Green and Associates Pty Ltd t/as Green and Associates Solicitors v Servcorp Gateway Pty Ltd

[2017] NSWCATCD 34

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Green and Associates Pty Ltd t/as Green and Associates Solicitors v Servcorp Gateway Pty Ltd [2017] NSWCATCD 34
Hearing dates:	24 January 2017
Decision date:	27 April 2017
Jurisdiction:	Consumer and Commercial Division
Before:	G.J. Sarginson Senior Member
Decision:	1. The application is dismissed.
Catchwords:	Consumer Claim-Termination of Contract-Circumstances of termination-Whether conduct repudiatory-Misleading or deceptive conduct-Unconscionable conduct-Unsolicited services
Legislation Cited:	Civil and Administrative Tribunal Act 2013 ss 45, 60 Fair Trading Act 1987 ss 4, 79D, 79H, 79I, 79F Australian Consumer Law 2010 ss 3, 18, 21, 29, 40
Cases Cited:	Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 BP Refinery (Westernport) Pty Lt v Hastings Shire Council (1977) 180 CLR 266 Shevill v Builder’s Licencing Board [1982] HCA 47; (1982) 149 CLR 620 Kirkwood & Ors v Drinkwater [2000] NSWCA 126 Commissioner of Taxation v Reliance Carpet Co Pty Ltd [2008] HCA 22; (2008) 236 CLR 324 Clarke & Ors v Great Southern Finance Pty Ltd & Ors [2014] VSC 516 Sacks v Hammoud [2016] NSWCATAP 225 Toll (FCGT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 Gordon & Gotch Australia Pty Ltd v Horwitz Publications Pty Ltd [2008] NSWCA 257 Heilbut, Symons & Co v Buckleton [1913] AC 30 Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115 Miller & Associates Insurance Broking v BMW Australia Finance [2010] HCA 31; (2010) 241 CLR 357 ASIC v National Exchange Pty Ltd [2005] FCAFC 226; (2005) 148 FCR 132
Category:	Principal judgment
Parties:	Green and Associates Pty Ltd t/as Green and Associates Solicitors (applicant) Servcorp Gateway Pty Ltd (respondent)
Representation:	Applicant: Mr D Green, director Respondent: Mr M Moufarrige, director
File Number(s):	GEN 16/47608
Publication restriction:	Nil

REASONS FOR DECISION

1. The major issue in dispute in the proceedings is whether or not the conduct of the respondent is a breach of the contract between the parties entitling the applicant to terminate the contract. There are further issues in dispute as to whether the respondent has breached provisions of the Australian Consumer Law 2010 (‘the ACL’).

2. Mr Green, sole director of the applicant appeared and gave evidence. Mr Moufarrige, director of the respondent, appeared and gave evidence. Mr Miller, commercial analyst of the respondent, also appeared, but did not give evidence.

3. Both parties indicated at the outset of the hearing that they were ready to proceed and did not seek to adjourn the matter for any reason.

Background

4. The applicant is a company of which Mr Green is a director. Mr Green is a legal practitioner in NSW, and operates a legal practice. The respondent operates a business licencing serviced offices for commercial purposes. There is no dispute that, in June 2016, the parties entered into a written agreement for the applicant to licence a serviced office from the respondent at premises in Macquarie Place, Sydney. A written “service agreement” between the parties was executed dated 14 June 2016 (‘the written agreement’). The fixed term of the agreement was from 1 July 2016 to 30 June 2017. The agreement provided that the first 4 months would be rent free. On 26 October 2016 the applicant vacated the premises and on 28 October 2016 commenced these proceedings in the Civil and Administrative Tribunal (‘NCAT’).

The Claim

5. Primarily, the applicant alleges that the conduct of the respondent was (i) in breach of implied and/or express terms of the written agreement; (ii) of such a nature as to constitute a repudiation of the contract, and the applicant was entitled to accept the repudiation and terminate the contract; (iii) was misleading or deceptive conduct within Section 18 and/ or 29 of the Australian Consumer Law 2010 (‘the ACL’); (iv) unconscionable conduct within Section 21 of the ACL.

6. When the proceedings were filed on 28 October 2016, the applicant sought orders that the applicant be paid $8,922.95, and not have to pay the amount of $1,384.74. On 22 November 2016, the matter was listed for a Group List and Conciliation hearing at the Tribunal. The matter was set down for hearing, with directions that each party file and serve evidence. No order was made granting the applicant leave to file an amended application.

