Edmunds-Jones Pty Ltd and 1 Ors v Australian Women's Hockey Association Inc
Case
•
[1999] NSWSC 1014
•7 October 1999
No judgment structure available for this case.
CITATION: Edmunds-Jones Pty Ltd & 1 Ors v Australian Women's Hockey Association Inc [1999] NSWSC 1014 revised - 11/10/99 CURRENT JURISDICTION: Equity FILE NUMBER(S): 2180/96 HEARING DATE(S): 23/06/98, 24/06/98, 25/06/98, 26/06/98, 15/03/99, 16/03/99, 17/03/99, 18/03/99, 19/03/99, 24/03/99, 23/06/99, 07/09/99 JUDGMENT DATE:
7 October 1999PARTIES :
Edmund-Jones Pty Limited ACN 002 672 684 (First Plaintiff)
Helen Elizabeth Jones (Second Plaintiff)
Australian Women's Hockey Association Inc ARBN 053 965 610 (Defendant)JUDGMENT OF: Santow J
COUNSEL : J B Simpkins (First and Second Plaintiffs)
D E Grieve, QC/ G P F Rundle (Defendant)SOLICITORS: Minter Ellison (First and Second Plaintiffs)
Norton Smith & Co (Defendant)CATCHWORDS: CONTRACT — Was consultancy agreement providing for various commission-type payments on third party sponsorship to association governing Australian women’s hockey void for uncertainty — Use of "and/or" — Distinction between ambiguity and uncertainty — Construction of contract — Principles — Independence or interdependence of obligations of consultant and association ; EVIDENCE — Failure to put allegations of untruthfulness against plaintiff in cross-examination — Unfairness and principle of Browne v Dunn.; WORDS AND PHRASES — "Sponsorship"; "and/or"; "renew" CASES CITED: Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1
Allstate Explorations NL v Beaconsfield Gold NL [1999] NSWSC 832 at paras 39-44 (Santow J, 25 August 1999, unreported)
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435
Bonitto v Fuerst Bros [1944] EC 75
Browne v Dunn (1894) 6 R 67 (HL)
Colley v Overseas Exporters [1921] 3 KB 302
Coomera Resort Pty Ltd v Kolback Securities Ltd & Ors (Mackenzie J, BC9800289, 20 February 1998, unreported)
Cuthbert v Cumming (1855) 10 Exch 809; 156 ER 668
Esso Australia Ltd v R T & M R Abella Pty Ltd (1989) 91 ALR 476
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Babour Ltd [1943] AC 32
Gurney v Grimer [1932] 38 Comm Cas 7
Hillas & Co Ltd v Arcos Ltd 147 LT 503
Hyde & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310
Locke v Dunlop 39 ChD 387
McDonald v Dennys Lascelles Limited (1933) 48 CLR 457
Mcfarlane v Daniell [1938] 38 SR(NSW) 337
Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] 2 WLR 945
Meehan v Jones (1982) 149 CLR 571
Michael Realty Pty Ltd v Carr [1975] 2 NSWLR 812 (aff. [1977] 1 NSWLR 553)
Millen v Grove [1945] VLR 259
Ryan v Ferguson (1909) 8 CLR 731
Spunwill Pty Ltd v BAB Pty Ltd (1994) 36 NSWLR 290
10th Cantanae Pty Ltd v Shoshana Pty Ltd (1987) 18 FCR 285; 79 ALR 299
Top Performance Motors Pty Ltd v Ira Berk (Qld) Pty Ltd (1975) 5 ALR 465
Trade Practices Commission v Tooth & Co (1979) 142 CLR 307
York Air Conditioning & Refrigeration (A’asia) Pty Ltd v The Commonwealth (1949) 80 CLR 11DECISION: Plaintiffs entitled to commission claimed.
7 October 1999
REVISED — 11 October, 1999
IN THE SUPREME COURT
OF NEW SOUTH WALES
IN EQUITYSANTOW J
No. 2180/96
EDMUNDS-JONES PTY LIMITED ACN 002 672 684
First Plaintiff
HELEN ELIZABETH JONES
Second PlaintiffJUDGMENT
AUSTRALIAN WOMEN’S HOCKEY ASSOCIATION INCORPORATED
Defendant
Table of Contents
Page
1 The First Plaintiff, which was prior to 3 September 1992 known as Edmunds-Jones Sports Marketing Pty Limited, carries on business as a marketing consultant. The Second Plaintiff, Helen Jones, who is also known as Helen Edmunds-Jones, is a director and the principal shareholder of the First Plaintiff. 2 The Defendant, Australian Women’s Hockey Association Incorporated (“AWHA”), is a non-profit organisation incorporated pursuant to the Australian Capital Territory’s Associations Incorporation Act 1991 (ACT). The Defendant is the national body responsible for women’s hockey in Australia. Its activities therefore include organising national hockey tournaments and competitions and the involvement therein of Australian women’s hockey teams including in the World cup and the Olympic Games. 3 This dispute arises out of a sports marketing consultancy relationship governed by a series of five annual contracts in similar form from 1989 to the end of 1994. That relationship and those contracts were between the Australian Women’s Hockey Association Incorporated and Edmunds-Jones Pty Limited. The final contract in the series and the principal subject of this dispute (“the 1994 Consultancy Agreement”) was entered into on 1 January 1994. It was not renewed when it came to an end on 31 December 1994. The 1994 Consultancy Agreement, like its predecessor, was a contract for the provision of consulting services by the Plaintiffs in return for certain fees and commissions payable by the Defendant. The dispute between the parties centres round the First Plaintiff’s claim for commission based on sponsorship payments to the Defendant in cash or kind involving Telstra and Qantas.
INTRODUCTION
INTRODUCTION
PRINCIPAL MATTERS IN DISPUTE
FACTUAL BACKGROUNDThe Telecom/Telstra Agreements
LEGAL QUESTIONS
The Telecom Stix Series
Conclusion
The 1995 Telstra Agreement
The 1994 Proposal
Reasons for Refusal
Legal Advice
The Media Campaign
Representations by Telecom that the Door was Still Open
1995 Sponsorship Proposal
Mrs Jones’ Credit
Conclusion
The alleged failure to act in a professional and businesslike fashion and to “maintain and enhance the image of the Defendant and women’s hockey generally”.
Summing Up
Expectation of 1995 Telstra agreement — Evidence
Findings
The Qantas AgreementsQuestion 1 — uncertainty:
Principles
“and/or”
(a) Relationship between opening part of clause 4 and concluding proviso in the case of sponsorship by the provision of goods and services
(b) When must any agreement for the purpose of clause 4(b) with Telecom Australia be entered into — meaning of first proviso.
(c) Reconciliation of clauses 4(b) and 4(a)
(d) Uncertainty of second proviso to clause 4(b)
(e) Uncertainty of third proviso to clause 4(b)
(f) Clause 4(c) not reconcilable with clause 4(b)
Uncertainty generallyConclusion
Question 2 — fulfilment of conditions for entitlement to commission:
Conclusions
Question 3 — disentitling breach:
Question 4 — commission on $80,000 in relation to 1993 Telstra Stix Series:
Question 5 — “renewal” or “subsequent year of sponsorship”:
Subsequent year of sponsorship — fifteen per cent fee under clause 4(b)
Conclusion
Renewal — twelve per cent fee under clause 4(c)
Conclusion
Question 6 — Qantas commission:
Conclusion
Question 7 — Quantum Meruit entitlement:OVERALL CONCLUSIONS
COSTS AND ORDERS
4 The Plaintiffs seek a declaration that the Defendant pay certain fees and commissions said to be due and payable principally under the 1994 Consultancy Agreement between the parties. There is an earlier dispute in point of time but only for about $12,000 arising under the 1993 Consultancy Agreement. This was for commission of fifteen per cent on $80,000 received from Telstra Corporation Ltd (“Telstra”, or “Telecom” its previous name) pursuant to what is described as the 1993 Telstra Stix Series. That involvement of Telstra followed it entering a sponsorship agreement in February 1993 (“the 1993 Telstra Agreement”) which by its terms expired on 31 December 1994. 5 However the dispute principally centres around the First Plaintiff’s claim for commission in respect of sponsorship by Telstra both in 1995 and to the present day. It is claimed pursuant to the 1994 Consultancy Agreement. The parties have however joined issue on whether:
PRINCIPAL MATTERS IN DISPUTE
6 The same issues arise in relation to the claim for commission based on Qantas payments. There is however an anterior issue going to eligibility for commission. Was any agreement for Qantas’ sponsorship the result of Qantas, as required by clause 4(b), “having been approached or introduced or negotiations commenced on or subsequent to the 1st January 1989” having regard to the issue in para 7 below? 7 The parties join issue on whether, if any Qantas sponsorship predated 1 January 1989, this precludes any fee to the Plaintiffs; see clause 4(a) of the 12 December 1989 Consultancy Agreement (and note clause 3(a) of the 17 July 1989 Consultancy Agreement). 8 Essentially, the Plaintiffs contend that
(a) the 1994 Consultancy Agreement as a matter of construction entitles the First Plaintiff in the circumstances to such commission either under clause 4(b) at fifteen per cent as a “subsequent year of [Telstra] sponsorship” or under Clause 4(c) at twelve per cent as a “renewal” of [Telstra] sponsorship;(b) Mrs Jones did what she needed to do under the Agreement including compliance with her duties so as to earn that commission and was not disentitled by any breach or non-fulfilment of any condition, express or implied, if such there were;
(c) clauses 4(b) and 4(c) or the agreements as a whole are void for uncertainty, and, if so
(d) the Plaintiffs were nonetheless entitled to reasonable remuneration based on quantum meruit, with the further question, in what sum and how calculated.
9 Thus in contention is whether the 1995 Telstra Agreement and what preceded it from 1 January 1995 constituted:
(i) notwithstanding the 1994 Telstra Agreement’s termination, in reality a continuing sponsorship relationship subsisted between Telstra and the Defendant continuing between 31 December 1994 and 5 May 1995, thereafter continuing under the 1995 Telstra Agreement and subsequent agreements; and(ii) this, with or without the 1995 Telstra Agreement referred to below, constituted “subsequent year[s] of sponsorship”, and entitled the First Plaintiff to a fifteen per cent commission under clause 4(b) of the 1994 (or 1993) Consultancy Agreement on any Telstra sponsorship payments (or equivalent goods and services).
Alternatively, the Plaintiffs rely upon a further written sponsorship agreement with Telstra and the Defendant entered into for a period of two years from 5 May 1995 (“the 1995 Telstra Agreement”) as constituting a “renewal” of sponsorship within the meaning of the 1994 Consultancy Agreement so as to entitle it to twelve per cent commission under clause 4(c) thereof.
10 It was contended in relation to Qantas that in 1994, culminating in the agreement with Qantas of 7 November 1994, the Plaintiffs negotiated with Qantas for Qantas to provide sponsorship to the Defendant whereby Qantas provided domestic and international air carriage in return for the supply of specified revenue and publicity benefits by the Defendant for the period 1995 until 1998. 11 The Qantas Agreement further provided for Qantas to sponsor the Telstra Stix for the sum of $5,000 for the 1994 Series, 1995 Series and each Series thereafter. Based upon the alleged monetary benefits received by the Defendant from Qantas under that Qantas Agreement between 1994 and 1998 (or the monetary benefit of services provided and sponsorship payments paid by Qantas), the First Plaintiff claims commission of fifteen per cent under clause 4(b) of the 1994 Consultancy Agreement. Alternatively the First Plaintiff claims twelve per cent under clause 4(c) of the relevant Consultancy Agreement in respect of any renewal by Qantas of its sponsorship arrangement with the Defendant 12 Both in respect of Telstra and Qantas into the future, the First Plaintiff similarly claims in respect of each year of sponsorship or renewal. 13 The Defendant denies any liability, disputes the relevant amounts, claims the Plaintiffs were in breach of the contractual obligations or of an implied condition so as to disentitle them to any commission and contends that in any event the relevant Consultancy Agreements are void for uncertainty. The Plaintiffs respond by claiming in the alternative on a quantum meruit basis, similarly calculated, should the relevant contract be void for uncertainty. 14 The Plaintiffs provide a detailed quantification of their claim as at 26 August 1999 (including interest) referenced to the relevant invoices and other records in respect of both Telstra and Qantas. It is expressed in the alternative (twelve per cent or fifteen per cent), totalling respectively $962,154.29 or $810,516.50 plus interest; see PX7. The Defendant has not at this stage agreed with the relevant calculations. But it has been accepted that any dispute on that could be dealt with if it arises, after I have given judgment on liability.
(ii) a renewal of the 1993 Telstra sponsorship to which twelve per cent commission applies under clause 4(c) of the 1994 (or 1993) Consultancy Agreement.
(i) a “subsequent year of sponsorship” to which a fifteen per cent commission applies under clause 4(b) of the 1994 (or 1993) Consultancy Agreement, or
FACTUAL BACKGROUND
15 What follows is a statement of facts a substantial portion of which is uncontroversial; however there are areas of significant difference upon which I make findings where necessary. 16 References are as follows:
17 The relationship between Mrs Jones and the Defendant evolved from contacts beginning in 1988. In that year, Mrs Jones as an employee then of Grant Kearney and Associates acted on behalf of the Defendant in negotiations with what was then the Australian Overseas Telecommunications Corporation Limited (later Telstra Corporation), for the purpose of securing sponsorship of the 1990 Women’s Hockey World Cup [Helen Jones (“HEJ”) 21/5/96 para 8]. Mrs Jones was at the time successful in obtaining sponsorship for the Hockey World Cup in the sum of $350,000 [HEJ 21/5/96 para 8], though still as an employee of Grant Kearney and Associates. 18 During 1989, Mrs Jones on behalf of herself and her company (the First Plaintiff) engaged in negotiations with the Defendant regarding the drafting of a consultancy agreement. 19 In a letter dated 17 August 1989 Lane & Lane (AWHA’s solicitors) reported to AWHA, that a proposed new sub-clause 4(e) in the following term was requested by Edmunds-Jones to be inserted in the consultancy agreement:
BEC: Affidavit of Mrs Cawood sworn 5 September 1996
T: Transcript followed by page number followed where necessary by line number.
BEC2: Affidavit of Mrs Cawood sworn 3 December 1996
HEJ: Affidavit of Mr Jones sworn 21 May 1996
HEJ 19/9/96 Affidavit of Mrs Jones sworn 19 September 1996.
AEO: Affidavit of Mr O’Neill sworn 9 June 1998
ECN: Affidavit of Miss Nixon sworn 1 December 1998.
The numbers following the initials of the deponents are page references.
PTB: Plaintiffs’ Tender Bundle, the number following represents the document number
20 In the same letter to AWHA, Lane & Lane said:
“(e) Fees payable pursuant to sub-clause (c) of this clause shall be payable upon any renewal of any sponsorship for years commencing on or after1 January 1990 whether or not this Agreement has otherwise terminated through effluxion of time or by the act of either party to the intent that this clause shall enure for the benefit of the Company until such time as all fees payable pursuant hereto have been received by the Company” (PTB 5)
21 In a letter dated 27 September 1989 Lane & Lane said to AWHA:
“As you will appreciate the result of a clause of this type would mean that the 15% fee payable to Mrs Jones would not just apply during the term of the actual agreement which was entered into on or prior to 31 December 1989, no matter how long the term of the Agreement, but on any further agreement entered into with that party on or subsequent to 1 January 1990”.
22 On 12 December 1989, the Plaintiffs entered into the first of a number of consultancy agreements with the Defendant. The Defendant entered into that agreement with “Helen Edmunds-Jones carrying on business as Edmunds-Jones Sports Marketing Pty Limited” [BEC 2, 25]. Speaking generally, the Plaintiffs agreed to provide advice and assistance in marketing, sponsorship and communications in return for certain fees and commissions payable by the Defendant. 23 Consultancy agreements in similar terms were entered into between the plaintiffs and AWHA for periods up to December 1994 as follows: · an agreement in 1991 for a period of 18 months commencing on 1 July 1991. The monthly retainer increased to $1,200. Commission on new sponsorship remained at 15%, and 12% upon the renewal of these contracts [BEC 60]; · In 1993 an agreement for one year commencing on 1 January 1993 in which the retainer increased to $1,500 per month [BEC 75]; · A final agreement for a period of one year commencing on 1 January 1994 [BEC 89]. 24 The various consultancy agreements were in similar terms and, by reference to the agreement for the period 1 January 1994 to 31 December 1994, relevantly included the following provisions:
“Further, we confirm your instructions that a fee of 12% will be paid to Ms Edmunds-Jones on agreements which are entered into subsequent to the 1st January 1990, the sponsor of which was previously approached to introduce, or negotiations commenced or or [sic] subsequent to the 1st January 1989” (PTB 6).
25 The consultancy agreement between the Plaintiffs and the Defendant expired on 31 December 1994 and was not renewed. From about mid 1993, the Second Plaintiff was also paid costs and expenses for promotional activities. From 1 July 1991 the Plaintiffs were paid $450,121 by AWHA pursuant to the consultancy agreements but excluding any amounts paid in respect of the 1990 World Cup. [BEC 16] 26 On 14 and 15 May 1994, at a meeting the board of the Defendant it was agreed to review the roles and responsibilities of the marketing consultant “to determine her effectiveness in the areas of sponsorship and raising the profile of women’s hockey”. The desirability of retaining the Plaintiffs as marketing consultants came under further examination in a 12 September 1994 meeting between Ms Cawood who was the Executive Director of the Defendant, and another member of the board of the Defendant. During that meeting, reference was made to the fact that the Plaintiffs had not secured sponsors for 1995. 27 The Board of the Defendant subsequently agreed with a Marketing and Promotions Committee report not to renew the 1994 Consultancy agreement with the Plaintiffs. Minutes of that meeting, dated 21 and 22 October 1994 record the resolution to seek expressions of interest from other consultants in the marketplace. 28 Minutes of the annual council meeting of the Defendant held on 19 and 20 November 1994, under the heading “Marketing and Promotions”, quote the following as having been resolved:
Clause 3
Ms Jones shall, during the term of this agreement implement in a professional and businesslike fashion all the duties specified in the Consultancy Brief annexed hereto and marked with the letter “A” (hereinafter referred to as “the Consultancy Tasks”). [BEC 90]
Clause 5
In consideration for the satisfactory rendering the service of carrying out the Consultancy Tasks the Association shall pay to the Company a retainer as specified in the Schedule annexed hereto and marked with the letter “B” together with fees as specified in the Schedule annexed hereto and marked with the letter “C”. [BEC 91]
Sub-clause 7(a)
The Company shall have the exclusive right to undertake and complete the Consultancy Tasks PROVIDED THAT if in the reasonable opinion of the Association the tasks are not performed with skill and expertise by Ms Jones, the Association may upon fourteen (14) days notice terminate this Agreement by notice in writing and appoint at its discretion an alternative person or company to carry out the Consultancy Tasks. [BEC 91]
Annexure "A" - Consultancy Brief
The Company and Ms Jones shall provide and render the following services in conjunction with officers nominated by the Association:
A.. Negotiate and submit for approval by the Association all sponsorship contracts of any kind and in particular, but without limitation, for monetary payments and the provision of goods and/or services.
..
C. Maintain and enhance the image of the Association and womens hockey generally and act within the determination of the Association and the International Hockey Federation policies.
D. The seeking of sponsorships, negotiating sponsorship agreements and the servicing of sponsors.
...
F. Ms Jones shall attend regular monthly meetings with the Association and shall present to the Association at such meetings written reports detailing such information as reasonably required by the Association and in particular but without limitation detailing action taken with respect to all activities being carried on pursuant to this Agreement and in particular but without limitation the status of each matter, the current progress and the proposed timetable for further action together with budgets for estimated income and expenditure for each matter. The meetings shall be held at such place and at such time as reasonably required by the Association and it is agreed that Ms Jones shall not be required to attend meetings of the Association on more than one day per calendar month. [BEC 95]
Annexure "B": Remuneration – Consultancy
Clause 1
A retainer of One thousand Five Hundred Dollars ($1,500.00) per month in arrears shall be paid by the Association to the Company on or before the 1st day of each and every month of the term of this Agreement, the first payment being due on the 1st January 1994 subject to and conditional upon the terms and conditions of this Agreement.
Clause 2
In addition to the retainer referred to in Clause 1 herein, the Association shall bear:
(a) all the direct costs of the Company or Ms Jones incurred when undertaking the Consultancy Tasks including any travel, accommodation and hospitality costs, claims for which must be supported by documented evidence of the expense;
(b) all costs associated with the design, production and distribution of printed material which costs have been authorised by the Association prior to their being incurred provided however that the costs shall either be refunded to the Company or Ms Jones upon production of written evidence of there being incurred or paid by the Association directly upon the production of the account. [BEC 97]
Annexure "C" – Fees
In addition to the retainer referred to in Annexure "B" herein the Association shall pay to the Company fees determined in accordance with the following provisions:
Clause 1
Ms Jones shall submit a report to the Association on or prior to the first day of the month immediately succeeding the execution of this Agreement being in satisfaction of the requirements of the provisions of Clause F of Annexure "A" hereto for the first monthly report:-
(i) Detailing all contracts entered into on or prior to 1st January, 1994 as a direct result of services being rendered by the Company and Ms Jones;
(ii) Detailing names of potential sponsors and/or donors and advances made and otherwise and the individual contact in that organisation the Company has pursued since the 1st January 1994 and proposes to pursue;
(iii) Detailing all contracts in the process of negotiation as at 1st January 1994 and at the date of this Agreement, including a fully summarised report of the status of the negotiations and the programme for future action (where appropriate) as regards these contracts;
(iv) Detailing plans for the opening of negotiations for further proposed agreements.
This report shall be updated in similar form on a monthly basis in accordance with the requirements of Clause F of Annexure "A" hereto and presented to the Association within seven (7) days of the expiry of each and every month of the term of this Agreement. With respect to this Agreement the submission of the reports referred to herein is acknowledged by the parties to be an essential term. [BEC 99]
Clause 3
A Fee is payable in accordance with the provision of Clause 4 only on Agreements entered into as a result of the other party (sponsor and/or donor or otherwise) being located and/or introduced by the Ms Jones and/or the agreement being negotiated and/or concluded by Ms Jones and all negotiations and other actions by Ms Jones being in accordance with the provisions of this Agreement. [BEC 100].
Clause 4
The Fee payable to the company will be calculated and payable as follows where the percentage to be paid relates to the monetary amount of the sponsorship and in the case of the provision of goods and services as hereinafter set forth:-
(a) Nil on any and/or all agreements entered into by the Association on or prior to the 1st January 1994 or agreements entered into subsequent to 1st January 1994 with a person or company with whom the Association has previously had an agreement PROVIDED THAT nothing herein shall be deemed to relieve the Association from the payment of any fee payable in relation to any such Agreements under any previous Consultancy Agreement with the Company;
(b) Fifteen per cent (15%) on any concluded agreement entered into on or prior to the 31st December 1994 PROVIDED HOWEVER that this shall only apply to concluded agreements, the other party having been approached or introduced or negotiations commenced on or subsequent to the 1st January 1989 and on any agreement entered into with Telecom Australia PROVIDED THAT a fee of fifteen per centum (15%) shall be paid on subsequent years of sponsorship where the original sponsorship was negotiated by the Consultant and such sponsorship was for a period in excess of one (1) year up to the date of expiry of that actual Agreement and no further AND PROVIDED FURTHER THAT no fee shall be payable to the Company pursuant to this sub-paragraph where a fee has already been paid by the Association to the Company pursuant to the Consultancy Agreement between the parties prior to this present Agreement and that fee related to a period of sponsorship ending prior to 1st January 1994 or a sponsorship which extended beyond the 1st January 1994 but the said fee which has already been paid related to the whole period of sponsorship.
