rules r 77.04.  See also, Mann v The Capital Territory Health Commission (1981-1982) 148 CLR 97. However, any claim for damages in the present case would not come within r 77.04. Each breach occurring after 8 July 1998 should be regarded as giving rise to a fresh cause of action in damages and would require a fresh set of proceedings. If there were a breach on the part of the defendant of any contract between the defendant and the plaintiff, one could not predict when any such breach would be likely to occur. There is no guarantee that any such breach would be recurring or intermittent.

1. The facsimile dated 2 April 1998 also contains reference to a number of 0500 numbers.  No mention of these has been made by either party at trial.  I do not propose to deal with them further.

2. The plaintiff had a number of other accounts with the defendant.  These included accounts numbered 262 7611 763, 376 8909 400 and 577 9890 500.  None of these were in respect of Transferred Lines and should be ignored in respect of this claim.

3. Counsel for the plaintiff submitted that the defendant could not rely on cl 10.3 of the General Terms and Conditions to permit it to disconnect services without notice because, he said, the defendant had adopted “an invariable practice” of allowing time beyond the due date, of serving a reminder notice allowing further time and of serving a disconnection notice and allowing still further time.  There is no evidence before me of anything done by the defendant which would amount to “an invariable practice” of the kind described.  While there may well have been instances where the defendant offered some latitude before disconnecting the line or lines concerned, “an invariable practice” would require much more.  Either witnesses would have to depose to such practice or it would have to be conceded by someone holding a senior management position in the defendant, duly authorised to make such a concession on behalf of that company.  In my opinion, the defendant was entitled to disconnect a Transferred Line without notice to the plaintiff at any time when a bill was outstanding, in respect of that line, the payment of which was overdue. 

4. On 8 July 1998, Mr Maine complained that certain of the plaintiff’s telephone lines had become disconnected. Mr Maine was in Adelaide at the time.  He contacted Mr E J Spencer, the manager of the defendant’s National Collection Centre located in Melbourne.  According to Mr Maine, on that day in a telephone conversation with Mr Spencer, Mr Maine complained at the disconnection of the plaintiff’s telephone lines.  He said that if any more of the plaintiff’s telephone lines were disconnected, he would obtain a court order to have the defendant stopped.  According to Mr Maine, Mr Spencer replied that he did not give a damn and that he was withdrawing all services to the plaintiff.  He said that the defendant had made a business decision not to give any telephone lines to any company that Mr Maine had anything to do with.  According to Mr Maine, Mr Spencer further said that the defendant was not prepared to provide any future services to the plaintiff because NDA had an outstanding bill.

5. In his evidence, Mr Spencer said that he had spoken to Mr Maine on the telephone on a number of occasions.  He recalled an occasion which occurred on 8 July 1998 at about 5.30 pm when Mr Maine rang to say that he had obtained an injunction from this Court ordering the defendant not to disconnect telecommunication services in the name of the plaintiff and to restore services in the name of the plaintiff which had apparently been disconnected.  The only itemisation of the lines affected is contained in the facsimile from NDA to the defendant dated 2 April 1998 and referred to earlier in these reasons.

6. The injunction granted on 8 July 1998 referred to telecommunication services generally and not merely Transferred Lines, although these would clearly have been included within the expression “telecommunication services” and were within the scope of the injunction.  At the time of the issue of that injunction, the defendant was lawfully entitled to cancel the telecommunication services provided to the plaintiff and was not in breach of contract on that account.  The injunction had the effect of holding matters in abeyance until the dispute between the parties could be resolved by this Court.

7. As part of the relief claimed, the plaintiff seeks a permanent injunction restraining the defendant from discontinuing the Transferred Lines until equivalent services can be provided by another carrier.  The plaintiff has since abandoned its claim for a permanent injunction.

8. In my opinion, the plaintiff’s claim relating to the Transferred Lines fails and the plaintiff is not entitled to any relief in respect of it.