Amended Claim

7. On 6 December 2016, the applicant filed documents with the Tribunal. The documents of the applicant were

1. Points of Claim; and

2. An affidavit of Mr Green dated 5 December 2016, which exhibited the documents upon which the applicant relied.

8. The Points of Claim significantly expand the scope of the applicant’s claim. In “particulars of loss and damage” the applicant sought:

1. reimbursement of $1,422.95 the applicant had paid the respondent in respect of an invoice issued by the respondent in October 2016;

2. $700.00 in respect of the difference between the security deposit the applicant had paid under the licence agreement to the respondent, and the security deposit for new premises;

3. $40.32 for parking fees while vacating the premises;

4. “temporary virtual office services” of $783.15;

5. “mail redirection services of $26.90;

6. filing fees in the NCAT proceedings;

7. removal fees of $225.50;

8. printing business cards with new address of $148.96; and

9. “legal costs” of the proceedings.

9. The applicant also filed an outline of written submissions with the Tribunal on 18 January 2017. That document, like the Points of Claim, was not paginated. However, the outline of written submissions comprised of 122 paragraphs (20 pages in length). The final paragraph sets out “appropriate orders”. 8 “appropriate orders” are identified, again expanding the scope of the claim. Relevantly, in the document the applicant seeks orders that:

1. All “agreements and contractual documents” between the applicant and respondent be “set aside”;

2. The applicant is not liable to pay any monies to the respondent;

3. The respondent to refund the applicant $3,000.00 paid as a security deposit;

4. The respondent to refund the applicant $1,422.95 that had been “overcharged” by the respondent;

5. The respondent pay the applicant $2,021.21 for unspecified reasons;

6. The respondent pay the applicant an unspecified amount for loss of income;

7. The respondent pay the applicant’s legal costs.

10. Mr Green informed the Tribunal that the amount of $2,021.21 represented the total of the amounts set out in paragraph 79 of the Points of Claim; being the amount the applicant alleged had been overpaid to the respondent.

11. At the hearing, I raised with Mr Green as to why he had never sought leave to amend the claim, in circumstances where the initial claim filed with the Tribunal was for an amount of damages significantly less than as set out in the Points of Claim, and the orders sought were of considerably narrower ambit.

12. Mr Green stated that the issue of Points of Claim had been orally raised with the Member who presided at the Group List and Conciliation hearing. Whether or not such an issue had been raised, the applicant had not sought leave to amend the application, nor had there been any orders granting the applicant leave to amend the claim.

13. Mr Moufarrige, stated that he did not oppose the applicant relying upon an amended claim, as he believed the respondent was in a position to meet all of the issue raised by the applicant in the amended claim at the hearing, and did not seek an adjournment. In circumstances where the respondent did not oppose the application to amend, the Tribunal granted the applicant leave to rely upon the amended application, as set out in the outline of written submissions of the applicant and Points of Claim.

Leave to Appear

14. The respondent opposed leave being granted for Mr Green to appear for the applicant, as he is an Australian legal practitioner. However, in circumstances where Mr Green is the sole director of the applicant, and was appearing in his capacity as the director of the applicant, leave was granted. As was made clear to Mr Green, the issue of a director of a company representing the company under Section 45 of the Civil and Administrative Tribunal Act 2013 is a separate issue to the issue of costs under Section 60 of the Civil and Administrative Tribunal Act 2013.

Applicant’s Evidence and Documents

15. The evidence and documents of Mr Green, as set out in the affidavit dated 5 December 2016, can be summarised as follows:

16. Mr Green is the sole director and sole employee of the applicant and the applicant has never employed any other person.

17. On 9 June 2016, Mr Green met with Ms Lauren Cunningham, a manager of the respondent, at premises of the respondent at 1 Macquarie Place, Sydney. Mr Green told Ms Cunningham that he wanted to move into an office by July 2016 and by August 2016 hoped to have 1 or more employees working for him. Ms Cunningham said, apart from rent “all services are charged on a pay as you go system”. Ms Cunningham told Mr Green that services are only charged “per person” and “if there’s only one of you at first you can just get one internet package, then when you employ someone else, you start paying for a second one when they start”.

18. Ms Cunningham stated that the respondent had a “connect” package, for the sum of “$350.00 per person per month”. The package included “phone line and call handling services”; “unlimited internet”; and receptionists taking and screening calls. Ms Cunningham stated that if Mr Green wanted to hire the respondent’s administrative staff for a particular task, it would cost $13.00 per every 10 minutes. Ms Cunningham stated that the board room could be hired for $132.00 per hour, and other meeting rooms for $81.00 per hour or $13.50 per every 10 minutes. Ms Cunningham stated that “you get a tea, coffee and water package included too”.