(c) If the sponsorship arrangement in any concluded agreement of the kind referred to in sub-clause (b) of this Clause is renewed for periods commencing on or after 1st January 1995, twelve per cent (12%) whether or not this Agreement has otherwise terminated through effluxion of time or by the act of either party to the intent that this Clause shall enure for the benefit of the Company until such time as all fees payable pursuant hereto have been received by the Company. [BEC 100]
29 Ms Cawood knew, before seeking that legal advice, that is, before 19 October 1994, that the contract between the Plaintiffs and the Defendant would not be renewed at the end of 1994 [Cawood T, 357 .15]. 30 There is no evidence to suggest that the Defendant took any steps to seek expressions of interest from marketing agents during late 1994. While the Defendant was aware that the Consultancy Agreement with the Plaintiffs was not going to be renewed, no alternative marketing agents were approached. Ms Cawood could not assert otherwise when questioned about this issue [Cawood T, 392]. I comment further on her evidence below, in relation to Telstra. 31 On 31 December 1994 the fourth Consultancy Agreement between the First Plaintiff and the Defendant expired and was not renewed. 32 This was confirmed by minutes of a Board Meeting of the Defendant held on 4 and 5 February 1995. Further, at that meeting, it was resolved that no replacement Marketing Consultant be engaged and that the needs of the Defendant with regard to such a consultant be reviewed “on an event by event basis” [PTB, 81 at 4.4.2] 33 On 30 January 1995 the First Plaintiff invoiced the Defendant for certain fees outstanding, amounting to $13,001.94. For the earlier period from 1 July 1991 the Plaintiffs were paid $450,121 by AWHA pursuant to the Consultancy Agreements but excluding any amounts paid in respect of the 1990 World Cub [BEC, 16]. From about mid-1993, the Second Plaintiff was paid costs and expenses for promotional activities.
6.1.5.2 The Meeting was advised the WHA Marketing Consultant’s role and effectiveness had been reviewed. Legal advice was also sought regarding the Marketing Consultant’s contractual arrangements.
The Board has supported the Marketing and Promotions Committee’s recommendation the Marketing Consultant’s contract be terminated at the end of 1994.
WHA is to prepare a brief to submit to selected marketing companies with a view to seeking expressions of interest.
34 The Defendant entered into a sponsorship agreement with Australian Telecommunications Corporation trading as Telecom Australia in respect of the 1990 Hockey World Cup, on 21 August 1989. The sponsorship was to provide promotion and exposure for Telecom which agreed to pay $152,000 in sponsorship; that is $80,000 to the Australian Women’s Hockey team to be known as “the Australian Women’s Hockey Team sponsored by Telecom Australia” and the balance of $72,000 towards video and the awards. AWHA retained that the right to negotiate minor sponsorship agreements for the national teams which did not conflict with Telecom, excluding agreements in place with companies including Australian Airlines and Qantas. It appears that the negotiations for that agreement began at the end of 1988, most probably around 22 or 23 December 1988 [Jones T, 94 .20; 164 .45]. 35 The 1989 Consultancy Agreement specifically referred to sponsorship arrangements with Telecom, differentiating them from other sponsorship arrangements, commission on which would not be payable if the negotiations leading to their execution commenced before 1 January 1989. 36 On the same date, that is, 21 August 1989, Telecom Australia and the Defendant also entered into a general sponsorship agreement (the “1989 Telecom Agreement”). It can be accepted that the 1989 Telecom agreement was a result of the Plaintiffs’ efforts to obtain sponsorship for the Defendant and in relation to which the Plaintiffs were entitled to 15% of the sponsorship monies paid in respect of its terms. 37 On 8 May 1991, the Defendant entered into a further sponsorship agreement with Telecom Australia (the “1991 Telecom Agreement”). Under the provisions of the 1991 Telecom Agreement, Telecom Australia agreed to provide sponsorship for the years 1991 and 1992 in the sums of $100,000 and $150,000 respectively [BEC, 132]. The 1991 Telecom Agreement was entered into at a time when the Plaintiffs were employed pursuant to a consultancy agreement with the Defendant. 38 The sponsorship relationship was extended when on 15 February 1993, through the marketing efforts of the First Plaintiff, a further agreement was reached between Telecom Australia and the Defendant (the “1993 Telecom Agreement”). The 1993 Telecom Agreement provided for sponsorship for 1993 and 1994 of $200,000 per year [BEC, 140]. The 1993 Telecom Agreement provided in clause 8:
The Telecom/Telstra Agreements
39 It is not disputed that the Plaintiffs were paid the requisite commission on the amounts specified in the three agreements between AWHA and Telecom, the last of which, being the 1993 Telecom Agreement expired in 1994. 40 The first three Telecom agreements, namely those entered into in 1989, 1990 and 1993 were all the result of relevant activity on the part of the First Plaintiff rendering the Defendant liable to pay commission in respect of the amounts accruing to it under those agreements, a commission in fact paid. One can reasonably conclude that there was thus no complaint about the performance of the First Plaintiff under those sponsorship agreements to that point at least. [T, 28 .50]
8.1 In the event that the Sponsor wishes to extend its sponsorship (and for the purposes of this clause, ‘sponsorship’ will refer to and include both the Team Sponsorship and the “Let’s Play Hockey” sponsorship) for a further period of twelve (12) months for the calendar year 1995; it must notify AWHA in writing by 30 June 1994 whereupon AWHA will advise Telecom of the terms and conditions to apply to the sponsorship and a decision will be made by the parties as to the continuation of the sponsorship by 30 August 1994.
41 In 1993 the Defendant held the first national league competition which was played in different locations over a period of about one month and which, known as the “Stix Series” or “Telecom Stix Series”, replaced the national championships. 42 An agreement was reached between the Australian Broadcasting Commission and the Defendant (brokered by the Plaintiffs [Jones T, 116 .30]) in September 1993 for the ABC to record the hockey games played in Brisbane, Perth and Sydney and to broadcast eight programs, each of approximately 75 minutes duration. 43 The Defendant was to contribute $70,000 towards the production costs and a further sum of up to $10,000 for travel costs of ABC personnel. Telecom agreed to meet the contribution of $80,000 [BEC, 152]. This sum was in addition to sponsorship moneys otherwise payable under the existing sponsorship agreements between Telecom and the Defendant and was, I am satisfied, so negotiated by Mrs Jones for AWHA with Telecom in the way she describes in cross-examination [Jones T, 117 .20-25 and earlier from 116.15]. ABC had agreed to reduce its costs from $120,000 to the $80,000. 44 Thus the amount of $80,000 was paid by Telecom to the Defendant; see Mrs Jones T, 117 .35. The Defendant then paid the production costs of televising the Stix Series, as required by the ABC. 45 By letter dated 13 May 1994, some months later, the Second Plaintiff first claimed commission on behalf of the First Plaintiff on the sum of $80,000 paid by Telecom for the broadcasting expenses associated with the Telecom Stix Series. No mention of or request for commission was made by the Plaintiff before 13 May 1994. Her letter said:
The Telecom Stix Series
46 At a meeting between Mrs Jones and the Marketing Committee of the Defendant in June 1994, this issue of commission on the Telecom Stix Series sponsorship was discussed. Rosemary Scott of AWHA said to Mrs Jones at that meeting that the Defendant had not budgeted for commission on the sum of $80,000 paid by Telecom for broadcasting expenses. She said to Mrs Jones that if she wanted to be paid commission “you will have to negotiate an amount for Telecom to cover both production costs and your commission. We will not pay commission out of production costs”. Mrs Jones did not agree to the proposal put by Rosemary Scott — not surprisingly as there was no basis for it in the relevant Sponsorship Agreement. AWHA produced a document entitled “National Budget”, which did set aside $130,000 for “Telecom sponsorship including TV coverage” [Jones T, 122 .24]. 47 During that meeting the AWHA suggested that if the Plaintiffs generated in excess of $45,000 additional or secondary sponsorship for the 1994 Telecom Stix Series, commission on the 1993 production costs would be paid out of any excess of that figure of $45,000. Although a memorandum written by the Defendant with regard to the meeting refers to the arrangement so stated as “agreed”, Mrs Jones denied that the Plaintiffs consented to the course of action. Mrs Jones rather asserts that it was a resolution of the Defendant and was not agreed to by the Plaintiff [Jones T, 124 .55], However, the Second Plaintiff cannot point to any communication of her dissatisfaction with the arrangement to the Defendant. The Second Plaintiff indicated that the reason for her apparent acquiescence at first was to ensure the smooth running of the consultancy relationship at that time. 48 It was further ‘agreed’ that any money negotiated by the Plaintiffs for the 1994 television production costs must incorporate any commission that was to be paid to the Plaintiffs. 49 The Plaintiffs did not, as it turns out, manage to generate in excess of $45,000 in secondary sponsorship income for televising the 1994 Telecom Stix Series. Accordingly no commission was ever paid in respect of the 1993 television productions costs paid by Telecom Australia. 50 Finally, on 4 November 1994, the First Plaintiff, by invoice, sought payment of the sum of $461.63 as commission on a payment by Telecom of the sum of $3,770.50 for the design and printing of a brochure for the Stix Series. Thus in respect of the 1994 Telstra Agreement for the Telecom Stix Series from 1993, there was $12,000 claimed.
In early June 1994 Ms Cawood, the Executive Director of AWHA since 1987, telephoned the Second Plaintiff in relation to the letter of 13 May 1994 requesting payment of the commission. Ms Cawood suggested that the two parties needed to meet to discuss the commission issue.
“It may be worth noting that the commission from Telecom sponsorship ($80,000) for 1993 is still outstanding to Edmunds Jones as well and needs to be addressed from the Stix income this year as well.”
51 Based on the terms of the 1993 Sponsorship Agreement, but on the assumption to be considered later, that it was not void for uncertainty, there is no proper basis for denying the Plaintiffs either amount, namely $461.63 or $12,000. In particular there is no suggestion of non-performance by the First Plaintiff of its part of the Sponsorship Agreement to that point. In particular I am satisfied Mrs Jones secured the contribution of $80,000 from Telecom.
Conclusion
52 The 1993 Telecom Agreement was scheduled to expire at the end of 1994. Materially, the 1993 Telecom Agreement contained provision, at clause 8.1 (quoted above), for certain communications to be made if Telecom wished to renew its sponsorship with the Defendant. 53 The first requirement of clause 8.1 was that, if it were wishing to extend the sponsorship relationship, Telecom was to notify the Defendant “in writing” by 30 June 1994. Although no letter was sent to this effect, the Plaintiffs were satisfied that Telecom had communicated a desire to extend the sponsorship relationship by way of various meetings and other oral communications [Jones T, 139 .39] including discussions with Annamaree Pinner of Telecom in May of 1994 [Jones T, 148 .35]. Further discussions to a similar effect were alleged by the Second Plaintiff to have occurred in July or August 1994 between Mr O’Neill, the national sponsorship manager of Telecom, and the Second Plaintiff [Jones T, 149 .6]. The precise content and force of those conversations is unascertainable. They were not referred to by Ms Cawood in further correspondence with O’Neill or other Telecom representatives [Jones T, 152 .45]. I am nonetheless satisfied that the parties and in particular Telecom acted on the common assumption that Telecom wished to renew. 54 Thus it appears from the evidence of Mrs Wilson, President of AWHA, that despite not receiving written confirmation of a willingness to proceed with sponsorship on behalf of Telecom, it appears that the budget for the 1994-95 year of the Defendant included contributions from Telecom running into 1995 [Wilson T, 289 .5]. It seems even if there was some doubt as to the precise amount that would be forthcoming from Telecom, that the expectation certainly of the Board of the Defendant at the time the 1994-95 budget was drawn up was that the Telecom sponsorship would continue into 1995:
The 1995 Telstra Agreement
55 Despite the 1994-95 budget containing allowances for continued Telecom sponsorship and despite there being a process for the budget to be modified if the first expectations as to sponsorship income were proven to be incorrect, and further despite that it was usual practice for reports to be made to the Board by various committees about important matters such as the Telecom sponsorship, at the Board meeting of 21 and 22 October 1994 the matter of budget readjustment did not arise at board level within the First Plaintiff. [Wilson T, 290-1]
Q. And the usual practices, to your knowledge, were, in 1994, that if something was known to the committee, which cast significant doubt upon whether sponsorships would be renewed, that information would be passed on to the person preparing budgets, isn’t that right?
A. They would be based on the fact that the Telecom sponsorship ended in that year and the amount from the sponsorship therefore, from when the sponsorship would be renewed, was not known.
[Wilson T, 289 .30]
56 A sponsorship proposal was formulated by the Plaintiffs for submission to Telecom aiming to secure further Telecom sponsorship. This proposal was presented to Telecom by the Plaintiffs in late August 1994, some four days before the deadline for the submission of such a proposal as required by clause 8.1 of the 1993 Telecom Agreement. It appears that the late submission of the proposal was due to practical matters. The proposal had to be approved by a committee of the Defendant, members of which were overseas for the Hockey World Cup. Furthermore, a video was prepared that took some time to produce [Jones T, 158 .5-.30], though her evidence was that she personally felt that the proposed annual fee of $650,000 was “a bit high” and claims to have told Mrs Jones of that view (T, 323 .55 to 324.5), but relied on the Plaintiffs’ professed expertise in allowing the proposal to go forward. 57 Before submission of the 1994 proposal, I am satisfied that the proposal was approved by the Defendant. Ms Cawood admits, in particular, to approving the fee structure provided for in the 1994 Sponsorship Proposal [Cawood T, 323 .30]. 58 The proposal envisaged the sponsorship in 1995 of the national women’s hockey team (known as the Telecom Hockeyroos), the Stix Series, the Buchannan Cup and the Players’ Fund by Telecom. The total amount of sponsorship sought in the proposal for 1995 was $650,000 followed by another $650,000 for 1996. Alternatively, the amount would be $600,000 in 1995 if Telecom made a commitment for four years. Both these figures represented a very significant increase in sponsorship — from $200,000 to almost treble. 59 The August 1994 proposal submitted by the Plaintiffs to Telecom was rejected by Telecom. Mr O’Neill, as the responsible officer at Telecom, stated by way of affidavit that:
The 1994 Proposal
60 On the 13 October 1994, a letter was sent by O’Neill from Telecom to the Plaintiffs and was copied to Ms Cawood. This letter explained the rejection of the 1994 proposal by Telecom. Materially, the letter read:
“Under no circumstances would I have recommended a proposal that was based on an amount of $650,000 or any amount of a similar magnitude. Further I was not prepared to consider taking less than the entire rights for an amount which was comparable to what we had paid for the entire sponsorship rights.” [AEO 9/6/98 para 8]
61 Between the initial rejection of the proposal in August and the letter of 13 October 1994, the Plaintiffs did not approach any sponsor as a replacement for Telecom Australia. The Second Plaintiff maintains that during that period she continued to attempt to negotiate with Telecom through a Ms Passmore [Jones T, 146 .55]. Ms Passmore was a representative of Telecom dealing with the sponsorship. During those negotiations it appears that Ms Cawood did not directly take up with Mr O’Neill (as the representative of Telstra) any alleged change of heart with respect to the sponsorship of the Defendant that occurred between conversations had in May and July (or August) between the Plaintiffs and Telstra, and the later refusal of the 1994 Proposal at the end of August 1994. 62 The Defendant maintains that there was no such change of heart. There is contradictory evidence. The Plaintiff maintains that conversations with Annemaree Pinner of Telecom in June/July of 1994 gave the indication that Telecom was going to continue the sponsorship arrangement. This is referred to in a letter from the Second Plaintiff to Telecom of 4 November 1994 (received 14 November 1994):
“Your proposal clearly demonstrates the success, but as you will appreciate, we have to make difficult decisions on how we spend our limited sponsorship funds. The proposal has been carefully considered in line with our current strategy, and unfortunately based on its current content and funding requirements, Telecom Australia must decline the proposal.”
63 On the other hand, the Defendant maintain that there was no such representation. This is reflected in a letter from O’Neill of Telecom to Ms Cawood of 17 November 1994:
“I did ask Annemaree Pinner at the end of June if she could indicate to us your strategies in regard to renewing the sponsorship and she advised that she had referred the matter to you”.
64 Furthermore, in the period between 30 August 1994 and 13 October 1994, Telecom Australia did not make any decision as to where the money that might have been given to the Defendant might have otherwise been spent [O’Neill T, 234 .11]. Rather, during that period it was Telecom’s position that there might be some reconsideration of the sponsorship proposal [Passmore T, 267 .30]. I place considerable importance on the fact that Ms Passmore of Telecom communicated to her superior, Mr O’Neill, the desire to “save” the sponsorship arrangement [Passmore T, 267 .50]. It was her opinion that the 13 October 1994 letter had not severed the sponsorship relationship [Passmore T, 273 .10]. 65 Although the rejection of the 1994 Proposal should have been of acute significance to the Defendant, significantly there appears no reference whatsoever to that refusal in the minutes of a meeting of 21 and 22 October 1994 [PTB, 47].
“Discussions with Annemaree Pinner in June/July of this year advised Edmunds Jones to submit a new proposal to Telecom to ensure timeframe for negotiation was satisfactory to both parties”; see also Mr O’Neill’s evidence in T, 216 .35.
66 The August 1994 proposal submitted by the Plaintiffs to Telecom was rejected by Telecom. The responsible officer at Telecom Mr O’Neill stated that:
Reasons for Refusal
67 Some time in October Ms Passmore said after the initial rejection by Mr O’Neill i.e. after 13 October [Passmore T, 268 .41] — but later contradicted [Passmore T, 271 .35-45]), a conversation took place between Ms Cawood and Ms Passmore, dealing with the sponsorship of the AWHA [Passmore T, 268 .5]. The effect of this conversation was that Ms Cawood was made aware of the fact that the amount of money being sought in the submission made by the Plaintiffs was too great. It appears that information was not passed on to Mrs Jones. The implied contradiction of the date of the conversation being after Mr O’Neill’s initial rejection comes in this exchange about the form of the rejection letter which Ms Passmore had drafted for Mr O’Neill, when she was pressed about whether the words “funding requirements” would have conveyed that the price (of sponsorship) was too high.
He of course would have known that rejection of the proposal for renewal of the sponsorship was by no means the end of the sponsorship, for Telecom could still exercise its right of last refusal and renew the sponsorship at that point, presupposing its prior continuance; see clause 8.2 of the Telstra Sponsorship Agreement.
“Under no circumstances would I have recommended a proposal that was based on an amount of $650,000 or any amount of a similar magnitude. Further I was not prepared to consider taking less than the entire rights for an amount which was comparable to what we had paid for the entire sponsorship rights.” [AEO 9/6/98 para 8]
68 On 13 October 1994, O’Neill of Telecom wrote a letter to the Second Plaintiff and copied to Ms Cawood. Ms Cawood was thus aware, as of the arrival of that letter that the Second Plaintiff had been told that the reasons for refusal of the 1994 proposal was that it did not fit into Telecom’s “current strategy” [PTB, 44]. The nearest the letter gets to price is in the very general words which follow: “… based on its current content and funding requirements, Telecom Australia must decline the proposal.” 69 On 14 October 1994, a meeting of the Marketing Committee of the Defendant was convened before Mrs Jones’ arrival to discuss the rejection of the 1994 Telecom proposal chaired by one of its board members Ms Tye. Mrs Jones attended the meeting and says in her affidavit [HEJ, 41] “the mood of the Marketing Committee was jovial” — hardly congruous with a genuine expectation on the Committee’s part that Telstra’s sponsorship was really lost. At this point, Mrs Jones raised her concern that someone from the Defendant had been in contact directly with a representative of Telecom. She reproduces the conversation (HEJ, 41) in terms whose accuracy was not doubted by Ms Cawood (T, 353.4)
Q. That is something you inferred Mrs Cawood would understand as a result of your conversations with her?
A. My conversation with ?
Q. Mrs Cawood
A. Yes.
Ms Cawood could only be confidently anticipated by Ms Passmore as understanding the words in their ambiguous state, if when drafted Ms Passmore had already given Ms Cawood their intended message — that the price was too high.
70 Ms Cawood certainly did not raise the issues of concern made known to her by O’Neill or Ms Passmore in the conversation referred to above nor had she told Mrs Jones. If, indeed, as I conclude as more likely, that conversation between Ms Passmore and Ms Cawood had occurred before the Marketing Committee meeting of the 14 October 1994, it is significant that this information was not revealed to the Plaintiffs before or at that meeting. Ms Cawood, firstly, would not have been truthful in denying that she had had direct contact with Telecom, as I conclude she did. Second, such a denial and omission supports the inference that Ms Cawood desired the Plaintiff’s efforts to secure Telecom sponsorship to fail through ignorance of the true position. The Plaintiffs contend that the only reason such a course of action would be embarked upon is that Ms Cawood had in her mind the idea that if the Plaintiffs failed to continue the sponsorship arrangement, the Defendant could do so ‘in house’ — as later occurred — and, by so doing, could avoid the commission payable otherwise. I return later to that contention. 71 In a telephone conversation on 19 October 1994 between Mr O’Neill of Telecom and Mrs Jones (reproduced HEJ, para 42), Mr O’Neill confirmed the refusal of the 1994 Proposal by Telecom and that “I am not prepared to negotiate the proposal as I can’t afford the package”. He was not prepared to negotiate individual parts of the package: “if I can’t have everything, then I don’t want it at all”. Telecom would not negotiate the price with the Plaintiffs nor meet “to discuss options”. Rather, Mr O’Neill suggested that the Plaintiffs should offer the sponsorship proposal in the wider market place saying: “But I said I won’t break the package up so get out there and flog it — it’s worth the money and the women deserve it”. Note, contrary to the attack by the Defendant on Mrs Jones’ credit Mr O’Neill was here confirming that $600,000 was not too expensive in the market — just too expensive for Telecom. While he does not say it is “too cheap”, he comes close to it. 72 In the same conversation, Mr O’Neill asserted Telecom’s last right of refusal as contained in the 1993 Telecom agreement stating “you have to come back to me and I will make up my mind then”. He thus reflected clause 8 of the 1993 Telecom Agreement which reads (in part):
Jones: I’m surprised that you are taking this news so calmly.’
Cawood: ‘What else can we do?’
Jones: ‘I have read and re-read O’Neill’s letter and it doesn’t add up. Reading between the lines, I suspect that there is more to this letter than he wants me to know. Have you or anyone from WHA had any direct contact from anyone at Telecom whatsoever about this.’
Cawood: ‘No.’
Jones: ‘I would be very upset if anyone from WHA was dealing directly with Telecom.’
Tye: ‘What do you (Jones) suggest should happen now?’
Jones: ‘I will ring O’Neill and discuss this rejection but from the tone of the letter I suspect that he won’t want to speak to me.’
Tye: ‘What if he won’t?’
Jones: ‘I will write to him requesting a meeting to discuss ways to reach a compromise. If I get no response from the letter then I will make contact with Diedre Mason.’
Cawood: ‘I must insist that you give me a draft of the letter to Alan O’Neill for comment by the Marketing Committee before you send it.’
Jones: ‘I always do this so why would I not on this occasion? It seems to me that you want to monitor my words and actions very closely. Is there something that you are not telling me.’
Cawood: ‘No.’
Jones: ‘Maybe that Telecom want to deal with WHA and not through an agent. Do you think this could be the case?’
Tye: ‘If it were?’
Jones: ‘We would have to find a way around the problem. My prime objective is to have Telecom renew with you because it is going to be a lot easier at this stage than finding a new sponsor and obviously I have an ongoing vested interest in Telecom sponsorship continuing. I believe that it will continue until the Sydney 2000 Olympics.’
Tye: ‘I understand.’
