Frontier Networks Pty Ltd v Philadelphia Developments Pty Ltd

Link copied
Case Copied 41 min read

SUPREME COURT OF QUEENSLAND

CITATION:

Frontier Networks Pty Ltd v Philadelphia Developments Pty Ltd [2023] QSC 192

PARTIES:

FRONTIER NETWORKS PTY LTD

(applicant)

v
PHILADELPHIA DEVELOPMENTS PTY LTD

(respondent)

FILE NO:

BS No 14453 of 2022

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

25 August 2023

DELIVERED AT:

Brisbane

HEARING DATE:

27 January 2023

JUDGE:

Davis J

ORDERS:

1.    Paragraphs 5A(c), (d) and (e), 6, 6A(c) and (d), 7, 11(c), 12, 13, 15, 16(b) and 17(a) of the amended defence are struck out.

2.    It is declared that the defendant’s purported termination of the Master Development Agreement and the Site Licence and Access Agreement on 7 October 2022 was ineffective.

3.   The application is otherwise dismissed.

4.    By 4.00 pm on 1 September 2023, the defendant file and serve any material and submissions on costs.

5.    By 4.00 pm on 8 September 2023, the plaintiff file and serve any material and submissions on costs.

6.    Each party has leave to file and serve any application for leave to make oral submissions on costs by 4.00 pm on 15 September 2023.

7.    In the absence of any application being filed by 4.00 pm on 15 September 2023, the question of costs will be determined on the written submissions without further oral hearing.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – IMPLIED TERMS – GENERALLY – where the parties entered into contracts – where one contract gave access to the plaintiff to the defendant’s building (the SLAA) – where the other contract provided for the plaintiff to provide a telecommunications network to the defendant’s building (the MDA) – where the SLAA was for a fixed term with an extended term – where the MDA was of no fixed duration – whether there was an implied term that the MDA could be terminated on reasonable notice

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – GENERALLY – where the MDA defined the term “Insolvency Event” – where that definition only defined insolvency events committed by the defendant – where the defendant committed an Insolvency Event – where the defendant purported to terminate the contract based on its own Insolvency Event – whether on the proper construction of the MDA that right arose

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – GENERALLY – where by the MDA the plaintiff was to design, manufacture and install the telecommunications network – where the MDA then provided that the plaintiff would provide services to retail providers and to end users – where the MDA incorporated the plaintiff’s standard terms and conditions under which it provided services – where those standard terms and conditions provided for termination of services by the customer – whether on a proper construction of the MDA and the plaintiff’s standard terms and conditions the defendant could terminate the MDA on reasonable notice or at will

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS –…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Frontier Networks Pty Ltd v Philadelphia Developments Pty Lt... and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2023] QSC 192
Decision Date

CaseChat Overview and Summary

Frontier Networks Pty Ltd (Frontier) applied for summary judgment against Philadelphia Developments Pty Ltd (Philadelphia) on part of its claim. Frontier sought orders that various paragraphs of the amended defence of Philadelphia be struck out. Philadelphia, the developer of a residential unit complex, entered into two agreements with Frontier, a telecommunications network provider. The agreements were the Master Development Agreement (MDA) and the Site Licence and Access Agreement (SLAA). The MDA provided for Frontier to design, build, and install a telecommunications network and then provide services. The SLAA gave Frontier access to the building for installing, generating, and maintaining equipment. Philadelphia purported to terminate both agreements, which Frontier contested. Philadelphia provided three reasons for the termination, which were considered in the summary judgment application.

The court needed to determine if there was any real prospect of success for Philadelphia's defences and if a trial was necessary. Philadelphia argued that an Insolvency Event, defined as an insolvency event committed by itself, allowed termination under clause 97 of the MDA. The court found that clause 97 did not cover Philadelphia's own Insolvency Event, and thus, this defence had no prospect of success. Philadelphia also argued that the SLAA impliedly terminated when the MDA terminated. However, the court found no such implied term in the SLAA. Lastly, Philadelphia claimed that an implied term allowed either party to terminate the MDA at will or on reasonable notice. The court found that the terms and conditions incorporated into the MDA did not support such an implied term. Therefore, the court concluded that Philadelphia had no real prospect of success on any of its defences, and there was no need for a trial.