19. Ms Cunningham told Mr Green that he had “already been offered 4 months’ rent free” by the respondent (Mr Green’s affidavit does not make any reference to the circumstances in which that offer was made), and that the respondent could offer “Suite 19 here on a 12-month term if you’re interested?” Mr Green asked for paperwork to review. Mr Green stated he wanted the suite “set up to suit 2 people, but not actually start a second package” until Mr Green had hired an employee. Ms Cunningham replied that she would “only put one person down on the agreement” but that there would be “some fees payable for a second person in the first month in order to configure the suite”. Ms Cunningham stated that Mr Green could “just let us know” when he had hired another person, and “we can start their package too”.

20. At paragraphs 8 to 10 of his affidavit, Mr Green attaches a series of emails between himself and Ms Cunningham for the period between 11 June 2016 and 14 June 2016. Mr Green states in the body of his affidavit what he claims he meant to portray in the words used in the emails.

21. On 10 June 2016, Ms Cunningham sent Mr Green an email that relevantly stated, “Please see attached agreement for your kind review”. On 11 June 2016, Mr Green replied by email: “I am happy with the monthly office fee of $3,360.00. Just note-remember there will be two people in the office initially, not 1. I hope that makes no difference…In terms of outgoings, I understand these are really the company’s expenses. Would you be willing to drop these if we sign up for 2 connect packages...”

22. On 14 June 2016, Ms Cunningham replied by email: “Please see attached amended agreement based on two people in the office. The price is different as we need to provide another phone, internet connection and beverage fee…” That email was sent by Ms Cunningham at 12.20 pm on 14 June 2016.

23. At 5.38 pm on 14 June 2016, Ms Cunningham sent Mr Green a further email stating: “Hope you are well, just wanted to send you an updated agreement as I was able to get a small discount on the office you preferred based on 2 people”.

24. On 15 June 2016, Mr Green replied by email: “I asked a few questions in my email below that have not been answered or amended in the agreement. Just wondering whether that was an oversight or if I should take the answer as a negative”. Mr Green’s documents do not contain a copy of the “email below” and it is unclear whether he is referring to the email of 11 June 2016 or another email not in evidence.

25. At 11.41 am on 15 June 2016, Ms Cunningham emailed Mr Green as follows: “I have spoken this morning to our sales director and have approval to reduce the rental for this office to you to $3,000.00 per month. This brings down the overall cost to you. I have attached the updated agreement. This offer is only valid for 24 hours. I have also amended the security deposit to only be one month and you may guarantor the second month. The activation fee is a one-off cost and covers the set up as well as ordering the swipe cards from our building management for you and your colleague. The additional filing cabinet will not be a problem to arrange for you. Please let me know if you have any questions. I trust this offer is more attractive to you and we can welcome you to your new office at Gateway tower. I look forward to hearing from you”.

26. According to Mr Green (as set out in paragraphs 8 to 11 of his affidavit), references by him in emails to Ms Cunningham of “2 people” occupying the suite were intended to only apply to the future situation where he would employ a further person, and he did not interpret any reference by Ms Cunningham to “2 persons” or “2 connect packages as “displacing or altering” his conversation with Ms Cunningham on 9 June 2016.

27. On 17 June 2016, Mr Green executed a written ‘Servcorp Service Agreement’ dated 14 June 2016. Mr Green paid a security deposit of $3,000.00 and “first month’s charges” as set out in clause 6 of the written agreement ($1,820.00).

28. On the weekend of 2-3 July 2016, the applicant moved into the premises.

29. On 1 August 2016, the respondent issued the applicant with its first invoice. The written invoice refers to, as one of the invoice items “Servcorp Connect 2”. Mr Green stated that he paid the invoice “without reviewing it”.

30. On 1 September 2016, the respondent issued the applicant with its second invoice. That written invoice refers to, as one of the invoice items “Servcorp Connect 2”. Mr Green states that he paid the invoice “without reviewing it”.

31. In the period between 4 July 2016 and 22 September 2016, Mr Green had various conversations with employees of Servcorp with reference to his inability to hire an appropriate further person to assist him in his practice.

32. On 13 September 2016, Mr Green requested that the respondent send monthly invoices by email. The email relevantly states: “Apologies for the delay in paying this, but I have been overseas. I just tried to download this, but I am away from the office and hopeless at remembering my account details. Could you send me the invoice direct (and all future invoices directly) please?” In reply to that email, Ms Whyte of the respondent emailed Mr Green: “Please see attached your invoice as requested. Moving forward, we will send these directly to you for payment”.