73 I should add that Mrs Jones making direct contact with Mr O’Neill was wholly understandable in the circumstances. Indeed far from being a breach of any obligation to act in a professional and businesslike manner, her conversation was wholly justified by that obligation. Significantly, Mr O’Neill refused to engage in any negotiation on price, by pushing Mrs Jones to offer the sponsorship in the market place. Mr O’Neill’s own affidavit evidence does not deny Mrs Jones’ version of events. 74 The refusal of Telecom to negotiate was referred to in a letter of 21 October 1994 from Mrs Jones to Meg Wilson, the then President of the Defendant:
Nor did he express any concern at Mrs Jones foreshadowing she had to seek to sell it to someone else or the effect on “imagery that has cost Telecom so much to establish”. That was understandable — he was in a strong bargaining position with a last right of refusal. This was quite apart from whether he had reason to expect that AWHA would do nothing to risk losing Telecom as a sponsor, there already having been direct contact without Mrs Jones between Ms Cawood and Ms Passmore.
8.2 In the event that the parties fail to agree on new terms and conditions by 30 August 1994, AWHA will be free to negotiate with any other prospective sponsor PROVIDED HOWEVER that before committing itself to the prospective sponsor, AWHA must afford the Sponsor the opportunity to renew its sponsorship upon the same terms and conditions that have been negotiated between AWHA and the prospective sponsor. The Sponsor’s election to renew must be exercised no later than seven (7) days after notification by AWHA of the terms and conditions that the prospective sponsor has agreed to accept.
75 Despite being aware of the fact that Telecom had refused the 1994 proposal on the grounds of cost (a point communicated to her by Ms Cawood who, at that time, seems to have been in contact with Telecom in regards to the reasons for the refusal [Wilson T, 300 .20 and following]), Ms Wilson did not advise the Second Plaintiff on that matter [Wilson T, 302 .10]. 76 Significantly, a board meeting of the Defendant took place on 21 and 22 October 1994 (PTB, 47) and on a matter so critically important to the prospective financial well-being of the Defendant no reference appears in the minutes of any difficulty with her Telstra sponsorship for 1995. 77 Furthermore, even though the letter of 21 October 1994 to Meg Wilson was subsequently faxed to Ms Cawood, Ms Cawood made no apparent attempt to communicate to the Plaintiff the reasons for the rejection as known to Ms Cawood at that time. Yet Ms Cawood at that time believed that the reason for the rejection of the 1994 Proposal was the ground of cost. 78 Mr O’Neill explained the “current strategy” as being the establishment of four portfolios namely, sport, charity, the arts and the environment.[O’Neill T, 229 .25] However, when questioned whether there was something about the 1994 Proposal that was inconsistent with the current strategy as so described Mr O’Neill’s response was simply that:
“I have tried without success, to meet and discuss this decision with Alan [O’Neill of Telecom Australia] in an attempt to renegotiate terms more in line with Telecom’s “current strategy”.
79 In a letter of 14 November 1994, the First Plaintiff inquired of Mr O’Neill of Telecom for an explanation of the reasons given for refusal. The relevant paragraph reads:
“our strategy allowed us to spend a limited amount of funds and it didn’t fit.” [O’Neill T, 229 .55]
80 O’Neill gave further evidence under cross-examination to the effect that the only basis upon which the 1994 Sponsorship Proposal was rejected was that of price [O’Neill T, 218 .30]. Although questioned about the increased profile of the Australian Women’s Hockey Team, Mr O’Neill indicated that he was not convinced that the success of the team added enough extra to the proposal to make it attractive to Telecom Australia [O’Neill T, 220 .1]. 81 Apart from the dissatisfaction with the amount of monetary consideration requested by the Plaintiffs in the 1994 Proposal, Mr O’Neill was of the opinion that the sponsorship of the Defendant by Telecom should continue [T, 221 .1]. Yet Telecom was reluctant to negotiate the fee with the Plaintiffs [O’Neill T, 221 .30] a fact which bears some significance in light of later events. 82 In a letter of 18 November 1994, the Second Plaintiff wrote to Ms Cawood in relation to the refusal by the Defendant to provide monies requested by the Plaintiffs for the purposes of a media campaign. In the body of that letter is found the words:
‘Your letter…advising us to seek a new sponsor for WHA came as a surprise and your subsequent refusal to elaborate on Telecom’s “current strategy” prohibiting the continuation of this sponsorship or to discuss how we might break up the total package to accommodate Telecom’s budget, is most bewildering. The reluctance to work together to find a solution is uncharacteristic of the way we have observed the procedures of your department in the past.’
83 On the 19 October 1994 (PX6) a facsimile was sent by Lane & Lane Solicitors to Ms Cawood. The document was allowed to be adduced on the grounds that any privilege attaching to its contents had been waived by the production of the document. The first paragraph of the document reads:
“In presenting to prospective sponsors and listening to the opinions of others, including Alan O’Neill (who said that $600,000 a year was too cheap for what WHA is offering), I have reviewed the asking price.” [PTB, 59]
Though Ms Cawood’s evidence was that she realised that Telecom thought the price in the 1994 Proposal was too high, Ms Cawood maintained her silence towards the Plaintiffs on that issue.
Legal Advice
84 Under cross-examination, Ms Cawood, being the recipient of the facsimile, was unable to give any reason, other than that referred to in the document, as to why the advice had been sought [Cawood T, 328]. Nor could she give any clear evidence as to whom it was shown when received, and what discussion there was about it. The inference sought to be made by the Plaintiffs is that Ms Cawood was contemplating ways in which the Defendant could avoid the payment of commission to the Plaintiffs on any sponsorship agreement with Telecom Australia entered into after the termination of fourth Consultancy Agreement with the Plaintiffs. 85 Significantly in support of that inference, Ms Cawood admitted that it was her belief, on receiving the advice from the solicitors of the Defendant, that a Telecom Sponsorship agreement, if not entered into in 1994 could well be entered into in 1995. [Cawood T, 329 .40] That is, Ms Cawood could not have entertained the view that the sponsorship relationship between the Defendant and Telecom had permanently come to an end as she claimed to have done [Cawood T, 362 .25]. So far as credit is concerned, I did not find Ms Cawood at all a satisfactory or candid witness. Thus she frequently said she did not recall, rather than concede what would harm or be awkward for her case (see among many examples T, 364 .6). She would positively deny other matters with a confidence hardly congruent with her otherwise lacking recall. In contrast, I found Ms Jones a reliable witness, precise and forthcoming and where her recollection differs from Ms Cawood, I prefer the evidence of Mrs Jones. I deal later with the attacks on her credit which as I explain were without proper foundation and unfair.
The letter makes it clear that what AWHA was seeking to ascertain were the obligations to which AWHA might be exposed if the Telecom sponsorship were renewed during 1994 and how those obligations might differ if no renewal took place on or prior to 31 December 1994 (being the date of expiry of the 1994 consultancy Agreement if itself not renewed). It is clear (see PX6) that so far as any new sponsorship agreement with Telstra was concerned, the advice of Lane & Lane was there be a new agreement “which has been wholly and separately negotiated on new terms”.
We refer to your instructions to advise on the obligations of Australian Women’s Hockey Association Inc (“the Association”) with respect to the payment of a fee to Edmunds-Jones Pty Limited (“the Company”) pursuant to the provisions of Clause 4 of Annexure C of the Agreement.
86 By letter dated 21 October 1994, the Plaintiffs informed the Defendant of Telecom Australia’s continued refusal to renegotiate the 1994 Proposal. 87 The Plaintiffs indicated that they would need $3,000 to fund a campaign to find a new sponsor (in replacement of Telecom Australia). The Plaintiffs were aware of clause 8.3 of the 1993 Telecom Agreement and recommended to the Defendant to contain their disappointment lest clause 8.3 be breached. Clause 8.3 of the 1993 Telecom Agreement reads:
The Media Campaign
88 Despite the importance of a major sponsor such as Telecom to the Defendant, Ms Cawood refused to authorise the payment of $3,000 to the Plaintiff. Mrs Jones maintained in her affidavit, that part of the reason given by Ms Cawood for the refusal was that “Telecom may renew” [HEJ 21/5/96, para 16-28]. Meg Wilson, the President of the Defendant at that time further suggested that the reason for the refusal to provide $3,000 was that:
8.3 In the event that there is no extension of the period of sponsorship by the Sponsor, AWHA agrees that it shall not, at any time in the future, say anything, or cause anything to be said or published that in any way denigrates the Sponsor or its officers or calls into question any decisions of the Sponsor in relation to this matter. The rights and obligations of the parties under this clause 8.3 are continuing rights and obligations, separate and independent from the other rights and obligations of the parties and survive termination of this Agreement.
89 However, when questioned further by the Plaintiffs about the refusal of the Defendant to provide the $3,000 necessary to launch a campaign (by letter 18.11.94 PTB, 59), AWHA maintained that provision of only $1,000 was all that could be justified under budget restrictions present at that time (by letter from Meg Wilson 1.12.94 PTB, 62). Earlier on 1 November 1994, Ms Cawood telephoned Mrs Jones in relation to the funds requested for the media campaign. According to Mrs Jones, the conversation was to the following effect [HEJ, para 47]:
“We thought it was too high to do what she needed to do at that moment in the light of the fact that there was already a sponsorship proposal prepared”.[Wilson T, 304 .15]
90 Ms Cawood understood from speaking to Mr O’Neill or Ms Passmore of Telecom that whilst no assurance could be given, Telecom were willing to discuss the question of sponsorship with the Defendant in 1995 if the Defendant pursued sponsorship at that time [Cawood T, 369 .45]. This was a matter that Ms Cawood regarded as a matter of particular significance at the time [Cawood T, 370 .35]. 91 The conversation is echoed by a letter of 20 December 1995 from Mrs Jones to Meg Wilson [PTB, 69]. In the course of that letter, Mrs Jones mentioned that the Plaintiffs had saved the Defendant some $2,500 out of its budget allocated to the work of the Plaintiffs. There was never any response to that assertion [Cawood T, 385 .47]. It appears, then, that strict budgetary considerations were not behind the refusal of the Defendant to afford $3,000 towards the media campaign which further strengthens the inference that AWHA had reason to be confident that Telecom intended to renew its sponsorship and had no wish to allow the Plaintiffs to be involved in that anticipated outcome. 92 Despite not receiving the $3,000 fee, the Plaintiffs formulated a media campaign strategy design to raise awareness of the sponsorship opportunity available in the absence of Telecom. The media campaign was sent as an enclosure to a letter dated 4 November 1994 from the Plaintiffs to Telecom. Copies of the letter were sent to Mr O’Neill and to two other officers of Telecom in higher level positions than Mr O’Neill. 93 Ms Cawood objected to the fact that the letter was copied to Messrs Hinchcliffe and Denton, the two officers of Telecom Australia senior to Mr O’Neill [Cawood T, 379 .45] 94 The possibility of a media strategy had already once been raised with Mr O’Neill by the Second Plaintiff. In a telephone conversation of 19 October, Mrs Jones suggested that a campaign to find an alternative sponsor in replacement of Telecom might reflect badly upon Telecom [Jones para 59]. Although O’Neill maintains that such negative “fall out” was a source of concern for himself and Telecom [O’Neill T, 237 .15] it appears not to have been sufficient to elicit a compromise proposal from Mr O’Neill with respect to the sponsorship proposal of 1994 [O’Neill T, 237-8]. During that conversation, the Second Plaintiff said words to the effect:
Jones: ‘This campaign is going to cost $5,000-$,6000. All I am asking is for WHA to pay $3,000 towards it and Edmunds-Jones will meet the rest. Our input of money and effort makes sense given that we believe our contract with WHA will be renewed beyond this year. Has the Marketing Committee recommended to the Board that the contract be renewed yet?’
Cawood: ‘I am not at liberty to disclose whether they have or not.’
Jones: ‘Why?’
Cawood: ‘You are not going to force any statements of this from me. This is a Board decision and that is all I can say.’
Jones: ‘The question that I’m asking is ‘has the Marketing Committee made its usual recommendation to the Board?’ This all sounds ominous. Are you saying that there is some doubt because if you are, I would be mad to spend money on a sponsorship campaign which may not bear results until after our contract expires?’
Cawood: ‘I hate to be bearer of doom and gloom but WHA has decided to seek expressions of interest from a number of interested agencies for sponsorship management.’
Jones: ‘This is a ridiculous situation. I thought that we are a team but it seems I may no longer be on the team but no one is telling me. Are you happy for me to spend thousands of dollars on a sponsorship campaign when you may already know that we will not be around any more? Do you think this is fair? Regardless of your comments, we need to do the campaign for the team’s sake so I want you to contribute $3,000 out of the marketing budget that I haven’t fully spent.”
Cawood: ‘No we can’t afford it.’
Jones: ‘But we have just saved you that amount from your budgeted allocation to buy the team awards for each member of the team. The sponsorship of Gold Mark Jewellery saved you that money. If we don’t do the campaign, what are you going to do in January when your team has no sponsor?’
Cawood: “Telecom may renew and because of this we shouldn’t be going to the media with stories about WHA needing a sponsor at this time.’
Jones: ‘So you are prepared to run the risk. This is very much out of character and I am at a loss to understand the logic.’
Cawood: ‘We will give you $1,000 and that’s all.’
95 The letter was not first submitted to the Defendant for consideration. On 10 November 1994 Ms Cawood telephoned the Second Plaintiff and remonstrated with her for sending the letter to Telecom without first obtaining the approval of the Defendant. Ms Cawood, during that conversation said words to the effect:
“If you don’t agree to the proposal we will have to go out into the marketplace and find a new sponsor and, of course, tell the media that Telstra won’t renew the sponsorship.”
96 The telephone conversation was followed by a facsimile of 14 November 1994 in which the President of the Defendant Meg Wilson expressed her disapproval of the behaviour of Mrs Jones and further communicated that the Plaintiffs not pursue the planned media strategy. The facsimile read in part:
In reply, Mrs Jones claimed, with I consider proper justification, that the Defendant was preventing her from carrying out her contractual obligations.
“I want to tell you that you are completely out of line in sending that letter without first sending a copy to me”
97 The letter of 14 November 1994 was signed by Meg Wilson. Despite being disappointed with the fact that the 4 November letter of the Plaintiffs to Telecom was copied to Messrs Denton and Hinchcliffe, that disappointment was itself not mentioned in the l4 November 1994 letter. 98 The President of the Defendant, Ms Meg Wilson, explained that facsimile in the following manner:
“I refer to your letter addressed to Alan O’Neill, National Sponsorship Manager, Telecom Australia dated 4 November 1994. I must express dismay at the inappropriate action taken by you in submitting the letter to Alan O’Neill worded in such a manner which is unacceptable to Women’s Hockey Australia.
… WHA does not wish you to pursue the media strategy.”
99 On receiving a further facsimile of 16 November 1994 from the Plaintiffs asking for approval of the media release, Ms Cawood testified [BEC, para 45] that she was:
“I would not authorise a proposed media campaign as I believed that it created a risk of adverse publicity in the media and the possibility of a dispute with Telecom with whom the [Defendant] still had a contract. I believed that if the Association was seen to disparage its existing sponsor, no other sponsor was likely to have anything to do with us.”
100 Ms Cawood admitted, in cross-examination, that the press release of 16 November contained nothing that invited unfavourable speculation on behalf of the press as to the good faith of either the Defendant or Telecom [Cawood T, 373 .35]. Ms Cawood’s reticence with respect to the media release strengthens the inference that she maintained the belief all along that the sponsorship arrangement with Telecom would be renewed. She explained her reluctance as arising from an apprehension that the media release might breach provisions of the Telecom sponsorship agreement in existence at that time (that is, the 1993 Telecom Agreement) [Cawood T, 374 .30]. 101 Ms Cawood admitted, however, that she believed that Clause 8.3 of the Telecom agreement in force until late in 1994 did not necessitate a total media ban. Ms Cawood understood that the only prohibitions existing under the 1994 agreement were that certain material was not to be published in a particular way. Clause 8.3 reads:
“very concerned that a media release in these terms would initiate press speculation and comment on the relationship between AWHA and Telecom. I thought that would be contrary to the best interests of AWHA and possible contrary to the provisions of the existing [1993 Telecom] agreement.
102 On reading the media release, Ms Cawood further admitted that there was nothing within the media release proposed by the Second Plaintiff that denigrated Telecom nor that called into question any decision made by Telecom or its officers [Cawood T, 375 .5]. 103 The motives behind opposition to the media ban are the subject of a number of questions asked by Counsel for the Plaintiffs:
8.3 In the event that there is no extension of the period of sponsorship by the Sponsor, AWHA agrees that it shall not, at any time in the future, say anything, or cause anything to be said or published that in any way denigrates the Sponsor or its officers or calls into question any decisions of the Sponsor in relation to this matter. The rights and obligations of the parties under this clause 8.3 are continuing rights and obligations, separate and independent from the other rights and obligations of the parties and survive termination of this Agreement.
104 Telecom, too, it seems was dissatisfied with the media campaign proposed by the Second Plaintiff. In a letter sent by fax dated 17 November 1994 to Mrs Jones, Mr O’Neill wrote:
Q. Didn’t you speak to Mr O’Neill or Ms Passmore to find out if the media release was distributed there as a problem with clause 8.3?
Cawood: I can’t recall
Q. Wasn’t that the occasion upon which you had the discussion that you have set out in paragraph 46 of your affidavit?
Cawood: No [Cawood T, 37 .20]
105 Telecom’s complaint with the media strategy was not in relation to the description of the media campaign sent to Telecom by letter of 4 November 1994. Rather, Telecom was concerned that Mrs Jones would unduly compromise the interests of Telecom. In particular, Mr O’Neill was concerned about words said to him by Mrs Jones in an earlier conversation to the effect of:
“Furthermore, I strongly suggest careful consideration of the ramifications of releasing a media campaign strategy as I believe the objectives and avenues you have chosen do not meet with the standard Telecom Australia, but particularly Women’s Hockey Australia deserves.”
106 Mr O’Neill was concerned that Mrs Jones was going to employ:
“You don’t agree to the proposal, we will have to go out to the market place and find a new sponsor and of course tell the media that Telstra won’t renew the sponsorship” [O’Neill T, 251 .23]
107 This was despite the assurances of Mrs Jones, as contained in a letter dated 4 November 1994 from Mrs Jones to Mr O’Neill, that:
“A loaded gun approach. In other words, if you don’t do this then we will have to go and tell the media how bad Telstra is and who left Women’s Hockey in the lurch” [O’Neill T, 252 .1]
108 On 16 November 1994 [BEC, para 46] in the midst of the Plaintiffs’ seeking to find an alternative sponsor and acting on the belief that Telstra was uninterested at that stage, a conversation between Mr O’Neill or Ms Passmore of Telecom and Ms Cawood took place to the following effect:
“Because Telecom remains the major sponsor of WHA until the end of December and because we want to minimise any negative PR that may emerge (you and I have already discussed this and I confirm your sentiments that this is an inevitable consequence of terminating sponsorships), I want you to be fully informed as to our sponsorship campaign strategy”. [PTB, 51]
Attached to that letter was a copy of the media release as formulated by Mrs Jones in an attempt to find a replacement major sponsor, which was entirely innocuous and perfectly justified, given Mrs Jones’ understanding of the Telecom sponsorship position.
Representations by Telecom that the Door was Still Open
109 Mr O’Neill denied ever having such a conversation. Ms Passmore was uncertain whether she would have had that conversation [Passmore T, 274]. On the other hand, Ms Passmore admitted that she was, as of November 1994, willing to give consideration to a proposal lodged by the Defendant in 1995 [Passmore T, 275 .1]. 110 While maintaining that the conversation quoted above did take place, there is no evidence that Ms Cawood communicated that knowledge to Mrs Jones despite being of the opinion that it was information that was important and should have been passed on to the Plaintiffs as exclusive marketing agents at that time [Cawood T, 378 .1]. 111 In December 1994 Ms Cawood appears to have had a second relevant conversation. Ms Cawood talked to Ms Passmore of Telecom and communicated to her a concern on the part of the Defendant that they did not have a major sponsor lined up for 1995. Ms Cawood was concerned to ensure that the prospect of Telecom Sponsorship in 1995 remained a viable one [Cawood T, 397 .45]. Ms Cawood understood the effect of the conversation to be an invitation on behalf of Telecom to recommence correspondence with a view to a future sponsorship arrangement [Cawood T, 397 .50]. 112 A letter to Mrs Jones of 17 November 1994 expressed a belief on the part of Telecom that its first right of refusal continued into 1995. That letter read, relevantly:
“If [the Second Plaintiff] is unsuccessful in finding you a sponsor and you don’t have a sponsor by the end of the year you are free to come back to us in 1995 and talk. We can’t give you any assurance but we would be happy to discuss the matter with you again.”
Ms Cawood was unable to explain the context in which this conversation took place. The timing of it, however, is at about the time that Ms Jones was proposing a media release and it ought to be inferred that that was most likely the occasion for the conversation, and that whatever was said between Ms Cawood and Ms Passmore concerned that matter as well. The result of the communication must have been:
(i) on the part of Telecom, an expectation
(aa) that Mrs Jones (who by denying her $3,000 to prepare an effective media strategy) would be unlikely to find an alternative sponsor, and
(bb) that the Defendant would submit a proposal to Telecom in 1995; and
(ii) on the part of the Defendant, an expectation that if a proposal were submitted in 1995 there would be an ability to consult with Telstra regarding the proposal, and to reach an agreement thereby on price.
113 Furthermore, when asked whether he remained prepared to consider further sponsorship of the Defendant after 17 November 1994 provided the conditions of the sponsorship were appropriate, Mr O’Neill replied:
“Discussions with Annamaree Pinner in June/July of this year advised Edmunds Jones to submit a new proposal to Telecom to ensure timeframe for negotiation was satisfactory to both parties. The proposal was received on 26 August allowing us only four days for review as our contract states a decision must be made by 30 August. As you are aware, Telecom’s current contract with Women’s Hockey Australia offers Telecom the opportunity to renew its sponsorship under the same terms and conditions being offered to a prospective sponsor. The timeframe that Edmunds Jones are now left with to seek prospective sponsors for WHA cannot therefore, be attributed to Telecom’s decision not to further elaborate on our sponsorship strategy.”
“Our contract had not expired, we were still able to review the situation along two lines; if the funding was correct, or if they had brought back a potential sponsor who had paid whatever dollars, we would have first right of refusal. We were still in negotiations if you want to use that word.” [O’Neill T, 252 .20]
114 The Defendant held a further meeting on 19 and 20 November 1994 (PTB, 61). Although only a few weeks remained before the end of the year and the end of Telecom sponsorship, not one word of report was, apparently, made and, apparently, not one word of discussion about that ostensibly critical matter occurred. 115 On 2 December 1994, Mrs Jones spoke to Ms Tye, and when she asked whether there was any point in reporting on the sponsorship campaign, was told by Ms Tye: “I prefer not to comment” [HEJ, para 55]. Although Mrs Wilson comments on this conversation (in para 8 of her affidavit), she does not challenge this account of it. Ms Tye’s response is only consistent with a lack of any genuine interest on the part of the Defendant of securing an alternative sponsor prior to 31 December 1994. This was hardly surprising, given the advice of Messrs Lane & Lane to which reference has been made, and the direct communication that had been taking place between Ms Cawood and Telstra but I infer, deliberately not reported by Ms Cawood to Mrs Jones. 116 According to Ms Passmore, as the end of 1994 approached she had a further conversation with Ms Cawood to the following effect: 117 Mr O’Neill contended there was no sponsorship arrangement between the end of 1994 and the commencement of the 1995 Telstra agreement:
Ms Cawood: “We’ve got no sponsor for 1995 — what are we going to do? I am very worried. What sort of proposal would be acceptable to Alan?”
See Ms Passmore’s affidavit at para 13. By no later than early January 1995, this suggestion had been taken on board and Ms Cawood had asked Ms Passmore to assist in the formulation of an appropriate proposal: see Ms Nixon’s affidavit, para 8.