The court struck out certain paragraphs of Philadelphia's amended defence and declared that the purported termination of the agreements on 7 October 2022 was ineffective. The application for summary judgment was otherwise dismissed. The court ordered the parties to file and serve material and submissions on costs by specified dates and allowed applications for leave to make oral submissions on costs if filed by a certain date. Otherwise, the costs would be determined based on the written submissions.

Orders

Orders of the court

1. Paragraphs 5A(c), (d) and (e), 6, 6A(c) and (d), 7, 11(c), 12, 13, 15, 16(b) and 17(a) of the amended defence are struck out.

2. It is declared that the defendant’s purported termination of the Master Development Agreement and the Site Licence and Access Agreement on 7 October 2022 was ineffective.

3. The application is otherwise dismissed.

4. By 4.00 pm on 1 September 2023, the defendant file and serve any material and submissions on costs.

5. By 4.00 pm on 8 September 2023, the plaintiff file and serve any material and submissions on costs.

6. Each party has leave to file and serve any application for leave to make oral submissions on costs by 4.00 pm on 15 September 2023.

7. In the absence of any application being filed by 4.00 pm on 15 September 2023, the question of costs will be determined on the written submissions without further oral hearing.

Background

Background to the litigation

The plaintiff, Frontier Networks Pty Ltd (Frontier) applies for summary judgment on part of its claim and also seeks orders that various paragraphs of the amended defence of the defendant, Philadelphia Developments Pty Ltd (Philadelphia), be struck out.Background Philadelphia is the developer of a residential unit complex called “Pearl Main Beach” (the building). Frontier is in the business of designing, constructing and operating fibre-based telecommunications networks. On 8 September 2021, the parties entered into two agreements. One is called the Master Development Agreement (MDA). The other is called the Site Licence and Access Agreement (SLAA).[1][1]Referred to jointly as “the Agreements”. The terms of both agreements are critical to the present application and are analysed later in these reasons. In broad summary, the MDA provides that Frontier will design, build and install the network and then provide services on either a wholesale basis to retail service providers or directly to end users being those who have purchased residential units in the building.[2] The SLAA gives Frontier access to the building for the purposes of installing, generating and maintaining the equipment which is the subject of the MDA.[3][2]Clauses 11-15, 56 and 68.[3]This is clear from the Site Licence and Access Agreement, Schedule “Equipment”, the “Special Conditions” and clauses 1.1, 3, 4, 5, 7, 8 and 9 (referring to “Equipment” being that installed via the MDA). On 7 October 2022, Philadelphia purported to terminate the Agreements. The purported termination was not accepted by Frontier who commenced these proceedings against Philadelphia. Importantly, Philadelphia advances three reasons why the termination was justified.[4][4]The relevant pleadings appear in paragraphs [33], [52] and [65] of these reasons. Philadelphia relies upon clause 97 of the MDA[5] and alleges that on a proper construction of that agreement, if Philadelphia itself commits an “Insolvency Event”, it may terminate the Agreements.[6] It pleads that an Insolvency Event occurred and therefore the right to terminate arose and Philadelphia availed itself of that right (the first defence).[7][5]Clause 97 appears at paragraph [32] of these reasons.[6]Philadelphia pleads that there is an implied term of the SLAA that it falls if the MDA falls: See paragraph 6A(c) of the amended defence at paragraph [78] of these reasons.[7]Paragraphs 11(b)(iv), 11(b)(v), 11(c) and 15 of the amended defence. Clause 55 of the MDA refers to “Frontier’s terms and conditions at Philadelphia pleads that Frontier’s terms and conditions are incorporated into the MDA and provide a right to terminate without cause but on notice (the second defence).[9][8]Clause 55 appears at paragraph [51] of these reasons.[9]Paragraph 5A(b)(i), 5A(c), 11(b), 11(c)(i)(B) and 15 of the amended defence. Philadelphia asserts in the alternative that there was an implied term in the MDA that either it or Frontier could terminate the MDA at will with immediate effect, or alternatively, upon reasonable notice.[10] It is alleged that the term is implied by operation of law, or alternatively, in fact and that the implied term justified the termination (the third defence ).[11][10]Paragraph 5A(e) of the amended defence.[11]Paragraph 11(c)(i)(C) of the amended defence.The pleadings and the prayer for relief