33. On 22 September 2016, Mr Green sent Ms Whyte and Ms Vosinthavong (an administrative employee of the respondent) an email requesting work be performed regarding the preparation of Court Appeal Books. On 22 September 2016, Ms Vosinthavong sent an email to Mr Green containing a quotation. Relevantly, that email refers to “team costs” (i.e. time taken to perform the task) and “printing costs”. The quote refers to scanning documents; printing documents; and numbering documents. The total amount quoted was $965.00. Of that amount, the component for scanning is $140.60 (including “team costs”). Ms Vosinthavong states in the email “For this task I will need to manually number the original document’s pages and then scan it through to print off 7 copies”.

34. At 11.44 am on 22 September 2016, Mr Green sent Ms Vosinthavong an email stating: “Thanks for the quick turnaround. I have sorted the numbering issue as I struck a deal with the other side to use existing appeal books, so now only need to number the final 36 pages which I’ll do. As to the rest, I just need the copying, but also need the docs to be hole punched through the machine as they are being copied. I’ll need 14 white two-ring binders and white numbered tabs to divide the documents though. Does the office have those at hand? Thanks and sorry I am unorganised! PS the rates are fine. PPS I need to actually file these in Court by 4pm tomorrow. Is there any chance copying could be done a few hours earlier, i.e. by 2pm?”

35. At 12.00 pm on 22 September 2016, Ms Vosinthavong emailed Mr Green as follows: “No issues there, I’m glad you were able to sort something out so it’s one less worry for yourself. We have plenty of white page dividers on hand (roughly 20-25 left) and as for the white two ring binders, we only one at reception. I am more than happy to visit Officeworks to purchase these and charge it to your account. It will only cost $23.00 (set cost for leaving the building) and $34.50 to acquire the folders at Officeworks not including folder prices. Please advise me if you would like for me to purchase these for your documents. I will come by after my lunch (12 pm-1 pm) to grab the documents you need to be copied and will try to have done by COB today so it’s not too stressful to you tomorrow. As for the hole punching for the documents, our printer only has the function for stapling documents, however, I can manually hole punch the documents as the printing is being completed so the price I charge for my time is efficient and cost effective”. Although Mr Green does not refer to what occurred after Ms Vosinthavong sent her email in his affidavit, it appears the copying and preparation of the Appeal Books was performed, as Mr Green states he subsequently disputed the charge for scanning documents.

36. On 1 October 2016, the respondent issued its third invoice. That invoice includes charges for “Servcorp Connect 2” and scanning 671 pages. Mr Green stated in his affidavit that he “started to work from home as he felt uncomfortable about Servcorp’s overcharging”. According to Mr Green, the invoice of 1 October 2016 was “considerably higher” than the invoices of 1 August 2016 and 1 September 2016, and when he reviewed the invoices he “discovered” that (i) the respondent had been charging the applicant for “services for a second person the entire time, and not just the establishment fee or first month they represented was required to configure the office”; (ii) the respondent charged for “additional scanning and labour” beyond what he had agreed to in respect of the services provided on 22-23 September 2016; (iii) the respondent had charged to send its invoices by email; and (ii) the respondent had charged for “numerous indiscriminate items seemingly connected with telephone services, call handling, message taking, and invoicing”.

37. On 5 October 2016, Mr Green sent an email to Ms Toms (Manager) of the respondent. The email states that Mr Green has “issues” with the invoice of 1 October 2016, and “I have also checked old invoices as a result”. Mr Green raised the following issues: (i) the applicant had been invoiced for scanning and copying in respect of the preparation of Appeal Books, when all Mr Green had requested was copying; (ii) Mr Green had “noticed” that the applicant had been paying for “2x Servcorp Connect packages since July (in advance) when we had only had one person in the office”. Mr Green also raised paying for a “second beverage package”. Mr Green stated that he had “anticipated hiring more staff early on, so we cannot complain about the setup of the second connection but we have not been using the second ongoing connect service or the beverage package at all”; (iii) the respondent had “included 2 separate charges in the most recent invoice for sending an invoice”, which was unreasonable because Mr Green could not log into the “online system” (i.e. the respondent’s internal internet website portal which contained access to account details) “most of the time” and it was “unreasonable” to charge to send the account by email; (iv) the applicant was being charged $170.00 per month for “telephone intercept” as well as being charged for telephone messages being taken. The email requests that the respondent “get to the bottom of this” and that “in particular, the scanning issue is a priority as we need to issue invoices to or clients”. The email concludes by stating that the applicant “appreciates” the work of “Emily… and the girls” and that the applicant “really does not mind paying for the services we use, although we have to know what they are and the charges have to be reasonable”.