The estoppel claim

1. The next claim made by the plaintiff against the defendant is based on an estoppel. In Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Limited [1982] 1 QB 84, the following statement in relation to estoppel by convention appears in the judgment of Brandon LJ at p 130:

   "The kind of estoppel which is relevant in this case is not the usual kind of estoppel in pais based on a representation made by A to B and acted on by B to his detriment.  It is rather the kind of estoppel which is described in Spencer Bower and Turner, Estoppel by Representation, 3rd ed (1977), at pp 157-160, as estoppel by convention.  The authors of that work say of this kind of estoppel, at p 157:

   ‘       This form of estoppel is founded, not on a representation of fact made by a representor and believed by a representee, but on an agreed statement of facts the truth of which has been assumed, by the convention of the parties, as the basis of a transaction into which they are about to enter.  When the parties have acted in their transaction upon the agreed assumption that a given state of facts is to be accepted between them as true, then as regards that transaction each will be estopped as against the other from questioning the truth of the statement of facts so assumed.’"

1. This requires an assumption adopted by the parties as the conventional basis of their relationship.

2. In Franklin v Manufacturers Mutual Insurance Limited (1935) 36 SR (NSW) 76, Jordan CJ referred to estoppel by representation. He said at p 82:

   "In order that this type of estoppel may arise, it is necessary that (1) by word or conduct (2) reasonably likely to be understood as a representation of fact, (3) a representation of fact, as contrasted with a mere expression of intention, should be made to another person either innocently or fraudulently, (4) in such circumstances that a reasonable man would regard himself as invited to act upon it in a particular way, (5) and that the representation should have been material in inducing the person to whom it was made to act on it in that way (6) so that his position would be altered to his detriment if the facts were otherwise than as represented."

1. There is also equitable or promissory estoppel, a definition of which is set out in the following passage from the judgment of Brennan J in Waltons Stores (Interstate) Limited v Maher (1987-88) 164 CLR 387 at p 428-9. The passage is as follows:

   "In my opinion to establish an equitable estoppel, it is necessary for the plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt the assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff’s action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.”

2. I have mentioned these three kinds of estoppel because I am not sure which of the three the plaintiff relies upon.  Elements of all three are mentioned in the plaintiff’s pleadings.

3. The three kinds of estoppel to which I have just referred are subject to the rule that an assumption or representation must be clear before it can found an estoppel: Legione v Hateley (1982-83) 152 CLR 406 at pp 435-436 per Mason and Deane JJ. This does not mean that an assumption or representation, if it is to found an estoppel, must be express. The assumption or representation may properly be seen as implied by the words used or to be adduced from either a failure to speak where there was a duty to speak or from conduct: Legione v Hateley (supra at p 438).

4. The question of a claim based on estoppel was raised in par 8 to par 15 of the statement of claim.  In that document, the plaintiff alleged that it had requested that the OnRamp at Werribee be transferred into its name.  The plaintiff contended that such request was made orally in the telephone conversation in early May 1998 and again in the telephone conversation on 29 May 1998 between Mr Maine and Mr Quirk to which I have referred earlier in these reasons.

5. The statement of claim further alleged that an application for the transfer of the OnRamp at Werribee was subsequently made in writing on or about 29 May 1998.  The plaintiff contended that the application in writing referred to was a standard form of application for an OnRamp duo.  The application form in question was completed by Mr Maine on behalf of the plaintiff and returned to Mr Quirk by facsimile on the same day.  It was alleged that the defendant failed to transfer the OnRamp concerned into the name of the plaintiff and that the defendant failed to communicate to the plaintiff any refusal of the application or the imposition of any condition to the grant of the application referred to above.

6. In alleging a failure to transfer the Werribee OnRamp to the plaintiff, it is implied that the defendant had a duty to make such a transfer. In fact, that was not the case; there was no such duty to transfer the OnRamp. In alleging a failure to communicate to the plaintiff any refusal of the application, it is implied that the defendant had a duty to so communicate; in fact, it had no such duty.