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The application for summary judgment is made under r 292 of the Uniform Civil Procedure Rules 1999 (UCPR). Rule 292 provides:“292 Summary judgment for plaintiff(1)A plaintiff may, at any time after a defendant files a notice of intention to defend, apply to the court under this part for judgment against the defendant.(2)If the court is satisfied that—(a) the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and(b) there is no need for a trial of the claim or the part of the claim;the court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.” The guiding principle under the UCPR is enshrined in r 5 which provides:“5 Philosophy—overriding obligations of parties and court(1)The purpose of these rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.(2)Accordingly, these rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality and facilitating the purpose of these rules.(3)In a proceeding in a court, a party impliedly undertakes to the court and to the other parties to proceed in an expeditious way.(4)The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court.Example—The court may dismiss a proceeding or impose a sanction as to costs, if, in breach of the implied undertaking, a plaintiff fails to proceed as required by these rules or an order of the court.” Various cases decided after the introduction of the UCPR have considered whether the power to grant summary judgment has been widened by the operation of r 5. Two principles have emerged from the decided cases:(a)The text of r 292 must be applied. To achieve judgment summarily, the plaintiff must demonstrate that the defendant has “no real prospect of succeeding on the defence” and “there is no need for a trial”.[29](b)In applying the test, regard must be had to the fact that an order for summary judgment denies the party suffering the order from putting its case and so an order should only be made in the clearest of cases.[29]Rule 292(2)(a) and (b) and Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 at [11] and [17], Gray v Morris [2004] 2 Qd R 118 at [46]. On that second point, Gaudron, McHugh, Gummow and Hayne JJ said in Agar v Hyde:[30]“57.It is, of course, well accepted that a court whose jurisdiction is regularly invoked in respect of a local defendant (most often by service of process on that defendant within the geographic limitations of the court’s jurisdiction) should not decide the issues raised in those proceedings in a summary way except in the clearest of cases. Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.” (footnotes omitted)[30](2000) 201 CLR 552.

