David a Harris v AMP Financial Planning - [2019] VSC 24

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S ECI 2019 00298

DAVID A HARRIS PTY LTD and DAVID HARRIS	Plaintiffs
v
AMP FINANCIAL PLANNING PTY LTD	Defendant

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JUDGE:	Digby J
WHERE HELD:	Melbourne
DATE OF HEARING:	31 January 2019
DATE OF JUDGMENT:	4 February 2019
CASE MAY BE CITED AS:	David A Harris v AMP Financial Planning
MEDIUM NEUTRAL CITATION:	[2019] VSC 24

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CONTRACT – Construction and interpretation – Implied terms – Whether contract requires discretion to be exercised in good faith – Whether duty of good faith performance is implied in fact – Whether duty of good faith performance is implied in law – Burden of proof – BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 applied.

CONTRACT – Termination of contract – Termination clause – Where parties agreed to unqualified right of termination with notice – Whether express right to terminate contract is qualified – Whether express right to terminate contract must be exercised in good faith – Whether prohibition against unconscionable conduct qualifies express right to terminate contract.

INJUNCTIONS – Injunction to restrain termination of contract – Whether plaintiffs have a prima facie case – Whether balance of convenience favours granting injunction – Issue of the plaintiffs’ solvency – Whether value of an undertaking for damages is diminished – Where injunctive relief unsuitable because parties will be forced to continue a fraught relationship.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	J Foster	Macpherson Kelly
For the Defendant	M Loughnan QC S Dyrenfurth	HWL Ebsworth

HIS HONOUR:

Urgent application

By Summons on Originating Motion dated 23 January 2019, David A Harris Pty Ltd and Mr David Harris (the plaintiffs) seek orders restraining AMP Financial Planning (AMPFP or the defendant) from:

(a) relying on the Notice of Revocation and Termination issued to each of the plaintiffs on or about 26 March 2018 (termination notices), thereby restraining the defendant from:

(i) terminating the Authorised Representative Deed of Agreement (Representative) between the first plaintiff and the defendant; and

(ii) terminating the Authorised Representative Deed of Agreement (Corporate Practice) between the second plaintiff and the defendant; and

(iii) revoking the personal authorisation of the first plaintiff as an authorised representative and credit representative of the defendant; and

(iv)revoking the corporate authorisation of the second plaintiff as an authorised representative and credit representative of the defendant.

(b) issuing any further notices of revocation and termination to each or any of the plaintiffs;

until such time as a final determination is made by the Court.[1]

[1]Summons on Originating Motion (25 January 2019).

The above mentioned Authorised Representative Deeds of Agreement are herein referred to as the Authorised Representative Agreements.

For the reasons that follow, I have decided to refuse the relief that is sought by the plaintiffs. I will order that the plaintiffs’ Summons and Originating Process be dismissed.

In summary my reasons for refusing the relief sought by the applicant plaintiffs are:

(a) there…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] VSC 24
Decision Date: 4 February 2019

CaseChat Overview and Summary

David Harris brought a claim against AMP Financial Planning regarding the construction and interpretation of a contractual agreement, as well as the termination of that contract. The case was heard by the Federal Court of Australia. The central issues before the court were whether the contract implied a requirement for discretion to be exercised in good faith, whether a duty of good faith performance was implied in fact or in law, the burden of proof in relation to these matters, and the interpretation of the contract’s termination clause. The court also needed to determine if an injunction to restrain termination of the contract could be granted under the circumstances.

The court began by examining the contract to ascertain if it required discretion to be exercised in good faith. It found that there was no express term in the contract that required the exercise of discretion in good faith. The court then considered whether a duty of good faith performance was implied in fact or in law. It concluded that while a duty of good faith performance could be implied in fact in certain circumstances, the circumstances of this case did not necessitate such an implication. Regarding the burden of proof, the court followed the principles established in BP Refinery (Westernport) Pty Ltd v Shire of Hastings, finding that the burden rested on the party asserting the existence of the implied term. The court also scrutinised the termination clause, concluding that the parties had agreed to an unqualified right of termination with notice, which was not subject to any implied requirement of good faith or prohibition against unconscionable conduct.

The court determined that the plaintiffs did not have a prima facie case for an injunction to restrain termination of the contract. It found that the balance of convenience did not favour granting the injunction, particularly given the plaintiffs’ solvency and the potential unsuitability of injunctive relief in forcing the parties to continue a relationship marked by tension. The court ultimately dismissed the plaintiffs’ claims and made no orders in relation to the injunction.

No further orders were made by the court beyond dismissing the plaintiffs’ claims.

Orders