7. It was alleged that such failure to communicate constituted an implied representation to the effect that there was no impediment to the grant of the application and to the effect that the OnRamp connection would be transferred into the name of the plaintiff in due course.  In fact, such failure could not amount to an implied representation of any kind. The plaintiff contended that in reliance on and induced by the representation, the plaintiff on or about 4 June 1998 assumed responsibility to a number of distributors for providing internet access previously provided by NDA.  There is nothing in the evidence arising from the two telephone conversations with Mr Quirk and the surrounding circumstances and, in particular, the negotiations relating to the recovery of the NDA telecommunications account which would amount to an inducement made by the defendant to the plaintiff in relation to the Werribee OnRamp. The plaintiff contended that if the defendant were permitted to disconnect the OnRamp connection the plaintiff would suffer loss and damage. If the plaintiff suffered loss or damage as a result of any inducement of the kind referred to above, it is not loss or damage for which the defendant could properly be held responsible. The OnRamp connection was a crucial component of the plaintiff’s business as the provider of internet and related services.

8. As I have said, in order to found an estoppel, the representation or assumption relied upon must be clear and unequivocal.  An estoppel cannot be founded on an ambiguity.  To the extent that a representation or assumption can arise from the telephone conversation between Mr Maine and Mr Quirk in early May 1998, I consider that it was ambiguous and should not have founded an estoppel.

9. The account of NDA with the defendant had been outstanding for some months.  In February 1998,  there had been negotiations  between Mr Maine and representatives of the defendant in order to identify and correct any errors in NDA’s outstanding account.  At or about 21 April 1998, the defendant had rendered an account to NDA claiming $17 869 as overdue.  At that time there were negotiations between Mr Maine and Ms Terrie Ryan for the payment of NDA’s outstanding account with the defendant.  On 30 April the defendant had threatened to disconnect the services contained in that account.  In early May 1998, at about the time of the first telephone conversation between Mr Maine and Mr Quirk, the defendant was preparing to disconnect the services the subject of NDA’s account with it.  At about that time, there was the episode involving Hale & Wakeling where the defendant was pressing for the payment of its account by threatening disconnection of services and Hale & Wakeling were seeking an extension of time for payment on behalf of NDA.  There was a short extension of time.  The amount of $5 000 referred to earlier was offered as a gesture of goodwill.  It was never paid.  There was a telephone conversation between Mr Maine and Ms Galtieri of the defendant.  Ms Galtieri requested that all amounts in dispute be listed by 15 May 1998.  She drew attention to the fact that the services affected (which included the Werribee OnRamp) would be discontinued unless action was taken within the time limited.

10. If there were any matters genuinely in dispute, no progress was made in resolving them.  Over the period from February to May 1998, there was no written communication of any kind emanating from Mr Maine or NDA setting out items in the defendant’s accounts which were claimed to be in dispute and setting out grounds of dispute.  In the circumstances, I have a serious doubt as to Mr Maine’s bona fides in relation to NDA’s account.

11. On 20 May 1998, Mrs Christina Quirk proceeded to disconnect all services in the name of NDA.  The disconnection applied to the services included in the invoice rendered to NDA on 21 April 1998  and took several hours to complete.  It included the Werribee OnRamp service.

12. Having regard to the above sequence of events, Mr Maine should have been in no doubt that from late April 1998 onwards NDA’s services were about to be disconnected for non-payment of the bill dated 21 April 1998 and referred to earlier in these reasons.  The bill in question at p 56 onwards related to the Werribee OnRamp service.  Over the period concerned, Mr Maine knew that the services referred to had not been provided and that the lines in question (including the lines for the Werribee OnRamp service) would not be transferred to the plaintiff.

13. For there to be an estoppel of any kind, the plaintiff must have been induced to alter its position by a representation or promise or by an agreed state of affairs the truth of which has been assumed by convention of the parties as the basis of a transaction they were about to enter.  Mr Maine was fully informed all along of the steps taken by the defendant to disconnect the service in relation to the Werribee OnRamp along with other services in the name of NDA.  The defendant had made its position clear to Mr Maine and through him, to NDA and the plaintiff in relation to the Werribee OnRamp that the service, along with other services in the name of NDA, would not be transferred because of the outstanding debt of NDA. In those circumstances, and having regard to all that was happening at the time involving NDA and the plaintiff and the defendant, it cannot possibly be said that the plaintiff was entitled to the benefit of any estoppel of the kind alleged. In any case where a plaintiff knows the true situation, there cannot be an inducement or an assumed state of affairs of a kind necessary to found an estoppel. The plaintiff concerned is fully informed as to the true situation and, in that case, there is no room for an estoppel to operate.