Ratio Decidendi

Legal Principle Established

The first defence has no prospect of success and there is no need for a trial of any issue concerning the first defence.The second defence: Incorporation of the General Terms and Conditions Clause 55 of the MDA provides:“55)Frontier will operate the Network for the purpose of delivering the Wholesale Services in accordance with Frontier’s terms and conditions at >In relation to its reliance upon clause 55 and Frontier’s terms and conditions, Philadelphia pleads that it:“c.says further that, pursuant to clause 55 of the MDA, the following terms of the plaintiff’s Standard Form of Agreement (Standard Form of Agreement) were incorporated into the MDA:i.by clause 1 ‘Document Structure and Precedence’:2.1 Depending on which services have been purchased by the Customer, different documents may apply.(a) The General Terms and Conditions apply to ALL Frontier Customers.”[60][60]Paragraph 5A(c) of the amended defence. Philadelphia then pleads sections 4.1, 4.2 and 4.4 of Frontier’s standard terms and conditions. Section 4 in its entirety is:“Section 4. Commencement and termination of this Agreement4.1Commencement of Agreement(a) We ask you to note that this Agreement commences on the date that you sign or submit an Application Form. The term of your Service commences on the date we complete installation of all Broadband Transmission Facilities required under the agreement with you and activate your service in our system.4.2Application Cancellation(a) You may cancel an application made for a service at any time prior to the commencement of the service. To avoid doubt it should be emphasised that cancellation requests received subsequent to the commencement of those services are service cancellation requests and clause 4.4 will therefore apply.(b) Application cancellation requests must be made in writing and sent by email to cancellations@frontiernetworks.com.au.(c) Upon receipt of your cancellation request we will issue you with a ticket number by email, confirming that we have received your request. The date of your request is deemed to be the date when this confirmation email is sent by us. If you have not received your ticket number within 24 hours of sending your request then you should assume that we have not received the request and you should make contact with us to follow this up.(d) To ensure that you[61] cancellation request is processed promptly, once you have received your ticket number, phone Frontier Customer Service on 1300 85 85 35 and quote your ticket number to confirm.[61]This should be “your”. (e) Upon cancelling an application you will be charged the Application Cancellation Fee unless a Cooling Off Period applies to you in which case you will only be charged the Application Cancellation Fee if you cancel after the Cooling Off Period has ended.(f) Where a Cooling Off Period applies to you we may choose to delay commencement of installation work for the service until after the Cooling Off Period has ended.4.3Our right to suspend or terminate a service(a) We may suspend or terminate your Service if:(i)you are in serious breach of this Agreement (you will be in serious breach if you breach your obligation to pay our charges for the Service, breach the Acceptable Use Policy or breach clauses 1.1(c), 1.1(d), 1.1(e), 1.1(g), 9.4, 10.3 or 13.2 of this Agreement); and(ii)we have notified you in writing of your breach and you have failed to remedy the breach within 30 days of our notice (if the breach can be remedied).(iii)If the breach is something which cannot be remedied, we may immediately terminate your Service with notice to you.(iv)Engaging in conduct that breaches the Acceptable Use Policy or breaching clauses 1.1(d), 1.1(g), 9.4, 10.3 or 13.2 of this Agreement are breaches that are not capable of remedy.(b) In addition, we may suspend or terminate your Service if you do not pay the charges by the due date. If we lift the suspension on your Service, a $30 administration fee applies.(c) If we terminate your Service under clause 4.3(a) during your Contract Term, you must pay us the Cancellation Fee.(d) We may suspend the Service to you during the 30 day period before we terminate your Service under clause 4.3(a). If we do suspend your Service, we will reimburse any monthly fees (pro-rated if necessary) that you paid during the suspension.(e) If we terminate the Service for any reason, you must still pay us for any charges incurred before the termination.(f) We may also terminate the Service at any time by giving you 30 days prior written notice.(g) If we terminate your service under the provisions of clause 3.2(b) and you fail to settle your account within 90 days we may, at our sole discretion, retain or sell any equipment of yours that is in one of our data centres as part payment of your account. 4.4We understand that, at some stage, you may no longer wish to continue with your Service for a number of reasons. Your rights when cancelling your service are as follows:(a) All cancellation requests must be made in writing and sent by email to cancellations@frontiernetworks.com.au.(b) You may make a cancellation request under this agreement at any time provided you give us at least 28 days notice, unless you are cancelling under clause 4.4(f).(c) If you cancel this Agreement before the end of your Contract Term, you must pay us the Cancellation Fee unless you are cancelling under clause 4.4(f) in which case you do not have to pay the Cancellation Fee.(d) Upon receipt of your cancellation request we will issue you with a ticket number by email, confirming that we have received your request. The date of your request is deemed to be the date when this confirmation email is sent by us. If you have not received your ticket number within 24 hours of sending your request then we are deemed not to have received the request and you should follow up with us.(e) Your cancellation request will take effect on your next service anniversary date following the expiry of the 28 day notice period, unless you are cancelling under clause 4.4(f).(f) In certain circumstances you may request that your Service be cancelled immediately. ‘Immediate cancellation’ means that no notice period applies so your cancellation request will take effect on your next service anniversary date following the date of your request. Immediate cancellation requests may be made when:(i)we are in serious breach of this Agreement; that is, if we breach our obligation to use reasonable care and skill in providing the Service and our obligations under clause 5.2); and(ii)you have notified us in writing of our breach and we have failed to remedy the breach within 30 days of receiving your notice.4.5At certain times, we need to perform maintenance on or protect our networks to keep providing a high performing service to users. This means that we may sometimes need to suspend your Service if it is necessary for the purpose of maintenance, integrity, protection or restoration of our networks or the users of our networks. If we need to suspend your Service under this clause, we endeavour to ensure that the suspension is for as short a period as is reasonably possible.4.6Unfortunately, we cannot control some external events that may affect our provision of the Service to you. If a Regulatory Event occurs, we may not be able to continue providing the Service to you at all or may not be able to provide it on the same terms as set out in this Agreement. If this happens, we will give you as much notice as we reasonably can and we may need to terminate this Agreement. You will not pay any Cancellation Fee is your Service is terminated under this clause.4.7Exercise of our rights under clauses 4.5 and 4.6 does not affect your Contract Term.4.8 The effect of termination(a) We need to make sure that certain things occur if you or we terminate this Agreement. So, if this Agreement is terminated:(i)any software licences granted to you under this Agreement will immediately terminate and you must return to us or destroy the Software and all copies as we direct; and(ii)you must immediately return any of our property to us.(b) If we terminate this Agreement under clause 4.2 and, at your request, we later agree to provide you with the Service again, you will need to pay us a disconnection fee set out in the Plan Table.(c) If you fail to return our property to us within 28 days of termination of this agreement you will be liable for the full retail price of the property.” (emphasis added)