Ms Passmore: “I am trying to keep Alan on side. He won’t tell me what he’s looking for or what you should do. If you’re getting desperate, he could try another proposal but ask for less money.”
118 No less significantly, Ms Cawood could not remember any occasion during late 1994 at which she met with other members of the Defendant to discuss a plan of action should the Plaintiffs be unable to secure sponsorship before the end of the 1994 Consultancy Agreement [Cawood T, 396 .50] 119 But if Telecom sponsorship had ceased, there is no reference to the sponsorship being other than continuous in recent publicity for what were termed “Tenth Anniversary Documents” (PX10).
“By the end of 1994 as far as I was concerned the existing sponsorship arrangement had come to an end and there was no further sponsorship by Telecom for AWHA…. Any further consideration of sponsorship by Telecom for AWHA depended upon a new proposal which was commercially realistic” [AEO, para 12]
“Between the expiry of the previous sponsorship agreement in 1994, and just before I finished as the Sponsorship Project Manager, there were no sponsorship activities by Telecom in respect of Australian Women’s Hockey Association which I can recall. My recollection is that January and February were months during which there were no events or functions for which Telecom provided assistance, or at which we displayed promotional material and sent representatives” [Passmore 16/6/98 para 16]
No new logos (with “Telstra” on them rather than “Telecom”) were made for new uniforms nor was any organisation for the 1995 hockey season done by Telecom during 1994 [Passmore 16/6/98 para 17-9].
On the other hand, revealingly in my opinion, Ms Passmore admitted that the sponsorship file pertaining to Telecom’s sponsorship of the Defendant was never filed in the offices of Telecom as a lapsed sponsorship arrangement [Passmore T, 285 .35].
120 In early January 1995, swiftly after the expiration of the First Plaintiff’s consultancy arrangements, Ms Cawood told Ms Nixon of the Defendant that Ms Passmore of Telecom had offered to advise the Defendant on what to put in a proposal to Telecom with regard to sponsorship in 1995 [Cawood T, 398 .40]. Ms Cawood spoke to Ms Passmore at that time to discuss what assistance she might provide in submitting a further proposal for sponsorship to Telecom [Cawood T, 400 .55]. 121 By 23 January 1995, the Defendant and Telecom had arranged a meeting to discuss further Telecom sponsorship. Notes made in preparation for the meeting describe the purpose of the meeting as “sponsorship renewal” and refer to the “Re-launch of Telecom sponsorship”. 122 The purpose of the meeting was said to be to assist the Defendant in formulating a proposal that would be acceptable to Telecom and, in particular to Mr O’Neill [Passmore T, 276]. A similar meeting was not convened in relation to the 1994 proposal [Passmore T, 277 .25]. Ms Passmore, at the meeting of 23 January 1995 suggested that the Defendant should incorporate certain messages, the content of which Telecom wished to convey to the media as part of its corporate image. 123 A new proposal was submitted to Telecom by the Defendant on or about 3 February 1995 [ECN, 3]. It is certainly not an outline of a contract, but mainly consists of the lengthy calendar of future hockey events with identification of advertising opportunity. The only “contractual” aspect of the proposal was that it envisaged a total sponsorship of $570,000 broken up into a sum of $270,000 for 1995 and $300,000 for 1996. The date of the proposal is uncertain. But certainly by early February a draft sponsorship agreement had been brought into existence between the Defendant and Telstra Corporation Limited (Telstra) dated 1 February 1995 and contained these figures for year 1 and year 2; PTB, 75. It is my conclusion that though the agreement was not finalised till later, commercial agreement on its essential terms had been reached. 124 Significantly, no proposal was submitted by the Defendant to any potential sponsor other than Telecom then, earlier, or later. [Wilson T, 312] 125 In about February 1995 Telstra produced a post evaluation document of the WHA and Telstra sponsorship:
1995 Sponsorship Proposal
126 On 4 and 5 February 1995 AWHA held its board meeting and the following was resolved:
"December 1994 saw the departure of WHA’s marketing promotions agency, which now provides for easier channels of communication between the sponsor and WHA. Hence, WHA have prepared their proposal and wish to deal directly with Telecom Australia in the hope of securing a new partnership". (PTB, 79)
127 In a letter dated 10 February 1995 AWHA advised Helen Jones that her application to act as marketing consultant for WHA had been rejected (PTB, 83). 128 In a facsimile dated 21 February 1995 from Ellie Nixon of AWHA to Maria Buchland of Telecom providing information on players and results, AWHA stated that:
"4.4.2 The Board agreed not to appoint a Marketing Consultant at this stage but review the actual needs of WHA on an event by event basis.
4.4.3 After consultation with the NED and PL Tye, Ellie Nixon has prepared a submission for future sponsorship of WHA". (PTB, 81).
129 By facsimile dated 21 February 1995 from Maria Buckland of Telecom to Ted Taylor, CEO representative for Telecom at the Four Nations Tournament in Tasmania the following directive is given:
"Can’t stress enough that he cannot mention anything about the future". (PTB, 85)
130 In the process of drafting the final agreement, a facsimile was sent by Ms Cawood to Telecom as a result of legal advice from the Defendant’s solicitors [Cawood T, 408 .6]. The facsimile of 8 March 1995 contained the following revealing words:
"As we have not yet signed a new sponsorship agreement with Australian Women’s Hockey Association, I must stress it is important not mention anything regarding any future sponsorship plans. Something to the effect that Telecom Australia has sponsored the Telecom Hockeyroos since 1989 and is proud of their many achievements which are ….(info sheet) attached. We’re looking forward to the series _best of luck, Telecom Hockeyroos (PTB, 86).
131 Ms Cawood reluctantly admitted that she was, in requesting the rewording of the proposed contract, in receipt of advice from Michelle Wearn of Lane & Lane about the form of the contract (T, 408 .6-.10). She admitted again only after many questions that she wanted to avoid the 1995 Telecom agreement having the appearance of being a renewal within the meaning of the 1994 Consultancy Agreement [Cawood T, 409 .45-150]. Her evidence is revealing:
“The proposed contract is generic and it is suggested that it should be re-jigged so that it does not look like any previous contract - change the form of the agreement - one of the suggested changes is:
‘Negotiations were carried out in 1994 with respect to a new agreement from which Telecom determined not to enter into a new agreement. Subsequently a new proposal a copy of which is annexed, was submitted by WHA and after extensive negotiations a new agreement was concluded on the terms and conditions contained in this agreement.” [my emphasis]
The above suggested change related to recital C.
By ‘re-jig’, Ms Cawood says she intended to convey that the contract should be reworded according to the legal advice she had earlier received [Cawood T, 408 .38]. A further change was suggested in a facsimile of 8 March 1995. Recital D would be changed to read:
“The Sponsor and the Sponsored Party have agreed to the new proposal and as a consequence the Sponsor shall become the principal sponsor, etc. etc…” [my emphasis]
132 Telecom Australia, (Maria Backlund) consented to the re-wording of the contract in a facsimile also dated 8 March 1995:
Q. Was one of the things you were wanting to avoid in the drafting of the new agreement with Telecom the appearance of the agreement being a renewal?
A. Yes.
She then acknowledged that “It was on the advice of the legal people” (T, 409 .57), having earlier been referred also to the letter of advice from Lane & Lane of 19 October 1994 (PX6). She admitted to having read that advice as to “what might happen in terms of an obligation to pay a fee to Mrs Jones if there was a renewal” (T, 409 .40-.45).
133 Mr O’Neill, in cross-examination asserted that some negotiation did take place with regard to the 1995 proposal [O’Neill T, 257 .5]. This was the normal practice at that time [O’Neill T, 258 .20]. However, Mr O’Neill was not part of the ‘build-up exercise’ and could not agree or disagree with the proposition that there were no extensive negotiations at that time [O’Neill T, 259 .15]. Mr O’Neill was “definitely not aware of any extensive negotiations” [O’Neill T, 259 .25]. Mr O’Neill testified that the negotiations with the Plaintiffs did extend from June until December and that as such, they were ‘extensive’. [O’Neill T, 261 .35] That assertion is not consistent with the evidence. 134 Recital “C” of the 1995 Telstra Agreement states:
“It is acceptable that [the Defendant’s solicitors] draw up a suitable Sponsorship Agreement whilst keeping in mind the essence of Telecom’s generic Sponsorship Agreement document, or, alternatively, work with … our legal counsel, to do same.
I have spoken to [our legal counsel] and briefed him on the situation, both past and present. He is expecting a call from [your solicitor] to determine the best course of action.” [PTB, 94]
135 It appears, in fact that the negotiations were far from ‘extensive’. Counsel for the Plaintiffs, in cross-examination of Ms Cawood put it thus:
“C. As part of the extensive negotiations mentioned in Recital B, AWHA agreed to comply with the reasonable requirements of Telecom concerning its proposed new corporate identity implementation plan.”
136 After considerable further questioning on the matter, Ms Cawood belatedly admitted that it was not proper to refer to the 1995 Telecom Agreement as being the result of ‘extensive negotiations’ [Cawood T, 411 .55]. Ms Cawood could not then proffer any reason why the recitals to the 1995 Telecom agreement referred to extensive negotiations [Cawood T, 412]. None of this evidence did anything to assist her credibility as a witness. 137 A further draft of the Telecom Sponsorship agreement was then faxed on 21 March 1995 by Simon Tan of Telecom to the solicitors of the Defendant. Obligingly the accompanying letter pointed out that “I have structured the agreement as “a new agreement between the parties”. He reiterated the notion of a renegotiated agreement arising from a “new” proposal when he then adds; “The draft contemplates a proposal prepared by AWHA. Please send me a copy of the proposal for inclusion in the final agreement” (PTB, 102). 138 That this was really a facade is evident from the fact that the draft agreement was successfully drafted with no such prior proposal. All of this supports the inference that both sides were co-operating to “dress-up” the agreement as a new agreement based on a supposedly “new” AWHA proposal, rather than what it really was, that is a renewal of the past sponsorship on “generic” Telecom terms with a relatively modest increase in sponsorship amounts. Thus comparing the 1993 Telstra Agreement entered 15 February 1993 (BEC, 139), to this draft they are not markedly different. There are updating changes, a self-serving recital B, quoted below and the amounts for 30 June 1993 and 1994 were $200,000 each, as against $270,000 on signing and then $300,000 paid on the Agreement’s first anniversary. Recital B provides:
Q. So far as the 1995 sponsorship was concerned is all that happened this: First you spoke to Miss Passmore and she agreed to come and have a meeting, that was the first thing that happened, is that right?
A. To the best of my recollection
Q. Secondly, there was a discussion at the meeting about what could usefully be put in a sponsorship proposal?
A. To the best of my recollection.
Q. The third thing that happened was that that information was taken and used to put in a new proposal for sponsorship to be presented to Telecom?
A. As far as I can recall.
Q. Shortly after the receipt of the proposal by Telecom you learned that Telecom approved the further sponsorship?
A. I can’t recall.
Q. I suggest to you the next thing that happened after the submission of the proposal was you learned that it was accepted?
A. Yes.
Q. There wasn’t any extensive negotiation was there in 1995 about getting that sponsorship from Telecom for 1995?
A. I can’t recall. [Cawood T, 406 .25]
139 In reality the negotiations were not at all extensive and the proposal does little more, so far as the substance of the new contract is concerned, than stipulate the two annual money amounts. 140 In anticipation of the soon to be executed Telecom sponsorship, an AWHA press release of 22 March 1995 referred to the “Telstra” Hockeyroos and “Telstra Four Nations Tournament”. 141 The Telecom sponsorship of the Defendant was officially launched on 27 March 1995. That launch was not recalled by Ms Tye, Chair of the Marketing and Promotions Policies Committee of the Defendant in 1994 [Tye T, 175 .1]. 142 Shortly afterward, on 6 April 1995, a Marketing and Promotion Committee report to the Council of the Defendant read in what I again consider a self-serving fashion:
“B. The parties entered into a sponsorship agreement dated 15 February 1993 under which, inter alia, Telecom reserved the right to extend or renew its sponsorship of AWHA. After extensive negotiations did not result in a renewal or extension of the earlier sponsorship, AWHA submitted a proposal to Telecom (a copy of which is attached) which forms the basis of this agreement.”
143 Ms Cawood believed that the sponsorship proposal submitted to Telstra in early 1995 was what was meant by “in-house” preparation [Cawood T, 436 .50] 144 The 1995 Telstra agreement was executed on 5 May 1995. The agreement was for the term of the years 1995 and 1996. Recital B of the 1995 Agreement which I have quoted above repeats the earlier draft.
Minutes of a later meeting of the Board of the Defendant (21 May 1995) further refer to “in-house preparation”:
“success was due to the preparation of the proposal and its presentation to Telstra. This was the result of in-house preparation totally. The sponsorship is an entirely new negotiation”
“Sponsorship - Given Edmunds-Jones’ unsuccessful approach for sponsorship from Telecom, the new Telstra sponsorship was achieved through in-house preparation. Any future minor sponsorship to be determined on an individual basis.” (PTB, 128)
145 Before dealing with certain factual findings which should be made, I need to deal briefly with the attacks on her credit. 146 First, it is asserted in para 4.4 of the Defendant’s written submissions that Mrs Jones “did not herself believe the sponsorship to be worth anything more than $300,000 per annum”. Reliance is placed upon the letters of 18 November 1994 and 20 December 1994 (PTB, 59 and 69). The letter of 18 November 1994 states (in the third paragraph relied upon by the Defendant) that:
Mrs Jones’ Credit
147 The Defendant did not cross-examine Mrs Jones on how the figure of $2MK to be inserted in the paragraph. In particular it was never put to Mrs Jones that her subjective belief was that that was all the Defendant was worth by way of sponsorship. In any event, it is apparent from other parts of the letter that Mrs Jones entertained a subjective belief that much more should be asked for. On the second page of the letter dated 18 November 1994 Mrs Jones wrote:
“It was important to my plans in seeking a sponsor for WHA to have the expenditure of $3,000 approved. However, your later advice to me that the request is refused and I must make do with $1,000 hardly seems indicative of an organisation seriously seeking a sponsorship in the vicinity of $2M over the next six years.”
148 The letter of 20 November 1994 stated in para 2 (the paragraph relied upon by the Defendant) that:
“In presenting to prospective sponsors and listening to the opinions of others, including Alan O’Neill (who said that $600,000 a year was too cheap for what WHA is offering), I have reviewed the asking price. Unless WHA has any objections, I’ll be seeking an increased figure of $800,000 per year for a period of six years. This is still (I believe) $200,000 a year less than Optus is paying for athletics, so I think the Womens Hockey package is worthy of this amount, even if on the conservative side. Should you have any objection to the seeking a total figure of $4.8M for WHA, you may want to revise before any meeting which are anticipated for next week.”
149 Again, how the figure of $2M referred to in that paragraph was derived was not explored in cross-examination. It was never put to Mr & Mrs Jones that her subjective belief was that $2M was all that the Defendant was worth. For all one knows, the $2M could have represented the net benefit after various expenses had been defrayed out of sponsorship funds. Or it could be that this more closely represented the Defendant’s own estimate of what they thought they could get by way of sponsorship, though Mrs Jones thought the figure of $800,000 per year should be sought. It is hardly to be thought that if Mrs Jones truly believed that the Defendant was only worth about $300,000 per year sponsorship, and that was all she could realistically ask, that, given her own commercial interests, she would not have communicated such a view to Mr O’Neill in an attempt to renew the Telstra sponsorship, though it was evident Mr O’Neill was not encouraging negotiations. 150 The Defendant’s submissions also assert that the statement made by Mrs Jones in the letter of 18 November 1994 to the effect that Mr O’Neill had “said that $600,000 a year was too cheap for what WHA is offering” was clearly false; see para 4.5 of the Defendant’s written submissions. Mrs Jones gave evidence of this conversation; see HEJ, para 42 in particular page 13.8. She was not cross-examined about it. Mr O’Neill put on an affidavit subsequently to Mrs Jones first affidavit. It is clear from the quoted conversation that Mrs Jones was led to believe by Mr O’Neill that “you must have plenty of sponsors who would take it for $600,000 — haven’t you” and “it’s worth the money and the women deserve it”. That comes close to saying that if anything $600,000 was too cheap if there were plenty of sponsors willing to offer that amount. Certainly it is not in any substantive sense markedly different from Mr O’Neill was saying. 151 Next it is asserted (in para 4.9 of the Defendant’s written submissions) that Mrs Jones employed “the tactic of veiled threat” by making a reference to the negative publicity that would undoubtedly follow the Defendant seeking a new sponsor. The implication from the word “veiled” is that while the words may have been innocuous, they would reasonably have been understood in quite a different sense as a threat. But no such proposition was ever put to Mrs Jones in cross-examination. Although Mr O’Neill made reference to this aspect of the conversation in his affidavit (AEO, para 10) he did not suggest that the words were to be understood other than in their ordinary sense. 152 Then it was suggested that in the conversation Mrs Jones “resorted to the ploy of deceit”; a proposition again not put to Mrs Jones in cross-examination as elementary fairness would have required. She was said to have so resorted the ploy of deceit by using these words: “I realise this is a big jump, but I’ve been under a lot of pressure from the coaching staff saying that I am selling the sport off too cheap. You know, WHA can’t really afford this sponsorship at $200,000 as it’s costing them too much”. 153 The bases upon which it is said that this statement was deceitful seemed to be:
“We sought $3,000 which you say that WHA could not afford. Are you aware that at the same time of this refusal, we had by means of a similar sponsorship arrangement, saved WHA $2,500 out of its approved expenditure budget allocated to purchase presentation gifts for the World Cup Team? This saving was generated by “marketing” through a Prouds’ sponsorship. Surely it would be reasonable to use these savings to assist “marketing” to generate major sponsorship, which realistically could mean close to $2M to your organisation over the next six years!”
154 As to the former, there was no issue raised in the proceedings and has been none since which required Mrs Jones to justify the statement. The Defendant could have adduced evidence of contrary facts, subject to an argument about the width of the pleadings, if the facts were thought to be relevant. It chose not to do so. Mrs Jones was not cross-examined on the proposition that she lacked any adequate factual foundation for the statement. Ms Cawood’s reservation about the price being “a bit high” is not inconsistent with the statement that the coaching staff thought that the sport was being sold off too cheap. Clearly, the ultimate level of sponsorship must be a matter of opinion, in which there is room for legitimate difference. Certainly there was no basis for the Defendant to have asserted that the statement about pressure from coaching staff was deliberately false. 155 It is next alleged (in para 4.11 of the Defendant’s written submissions) that Mrs Jones repeated “her veiled threat” to Mr O’Neill by writing to him on 3 November 1994. That letter enclosed the planned media campaign. Mr O’Neill was asked about the detail of that media campaign (T, 244 .10 - 246 .22). Mr O’Neill’s only complaint seemed to be that the statement that Telstra doubled its return on investment was untrue because the return on investment was unquantifiable (T, 245 .25 - .41). The letter did no more than the conversation that preceded it between Mrs Jones and Mr O’Neill. Mrs Jones was again not cross-examined to suggest that she had made any veiled threat in the letter, and Mr O’Neill gave no evidence that he understood what was in the letter to be a veiled threat. 156 Next the Defendant (para 4.12 of its written submissions) deals with Mrs Jones’ statement (made to Ms Cawood) that she knew what Mr O’Neill’s agenda was. The Defendant called that “dissembling”, because the reference to “our current strategy” was not understood. Once again this is a matter upon which Mrs Jones was not cross-examined. Moreover it overlooks entirely the context of the conversation. Mrs Jones’ account of the conversation is given in her affidavit; HEJ, 50. Mrs Jones said, in the very same conversation, to Ms Cawood:
(b) Ms Cawood’s view that the $650,000 was “a bit high”.
(a) The absence of any evidence being adduced by the Plaintiffs of the factual foundation for it, and
157 In other words, the agenda that Mrs Jones was referring to in the conversation of 10 November 1994 was rather an agenda involving co-operation between Telstra and the Defendant to the exclusion of the Plaintiffs. I agree with the Plaintiffs that it is quite wrong to read into Mrs Jones’ reference to “Alan O’Neill’s agenda” any actual knowledge exclusive to Mrs Jones and unknown to the Defendant, which she was bound, as a fiduciary, to impart. The conversation suggests that Mrs Jones was drawing on inference. Indeed, if anyone was in the dark, it was she, not the Defendant. Indeed, she referred subsequently, in the same conversation, to a demand by Ms Cawood that she “disclose (her) assumptions regarding O’Neill’s agenda”. She declined to do this on the basis that she had “no hard facts to back it up”. 158 Finally, it is alleged (at para 4.15 of the Defendant’s written submissions) that the statement in the letter of 18 November 1994 that Mr O’Neill had said “$600,000 was too cheap” was “obviously fictitious”. I have dealt with that aspect already, but I need to deal with the further assertion that this statement was “not related by her in her evidence”. It was indeed related in para 42 of Mrs Jones’ affidavit of 21 May 1996 at page 13.8. It is also falsely asserted that Mr O’Neill was not challenged in cross-examination about it. Indeed he was; see Mr O’Neill’s cross-examination at T, 235 .10. Mr O’Neill’s only response was that he could not remember.
“I think that you all (WHA and Telecom) know exactly what’s going on and I’m the only one doing the guess work.”
159 It will be apparent that the Defendant chose in written submissions to attack Mrs Jones’ credit on grounds which were never put to her in cross-examination and which on examination of the evidence had no proper foundation. One could hardly find a clearer contravention of the rule in Browne v Dunn (1894) 6 R 67 (HL), grounded as it is in requirements of fairness, as Hunt J explains: Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1 at 22-3. The Defendant did not assist its case in its written reply by ignoring the Plaintiffs’ detailed response, and simply observing “gallantry may be laudable but cannot disguise untruths”. In my judgment the attack on Mrs Jones’ credit was both unfair and ill-founded. It provided no basis for the claim, dealt with below, of breach by Mrs Jones of the 1994 Consultancy Agreement.
Conclusion
160 The earlier question of Mrs Jones’ credit is not unconnected to what is here said about Mrs Jones being allegedly in contravention of clause 3, requiring that she “implement in a professional and businesslike fashion all the duties specified in the Consultancy Brief annexed hereto ….” and which in turn in para C requires Mrs Jones to “maintain and enhance the image of the Association and women’s hockey generally…”. 161 I deal here only with the factual issues concerning the conduct of Mrs Jones relied upon by the Defendant and not with whether non-compliance with these obligations could be such as to disentitle the First Plaintiff to commission or fees by reason of such compliance being a condition precedent to any entitlement. 162 The particulars relied upon in relation to either complaint are identical and are first set out in the Defendant’s particulars at para 37 of the Defence to Amended Statement of Claim. Essentially, the Defendant’s contention is that the Plaintiffs in communications with Telstra foreshadowed a publicity campaign which would be adverse to the interests and reputation of Telstra, doing so by a communication made orally, namely the conversation between Mrs Jones and Mr O’Neill on 19 October 1994 (HEJ, para 42) and in writing by letter dated 3 November 1994 (Annexure “BB” to this affidavit). 163 Then at para 40 of the Defence, it is pleaded that the letter of 3 November 1994, the references to a publicity campaign and/or the media campaign strategy sent to Telstra under cover of the letter of 3 November 1994 were calculated to and/or were likely to
The alleged failure to act in a professional and businesslike fashion and to “maintain and enhance the image of the Defendant and women’s hockey generally”.