14. In relation to the meeting between Mr Maine and Mr Quirk on 29 May 1998, Mr Maine was told that in order to transfer the OnRamp to the plaintiff, an application form would be required to be completed and signed on behalf of the plaintiff.  Where an application is involved it is generally the case that the party to whom the application is made has a discretion to accept or refuse the application.  In the present case, that would certainly be the position because of the nature and length of the form.  Where an application is concerned, one is not entitled to assume that it will necessarily be granted.

15. In my opinion the claim based on an estoppel fails.

The Service Guarantee Claim

1. Under s 234 of the Telecommunications Act 1997, the Australian Communications Authority is authorised to make standards to be complied with by carriage service providers in relation to the making of arrangements with customers about the period taken to comply with requests to connect customers for specified kinds of carriage services and the periods that carriage service providers may offer to customers when making those arrangements. For present purposes, the defendant is a carriage service provider.

2. If a carriage service provider contravenes a standard in force under s 234 of the above Act, in relation to a particular customer, it is liable to pay damages to the customer for the contravention. The amount of damages payable for a particular contravention is equal to the relevant amount specified in the scale in force under s 236: s 235 of the Telecommunications Act, 1997.

3. Under s 236 of the Telecommunications Act 1997, the Australian Telecommunications Authority is authorised by written instrument to specify a scale of damages for contravention of standards under s 234. By the same section it is provided that the scale must specify categories of contraventions and also specify a dollar amount as the amount of damages payable for contraventions covered by each of those categories: Telecommunications Act 1997, s 236.

4. I have considered the Telecommunications (Customer Service Guarantee) Standard 1997 in its application to this case.  Under par 3 of the Standard, it is provided that it applies to a carriage service provider who supplies to a customer a specified service or who is requested by a customer to connect that customer to the service.  In the Standard, “specified service” means the standard telephone service or an enhanced call handling feature.  A “standard telephone service” is defined in the Standard as a standard telephone service within the meaning of the Telecommunications Act supplied by means of a public switched telephone service line and a telephone hand set that does not have switching functions.  An “enhanced call handling feature” refers to a standard telephone service with a number of features added such as “call waiting” and “call forwarding”.

5. Under par 6 of the Standard, in making arrangements to connect customers to a specified service, the carriage service provider must make reasonable efforts to obtain the agreement of the customer to the terms of those arrangements, particularly in regard to the connection period.  It should be noted that par 6 refers to a “specified service” which, as I have already mentioned, is defined to mean a standard telephone service or an enhanced call handling feature. 

6. A carriage service provider must comply with an arrangement with a customer for a connection to be provided on an agreed date or within an agreed period:  Telecommunications (Customer Service Guarantee) Standard 1997, par 7(4).

7. In the present case the plaintiff ordered some 20 faxstream lines from the defendant for installation in connection with its business.  The order was placed on 6 April 1998.  Insufficient cabling was found to exist so that the order had to be placed on “hold”.  This was done on 9 April 1998.  The order was subsequently expanded so that a cable of 50 pairs of wires could be pulled through the channel under the roadway instead of 30 pairs.  With the cable containing an increase in the number of wires, it was found necessary to dig up 2½ kilometres of roadway.  It appears that a decision was made to increase the cable from 50 pairs to 300 pairs.  The job was ultimately completed on 17 July 1998.

8. In the statement of claim, the plaintiff alleges a contravention of a performance standard under s 234 of the Telecommunications Act in consequence of a failure to connect the 20 faxstream lines promptly.  It is alleged that the defendant undertook to connect the lines by 14 April 1998 but failed to do so until 17 July 1998.  The plaintiff alleges that by reason of the contravention, the defendant became liable pursuant to the Act to pay damages to the plaintiff in the sum of $20 per line for every working day the defendant failed to connect that line.  In this case, an aggregate of $27 200 is claimed.