164 The letter of 3 November 1994 (PTB, 51) was the subject of some cross-examination. A copy of the letter was sent by Mrs Jones to Ms Cawood, Ms Wilson and Ms Tye. Ms Cawood and Ms Wilson were cross-examined about the letter; T, 367 to 383. Ms Cawood stated that:
(i) cause embarrassment to Telstra and its national sponsorship manager,(ii) create the impression that the Defendant was threatening Telstra with a publicity campaign and/or adverse publicity,
(iii) prejudice the Defendant in obtaining a national sponsor,
(iv) adversely affect the reputation of the Defendant with Telstra, major companies and prospective sponsors,
(v) cause the Defendant to be regarded as an unworthy beneficiary of sponsorship,
(vi) create the impression that the Defendant was an organisation that would criticise or bring adverse publicity upon its sponsor,
(vii) lead to the speculation over the reasons why Telstra no longer supported the Defendant which would reflect adversely upon the Defendant and/or Telstra,
(viii) be contrary to the best interests of the Defendant,
(ix) imply, wrongly, that Telstra had acted unfairly or dishonourably in failing to enter into a further sponsorship agreement and, finally,
(x) imply, wrongly, that Telstra had refused to provide any further or any reasonable level of sponsorship to the Defendant.
165 Mrs Jones was cross-examined about the letter of 3 November (T, 150-161). It was not put to her directly that the letter was unprofessional or unbusinesslike or one which failed to maintain and enhance the image of the Defendant. Mrs Jones was, however, asked about her reason for copying the letter to Mr Hinchcliffe and Mr Denton. She said (T, 155 .5):
(a) the words in the letter of 3 November which were unacceptable were the words: “We would urge you to consider all the ramifications of this decision on Telecom’s impressive image in sport and particularly among the Olympic fraternity and not overlooking the disappointment of the players and the coaching staff” (T, 379 .40);(b) she was concerned that the letter had been copied to Rod Hinchcliffe and David Denton (T, 379 .46) at Telstra;
(c) the only thing which was unacceptable to the Association about the copying of the letter to Mr Hinchcliffe and Mr Denton was that there was no need for them to be notified (T, 381-2 .5), although they were persons who had had previous association with the Defendant (T, 381-2 .15);
(d) she signed a letter on 14 November 1994 to Mrs Jones (PTB, 55) which covers all matters which she thought it appropriate to complain about in respect of the letter of 3 November (T, 381 .26);
(e) yet the letter signed by Ms Cawood made no complaint in respect of the letter of 3 November being copied either to Mr Hinchcliffe or Mr Denton (T, 383 .35);
(f) she was unable to suggest any ramification which might have been being alluded to by Mrs Jones in the letter (T, 380 .40) other than those conveyed by the following words:
“Because Telecom remains the major sponsor of WHA until the end of December and because we want to minimise any negative PR that may emerge (you and I have already discussed this and I confirm your sentiments that this is an inevitable consequence of terminating sponsorships). I want you to be fully informed as to our sponsorship campaign strategy.”
(g) the word “ramification” which had been used by Mrs Jones was unacceptable because it “led to an unknown situation, I suppose” (T, 380 .1), but she was unable to say what was unacceptable about that to the Defendant (T, 380 .8).
Ms Wilson was cross-examined about the letter (T, 305-308). When asked what was unacceptable about the letter, she answered (T, 307 .22):
Ms Tye gave no evidence of having any concern about the letter.
“I didn’t view this letter in the light of a word unacceptable, I viewed this letter telling us what Mrs Jones was doing in connection with that reply.”
166 Even if the copying may have been intended also to put some pressure on Mr O’Neill, that could be considered a commercial leverage that Mrs Jones reasonably might bring to bear in the Defendant’s interests. The evidence manifestly fails to demonstrate that in writing the letter of 3 November the Plaintiffs acted otherwise than in a professional and businesslike fashion. 167 The conversation between Mrs Jones and Mr O’Neill which is complained of is set out in para 42 of Mrs Jones affidavit of 21 May 1996. The particulars do not identify of which particular aspect of this conversation complaint is made. Neither Ms Cawood, Ms Wilson nor Ms Tye sought, in their affidavits or otherwise, to explain why, from the Defendant’s perspective, the conversation between Mrs Jones and Mr O’Neill contained any communication which was unprofessional or unbusinesslike. The conversation preceded the letter of 3 November 1994. It contained similar sentiments to those expressed in the letter. Mrs Jones, for example, said:
“I did it because I believed, and still do believe, that it was Mr Rod Hinchcliffe that was responsible for approving the original sponsorship and that as Edmunds-Jones did work separately for Telecom and not always on behalf of women’s hockey, that, as I said in my letter, it was a courtesy to let him know that we had to adopt my immediate strategy as part of our search for new sponsorship, and to let him know it would be handled sensitively to avoid any negative PR for Telstra, whom I valued as a client.”
168 Mr O’Neill’s account of what appears to be the same conversation (see para 9 of his affidavit) contained similar words:
“I see, you want us to test the market for you — but what about the negative PR that campaign for a new sponsor will create for Telecom? I can hear companies (some being your business partners) saying — Telecom has dumped its Hockeyroo team — why?”
169 Mr O’Neill agreed that there was nothing remarkable about the Defendant going to the market place to find a new sponsor (T, 251 .35), that it would be obvious from such a course to anyone with knowledge of the sport that Telstra had not renewed the sponsorship (T, 251 .40), and that if all that Mrs Jones said was to the effect that Telstra would not renew the sponsorship, such conduct was unremarkable and unobjectionable (T, 252 .15). In other words, what both Mrs Jones and Mr O’Neill recalled in their affidavits as to this conversation were statements by Mrs Jones which were perfectly appropriate. 170 That Telstra later only increased the sponsorship amount, to a little under half what was sought — though still substantially up from $200,000 to $270,000 and then $300,000 — may have been the result of the Defendant’s fear of losing Telstra and thus choosing not to test the market and thus Telstra. It does not follow that Mrs Jones’ tactics were wrong. Nor does it follow that, even if they were wrong, she was thereby in breach of her obligations in what was essentially a judgment call where reasonable minds might differ. That Telstra regarded Women’s Hockey as a minor sponsorship compared say to swimming or the Olympic Games (T, 237 .51-.57 and T, 263 .55-264 .5) does not mean that the market if invited would not have paid substantially more — with Telstra having strong incentive then to exercise its right of last refusal to meet the market. This is particularly in light of enhanced successes in international competition of women’s hockey and its clear Olympic potential. Finally, who is to say that asking for more was not a rational strategy, even an obligation on the Plaintiffs in doing their job, on the basis that if you don’t ask, you don’t get. Even if less than the $600,000 was ultimately achieved, certainly a substantial increase was achieved even without testing the market.
“If you don’t agree to the proposal we will have to go out into the market place and find a new sponsor and, of course, tell the media that Telstra won’t renew the sponsorship.”
171 Accordingly, even if it were a condition precedent to any relevant entitlement to commission that the Plaintiffs act in a professional and businesslike fashion, the evidence does not demonstrate that the Plaintiffs acted otherwise. Likewise, there was no failure to “maintain and enhance the image of the Defendant and women’s hockey generally”. The assertions to the contrary, insofar as they go beyond the pleaded particulars, are not open for the Defendant to rely upon; see the Defendant’s written submissions, paras 5.1.1 to 5.1.10. But in any event, they were in the main unsubstantiated and unfair. Thus that “she lied to the defendant” (para 5.1.9) refers to the earlier matters going to credit where the Defendant has failed to substantiate its attack. Or else the Defendant merely repeats what is in the particulars in more florid language (para 5.1.6) (“she employed negotiating tactics of (at least) doubtful respectability namely threats and falsehood”) but with no proper basis made out for allegations of such seriousness. Or else indulges in argumentative assertion (e.g. 5.1.2) (“she formulated a proposal that the sponsorship fee be increased to $650,000 per annum which was inherently and obviously unrealistic and altogether lacked any commercial justification”). Use of the word “obviously” does not convert assertion to self-evident fact. 172 I turn now to whether there was a common expectation that Telstra would provide sponsorship for 1995 to the Defendant. This is a question anterior to characterising the outcome for the purposes of the 1994 Sponsorship Agreement as either a subsequent year of sponsorship (clause 4(b)) or a renewal of sponsorship (clause 4(c)).
Summing Up
173 The cumulative effect of the foregoing evidence, assessed below, is to justify the findings which follow concerning the joint expectation of Telstra and the Defendant as to renewal of the 1994 Telstra agreement. First, the evidence:
Expectation of 1995 Telstra agreement — Evidence
174 This leads to the following findings. 175 As a result of their communications during the course of 1994, I am satisfied that the Defendant and Telstra had a joint expectation, to the knowledge of each other, that:
(b) Ms Cawood spoke directly — probably to Ms Passmore — and was informed prior to or contemporaneously with the receipt of the letter of rejection dated 13 October 1994 by Mrs Jones that:
(a) the Defendant and Telstra both understood that communications about sponsorship for 1995 (to the extent that they were engaged in in 1994) were primarily communications between Telstra on the one hand and the Plaintiffs on the other hand; Mrs Jones was the primary point of contact but was not kept fully informed of direct contact between Defendant and Telstra.
“The amounts being sought in the submission are too high”
but did not inform Mrs Jones (BEC, para 40).
(c) According to both Ms Passmore and Mr O’Neill the submission prepared by the Plaintiffs was seen by Mr O’Neill in or about August 1994, and he immediately conveyed his view about the level of sponsorship being sought to Ms Passmore. It seems, in those circumstances, inherently likely that Ms Cawood learned in advance of the letter of 13 October 1994 that the proposal was likely to be rejected because the level of sponsorship being sought was viewed by Telstra as too high.(d) In October 1994 the Defendant sought advice from Messrs Lane & Lane as to the obligations that the Defendant might be exposed to if the Telecom sponsorship was renewed during 1994, and how those obligations might differ if no renewal took place on or prior to 31 December 1994. Ms Cawood was unable to explain the circumstances in which such advice was sought, and could give no clear evidence as to whom it was shown when received, and what any discussion was about it.
(e) The letter of rejection from Telstra was dated 13 October 1994 — that is, several weeks after the submission by Mrs Jones of the sponsorship proposal to Telstra. No explanation is provided in the evidence for this period of delay. Mr O’Neill had made his view clear to the Defendant directly that it was simply a matter of price but much less informatively in his letter of 13 October 1994 with its generalised reference to “current content and funding requirements”. That view was not communicated prior to dispatch of the letter by either Mr O’Neill or Ms Passmore to Ms Jones. It appears that Mr O’Neill did not say anything to Ms Passmore at the time that could reasonably have led her to think that the matter might be favourably considered by him in the absence of some change in the level of sponsorship being sought.
(f) Although Mr O’Neill gave evidence that the letter dated 13 October 1994 was in a standard form (T, 233 .30), Ms Passmore’s evidence was to the contrary — according to her, the words:
“The proposal has been carefully considered in line with our current strategy and, unfortunately, based on its current content and funding requirements, Telecom Australia must decline the proposal.”
were words chosen by Mr O’Neill specifically and deliberately for refusal of Mrs Jones’ sponsorship proposal on behalf of the Defendant (T, 270 .30). It should be concluded that Mr O’Neill’s evidence on this point (the use of a “standard” letter) was at least lacking in candour. It would have been simple enough for Mr O’Neill at the time to state to Mrs Jones that the level of sponsorship being sought was too high and to communicate that view to Mrs Jones very shortly after the proposal was assessed in August 1994. The unexplained delay and the failure to identify the true reason for rejection with any clarity is more consistent with a preference on Mr O’Neill’s part, encouraged by the Defendant, to deal in due course with the Defendant itself without Mrs Jones. Indeed, Mr O’Neill’s inferred knowledge of the difficulties in locating major sponsors, combined with his knowledge of Telstra’s right of first refusal must, when combined with the date of the rejection letter (13 October 1994) have meant that it was obvious to Mr O’Neill that the course of conduct that he was engaged in was highly likely to promote the prospect of Telstra being able to deal directly with the Defendant in 1995 free of the Plaintiffs. The Defendant had a commercial interest in achieving that outcome in the perceived scope for avoiding paying a commission to the Plaintiffs having regard to the legal advice it had received from Lane & Lane on 19 October 1994 (PX6). In particular, a replacement sponsorship agreement could be altered to look like a new sponsorship in accordance with the advice received from Messrs Lane & Lane. It was suggested by Messrs Lane & Lane (at page 3 of the letter) that there be a new agreement “at some future time” “which has been wholly and separately negotiated on new terms”. Telstra’s objective is less clear. It seems clear, however, that at or about the time that Mrs Jones was submitting her sponsorship proposal, Telstra had become critical of some aspects of her performance; see, for example BEC, para 39.
(h) Mrs Jones then, quite understandably, communicated orally with Mr O’Neill in an endeavour to discuss the rejection. Mr O’Neill refused to engage in any negotiation. Mr O’Neill insisted upon his right of first refusal. Mr O’Neill, with what can only have been the obvious intent of deflecting Mrs Jones from any negotiation on price, told her (according to Mrs Jones’ first affidavit, page 13.8)
(g) A meeting of the Defendant was held to discuss the Telecom rejection. According to Mrs Jones, the mood of that meeting was, on the part of the Defendant’s participants, jovial (HEJ, para 41). At that meeting Ms Cawood gave what appears to be an at least inaccurate response to Mrs Jones about the existence of any direct communication between Telstra on the one hand and the Association on the other hand. According to Mrs Jones, Ms Cawood said that no one from the Association had had any direct contact with anyone at Telecom. According to Ms Cawood, she was asked specifically about the letter and said that no one had been in touch with Telecom about the letter. Mrs Jones’ recollection should be preferred over Ms Cawood for the reasons I have mentioned. Even according to Ms Cawood’s account, however, it was appropriate for her to respond by disclosure of her earlier conversation with Telecom in which she was told that the amount was too high. This was something which was not included in the letter of rejection. It was something which was material. It was something which she chose not to communicate, even on the occasion of this meeting, or on any other occasion prior to the expiration of the Consultancy Agreement.
“But I said I won’t break the package up so get out there and flog it — it’s worth the money and the women deserve it.”
When Mr O’Neill came to swear his affidavit, he chose not to deny this aspect of Mrs Jones’ account. Mrs Jones’ recollection is corroborated by the letter that she sent to the Defendant on 18 November 1994 (PTB, 59, page 2.1). Mrs Jones had no motivation at the time of writing that letter for distorting what Mr O’Neill had said to her.
(i) The unsuccessful approach by Mrs Jones to Mr O’Neill was reported back to the Association on 21 October 1994 (PTB, 48). On the surface, the Defendant’s major sponsor had rejected the proposal for sponsorship for 1995, a matter critically important to the prospective financial well-being of the Defendant. It was the practice of the Defendant to discuss significant matters bearing upon sponsorship at its board meetings. A board meeting of the Defendant took place on 21 and 22 October 1994 (PTB, 47). No reference was made to any difficulty with the Telstra sponsorship for 1995. Likewise at the further meeting on 19 and 20 November 1994.(j) The Defendant rejected reasonable requests by the Plaintiffs for funds to assist in locating an alternative sponsor and for an ability to publicise the availability of the sponsorship. In so far as the publicity was concerned, not one witness called on behalf of the Defendant was able to provide any satisfactory explanation for the refusal on the part of the Defendant to approve any publicity whatsoever of the availability of the sponsorship.
(k) I have earlier referred to the conversation between Ms Cawood and Ms Passmore in mid-November 1994 and its context. Also to the evident lack of interest of Ms Tye (in her conversation with Mrs Jones on 2 December 1994 showing no genuine interest in any project to seek an alternative sponsor than Telecom.
(l) A proposal was submitted by the Defendant to Telstra and commercial agreement swiftly reached in early February 1995 about the terms of a new sponsorship. At no time prior to such commercial agreement being reached did Telstra seek any replacement team. At no time prior to such commercial being reached did Telstra remove the Defendant’s file into the lapsed sponsorships area. At no time prior to the commercial agreement being reached did the Defendant seek or propose to seek sponsorship from any alternative sponsor.
(m) When the formal sponsorship agreement was being negotiated an attempt was made to clothe it with the appearance of a new agreement and, accordingly, references were made to “extensive negotiations” in the recitals which were completely at odds with the true facts (PTB, 93 and 94 as well as the sponsorship agreement, document 125). Ms Cawood was unable to offer any legitimate explanation for the “re-jigging” of what otherwise would have been a standard or generic Telstra sponsorship agreement. She conceded eventually that there had been no “extensive negotiations” (T, 411 .9). The drafting of the sponsorship agreement is only consistent with an endeavour to further implement the advice from Messrs Lane & Lane that what was required in order to avoid the payment of commission to the Plaintiffs was an agreement which had been “wholly and separately negotiated on new terms”. Ms Cawood agreed as much (T, 409 .7-.9). The attempt to “re-jig” the sponsorship agreement is only consistent with a conscious appreciation that without that re-jigging there would not appear to have been a sponsorship agreement which had been “wholly and separately negotiated on new terms”, which is what the advice from Messrs Lane & Lane had suggested was necessary.
Findings
176 The Defendant have had an ongoing relationship with Qantas Airways Limited (Qantas) since 1986. 177 In the Annual Reports of AWHA from 1986 until at least 1989, Australian Airlines is acknowledged as providing sponsorship to the Defendant to the extent following. 178 In the 1986 Annual Report for AWHA, the report by the Director of Finance for the year 1985-86, states:
(a) the Plaintiffs would not be successful in locating an alternative sponsor on or before 31 December 1994;(b) the Defendant intended to approach Telstra in its own right after 31 December 1994, and to make application for a renewed sponsorship agreement;
(c) this direct approach would be to the exclusion of the Plaintiffs and by means, effective or not, calculated to avoid paying any commission to the Plaintiffs, with Telstra co-operating in that approach including by use of legal window dressing, evinced by the 1995 Telstra Agreement, to falsely suggest an agreement that was not generic and was the result of “extensive” negotiations;
(d) when the Defendant approached Telstra in 1995 there would be a need to resolve the only difficulty that Mr O’Neill had perceived with Mrs Jones’ proposal, namely price (in the sense of the monetary level of sponsorship);
(e) agreement would be reached on price;
(f) there would, accordingly, be a new sponsorship agreement which would be available from Telstra to the Defendant for 1995.
Whether that state of affairs culminating in the 1995 Telstra agreement constituted, within the meaning of clause 4(b) of the 1994 Consultancy Agreement a “subsequent year of sponsorship”, or within the meaning of clause 4(c) of the 1994 Consulting Agreement, a renewal of the Telstra sponsorship arrangement, notwithstanding that price was not agreed till shortly after 31 December 1994, is both a legal and factual question. It is answered with related questions under Legal Questions below.
The Qantas Agreements
179 In the 1987 Annual Report Qantas is acknowledged at the commencement, and in the Finance Committee Report it is stated:
In the section of the report headed "Sponsorship", thanks are expressed to the "subsidiary sponsors", inclu ding QANTAS. [DX9 Tab 18 page 7]
New sponsors this year include QANTAS and the Shell Co. who will provide $10,000 a year for the next three years for the Under 18 squad. [DX9 Tab 18 page 36]
180 In the 1988 Annual Report Qantas is acknowledged at the commencement, [DX9 Tab 20 page 1] and thanked in the sponsorship and government grant section of the Finance Committee Report. [DX9 Tab 20 page 16] In the notes to the accounts, under the heading, Qantas Sponsorship, it is noted:
Qantas and Australian Airlines were thanked, along with other companies, in the section on sponsorship and government grants .
Fares of delegates to F.I.H. were under budget because of the use of F.O.C. fares on QANTAS where possible, as this was part of their sponsorship package. [DX9 Tab 19 page 20]
181 In the 1989 Annual Report Qantas is again acknowledged at the commencement, and thanked in the sponsorship and government grant section of the Finance Committee Report. In a marketing report by H. Edmunds-Jones, [T, 30 .55] it is reported:
A sponsorship is given by discount on tickets and supply of some F.O.C. tickets for officials travelling overseas. [DX 9 Tab 20 page 109]
182 Thus the ‘contra-travel’ arrangement between the Defendant and Australian Airlines existed before the 1 January 1989 commencement date of the fee structure provided for in the first Consultancy Agreement between the Plaintiffs and the Defendant. 183 In relation to international travel there was in existence before 1 January 1989, an arrangement whereby Qantas provided for a group travel discount and a waiver of excess baggage penalties. 184 On the other hand, no specific agreement between Qantas and the Defendant before 1 January 1989 with regard to such benefits could be identified. The Second Plaintiff gave evidence in cross-examination to the effect that at that time the Defendant would use a number of airlines and make their decision largely on the basis of ticket price [Jones T, 108 .1]. The Defendant appears to have made ad hoc agreements with a number of other carriers for one-off discounted travel [Jones T, 113-4] 185 In the agreement of 21 August 1989 between the Defendant and Telecom, there appears these words forming part of clause 2:
In the notes to the accounts under the heading, Qantas Sponsorship, it is noted:
The sponsorship contract with Australian Airlines was re-negotiated doubling the amount of contra travel and on an international aspect, we made exhaustive investigations as to the most profitable way of handling overseas travel. Our recommendation was not to enter a new agreement with QANTAS and in doing so appoint Gullivers Sports Travel to handle AWHA future bookings as well as going direct to the appropriate international carriers operating the same routes as QANTAS. [DX9 Tab 21 page 119]
The sponsorship is given by discount on tickets, and not in cash. [DX9 Tab 21 page 14]
186 In 1992, an agreement was entered into for sponsorship by Australian Airlines Limited of the Defendant and thus prior to any consultancy agreement with the Plaintiffs. Accordingly, no commission was payable on sponsorship monies provided by Australian Airlines Limited [clause 4(a) BEC, 100]. 187 By letter dated 15 April 1992 Australian Airlines Limited agreed to provide further sponsorship for a period of three years commencing on 1 January 1992 and concluding on 31 December 1994 [BEC, 166]. In 1993, the merger of Australian Airlines Limited with Qantas resulted in the replacement of Australian Airlines with Qantas as sponsor as the Australian Airlines brand name was phased out. On 27 May 1993, a letter from Qantas to the Defendant confirmed that the agreement that then existed between the Defendant and Australian Airlines Limited would, from that time on, be administered by Qantas. 188 In the program for the 1993 Telecom Stix Series, Qantas was acknowledged as a sponsor and the "official airline of Telecom Stix Series". [BEC, 174] The Qantas name and logo appeared on banners displayed at matches during the 1993 Telecom Stix Series alongside banners for other sponsors. [BEC, 9, 176] Sponsorship payments in 1994 pursuant to the letter of agreement dated 15 April 1992 with Australian Airlines Limited were made by Qantas Airways Limited. [BEC, 9]. 189 In the 1993 Annual Report, under the acknowledgments at the commencement, Qantas Australian Airlines is mentioned in respect of "continuing financial assistance and provision of contra travel" and Mrs Jones reported in her marketing report that:
“AWHA retains the rights to negotiate other minor sponsorship agreements for the Team during the said period, which will not conflict with the Sponsor. This excludes minor sponsorship agreements already in place at the time of the signing of this contract, in respect of the following companies and/or products:
The Second Plaintiff admits to being aware that Qantas was described as a minor sponsor in the sponsorship agreement. However, Ms Cawood was not aware, or did not admit to being aware, of any agreements being in existence at that time.
(1) Adidas
(2) A G Thompson
(3) Australian Airlines
(4) Qantas
(5) Triumph”
190 In the 1994 Annual Report Qantas is acknowledged at the commencement for "continuing financial assistance and provision of contra travel" and in the report by the marketing and promotions consultants it is indicated under the heading Australian Airlines (Qantas):
Support sponsorships also important to WHA which have been maintained throughout the year are Qantas Australian Airlines and Kookaburra Sport. [BEC, 179]
191 It appears that much of the ‘sponsorship’ provided by Qantas to the Defendant was therefore in the form of “contra travel” up to 7 November 1994. However, on 18 March 1994, the Defendant did receive a cheque from Qantas for $5,000, being a sponsorship payment for the period 1 July 1993 to December 1993. 192 On 11 August 1994 a representative of the First Plaintiff met with Steve Loader, a representative of Qantas (Mr Steve Loader was the person responsible for making all sponsorship decisions for Qantas with sporting bodies) to discuss the possibility of Qantas sponsorship of the Defendant. In September, a marketing report of the Plaintiffs referred to further meetings with Qantas. 193 On 21 September 1994 a proposal was presented by the Plaintiffs to Qantas. A further meeting was then held between the Plaintiffs and Qantas about the terms of a sponsorship agreement. Qantas represented that they would sponsor the 1994 Stix Series with respect to airfares. A draft agreement incorporating that and other representations was faxed to the Defendant by Qantas on 18 October 1994. 194 By a letter of agreement dated 7 November 1994 between Qantas and AWHA, Qantas agreed to provide sponsorship for four years commencing on 1 January 1995. 195 The sponsorship consisted air carriage in annual instalments of $50,000, $52,500, $55,000 and $57,500 [Annexure J to HEJ, 76] . Tickets issued as sponsorship were to be used by employees or members of the Defendant or persons designated by the Defendant. The agreement also involved a minimum 9% discount off international air fares and a waiver of excess baggage requirements on such international flights. 196 Furthermore Qantas agreed to provide to the Defendant a 40% discount on airfares on certain (domestic - above QF400) flights for a period of three years from the commencement of the agreement. 197 Finally, Qantas agreed to provide $5,000 cash per year to the Defendant for the naming rights and sponsorship of the Player of the Match and Player of the Series Awards pertaining to the Stix Series. 198 On 31 December 1994 the Plaintiffs forwarded to the Defendant an invoice for the amount of $8,550.00. This represented commissions on both the 1994 Stix Series and on the domestic and international travel arrangements. 199 In a letter dated 6 February 1995 to Mrs Jones, Ms Cawood states:
Australian Airlines has been the official carrier of WHA for the past eight years and the contract expires in December this year. The contract has been re-negotiated with QANTAS to cover international as well as domestic travel for the period 1995-2000. [DX9 Tab 23 page 14]
200 The pleadings as ultimately amended expose the following questions for determination: 201 Question 1 — uncertainty: In the events which have happened are clauses 3 and 4 of Annexure C to the 1993 or 1994 consultancy agreement, capable of enabling the Plaintiffs or either of them to recover any commission from the Defendant (but for any essential breaches on their part and subject to their proper construction) or are those clauses void for uncertainty and in consequence the relevant agreement? 202 Question 2 — fulfilment of conditions for entitlement to commission: If the answer to the first limb of question 1 is “yes”, did the Plaintiffs perform and discharge each and every of their obligations under the consultancy agreements so as not to be disentitled to any commission and, in particular
2. Re commission on Qantas sponsorship
“As you know Australian Airlines has been a sponsor of AWHA for over 8 years and the fact that Qantas and Australian Airlines merged the legal technicality which you highlighted of Australian Airlines no longer being a separate entity should not result in increased costs for WHA or a bonus for Edmunds-Jones.
LEGAL QUESTIONS
Given this, my opinion is that $25,000 of the Qantas funding should be applied to the previous Australian Airlines arrangement being for domestic airfares which would, had not the merger occurred being under that long standing arrangement. The remaining $25,000 of the Qantas arrangement, being for overseas flights would then legitimately apply a claim by Edmunds-Jones of 15% being $3,750.
203 Question 3 — disentitling breach: If the answer to question 2 is “no”, were the Plaintiffs’ contractual breaches of such materiality as to disentitle them to any of the commissions claimed? 204 Question 4 — commission on $80,000 in relation to 1993 Telstra Stix Series: If the relevant Consultancy Agreements are not void and any relevant condition precedent has been satisfied, whether the Plaintiffs are disentitled to commission on the sum of $80,000 paid for the production costs of the 1993 Telstra Stix Series by reason of:
(ii) did the Plaintiffs maintain and enhance the image of the Defendant and women’s hockey generally (as required by clause C of Annexure A)?
(i) did Mrs Jones during the term of the 1994 agreement “implement in a professional and businesslike fashion all of the duties specified in the consultancy brief….” as required by clause 3; and/or
205 Question 5 — “renewal” or “subsequent year of sponsorship”: If the relevant Consultancy Agreements are not void and any relevant condition precedent satisfied, did the sponsorship agreement between Telecom and the Defendant of 5 May 1995 constitute:
(i) an alleged inability to be able to properly characterise such payments as “sponsorship”;(ii) an alleged entry into an agreement to waive made on or about 21 May 1996;
(iii) an alleged estoppel; and
(iv) an alleged failure to submit an itemised account?
206 Question 6 — Qantas commission:
(a) a subsequent year of sponsorship within clause 4(b), or(b) a renewal of a sponsorship agreement or arrangement on or after 1 January 1995 within clause 4(c),
so as to entitle the Plaintiffs to a fee of fifteen per cent or twelve per cent respectively on sponsorship payments, or on the monetary equivalent of goods and services provided by Telecom?
207 Question 7 — Quantum Meruit entitlement: If clauses 3 and 4 of Annexure C to the consultancy agreement(s) are void for uncertainty are the Plaintiffs or either of them entitled to any reasonable remuneration based on quantum meruit and if so, in what sum?
(b) On the same basis, did Qantas become a party by novation to the Australian Airlines Sponsorship Agreement and, if so, whether such circumstance precluded commission on Qantas sponsorship?
(a) If the relevant Consultancy Agreements were not void for uncertainty and any relevant condition precedent was satisfied, was any sponsorship agreement of the Defendant by Qantas, the result of Qantas “having been approached or introduced” or were negotiations in relation to the agreement commenced “prior to 1 January 1989”, so as to disentitle the Plaintiffs from commission?
Question 1 — uncertainty:
208 In the events which have happened are clauses 3 and 4 of Annexure C to the 1993 or 1994 consultancy agreement, capable of enabling the Plaintiffs or either of them to recover any commission from the Defendant (but for any essential breaches on their part and subject to their proper construction) or are those clauses void for uncertainty and in consequence the relevant agreement? 209 The Defendant contends that the Consultancy Agreements and in particularly that for 1993 and 1994 were void for uncertainty. The basis for that contention is set out in para 7-7.9 of the Defendants’ written submissions, starting with the use of the phrase “and/or” in the introductory clause 3 of Annexure “C” dealing with fees, where what Mrs Jones must do to earn a fee is laid down. Clause 4 then defines the temporal requirements applicable to eligible agreements giving rise to a fee entitlement, differentiating between the fifteen per cent fee in clause 4(b) and the twelve per cent fee applicable to a renewal of “the sponsorship arrangement in any concluded agreement of the kind referred to in sub-clause (b) of this clause”.
210 Before dealing with the elaboration of that basis for alleging uncertainty and the others that follow, I set out below what can be taken to be common ground as to the principles applicable to dealing with allegations of uncertainty and the differentiation between uncertainty and ambiguity. These are usefully summarised by Mackenzie J of the Queensland Supreme Court in Coomera Resort Pty Ltd v Kolback Securities Ltd & Ors (Mackenzie J, BC9800289, 20 February 1998, unreported) at 97:
Principles
211 Before dealing with the other bases for alleging uncertainty, I deal with the use of “and/or” in clause 3 which is the Defendant’s first basis for alleging uncertainty. “And/or” has long been in use in business documents. Its meaning was discussed in Cuthbert v Cumming (1855) 10 Exch 809; 156 ER 668. Criticism of it has included Bennett J in Practice Note 1940 WN 155 who stated that it should not be used in an affidavit and threatened to order costs against anyone who did so. In Bonitto v Fuerst Bros [1944] EC 75 at 82 Viscount Simon, in discussing the confusion in the pleadings, spoke of “the repeated use of that bastard conjunction “and/or” which has, I fear, become the Commercial Court’s contribution to basic English.”; see generally the discussion in Piesse “The Elements of Drafting” ninth edition (LBC, 1995) by J K Aitken at 61-85. 212 Nonetheless, despite the constant refrain of criticism, courts have tended not to strike down contracts as void for uncertainty merely because they have shown what Gavin Duffy J described as “the common and deplorable affection for the form and/or” in Millen v Grove [1945] VLR 259. Thus Scrutton LJ considered the ordinary business meaning of “and/or” in Gurney v Grimer [1932] 38 Comm Cas 7 at 13 and had no difficulty in determining its effect in that context:
“and/or”
“A contract is only void for uncertainty if an essential term is uncertain ( Thorby v Goldberg (1964) 112 CLR 597; Godecke v Kirwin (1973) 129 CLR 629, 646). Because of the great inconvenience otherwise resulting, Courts nowadays strive to uphold the existence of a contract if possible ( York Air Conditioning & Refrigeration (A’asia) Pty Ltd v The Commonwealth (1949) 80 CLR 11; Meehan v Jones (1982) 149 CLR 571. The notion that it would be a reproach upon the law if the parties had intended to agree and believed they had agreed were told that for legal reasons the contract had never come into existence is uppermost in the Court’s mind ( Hillas & Co Ltd v Arcos Ltd (1932) 147 LT 503; Prints for Pleasure Limited v Oswald-Sealy (Overseas) Ltd (1968) 3 NSWLR 761. But such belief is not decisive of the existence of a certain contract. It is important to avoid a ‘narrow or pedantic’ approach ( Upper Hunter District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429, 437). If the parties have acted on the basis that there is agreement, the readiness to uphold it may be reinforced ( F & g Sykes (Wessex) Ltd v Fine Fare Limited (1967) 1 Lloyds Rep 53; Brown v Gould [1972] Ch 53. Where the parties have shown by conduct that they can understand and apply the terms of the contract, a Court should be reluctant to find the contract is uncertain ( Hillas & Co Ltd v Arcos Ltd ; York Air Conditioning & Refrigeration (A’asia) Pty Ltd v Commonwealth ). But if an uncertainty cannot be resolved there is no room for upholding the agreement. It is, however not uncommon that parties may clarify what was previously uncertain… .”
213 His interpretation of the expression accords with Fowler’s “Modern English Usage” third edition (Oxford, 1996) where the expression is defined as a “formula denoting that the items joined by it can be taken either together or as alternatives”. Fowler describes the expression as verging on the inelegant when used in general writing and as having been first recorded in the mid nineteenth century in legal contexts. 214 Michelle Asprey in her book “Plain Language for Lawyers” second edition (Federation Press, 1996) at 175 agrees with Fowler that the better way of expressing the same idea is to use the expression “x or y or both”. 215 Indeed that is the meaning which the Plaintiffs, in my view correctly, contend should be accorded to that expression “and/or” in clause 3, which for convenience I quote below with emphasis added:
“There is really a clear understanding of what the words “and/or” mean. To take one of the simplest cases and an obvious case, where there is a charter party by which a ship is to proceed to Rotterdam an/or Antwerp at charterer’s option it means one of three things: the charterer may either send the vessel to Rotterdam alone or he may send her to Antwerp alone, or he may send her to Rotterdam and Antwerp.”
216 Thus while it is argued on behalf of the Defendant that the use of the phrase “and/or” makes it impossible to say whether it was sufficient for Mrs Jones to locate, introduce, negotiate or conclude, or whether she had to locate, introduce, negotiate and conclude in order to be entitled to commission, the Plaintiffs contend that the phrase plainly indicates that it suffices to satisfy clause 3 that the Plaintiffs do some one or more of these things:
“A Fee is payable in accordance with the provision of Clause 4 only on agreements entered into as a result of the other party (sponsor and/or donor or otherwise) being located and/or introduced by Ms Jones and/or the agreement being negotiated and/or concluded by Ms Jones and all negotiations and other actions by Ms Jones being in accordance with the provisions of this Agreement.”
217 Indeed when reference is made to clause 4, where the draftsperson maintains continued enthusiasm for the inelegant expression “and/or”, the any or all preferred interpretation is borne out by the expression “any and/or all agreements” in clause 4(a). Again in clause 4(b) in the first proviso the reference is made to “concluded agreements, the other party having been approached or introduced or negotiations commenced on or subsequent to the 1st January 1989…”. 218 Thus, awkward though the expression may be, as Lord Wright said in Hillas & Co Ltd v Arcos Ltd 147 LT 503 at 514, the court should construe commercial contracts “fairly and broadly without being too astute or subtle in finding defect”. 219 Thus I am satisfied first that clauses 3 and 4 do not fail for uncertainty on the ground of the use of the expression “and/or” and second, that the expression does have the meaning contended for by the Plaintiffs in that context. 220 The remaining grounds of attack on the basis of alleged uncertainty can be summarised as follows:
“(a) locate;
(b) introduce;
(c) negotiate;
(d) conclude.”
That seems reasonable enough in the context of an agent or consultant earning a commission for efforts made. It would be most unfair if the agreement permitted no fee where Mrs Jones located a sponsor, but AWHA chose to take over the negotiation or to carry matters to conclusion.
221 I deal with each of these grounds on alleged uncertainty as follows:
(a) The concluding proviso to clause 4 is uncertain (see paras 7.4 and 7.9 of the Defendant’s written submissions). It is said that the proviso is uncertain in that:
(i) in distinguishing between monetary sponsorship and sponsorship by way of the provision of goods and services, where the sponsorship is by way of goods and services, the final proviso to clause 4 stipulates that “the fee payable to the Company relating to agreements for supply of goods and services shall be calculated upon the actual monetary amount received by the Association when utilising the goods and/or services and not the actual value of the goods and/or services. Payment shall be made to the Company within thirty days of such date.” It is then said that such proviso produces an absurd result where, for example, a sponsor provides hockey uniforms and the uniforms are worn by players in a match promoted by the Defendant to which members of the public attend on paying an entrance or gate fee. It is then suggested that if “the actual monetary amount received by the [Defendant] when utilising goods” is the amount of that gate or entry fee, the Plaintiffs have provided no evidence to support any claim for commission based on such a mode of calculation but equally, if the proviso does not mean that, there is no other ascertainable meaning.
(ii) In a case of “agreements for the provision of goods or services” as referred in the words immediately preceding the final proviso to clause 4, the fees payable to the Plaintiffs are required to be paid “at such time as the Association receives a monetary benefit from the supply of the goods and services”. If such goods and services were thus provided in kind rather than by way of direct monetary payment, how does one calculate “a monetary benefit” from their supply and, more particularly, how does one do so in accordance with the final proviso which requires that the calculation be “upon the actual monetary amount received by the Association when utilising the goods and/or services and not the actual value of the goods and/or services”. Ex hypothesi the actual monetary amount was never received and the concluding proviso eliminates as a possible answer to that question “the actual value of the goods and/or services”.
(b) It cannot be said whether, for the purposes of clause 4(b), any agreement entered into with Telecom Australia is required to be one which was entered into on or prior to 31 December of the relevant year (para 7.6 of the Defendants’ written submissions);(c) It cannot be said how clauses 4(b) and 4(a) are to be reconciled (para 7.6 of the Defendants’ written submissions);
(d) It cannot be said, for the purposes of clause 4(b), what the words “where the original sponsorship was negotiated by the Consultant and such sponsorship was for a period in excess of one (1) year up to the date of expiry of that actual Agreement and no further” mean (para 7.7 of the Defendants’ written submissions);
(e) It cannot be said whether the third proviso to clause 4(b) is operative where a fee has been paid which related to a whole period of sponsorship extending beyond the relevant date, but which was further extended (para 7.7 of the Defendants’ written submissions);
(f) It cannot be said how clause 4(c) is to be reconciled with clause 4(b) (para 7.7 of the Defendants’ written submissions).
222 Essentially the Defendant’s contention is that the concluding proviso to clause 4 is uncertain and that uncertainty relates to sponsorship by way of the provision of goods and services, whether effected by the sponsor providing goods and services direct, or by the sponsor making a payment to a third party where the third party in turn provides the goods and services to the Defendant. The alleged uncertainty relates to the method of calculating the sum by reference to which commission is payable and the time from which commission is payable. 223 The starting point in attempting to construe a contract potentially ambiguous, is to determine whether a meaning can be attributed objectively to the words used, from the evident commercial purpose of the parties’ overall arrangements; compare Lord Steyne “Contract Law: Expectations of Honest Men” (1997) 130 LQR 431 at 441. That in turn requires a determination of what Lord Steyne calls “the objective contextual scene”, though the extent of extrinsic evidence which may be called upon to resolve ambiguity is a matter of debate as is the scope for finding ambiguity; Allstate Explorations NL v Beaconsfield Gold NL [1999] NSWSC 832 at paras 39-44 (Santow J, 25 August 1999, unreported). In Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] 2 WLR 945 Lord Steyn at 961 explains:
(a) Relationship between opening part of clause 4 and concluding proviso in the case of sponsorship by the provision of goods and services
224 Here there can be no rational basis for distinguishing between the situation where the sponsor pays a monetary amount direct to the Defendant, for example to buy hockey uniforms, and where the sponsor pays that same monetary amount to a third party supplier to provide the hockey uniforms to the Defendant. In either case, the payment has the same purpose, namely to provide a benefit to the Defendant readily ascertainable by reference to the money amount actually paid by the sponsor. In my judgment, clause 4 treats both payments in the same way, such that the expression “receipt by the Association of the monetary payments owing pursuant to the terms of the relevant agreement” where it appears in the last sentence of clause 4 before the final proviso is intended to embrace monetary payments directly received or indirectly received. The obvious example would be where the sponsor is directed by the Association to make a payment direct to a supplier which otherwise the Association would have had to pay itself. While literally the Association has not received the monetary payment, it has in a practical sense done so and both a direct receipt or such an indirect or constructive receipt are embraced by the earlier quoted words. 225 In contrast to that situation, is the situation where the sponsor never makes a monetary payment but simply provides goods and services to the Association. In that circumstance, clearly enough there is a commercial purpose in having a mechanism for calculating a monetary value to be attributed to the goods and services. The opening part of clause 4 and the lead in to its final proviso are directed to providing a basis for determining, but in that situation only, both how such a value is to be attributed and the time from whence commission is to be calculated. It does so, admittedly in clumsy and imprecise language. The question is whether any sense can be made of it which accords with a discernible commercial purpose of the parties derived from the objective contextual scene. 226 Clearly enough the possibilities for different values to be attributed ranging from the value of the goods and services to the sponsor, their market value, or their peculiar value to the Association, render it necessary for there to be some objective means of ascertainment of which if any of these possibilities was the parties’ objective intent when attributing a mode of calculating a value. 227 I am satisfied that the words “the actual monetary amount received by the Association when utilising the goods and/or services” applies to notional receipts, as if the Defendant had disposed of such goods and/or services, and means ordinarily the proceeds that would be received upon such a notional disposal. The outcome is ordinarily to attribute market sale value to the relevant goods and services. However, the qualifying word “actual” enables the Defendant, in the less usual case where this is so, to demonstrate that the benefit that would be received from such a notional sale should not be treated as the actual market value, in the event that the same goods or services could be acquired from some other source at lower than the market sale price. An example might be a standard discount available from several sources for the particular service, such as air travel for a community sporting group, which Qantas and other airlines might provide. 228 Support for this interpretation is gleaned from the words immediately preceding the last proviso. There reference is made, in the case of an agreement for the provision of goods or services, to the time when the Association “received a monetary benefit” from supply thereof. 229 Although as I have said the language is imprecise and clumsy, I am satisfied that this interpretation avoids consequences which would otherwise be “capricious, unreasonable, inconvenient or unjust” (to use the words from earlier authorities cited in Locke v Dunlop 39 ChD 387 at 393 in turn referred to by Gibbs J in Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109-10). What would clearly be capricious in the present circumstance would be to have a gap in respect of sponsorship in kind as would be the case were there no method for calculating its attributable value for commission purposes. But I am satisfied there is no such gap. Rather, the relevant provisions clearly contemplate that such sponsorship in kind should be taken into account no less than monetary sponsorship in the conventional sense. Indeed, were it necessary to do so, if that were a source of ambiguity for which no content could be provided, there would be adequate basis for severing that part of the relevant clause; see Mcfarlane v Daniell [1938] 38 SR(NSW) 337 at 345. However, I do not consider that that course is necessary.
“First, in respect of contracts …. the contextual scene is always relevant. Secondly, what is admissible as a matter of the rules of evidence under this heading is what is arguably relevant. But admissibility is not the decisive matter. The real question is what evidence of surrounding circumstances might ultimately be allowed to influence the question of interpretation. That depends on what meanings the language read against the objective contextual scene will let in. Thirdly the inquiry is objective: the question is what reasonable persons, circumstanced as the actual parties were, would have had in mind.”
230 The Defendant’s submissions ask (in para 7.6) what the first proviso to clause 4(b) means, where it says
(b) When must any agreement for the purpose of clause 4(b) with Telecom Australia be entered into — meaning of first proviso.
231 I consider that the first purpose of the proviso is to confer an entitlement to commission or fee on telecom sponsorship without the Plaintiffs having to establish that the Plaintiffs had any role with respect to approaching, introducing or negotiating with Telecom Australia after the relevant date (1st January 1989). That provision finds its origin in the sequence of Consultancy Agreements starting with 1989. Clause 3(a) of the first one, entered on 17 July 1989 excepts Telecom Australia from the preclusion of any fee on any agreements “entered into by the World Cup with a person or company with whom the Australian Women’s Hockey Association Inc have previously had an agreement except in relation to Telecom Australia”. [emphasis added] This is similarly provided in clause 4(b) of the 1991 Consultancy Agreement; see first proviso quoted earlier. In addition, by the preceding words of clause 4(b) of the 1991 and following Consultancy Agreements, this sponsorship agreement must have been entered into on or prior to the end of the relevant December year in which the relevant Consultancy Agreement expires. 232 It will be recalled that according to Ms Cawood’s evidence (BEC, para 10) she was approached by an employee of Telecom as early as 1988 and, in consequence, asked Mrs Jones to speak to that employee. There were negotiations in 1988 in which Mrs Jones thus played a part, in respect of the 1990 Womens Hockey World Cup (HEJ, 8). At the same time that Mrs Jones was speaking to Telecom about 1990 Womens Hockey World Cup, she was speaking to Telecom generally about sponsorship (T, 83 .20). I should add that the reference to “any agreement entered into with Telecom Australia” was not intended to apply to any agreement ever entered into with Telecom Australia but rather any Telecom Australia agreement which existed at the time of the relevant Consultancy Agreements. Other parts of the consultancy Agreements, in particular the second proviso to clause 4(b) and clause 4(c) dealt with the position of the Plaintiffs in relation to renewals of, inter alia, the Telecom sponsorship after the termination of any consultancy. 233 I therefore conclude that there is no sufficient basis for uncertainty on this ground either.
“PROVIDED HOWEVER that this shall only apply to concluded agreements, the other party having been approached or introduced or negotiations commenced on or subsequent to 1st January 1989 and on any agreement entered into with Telecom Australia”.
234 I have already dealt with the supposed difficulty of reconciliation in relation to the reference to Telecom Australia. Otherwise, there is no real difficulty in reconciling the two clauses as I explain. Clause 4(a) of the 1991 Consultancy Agreement (and mutatis mutandis with each subsequent Consultancy Agreement) make clear that if a concluded sponsorship agreement has been entered into “on or prior to the 1st July 1991”, that precludes from any fee that sponsorship agreement and likewise is precluded any subsequent agreement with the same person or company with whom the Association previously had (such) an agreement. The preclusion is from any fee under that Sponsorship Agreement; the proviso to clause 4(a) permits a fee under any preceding Consultancy Agreement. Clause 4(b) then provides for a fee to be payable on any concluded agreement (not so precluded) entered prior to 31 December 1992 in the case of the 1991 Consultancy Agreement (or the relevant Consultancy Agreement’s expiry date). 235 Thus there is no sufficient basis for uncertainty on this ground either.