1. As I have said earlier in these reasons, the Australian Communications Authority is authorised to specify a scale of damages for contraventions of performance standards under s 234 of the Act. A copy of the written instrument referred to or a certificate as to its terms has not been admitted in evidence in this case. Such a document is essential and without it the plaintiff’s claim based on the service guarantee must fail.

2. A further question arises as to the application of the relevant standard in the circumstances of this case.  Mr Maine gave evidence that a faxstream service was a standard telephone service within the meaning of the Telecommunications Act supplied by means of a public switched telephone service line and a handset which does not have switching functions. On the other hand, Mr Spencer expressed a contrary view. A standard telephone service is defined in s 17 of the Telecommunications Act in a manner in which expert technical evidence would be required to be given to make any sense of it.  In my view a witness should have been called to give such evidence.  I do not suggest that an expert witness would be required to give evidence in respect of terms used in the Telecommunications Act or the Standard where those terms themselves are subject to a statutory definition.  But once one has passed the statutory definitions, assistance may be required as to the meaning of technical, scientific or electronic engineering terms.

3. In this matter, the defendant was faced with a situation where it could not simply connect the necessary number of lines.  Two and a half kilometres of roadway or footpath had to be dug up.  That having become necessary, there was no point in going to all the trouble and expense of digging up the roadway without laying as many additional lines as reasonable in order to serve future needs.  On this matter I consider that the onus lies on the defendant to establish that the time in fact occupied in providing the additional cabling was reasonable in the circumstances.  Evidence on this topic would have to come from an engineer familiar with the work of laying cable to ascertain the time reasonably required in obtaining the necessary cable, in submitting plans to and obtaining approval of the relevant local governing authority and in carrying out the work.  Also there may well be time necessary to finish other work in hand.  In addition, an explanation of why it was necessary to lay 300 pairs rather than a smaller number would have been relevant.  Presumably, to deal with the larger number of pairs would not involve a significantly greater delay.  It appears that there were some five pairs of wires available at the outset.  Could not these have been offered to the plaintiff?  If so damages in relation to them could have been avoided altogether.

4. Despite these considerations, the service guarantee claim fails for the reasons which I have given.

Claim under s 46 of the Trades Practices Act 1974

1. In its statement of claim, the plaintiff alleged that the defendant had at all material times a substantial degree of power in the telecommunications market in Australia.  The plaintiff further contended that the defendant had refused to transfer the Werribee OnRamp connection into the plaintiff’s name and continues to refuse to do so - notwithstanding the communication by the plaintiff to the Court in July 1998 of the plaintiff’s intention to have Optus Communications Pty Ltd take over from the defendant the provision of all the plaintiff’s telecommunications services. 

2. It was further alleged that the defendant’s refusal to transfer the Werribee OnRamp connection in the circumstances to which I have referred, had the effect, by reason of the particulars pleaded in par 14(a) of the statement of claim, of preventing Optus or any other carrier from providing an OnRamp connection at Werribee for the plaintiff and by reason thereof constituted a contravention of s 46 of the Trade Practices Act 1974 (Cwlth).  The particulars referred to in par 14(a) of the statement of claim were to the effect that the plaintiff would not be able to obtain an equivalent connection from another carrier because the defendant was a monopoly supplier of services such as an OnRamp connection in as much as no other carrier could at the relevant time directly provide such services to a customer although Optus Communications Pty Ltd could accept a transfer from the defendant of the right to provide an OnRamp service in respect of which the defendant has established the current account for that service with a customer.

3. In the statement of claim, the plaintiff contended that the defendant intended to disconnect the Werribee OnRamp and refuse to provide services to the plaintiff. The plaintiff further contended that the defendant had refused and continued to refuse the plaintiff’s application to have the Werribee OnRamp connection transferred into the plaintiff’s name notwithstanding the plaintiff’s declared intention to have the provisions of the service taken over by Optus Communications Pty Ltd. It was further alleged that the refusal had the effect and was for the purpose of preventing Optus Communications Pty Ltd from competing with the defendant for the provision of services in the OnRamp market in contravention of s 46 of the Trade Practices Act.