(c) Reconciliation of clauses 4(b) and 4(a)
236 The Defendant’s contention is that the second proviso to clause 4(b) is uncertain because it is not plain whether the proviso applies to all agreements or only to Telecom Australia agreements. Secondly, it is said that it is not plain what content the words “and no further” have. For the reasons below, I do not accept either contention. 237 I am satisfied that the second proviso to clause 4(b) relates to all agreements, including Telecom Australia agreements. The Telecom Australia agreements entered into during the terms of the Consultancy Agreements were:
(d) Uncertainty of second proviso to clause 4(b)
238 The concluding words of the second proviso to clause 4(b) (“and no further”) mean that there is no fifteen per cent entitlement for any period exceeding the term of the “concluded agreement” (within the first proviso). However, subject to that override, the fifteen per cent continues for so long as there is a concluded agreement embodying a continuing sponsorship “for a period in excess of one year”. I do not agree that a continuing sponsorship suffices without a matching concluded agreement; indeed both are necessary.
(a) on 8 May 1991 (for years 1991 and 1992) (see annexure “J” to Ms Cawood’s first affidavit); and(b) on 15 February 1993 (for years 1993 and 1994) (see annexure “K” to the same affidavit).
The Telecom sponsorship was earlier entered into on 21 August 1989 (for years 1989 and 1990) (see annexure “I” to the same affidavit). Since the period of the Telecom sponsorship was known and was in excess of one year, it is inherently unlikely that the parties would have chosen to adopt such general words if the second proviso was intended to relate only to the Telecom Australia agreement. There is no commercial objective that can be conceived of, moreover, for limiting the entitlement to commission “on subsequent years of sponsorship” only to subsequent years of a Telecom Australia sponsorship. It is plain that the second proviso relates to all agreements, including Telecom Australia agreements.
239 It is argued by the Defendant (in para 7.7) that the third proviso to clause 4(b) is uncertain because it is not plain whether a fee would be payable in respect of the receipt of sponsorship benefits by reason of an extension. The hypothetical problem posed in the Defendant’s submissions is put this way:
(e) Uncertainty of third proviso to clause 4(b)
240 The Plaintiffs’ contend that to the extent there may be an overlap between clauses 4(b) and 4(c), the Plaintiffs are entitled to elect. However, I do not consider there is any such overlap. Clause 4(b) always presupposes a concluded agreement, embodying a sponsorship. That sponsorship so embodied may extend to in excess of one year. If it does, this entitles the Plaintiffs to fifteen per cent commission for each subsequent year of sponsorship until the underlying original agreement ceases along with the sponsorship. Whereas renewal under clause 4(c), though also presupposing a contractual agreement embodying the sponsorship, does not require that the original agreement extend into later years. What it requires is that the sponsorship relationship be renewed, but continue to be embodied in a subsequent contractual agreement or series of agreements; see further under question 5. 241 For these reasons, I do not consider that clauses 4(b) and 4(c) cannot be reconciled or that they give rise to any basis for uncertainty.
“Suppose a sponsorship was arranged before 1 January 1994 but extended well beyond that date (e.g. until, say, 1996); suppose the Defendant paid the First Plaintiff a fee in relation to that sponsorship for the whole of its period; would any further fee become payable in the event that the sponsorship was extended beyond its fixed term (in the example given, to, say, 1997-1998)? If so, why?”
The third proviso refers to a date which (in each case) is the commencement date of the consultancy. The effect of the proviso is that no fee is payable under the current Consultancy Agreement in respect of a sponsorship which had an earlier commencement date if the fee paid under an earlier Consultancy Agreement relates to the whole of that period of sponsorship. The hypothetical posed takes the date 1 January 1994 and, therefore, presumably is posed in respect of the 1994 Consultancy Agreement. That hypothetical sponsorship is stated to extend beyond 31 December 1994. A fee is then said to have been paid “in relation to that sponsorship for the whole of its period” (that is, for the whole of its original period). It is then stated that there is an extension (“to, say, 1997-1998”). But there is a simple answer. The effect of the extension is that it is no longer true to say that a fee has been paid which relates to the whole period of sponsorship. The further sponsorship provided (under the extension) would attract an obligation to pay a fee, accordingly, under the new Consultancy Agreement. That answer to the problem posed is plain. It does not give rise to uncertainty.
(f) Clause 4(c) not reconcilable with clause 4(b)
242 In any event, uncertainty is only recently raised in these various respects well after the parties fell into substantial dispute. The contracts which are alleged in the present proceedings to be uncertain were entered into in 1993 and 1994. They mirrored earlier agreements, the first of which was in 1989. Whilst the Plaintiffs were actively engaged in performing the task contemplated by the Consultancy Agreements, there was never any suggestion that the agreements proved incapable of application and certainly the evidence does not indicate otherwise. It was only after termination of the consultancy (at the end of 1994) that the parties clearly fell into substantial dispute. 243 The present proceedings were commenced in 1996. It was not for some years later that the Defence was amended to raise (for the first time in the context of the dispute) an issue concerning an alleged uncertainty. Consistently with the authorities, this strongly suggests that this Court should be astute to consider whether any difficulties which have been properly identified are in truth difficulties of construction which reflect ambiguity still capable of resolution, rather than of such a level of uncertainty as to render the contract devoid of meaning in an essential respect. It is to be remembered what Latham CJ in York Air Conditioning & Refrigeration (A’asia) Pty Ltd v The Commonwealth (1949) 80 CLR 11 at 53 said:
Uncertainty generally
244 As Gibbs CJ said in Meehan v Jones (1982) 149 CLR 571 at 578:
“When the parties have shown by their conduct that they understand and can apply the terms of a contract without difficulty, the court should be very reluctant indeed to pay no attention to such conduct by holding that the terms of the contract are unintelligible by reason of uncertainty.”
“The fact that opinions may differ as to which of these two meanings is given to the words of the clause does not mean that the clause is uncertain. If the court, in construing the contract, can decide which of the two possible meanings is that which the parties intended, there will be no uncertainty.”
Conclusion 245 I am satisfied that the contract is not void for uncertainty and that the proper construction of those provisions of it which are capable of more than one interpretation is as I have set out above. 246 The matters raised by the Defendant are rather properly characterised as questions of potential ambiguity, capable of being resolved as matters of construction in accordance with the well-settled approach of avoiding constructions which make commercial nonsense or fail to accord with the parties’ evident commercial purposes in an objective sense; see Hyde & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 at 313. Thus taking each of those questions of construction in turn, they are resolved as follows:247 It follows that the relevant provisions of the applicable Consultancy Agreement are not void for uncertainty. Thus, subject to the answers to Questions 2 and 5 being in the Plaintiffs’ favour, the First Plaintiff is entitled to recover any commission from the Defendant under whichever be the applicable provision of the 1994 Consultancy Agreement, that is either clause 4(b) or clause 4(c).
(a) clause 3 is satisfied if the Plaintiffs do any one or more of the following: locate, introduce, negotiate and conclude;(b) the first proviso to clause 4(b) excludes Telecom Australia Agreements from the requirement that the relevant conduct on the part of the plaintiffs commence only on or after 1 July 1989 or require the Plaintiffs to show they have done any of the matters in (a) above, vis a vis Telecom;
(c) clause 4(b) can be reconciled with clause 4(a) in the way earlier described;
(d) the second proviso to clause 4(b) relates to all agreements, including Telecom Australia agreements;
(e) the words “and no further” in the second proviso to clause 4(b) emphasise that the duration of the sponsorship is to be determined by having regard only to the original term of the negotiated agreement and not any extension by way of subsequent agreement;
(f) the third proviso to clause 4(b) would not be satisfied where there is an extension of a term for which a fee has previously been paid but which is subject to the receipt of a further fee;
(g) there is no real overlap between clauses 4(b) and 4(c), but are reconciled as I have described;
(h) the words “agreements for the supply of goods and services” in the concluding portion of clause 4 relate only to agreements for the direct supply by a sponsor of goods and services and not to payments by the sponsor to a third party on the basis that the third party is to supply goods and services of equivalent value to the Association — such payments to a third party are to be treated the same as payments direct to the Association;
(i) the words “the actual monetary amount received by the Association when utilising the goods and/or services” applies to a notional receipt of market value derived from a notional disposal, but so that if the Defendant could have acquired the relevant goods or services elsewhere at a lower price, then that lower amount is the basis for calculating the fee.
248 If the answer to the first limb of question 1 is “yes”, did the Plaintiffs perform and discharge each and every of their obligations under the consultancy agreements so as not to be disentitled to any commission and, in particular
Question 2 — fulfilment of conditions for entitlement to commission:
249 Earlier, at para 170 I concluded that even if it were a condition precedent to any relevant entitlement to commission, that the Plaintiffs act in a professional and businesslike fashion, the evidence does not demonstrate that the Plaintiffs acted otherwise. Likewise, I concluded that there was no failure to “maintain and enhance the image of the Defendant and women’s hockey generally”. 250 Thus, even if, prima facie, a breach of clause 3 would disentitle the Plaintiffs to their commission or at any rate a breach of sufficient magnitude, no such breach is made out. In those circumstances, I do not need to determine whether, as a matter of construction, the entitlement to commission under clause 4 depends upon “other actions by Ms Jones being in accordance with the provisions of this agreement”, as provided in clause 3. The Plaintiffs argue that there is a presumption of independence (rather than interdependence), citing, for example, Ryan v Ferguson (1909) 8 CLR 731; Colley v Overseas Exporters [1921] 3 KB 302, 309-311; McDonald v Dennys Lascelles Limited (1933) 48 CLR 457; Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Babour Ltd [1943] AC 32; Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435, 450-452, 461, 463-465, 475, 476; Michael Realty Pty Ltd v Carr [1975] 2 NSWLR 812, 830 (aff. [1977] 1 NSWLR 553). 251 I would agree that any failure by Mrs Jones in performance of the provisions of this agreement must be a failure connected to the manner in which the sponsorship agreement has been negotiated or concluded, and probably also as to the way in which the relevant sponsor has been “located and/or introduced”, as those expressions are used in clause 3. 252 Taking that as the relevant interdependence, and in circumstances where there was no repudiation of the agreement on the grounds of breach or alleged breach by the Plaintiffs, none of the allegations of breach by the Plaintiffs of the 1994 Sponsorship Agreement could of themselves relate to the negotiation and/or conclusion “by Ms Jones” of the 1995 Telstra Agreement; she was simply not involved in that process after 31 December 1994 on the Defendant’s own case. That she may have laid the groundwork for that later agreement, though excluded from its negotiation, yet somehow contravened the provisions of the 1994 Consultancy Agreement, would be to stretch interdependence further than the clause warrants. And, in any event, I have already concluded that that assumption of contravention is not made out.
(ii) did the Plaintiffs maintain and enhance the image of the Defendant and women’s hockey generally (as required by clause C of Annexure A)?
(i) did Mrs Jones during the term of the 1994 agreement “implement in a professional and businesslike fashion all of the duties specified in the consultancy brief….” as required by clause 3; and/or
253 The Plaintiffs did perform and discharge each and every of their obligations under the Consultancy Agreements so as to become entitled to any commission payable thereunder, it remaining to be determined whether commission is payable and if so on what basis. Even if I were wrong in the conclusion that there was no contravention, any contravention by the Plaintiffs could not have been in connection with the 1995 Telstra Agreement. Thus interdependence could not be made out to disqualify the Plaintiffs from fee or commission, if otherwise entitled.
Conclusions
Question 3 — disentitling breach:
254 If the answer to question 2 is “no”, were the Plaintiffs’ contractual breaches of such materiality as to disentitle them to any of the commissions claimed? 255 This question is already answered; there were no contractual breaches by the Plaintiffs.
Question 4 — commission on $80,000 in relation to 1993 Telstra Stix Series:
256 If the relevant Consultancy Agreements are not void and any relevant condition precedent has been satisfied, whether the Plaintiffs are disentitled to commission on the sum of $80,000 paid for the production costs of the 1993 Telstra Stix Series by reason of:
257 In light of my earlier factual findings under the heading “The Telecom Stix Series”, at paras 41-51, there is no proper basis for denying the Plaintiffs commission at the rate of fifteen per cent on $80,000 paid by Telecom in relation to the 1993 Telstra Stix Series for the ABC’s broadcasting costs. Clearly enough this payment was properly characterised as “sponsorship” connected as it was with that sporting event in which the Defendant participated. There was no agreement to waive made out nor any estoppel and the letter of 13 May 1994 sufficiently claimed commission; see para 45. Likewise commission is payable in the amount of $461.63; see para 50 above.
(i) an alleged inability to be able to properly characterise such payments as “sponsorship”;(ii) an alleged entry into an agreement to waive made on or about 21 May 1996;
(iii) an alleged estoppel; and
(iv) an alleged failure to submit an itemised account?
Question 5 — “renewal” or “subsequent year of sponsorship”:
258 If the relevant Consultancy Agreements are not void and any relevant condition precedent satisfied, did the sponsorship agreement between Telecom and the Defendant of 5 May 1995 constitute:
259 The starting point is to consider clause 4(b) of Annexure “C” in order to determine whether the conditions laid down by that sub-clause are satisfied for the fifteen per cent commission to be payable. In my judgment they are not. 260 The fundamental requirement for commission to be payable under clause 4(b) is contained in its first two lines prior to the provisos which follow. That requires “any concluded agreement entered into on or prior to the 31st December 1994”. That clearly enough means a contractual agreement for sponsorship of the Association, as the opening words of clause 4 indicate. Thus ad hoc sponsorship without such an agreement does not suffice; indeed its value to the sponsee must be less as it is ad hoc and not contractual. Unless clause 4(b) read in the context of the clause as a whole including the following provisos, leads to any different interpretation of what appears to be the evident meaning of its opening requirement, on no view could it be said that the agreement entered into with Telstra for 1995 had been entered into on or prior to 31 December 1994. This is so, even if the gap thereafter was not as great as 5 May 1995 when the 1995 Telstra Agreement was in fact executed; contractual agreement appears to have been reached in commercial terms as early as February 1995, though the precise date is unclear (paras 120-144). In particular it could not be said that the 1995 Telstra Agreement was simply an extension of the 1994 Telstra Agreement; it differed in one essential respect, namely that the price or level of sponsorship was increased. 261 Turning to the provisos, it is clear enough from the first proviso that what is required is a “concluded agreement” where (unless Telecom Australia) the other party was approached or introduced or negotiations commenced on or subsequent to 1 January 1989. There simply was no “concluded agreement” with Telecom on or prior to 31 December 1994 which extended beyond that date. The words “on any agreement entered into with Telecom Australia” could not on any rational interpretation override the requirement of a concluded agreement entered into on or prior to the 31st December 1994 in the opening words of clause 4(b). 262 The Plaintiffs however rely on the second proviso which is in these terms:
(a) a subsequent year of sponsorship within clause 4(b), or(b) a renewal of a sponsorship agreement or arrangement on or after 1 January 1995 within clause 4(c),
so as to entitle the Plaintiffs to a fee of fifteen per cent or twelve per cent respectively on sponsorship payments, or on the monetary equivalent of goods and services provided by Telecom?
Subsequent year of sponsorship — fifteen per cent fee under clause 4(b)
263 The Plaintiffs’ argument is that this proviso in effect expands the opening words to embrace any situation where first, the “original sponsorship” was negotiated by the Plaintiffs, assuming that that requirement applies also to an agreement entered into with Telecom Australia, and second, the “original sponsorship” was for a period in excess of one year so as to give rise to “subsequent years of sponsorship”, even though this be under a later and differing agreement rather than a continuation of the original one. The Plaintiffs’ argument is that the original sponsorship of Telstra was entered into on 28 August 1989 (see Annexure “I”, BEC, at 112). Furthermore, there is no dispute that first the Plaintiffs negotiated it and second that the sponsorship was one for a period in excess of one year (see Recital B and clause 2). 264 The fallacy in the Plaintiffs’ reasoning is that it relies upon a proviso not to qualify what precedes but to expand what precedes. But when one looks at the words of the second proviso, it would be drawing a long bow indeed to treat the reference to fifteen per cent as applicable to a subsequent year of sponsorship where there has been a break in the underlying agreement such that it expired on 31 December 1994 and was replaced by a different one; meantime the parties proceeded thereafter under an arrangement of continuing sponsorship whose terms so far as price was concerned remained to be negotiated. Indeed that is how I would so characterise the arrangements as my earlier findings indicate. But so characterising them does not assist the Plaintiffs. 265 I have earlier said that I do not consider the words “any agreement entered into with Telecom Australia”, coupled with the reference to sponsorship in the second proviso, justify an interpretation that gives Telstra sponsorship payments any special treatment in this particular context beyond that they do not need to be shown to have been the result of Telstra having been approached or introduced by the Plaintiffs. That is reinforced by the second proviso with its reference to “and no further”, clearly directed to a sponsorship agreement whose term was in excess of one year, being a sponsorship agreement entered into on or prior to 31 December 1994. Clause 4(b) was not intended to embrace a subsequent differing sponsorship agreement even if that subsequent agreement extended the actual sponsorship. 266 Finally, that fundamentality of finding a contractual agreement is reinforced by the concluding paragraph to clause 4 (quoted in para 272 below). It makes clear the fees are only payable on contracts, not on ad hoc sponsorship payments. A “subsequent year of sponsorship” means in this context a subsequent year of contractual sponsorship by way of extension of that same contract.
“PROVIDED THAT a fee of fifteen per cent (15%) shall be paid on subsequent years of the sponsorship where the original sponsorship was negotiated by the Consultant and such sponsorship was for a period in excess of one (1) year up to the date of expiry of that actual Agreement and no further.”
267 The sponsorship agreement between Telecom and the Defendant of 5 May 1995 did not constitute “a subsequent year of sponsorship” within the meaning of clause 4(b) of the 1994 Consultancy Agreement and there is no other basis for applying that provision as a basis for fifteen per cent commission on sponsorship payments by Telstra after 31 December 1994.
Conclusion
268 It remains to consider whether clause 4(c) of Annexure “C” applies to Telstra sponsorship payments after 31 December 1994 so as to apply the lower fee of twelve per cent on renewal. This is on the basis that the sponsorship agreement between Telecom and the Defendant of 5 May 1995, with or without such agreement or arrangement as preceded it, comes within the notion of renewal as embodied in the opening words of clause 4(c): “If the sponsorship arrangement in any concluded agreement of the kind referred to in sub-clause (b) of this Clause is renewed for periods commencing on or after 1st January 1995…” 269 I should add that the remainder of clause 4(c) provides for a rate of twelve per cent commission “whether or not this Agreement (meaning this Consultancy Agreement) has otherwise terminated through effluxion of time or by the act of either party to the intent that this Clause shall enure for the benefit of the Company until such time as all fees payable pursuant hereto have been received by the Company.” Those words as I explain clearly point to a continuing right to twelve per cent, notwithstanding expiry or termination of the Consultancy Agreement, provided there has occurred what clause 4(c) requires as regards the original sponsorship arrangement in any concluded agreement being later renewed. 270 The Plaintiffs’ argument for contending that clause 4(c) is applicable to the Telstra sponsorship payments made pursuant to the 1995 Telstra Agreement is that a distinction is here drawn between the “sponsorship arrangement” in clause 4(c) and the “concluded agreement” in that same sub-clause. Indeed, based on the interpretation of clause 4(b) which I consider correct, the two sub-clauses 4(b) and 4(c) do have independent operation. They recognise the relatively greater worth to the Association of a sponsorship agreement which continues for a longer term (clause 4(b)) and an agreement which is renewed, earning the lesser percentage of twelve per cent. However, as I explain below, I do not consider that a mere sponsorship arrangement, absent any concluded contractual agreement, does suffice for the twelve per cent commission to be payable. There is simply no mechanism for payment of a fee without a sponsorship contract; see para 272 below. But that, as I explain, does not mean the phrase “sponsorship arrangement” has no part to play. Rather it bears upon the degree of permitted difference between successive sponsorship contracts denoted by the term “renewed” in clause 4(c). What I conclude is that the original sponsorship arrangement in a concluded contract “entered into on or prior to 31 December 1994” is renewed, for purposes of clause 4(c), on the basis that the later sponsorship contract still gives effect to a continuing sponsorship arrangement, though essential terms of sponsorship such as price differ as between contracts and there was a brief interval between them. Such an interpretation recognises that a sponsorship relationship will necessarily evolve over time, including as to the level of sponsorship and the opportunities it gives sponsor and sponsee. The word “arrangement” is broad enough to accommodate such an evolution and sensibly does so. 271 To explain, were the position simply that there was a subsequent sponsorship arrangement never embodied in a “concluded agreement” used in the contractual sense, that would disqualify the arrangement from any commission under clause 4(c) or at all. That introduces at least one rational limitation consonant with the parties evident commercial purpose on the Plaintiffs’ entitlement to a continuing commission after “this Agreement [meaning the Consultancy Agreement] has otherwise terminated through effluxion of time or by the act of either party…”; see clause 4(c). The clear intent of clause 4(c) is that it should have a continuing operation notwithstanding the termination of the relevant consultancy agreement, as borne out by the concluding words “to the intent that this Clause shall enure for the benefit of the Company until such time as all fees payable pursuant hereto have been received by the Company.”. 272 I should add that the requirement for there being a concluded agreement of the contractual sense is reinforced by the whole of the last paragraph to clause 4, and is clear from the highlighted words quoted below:
Renewal — twelve per cent fee under clause 4(c)
273 To elaborate, I am satisfied that that clause 4(c) requires the following elements:
“The above stated fees are payable on all contracts entered into in accordance with the provisions of this Agreement. All fees shall become payable to the Company upon performance of the Agreement by the other contracting party (or from time to time if the Agreement provides for payment from time to time to the Association of lump sums) and receipt by the Association of the monetary payments owing pursuant to the terms of the relevant agreement and in the case of agreements for the provision of goods and services …” [emphasis added]
274 But such a renewal within clause 4(c) does not require any identity in dollar amount (or its equivalent in goods and services) between the original sponsorship agreement and the subsequent agreements. Nor need the two agreements (or subsequent agreements in the series) follow each other with no break, so long as the broad character of the sponsorship arrangement continues. By the contract being “broadly” contemporaneous with the sponsorship arrangement, I mean that the contract need not subsist without break, such as where, as here, the sponsorship was briefly in a kind of temporary holding pattern though never terminated, in the period after 31 December 1994, or where time is needed to negotiate new commercial terms, though the sponsorship arrangement continues meantime. However, no fee or commission can be recovered until there is a concluded agreement. 275 Likewise for such renewal to come within clause 4(c), there is no need for the Plaintiffs or either of them to be involved in the negotiation of the subsequent agreement or any requirement for the Plaintiffs to maintain a continuing consultancy relationship with the Defendant. 276 Such an interpretation comes closest to accommodating the phraseology used by the parties in the relevant consultancy agreement with its reference in clause 4(c) to a sponsorship arrangement in a concluded agreement being renewed. It respects the necessity to find both a contractual agreement, and continuity in an overarching sponsorship arrangement. The latter gives some elasticity to what divergence can be accommodated by the word “renewed”, though limited by the requirement of a continuing sponsorship arrangement. It thus accords with the parties’ evident commercial purpose in reducing the commission to twelve per cent where there has been a renewal by successive agreements, rather than an original long term of (say) three years. It is perfectly understandable that a party introducing a sponsor or having had sufficient involvement in the original introduction of the sponsor should have a continuing commission based on the renewal of the sponsorship arrangement. The Defendant has the safeguard of requiring a fresh concluded contract for sponsorship before any commission is payable. That is not to be characterised, as the Defendant sought to do, as a monopoly right. Rather it is a reasonable safeguard for the party originally involved in obtaining the sponsorship to be rewarded, though at a lesser percentage rate, for continuation by renewal of that sponsorship, even if that party’s consultancy be not renewed. Thus, for example, an estate agent is often protected for commission if a tenant the agent originally introduced renews the lease, whether the agent still retains the agency or not. This recognises that renewal may have been only possible because of the agent’s original introduction. That is hardly a “monopoly right” especially as the agency can be terminated. 277 Much reference was made in both parties’ written submissions to the meaning of the term “renewed”, in the context of leases or franchises. That comparison is of limited use. What is to be renewed is not the agreement itself but the sponsorship arrangement embodied in the agreement (though a new agreement will also be necessary). Hence the word “renewed” arises in the more general context of an overall arrangement rather than the more precise context of a particular contract. Thus arrangement has the sense of a plan arranged between two or more parties; see, for example, Top Performance Motors Pty Ltd v Ira Berk (Qld) Pty Ltd (1975) 5 ALR 465. That points to a broader interpretation to the term “renew” than if the requirement were simply a comparison between the original concluded agreement and any subsequent agreement. The comparison is rather to renewal for purposes of a continuing overarching sponsorship arrangement as it evolves between agreements. That precludes the necessity for each agreement to follow immediately upon the other without break. That said, the absence of any break in the sponsorship arrangement points to renewal, though it would not be essential if the arrangement were simply suspended for a brief time with no substitute sponsorship. 278 Indeed, a renewed lease can vary in its terms from the original lease, whether as to rent, term or otherwise; Trade Practices Commission v Tooth & Co (1979) 142 CLR 307. The position is even clearer as to a franchise. 279 Thus Esso Australia Ltd v R T & M R Abella Pty Ltd (1989) 91 ALR 476 was decided in relation to the Petroleum Retail Marketing Franchise Act (1980) (Cth). At issue was whether a franchise agreement with followed either a consensual determination of an earlier franchise agreement or a holding over from an earlier franchise agreement could be treated as a “renewal”. The Full Federal Court gave an affirmative response in relation to both. In relation to the consensual termination circumstances it was said (at 486) that:
(i) An original concluded agreement of a contractual nature (“original agreement”) has been entered into between the sponsor and the Defendant on or prior to the 31st December 1994 for sponsorship, such to include any agreement entered into with Telecom Australia;(ii) A subsequent concluded agreement of a contractual nature (“subsequent agreement”), is entered into between the sponsor and the Defendant which may be one or more of a related series;
(iii) Such contract may have a brief gap between it and its predecessor, so long as it continues broadly contemporaneously with the sponsorship arrangement, and
(iv) A continuing sponsorship arrangement subsists, requiring no more than:
(a) the same entity or organisation stands behind the relevant activity in providing financial assistance or assistance in goods and services to the same sponsee, with the sponsor seeking to obtain for its product the endorsement, express or implied, of (here) admired sportswomen by their continued association with the sponsor and its logo; see the definition of “sponsorship” in 10th Cantanae Pty Ltd v Shoshana Pty Ltd (1987) 18 FCR 285; 79 ALR 299, and
(b) a substantial equivalence between the activity sponsored in the original agreement and the activity sponsored in the subsequent agreement.