4. So far as is material, s 46 of the Trade Practices Act 1974 is as follows:

   "46.(1) A corporation that has a substantial degree of power in a market shall not take advantage of that power for the purpose of:

   (a)     eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market;

   (b)    preventing the entry of a person into that or any other market; or

   (c).... deterring or preventing a person from engaging in competitive conduct in that or any other market. 

   (1a) - (3)...

   (4)... In this section:

   (a).... a reference to power is a reference to market power;

   (b)... a reference to a market is a reference to a market for goods or services; and

   (c).... a reference to power in relation to, or to conduct in, a market is a reference to power, or to conduct, in that market either as a supplier or as an acquirer of goods or services in that market. 

   (5) - (7) .."

1. It is admitted on the pleadings that the defendant had at all material times a substantial degree of power in the telecommunications market in Australia. However, the expression “market” is used on several occasions in s 46 of the Trade Practices Act and for the purposes of that section it is necessary to know what the relevant market is.  For the purposes of the Trade Practices Act, a market must be defined in both product terms and geographic terms. Section 46 of the Trade Practices Act should be read with s 4E which provides as follows:

   “For the purposes of this Act, ‘market’ means a market in Australia and, when used in relation to any goods or services, includes a market for those goods or services and other goods or services that are substitutable for, or otherwise competitive with, the first-mentioned goods or services.”

In Re Queensland Co-operative Milling Association Ltd; Defiance Holdings Ltd (1976) 25 FLR 169 the following statement appears on p 190:

“We take the concept of a market to be basically a very simple idea.  A market is the area of close competition between firms or, putting it a little differently, the field of rivalry between them.  (If there is no close competition there is of course a monopolistic market.)  Within the bounds of a market there is substitution - substitution between one product and another, and between one source of supply and another, in response to changing prices.  So a market is the field of actual and potential transactions between buyers and sellers amongst whom there can be strong substitution, at least in the long run, if given a sufficient price incentive.  Let us suppose that the price of one supplier goes up.  Then on the demand side buyers may switch their patronage from this firm’s product to another, or from this geographic source of supply to another.  As well, on the supply side, sellers can adjust their production plans, substituting one product for another in their output mix, or substituting one geographic source of supply for another.  Whether such substitution is feasible or likely depends ultimately on customer attitudes, technology, distance, and cost and price incentives.

It is the possibilities of such substitution which set the limits upon a firm’s ability to ‘give less and charge more’.  Accordingly, in determining the outer boundaries of the market we ask a quite simple but fundamental question:  If the firm were to ‘give less and charge more’ would there be, to put the matter colloquially, much of a reaction?  And if so, from whom?  In the language of economics the question is this:  From which products and which activities could we expect a relatively high demand or supply response to price change, i.e. a relatively high cross-elasticity of demand or cross-elasticity of supply?”

This statement received the approval of the High Court in Queensland Wine Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 167 CLR 177.

1. In the present case, no evidence of any kind has been adduced to enable the applicable market to be defined and without such a definition I cannot take the claim under s 46 any further.

2. I note that par 4.4 of the particulars in respect of par 15C of the amended statement of claim refers to the provision of services in the “OnRamp market”.  A “market” must be identified in economic terms.  For there to be a market, certain criteria must be identified.  Such identification has not occurred in this case.  There is simply no evidence that such a thing as an OnRamp market exists.  Such a market is referred to in par 4.1 of the particulars of the statement of claim and also in 4.4 of those particulars.

3. At the heart of s 46 of the Trade Practices Act is the proposition that a corporation to which that section applies must not take advantage of its market power for one or more of the proscribed purposes listed in subs (1).  In Queensland Wire Industries Proprietary Limited v The Broken Hill Propriety Co Limited (cited above) at 191 per Mason CJ and Wilson J the following question was identified as the one to be determined:

   "The question is simply whether a firm with a substantial degree of market power has used that power for a purpose proscribed in the section, thereby undermining competition ..."

1. This may involve a consideration of subjective as well as objective elements to determine the nature of the “purpose” in question.  Purpose will usually be inferred from the nature of the arrangement, the circumstances in which it was made and its likely effect: Dowling v Dalgety Australia Limited (1992) 34 FCR 109.