280 Section 3(2) of that Act provided that a reference to an agreement included a reference to a “terminated or expired” agreement. Section 3(4) provided that the terms of the new franchise agreement (in order for there to be renewal) should not be substantially different from the provisions of the original franchise agreement, except in certain identified respects. 281 As was pointed out by the Plaintiffs in their written submissions, clause 4(c) of Annexure “C” similarly applies “whether or not this Agreement has otherwise terminated through effluxion of time or by the act of either party”. Clause 4(c) contemplates that any renewal might be on or after 1 January 1995; thus the renewed term does not have to commence on the day following the expired term. Clause 4(c) was clearly intended to provide an ongoing benefit. It is specifically stated that the provision “shall enure for the benefit of the Company until such time as all fees payable … have been received”. Were on the other hand the Defendant’s construction correct, the contractual benefit conferred on the Plaintiffs by clause 4(c) would be illusory. It could be done away with in a moment simply by the device of arranging a day’s break between the expiration of one sponsorship arrangement and the commencement date of the next. That would not accord with the evident commercial purpose of clause 4(c) to which I have referred. 282 The commercial position contemplated by clause 4(c) is significantly different from the relationship which exists between a lessor and lessee, where (only by reason of the rights conferred by the original lease) the party entitled to the benefit (the lessee) is empowered to compel the renewal, if necessary, starting on the day after the expiration of the term. Here renewal is a matter of consensual choice by both sponsor and sponsee. Each has an ongoing and increasing investment in the continuance of the sponsorship relationship but equally a commercial motivation over time to squeeze out the original introducing party if possible — hence the need for protection under a clause such as clause 4(c) while the Plaintiffs’ leverage and contribution remain fresh in the Defendant’s mind. 283 The Full Federal Court in Esso Australia Ltd (supra) went on to consider the circumstance of the holding over under the original franchise agreement, and concluded that, in the context of the legislation, the expression “term” did not bear its technical meaning but, rather, included the whole of the period of occupation, including that under any holding over. In that respect only, their Honours departed from the reasoning of Hill J (the trial judge) who dealt with the matter on the footing that the expression “term” bore its technical meaning. Hill J’s analysis, however, is relevantly quoted in the Full Court’s decision (at 487 .7). Hill J said:
“The respondent referred to Associated Minerals Pty Ltd v NSW Rutile Mining Co Pty Ltd (1961) 35 ALJR 296 at 298, as indicating that in ordinary usage the word ‘renewal’ used in relation to a lease, identifies a lease which is granted during, and which follows immediately upon, the term of a lease which has expired by effluxion of time. But the 1980 Act, as is indicated by s3(2) and (4), is so drawn that a franchise agreement may be a renewal of a franchise agreement which preceded it and came to an end before the renewal was granted.”
284 Turning again to the present circumstances, it follows from the interpretation which I consider correct of clause 4(c) that the fact that the 1995 Telstra Agreement increased the sponsorship payment or made other changes, does not alter the essential character of the sponsorship arrangement, which I am therefore satisfied was thus renewed in that concluded agreement. Nor does it matter that the 1995 Telstra Agreement had a brief gap from the expiry of its predecessor on 31 December 1994, whether that gap was simply to mid-February 1995 or till 5 May 1995. There is ample evidence as set out in my findings at para 175 that as of 31st December 1994 and in the ensuing period till commercial and then formal agreement was reached, Telstra and the Defendant were proceeding on the basis that they were maintaining no other sponsorship arrangement than with Telstra and there was every confidence that a concluded contractual agreement would be reached. I have referred earlier to the numerous “Tenth Anniversary documents” (PX10) which leave no suggestion that there was otherwise than a continuing sponsorship arrangement and relationship. Even in that intervening period, on 23 January 1995 a meeting took place between AWHA and Telecom which discussed “sponsorship renewal” and “re-launch of Telecom sponsorship” with the object, inter alia, of obtaining from Telecom a statement of the form of sponsorship proposal that would need to be submitted by AWHA to Telecom for the years 1995 to 1996 in order to obtain a favourable consideration of it. Thus there is the evidence of Ms Ellie Nixon’s affidavit of 1 December 1996 at paras 8-11. The heading to Ms Nixon’s notes of the meeting — Annexure “B” — plainly indicate that what was regarded as being discussed was “sponsorship renewal”. 285 Apart from Ms Passmore’s affidavit at para 14 and Ms Cawood’s first affidavit at para 48, Ms Nixon conceded in cross-examination that the basis of the proposal by the Association were the suggestions emanating from Telstra via Ms Passmore; see T, 313 .42-322 .27 and note also the cross-examination of Ms Passmore at T, 277 .1-288 .36 and of Ms Cawood at T, 398 .15. Whilst the sponsorship proposal which was submitted in consequence of the meeting held on 23 January 1995 sought a sponsorship amount which was significantly less than that sought by Ms Jones in August 1994, the commercial content of the proposal was otherwise the same. Mr O’Neill gave this evidence (T, 254):
On the present facts, the sponsorship agreement with Telstra expired. Immediately after its expiry no new sponsorship agreement was entered into, either with Telstra or any other person. A subsequent sponsorship agreement was entered into with Telstra. Hill J’s analysis supports the conclusion that that subsequent sponsorship agreement is properly to be seen as a renewal of the original sponsorship agreement, notwithstanding that the term of the original sponsorship agreement had expired.
“Nevertheless the wording of s13 of the 1980 Act does rather imply that the concept of the term of an agreement on the one hand and the time when the agreement would expire on the other are both the same. However, it seems to me that whether it can be said that the franchise agreement expired when its term came to an end, or whether it continued in existence during the holding over period notwithstanding that its term had come to an end, I think that where there has been a franchise agreement which has expired and no new franchise agreement has been entered into either with the franchisee or any other person, a subsequent franchise agreement entered into with the franchisee is properly to be seen as a renewal of the franchise agreement, notwithstanding that the term of the franchise agreement had expired and in respect of the holding over period .” [emphasis added]
286 When reference is made to the substance of the proposal, clearly enough there was, to use Mr O’Neill’s words, “the same dozen eggs”, though with some “vamping up” of the proposal making it better for Telstra in terms of the relevant opportunities. 287 That the Defendant and Telstra engaged in a course of conduct designed to deliberately cloak the new sponsorship agreement with the character of a “new” agreement the result of “extensive negotiations”, rather than a renewal, clearly supports the Plaintiffs’ case that this was mere window-dressing, legal camouflage. That, as I have already pointed out, reflected the optimistic legal advice originally obtained on 19 October 1994 from Lane & Lane (as to how a renewal might be avoided) and who remained involved in the drafting of the relevant agreement.
“Q. Was your only real focus (in assessing the 1995 proposal) to make sure the money was right?
A. To make sure that what we had was commercially viable.
Q. Does that mean that your only focus was to make sure the money was right?
A. No, it was not.
Q. What other matters did you say you considered in 1995?
A. What was actually part of the proposal was in place before 1994, if we had the same dozen eggs we would pay the same freight, same money for anything else that we could do to actually vamp up the proposal and make it better for Telstra.” [emphasis added]
288 It thus follows that such break as occurred in the binding contractual position as between Telstra and AWHA did not preclude clause 4(c) applying and in particular did not interrupt the ongoing sponsorship arrangement. Contract and sponsorship arrangements were broadly contemporaneous, in the sense I have used earlier. That ongoing sponsorship arrangement, coupled with the 1994 and 1995 Telstra Agreements, did therefore satisfy the requirement under clause 4(c) for renewal. The consequence of that is that commission at twelve per cent is payable under clause 4(c) on all sponsorship payments by Telstra and on the provision of any goods and services of a sponsorship nature by Telstra, during such period as a concluded agreement subsisted as well as the sponsorship arrangement. No submissions have been made to the effect that any subsequent sponsorship agreement with Telstra concluding with the sponsorship agreement of 30 June 1998 (see Plaintiffs’ Quantum Bundle at 7) is in any different position from the 1995 Telstra Agreement. It follows that clause 4(c) of the agreement continues to apply with respect to any Telstra sponsorship payments or provision of goods and services by way of sponsorship to or for the benefit of the Association. The quantification of total fees plus interest that follows from that conclusion can readily be done, based on the work to date; see Plaintiffs’ quantum bundle.
Conclusion
289 (a) If the relevant Consultancy Agreements were not void for uncertainty and any relevant condition precedent was satisfied, was any sponsorship agreement of the Defendant by Qantas, the result of Qantas “having been approached or introduced or were negotiations in relation to the agreement commenced “prior to 1 January 1989”, so as to disentitle the Plaintiffs from commission?
Question 6 — Qantas commission:
290 It is important that the manner in which the question is posed should fairly reflect the operation of the relevant consultancy agreement, properly construed. In particular, were the circumstances such that the Qantas arrangements fell outside any eligibility for commission to the Plaintiffs under the relevant Consultancy Agreement or agreements? 291 Essentially, the Plaintiffs rely on the contention that there was no agreement of a sponsorship nature with Qantas, but at most merely ad hoc benefits arguably generally available to community groups, until Mrs Jones successfully negotiated a sponsorship agreement for the first time on 7 November 1994; see Annexure “J” of HEJ. On the evidence, reviewed below, I am satisfied the Plaintiffs are right in that contention. 292 The Defendant contends that starting from 1986, it is clear that Qantas was one of the sponsors of the Defendant well before 1 January 1989, citing the following material in support of that contention: · “1986 report (tab 18) at pages 7 and 36;
(b) On the same basis, did Qantas become a party by novation to the Australian Airlines Sponsorship Agreement and, if so, whether such circumstance precluded the agreement being one for which Qantas was approached or introduced, or for which negotiations were commenced, by the Plaintiffs?
· 1987 report (tab 19) at pages 1 and 21;
· 1988 report (tab 20) at pages 1, 16 and 109;
· 1989 report (tab 21) at pages 1, and 17 and 3 and 14 of the financial statements) — see also page 119 and transcript pages 97 line 30, 108 line 15, 110 line 30 and page 3 of annexure “I” to Mrs Cawood’s affidavit of 5 September 1996;
· 1993 report (tab 22) at pages 2 and 19;
· 1994 report (tab 23) at pages 2 and 14;
· documents evidencing the sponsorship agreement to 1988 (tabs 25-30);” 293 To this the Plaintiffs respond that even if it were correct to describe Qantas as a sponsor, none of the various annual or other reports so cited prove any agreement. As indeed the Defendant contended in the context of Telstra, it is only upon a contractual agreement for sponsorship that a commission or fee is payable, as I have already concluded in relation to question 5. Each of the Consultancy Agreements emphasise the primacy of contractual sponsorship rather than ad hoc sponsorship. 294 Dealing with each of the documents relied upon by the Plaintiffs as “evidencing the sponsorship agreement to 1988” it is clear that none of the arrangements referred to by the Defendant (being the documents from tab 18 to tab 23 and then tabs 25 to 30 of DX9) constitutes or evidences a sponsorship agreement. 295 Thus, for example, there is a letter from Qantas to the Defendant dated 20 March 1986 indicating a preparedness on the part of Qantas to provide discount travel, a contra of $10,000 and a baggage allowance (document 26) then there is a letter from the Defendant to Qantas dated 3 April 1986 accepting the proposal (document 27). That is not a contractual sponsorship agreement properly enforceable as a contract. 296 Then on 27 January 1987 there is a letter from the Defendant to Qantas seeking confirmation that the proposal put forward in February 1986 (presumably that in document 25) would be operative for 1987 (document 28). There is a letter in response from Qantas to the Defendant dated 13 February 1987 confirming the availability for 1987 of a nine per cent discount and a $10,000 contra (document 29). Finally, there is a letter from Qantas to the Defendant dated 8 June 1988 offering only a nine per cent discount on the best available fare types for overseas travel undertaken by officials (document 30). 297 I agree with the Plaintiffs’ contention that the documents identified in the Defendant’s tender bundle do not prove any sponsorship “agreement”. Nothing was promised on the part of the Defendant in the terms of the provision of either the nine per cent discount, the $10,000 contra or the baggage allowance. If Qantas had unilaterally decided to withdraw these privileges, no claim could have been successfully brought by the Defendant alleging any breach of contract. 298 The transcript references to the evidence of Ms Jones take the matter no further. Ms Jones did, however, give relevant evidence. She denied (at T, 90. 52) that she was aware of any previous “sponsorship agreement” with Qantas. In her professional opinion a sponsorship only existed if the Association gave benefits in return (T, 98 .20). Contra travel was only a form of sponsorship if the Association gave benefits (T, 98 .40). The group travel discount arrangement was not sponsorship (T, 99 .1). Sponsorship required “a very detailed agreement with tenure that lists benefits for both parties and is much more involved than simply a marketing deal” (T, 105 .42). A group discount was something that virtually any community group could get (T, 106 .15), and the same was true of a baggage allowance (T, 106 .20). Ms Jones did not regard Qantas as a sponsor prior to her negotiation of the agreement of 7 November 1994 (T, 110 .35). The reference in the annual reports to Qantas being a sponsor represented the loose public use of the term “sponsorship” (T, 111 .20); it was not an agreement for sponsorship contemplated by the Sponsorship Agreements. 299 Ms Cawood’s first affidavit annexes, as annexure “I”, the sponsorship agreement between the Association and Telstra. That agreement referred in clause 2 (page 117 .2 of the affidavit) to Qantas’ minor sponsorship. Ms Jones was not, however, a party to that agreement. Even if she had been, the statement contained within it would be no more than an admission. The evidence manifestly fails to demonstrate any sponsorship agreement with Qantas prior to the Consultancy Agreements. 300 In determining what meaning is to be given to the sponsorship referred to in clause 4(a) of the Consultancy Agreements, in resolving any ambiguity regard can properly be had to the conduct of the parties where probative, as here, of a mutual subjective intention at the time of contracting; see Spunwill Pty Ltd v BAB Pty Ltd (1994) 36 NSWLR 290. In this regard, if is highly significant that when the Plaintiffs made a claim for commission in respect of the Qantas agreement, the discount travel arrangement was not relied upon by the Defendant at any time prior to the commencement of these proceedings as a basis for denying the Plaintiffs’ commission. The sole basis of denial, now apparently abandoned was the pleaded assertion that there had been effective novation from Australian Airlines to Qantas. For example, on 5 December 1994 the Defendant wrote to the Plaintiffs (HEJ Annexure “O”) stating:301 Accordingly, I conclude that there was no agreement and in particular no agreement for sponsorship with Qantas prior to the agreement for sponsorship of 7 November 1994 and it is undisputed that that agreement was negotiated by Mrs Jones. 302 Turning to the specific provisions of the relevant Consultancy Agreements, from the very first sponsorship agreement in 1989, commission is payable if an agreement for sponsorship is "negotiated and/or concluded by First or Second Plaintiff”; see clause 2 of the 1989 Agreement and clause 3 of each succeeding agreement. 303 Then clause 3(a) of the 1989 Agreements precludes any fee being payable on any agreements “entered into by the World Cup with a person or company with whom the Australian Women’s Hockey Association Inc have previously had an agreement except in relation to Telecom Australia”. [emphasis added] That preclusion is thus not for prior ad hoc arrangements. 304 The later agreements in clause 4(a) similarly preclude any fee on any “agreements entered into by the Association on or prior to the 1 July 1991 (see the 1991 Consultancy Agreement). In subsequent agreements later dates were substituted, with 31st December 1994 and 1st January 1989 appearing in clause 4(b) of the 1994 Consultancy Agreement. Naturally, in the agreements after 1989 there is a proviso to ensure that the Association is not relieved from the payment of any fee payable in relation to any such agreement payable under any previous Consultancy Agreement whilst clause 4(b) in the concluding proviso only precludes a fee being payable where a fee has already been paid relating to the whole period of sponsorship. No fee has been paid to Mrs Jones relating to the whole period of the Qantas sponsorship. 305 It must follow that there being no prior agreement with Qantas in the nature of a sponsorship agreement, the relevant 1994 Consultancy Agreement is not precluded from application. 306 Thus insofar as the agreement of 7 November 1994 has continued application, clause 4(b) would apply at the rate of fifteen per cent on the monetary amount of any Qantas cash payment sponsorship and, so far as the provision of goods and services, in particular air travel, that is applied to “the monetary benefit” for the supply of the relevant goods and services. That means comparing the discounted price to the ordinary market value or price of the relevant tickets, available to the Defendant elsewhere. 307 No detailed submissions have been made in relation to payments other than pursuant to the agreement of 7 November 1994 and thus I make no determination in relation to that issue. 308 I accept the Plaintiff’s contention as to quantum, that absent any contradictory explanation from the Defendant, the only available inference is that fares which were paid for by the Defendant for the period of the Qantas sponsorship agreement were fares which were discounted in accordance with the Qantas sponsorship agreement. I note that an updated schedule will be provided when the case on quantum is closed so as to precisely calculate the relevant sponsorship payment. 309 I should add, for completeness, that I do not consider that the novation argument has been substantiated and indeed it was not pressed in the Defendant’s written submissions. Essentially the contention is that in 1993 Australian Airlines Limited and Qantas Airways Limited merged and that prior to that date, namely for the period 1 January 1992 to 31 December 1994, Australian Airlines entered into a sponsorship agreement with the Defendant; see letter dated 15 April 1992 from Australian Airlines Limited. Insofar as Qantas became a sponsor of the Defendant by novation of the Australian Airlines agreement or by implied agreement, that can bear only upon commission with respect to the Australian Airlines agreement and not upon commission payable pursuant to the Qantas agreement of 7 November 1994.
“It is noted you have requested payment of 15% of the agreement entered into with Australian Airlines (now known as Qantas) and hereby draw your attention to annexure “C” — Fees — Clause 4(a) of the Association’s Agreement with you.
And by 6 February 1995 the Defendant had accepted that a commission was properly payable to the Plaintiffs on, at least, the overseas component for the Qantas sponsorship (as overseas travel was not part of any Australian Airlines sponsorship) (PTB, 82).
I confirm that the Association has previously had agreements with Australian Airlines (now known as Qantas) and accordingly, no fee is payable.”
310 The Plaintiffs are entitled to commission or fees in respect of all monetary payments or for (relevantly) the provision of services by Qantas pursuant to the sponsorship agreement of 7 November 1994, in such amount as to be quantified, upon the basis set out in this judgment.
Conclusion
311 If clauses 3 and 4 of Annexure C to the consultancy agreement(s) are void for uncertainty are the Plaintiffs or either of them entitled to any reasonable remuneration based on quantum meruit and if so, in what sum? 312 These questions do not arise, as I have earlier concluded that the relevant Consultancy Agreements are not void for uncertainty.
Question 7 — Quantum Meruit entitlement:
313 The Plaintiffs have been successful in relation to their claims both with respect to Telstra and Qantas sponsorship and thus costs ordinarily should follow the event. However, I give leave to the parties to address me on costs if they desire. 314 Subject to any quantification that may be required in relation to final calculation of amounts payable and interest thereon at the relevant rates, in respect of which it would be desirable for the parties to co-operate, I direct that the parties within twenty-one days of the date of this judgment provide draft orders giving effect to this judgment.
OVERALL CONCLUSIONS(1) The relevant Consultancy Agreements are not void for uncertainty and the Plaintiffs were not in breach of them even if, contrary to my conclusion, the alleged breaches could have precluded payment. The attack on Mrs Jones’ credit fails and should not have been made without properly putting to her in cross-examination the serious allegations made.
(2) The commissions or fees with respect to the Telstra sponsorship arrangement as embodied in the 1995 Telstra Agreement and any subsequent sponsorship agreement are payable at twelve per cent on payments made directly or to a third party for the Defendant’s benefit, or upon the market value of goods and services provided calculated as I have earlier set out; such fee is paid pursuant to clause 4(c) of the 1994 Consultancy Agreement (and not at fifteen per cent pursuant to clause 4(b)).
(3) The Qantas sponsorship as embodied in the Qantas sponsorship agreement of 7 November 1994 gives rise to a fee of fifteen per cent on the monetary amount of any Qantas cash payment sponsorship and so far as discounted tickets are concerned, by comparing the discounted price to the ordinary market value or price of the relevant tickets, as available to the Defendant elsewhere. This is pursuant to clause 4(b) of the 1994 Consultancy Agreement, there being no prior Qantas sponsorship agreement, but merely ad hoc benefits.
(4) There is no proper basis for denying the First Plaintiff the sums of $461.63 and $12,000 payable pursuant to clause 4(b) of the 1993 Consultancy Agreement in relation to Telecom payments associated with the Telecom Stix series in 1993.
(5) Quantification of the relevant amounts payable to the Plaintiffs, including interest, should now be completed, based on the Plaintiffs’ quantum bundle and in accordance with my determinations in this judgment.
COSTS AND ORDERS
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Last Modified: 09/13/2000
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Citations
Edmunds-Jones Pty Ltd and 1 Ors v Australian Women's Hockey Association Inc [1999] NSWSC 1014
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