2. The Werribee OnRamp was never transferred to the plaintiff but at all material times remained in the name of NDA until it was disconnected on 20 May 1998 because of the fact that NDA had not paid its accounts, including an account relating to the Werribee OnRamp.  Reference is made to communications between the defendant’s staff and Mr Maine referred to earlier in these reasons whereby it was made abundantly clear on a number of occasions that the lines in question were not cut off to prevent competition.  They were cut off for credit management reasons.

3. There is no evidence whatsoever that the defendant acted because of one of the proscribed purposes set out in s 46 of the Trade Practices Act.  I am satisfied that the defendant acted because of the very large outstanding debt owing to the defendant by NDA and that accounts of the plaintiffs were themselves overdue for payment.  Clearly, the defendant was anxious to avoid in the plaintiff a duplication of what had occurred in NDA.

4. In my opinion the claim of the plaintiff under s 46 of the Trade Practices Act fails.

5. Reference is made in par 15C of the statement of claim to the competition rule within the meaning of s 151AK of the Trade Practices Act.  This section is within part XIB which deals with anti-competitive conduct in the telecommunications industry.  The statement of claim seeks no relief under Part XIB in respect of the competition rule.  Also, in the course of argument, counsel for the plaintiff intimated that a claim in respect of the competition rule would not be pursued.

Special federal matter

1. The claim under s 46 of the Trade Practices Act is a “special federal matter” within the meaning of the Jurisdiction of Courts (Cross Vesting) Act 1987 (Cwlth).  Under s 6 of that Act, if a matter for determination in a proceeding that is pending in the Supreme Court of a State is a special federal matter and the court does not make an order under subs (3) in respect of the matter, the court must transfer the proceedings to the Federal Court.  Subsection (3) provides that the Supreme Court may order that the proceedings be determined by that Court if it is satisfied that there are special reasons for doing so in the particular circumstances of the proceedings other than reasons relevant to the convenience of the parties. 

2. On 26 October 1998 after hearing the parties and also after hearing counsel on behalf of both the State and Federal Attorneys-General, Debelle J ordered:

   "That the proceeding be determined by this Honourable Court notwithstanding that it involves a special federal matter."

Split trial

1. On 2 October 1998, Debelle J ordered:

   "That the trial of the issues of estoppel alleged by the plaintiff be limited to the question of liability, the question of damages to be reserved to a later trial."

1. On 2 November 1998 I made the following order:

   "Order that the trial:

   (a)     of the issue of estoppel;

   (b)... the claim arising under s 46 and s 82 of the Trade Practices Act; and

   (c).... the claim arising under the counterclaim

   be limited in each case to the question of liability, the question of damages (if any) or compensation in each case, to be reserved for a later trial."

1. On 10 January 2000, I made the following further order:

   "That the words “the claim arising under the counterclaim” be omitted from my order made on 2 November 1998 (page 70 of the transcript).

   That a further paragraph be added to the above order:

   ‘That the claim arising under the counterclaim and the claim in relation to the service guarantee be heard together with items (a) and (b) of my order of 2 November 1998."

1. In the circumstances, it will not be necessary to proceed to a second stage in relation to any of the claims made.

The counterclaim

1. The defendant has filed a counterclaim in respect of charges made by the defendant for telecommunications services provided by it to the plaintiff.

2. Three volumes were tendered and admitted by the consent of the parties containing the defendant’s standard terms and conditions of contract.  As I have said earlier in these reasons, it was further agreed between the parties that these were the terms and conditions of contract which regulate the supply of services by the defendant to the plaintiff for the purpose of this case.

3. Clause 4 of Item 2 of the standard terms and conditions of contract deals with the issue of payment of charges by a customer to the defendant.  Clause 4.2 is as follows:

   "Telstra’s records are sufficient evidence of the amount payable by the customer unless they are shown to be incorrect."

1. The effect of this provision is to make Telstra’s records proof of the amount payable by the customer unless the records are shown to be incorrect.  Effectively, this reverses the onus of proof.

2. Copies of invoices prepared by the defendant and addressed to the plaintiff have been tendered and admitted in evidence.  I would have expected the counterclaim to be concerned with invoices rendered for services provided from the inception of the services or, in the case of the Transferred Lines, from the date of the transfer up to 30 October 1998, the date of the filing of the counterclaim.  Instead, the counterclaim refers to the accrual of charges from 2 July 1998 which is not an accrual date selected by the defendant for charging purposes.  Some accounts go back to a date earlier than 2 July 1998 and some have a commencement date for services to be provided after that date.  It seems to me that the best I can do, having regard to the material before me, is to make a calculation of charges on and from the second available invoice date after 2 July 1998.  I do not know why 2 July 1998 was selected for the purposes of calculations in the counterclaim.  No explanation for its use has been given.

3. I calculate the amount due in respect of accounts numbered 216 7065 000, 381 1542 600, 376 8909 400, 262 7611 763 and 377 4387 400 listed in Schedule A of the counterclaim as the sum of $9 930.06.  This amount is made up as follows:

Date of Issue	Bill No	Amount
Account No 216 7065 000	30.7.98	T331 992 347	$1 987.07
4.8.98	T354 549 776	0.51
Account No 381 1542 600
22.8.98	T189 460 967	40.75
22.9.98	T136 647 067	40.00
22.10.98	T243 821 828	40.00
Account No 376 8909 400
(Connected 17.7.98)	22.7.98	T386 662 747	3 195.60
22.8.98	T369 669 877	438.00
22.9.98	T131 222 018	438.00
22.10.98	T135 719 158	438.75
Account No 262 7611 763
12.8.98	T311	773.23
12.9.98	T311	499.78
12.10.98	T311	385.55
Account No 377 4387 400
22.8.98	T369 493 087	447.17
22.9.98	T131 069 118	598.59
22.10.98	T268 645 538	607.06
$9 930.06

1. I have not seen anything which would assist me with regard to the account numbered 660 1499 300 in Schedule A of the counterclaim and accordingly I have been unable to fix a figure in relation to that account.

2. The counterclaim also includes a claim for charges in respect of services provided through the OnRamp situated at Werribee.  Charges in respect of that service are included in account number 479 1064 300 rendered to NDA.  The OnRamp in question was never transferred to the plaintiff and the account for services provided by it remained at all times with NDA.  I know nothing about account number 228 0814 000 appearing in the counterclaim in Schedule B.

3. In the counterclaim, the defendant claims such further amounts as may accrue between the date of filing the counterclaim and the date of trial of the action.  As I have explained earlier in these reasons, an action cannot include a cause of action accruing after the date of the summons.  The same principle applies in relation to a counterclaim.  The pleading of additional amounts accruing due from time to time is the pleading of fresh causes of action and cannot be included in the counterclaim as originally filed; nor can it be made the subject of amendment to the counterclaim: Baldry v Jackson and other cases cited earlier.  I refer to what I have said earlier in these reasons on this topic.

4. I have considered the fact that there may have been a number of occasions where the defendant disconnected particular lines in contravention of the injunction to which I have referred earlier.  I am inclined to think that these disconnections were due to inadvertence and not to any deliberate act on the part of the defendant and its management and staff.  In my opinion the disconnection of lines the subject of any of the accounts by the defendant, while it may have constituted a fundamental breach of the contract in question, there is no evidence that the plaintiff responded to such behaviour by bringing the contract to an end.  As I see it, the plaintiff elected to continue the contract and the plaintiff continued to have the use of the services.

5. In my opinion, obedience to the injunction is a matter separate from matters of breach of contract.  If the injunction is disobeyed, proceedings by way of civil contempt can be considered.  I say no more on that matter.  It raises issues which are separate and apart from the issues now under consideration.

1. For these reasons I would propose to enter judgment in the following terms:

   (1)    That the plaintiff’s action against the defendant be dismissed.

   (2)... That there be judgment for the defendant against the plaintiff on the counterclaim in the sum of $11550.06 inclusive of a lump sum of $1620 for interest.

2. I will hear counsel for the parties as to costs.