15. On 6 October 2016, Ms Toms of the respondent replied to Mr Green’s email of 5 October 2016. Ms Toms stated that she had spoken to “Emily” (i.e. Ms Vosinthavong) and Ms Vosinthavong would send an email to the applicant explaining the charges for scanning. Ms Toms stated: “In relation to your Servcorp Connect and Beverage, this is per your Service Agreement. If you would like to downgrade to Servcorp Connect 1 and 1 Beverage fee we are happy to with 1 months’ notice”. Ms Toms stated that Ms Whyte of the respondent “liaised with you in relation to having your calls intercepted and announced to you. If you would just like the receptionist to answer the phone on your behalf, then transfer it to your extension and release (included in the connect package) we can to this. Let me know and I will cancel the service as of next month. In respect of the issue regarding sending accounts by email (and charging for it) Ms Toms states: “if you would like a team member to get through how to use our client portal for invoices, I can arrange complimentary. Please note: from our end the system is working and your account is fully functioning. I will take you off the notifications list.” Ms Toms concluded the email by stating: “Please let me know you decision in regards to the above changes and I will implement them asap”.

16. At 12.41 pm on 6 October 2016, Ms Vosinthavong sent Mr Green an email in response to his query regarding the cost of scanning. Ms Vosinthavong stated that “as our Canon printer does not have the facilities to scan and photocopy all at once” and as the printing was a matter of “urgency”, she made an “informed decision based on time constraints and cost-effective options” to scan, copy, print, manually hole punch, and sort the volumes of Court Appeal Books, because if she had only manually photocopied the documents, the task would have taken “well over 2 hours extra to complete”. Ms Vosinthavong stated that the invoice contained “an extra 82 pages of scanning and 21 pages of black and white printing that was entered in your invoice as the Canon printer logs every client’s printing/photocopying /scanning use for the month”.

17. On 6 October 2016 Mr Green states in his affidavit that he attended the office to “collect some documents” and saw Ms Vosinthavong and Ms Toms. As Mr Green walked past, he perceived Ms Vosinthavong and Ms Toms were laughing and “ridiculing” him regarding the issue of “overcharging”. Mr Green did not raise any issues personally with Ms Toms or Ms Vosinthavong on 6 October 2016.

18. On 8 October 2016, Mr Green sent an email to Ms Toms of the respondent. The email asserts that it was “ostensibly clear” that: (i) the Servcorp Connect and Beverage package was contingent upon 2 persons residing in the office and the applicant was not liable to pay for the second package, based upon Mr Green’s discussion with Ms Cunningham prior to signing the contract; (ii) the applicant was not liable to pay a charge of $170.00 per month in respect of telephone services, as Mr Green was led to believe by Ms Cunningham that the “connect” package included all telephone services, and there was nothing in the written agreement entitling the respondent to charge a further amount; (iii) the charge of $4.80 by the respondent to send its invoice by email was “illegal”; and (iv) the applicant had been charged $144.05 for scanning Court Books it did not request. Mr Green asserted that the applicant had been “overcharged” $1,360.24 “on past invoices” and $513.35 “on the current invoice. Mr Green stated that the applicant had paid $1,422.95 in respect of the “October invoice” and concluded the email by referring to various provisions of the ACL and that further demands should not be made by the respondent.

19. On 17 October 2017, Ms Toms of the respondent emailed Mr Green. Ms Toms stated that she had “spoken with my head office” and the position of the respondent was that:

1. The Servcorp Connect 2 and 2 beverage fees would be charged “as per the service agreement” until 31 October 2016. From 1 November 2016, the applicant would be “downgraded” to being charged for Servcorp Connect 1 and 1 beverage fee;

2. The telephone service of “Servcorp intercept ($170.00 per month) will be re-credited to the applicant’s account in the October and September invoice (totalling $340.00) and not charged in the future;

3. The invoice notification fee of $4.80 would be waived; and

4. That although scanning was the only way in which the work requested for preparation of the Appeal Books could be performed, the respondent would waive the fee and “apply $144.05 to your account”. The respondent stated that $488.95 would be credited to the applicant’s account.

43. On 20 October 2016, Ms Toms sent Mr Green an email requesting payment of $2,807.69 “credits applied to your current invoice” as it “is outstanding”. The email concludes that if Mr Green had any questions, not to hesitate to contact Ms Toms.

44. On 20 October 2016, Mr Green states that he “phoned a friend of mine” who “I knew was close to a senior executive of Servcorp” to request that his account be “looked into”.

45. On 21 October 2016, Mr Green states that Mr Dirk Miller of the respondent telephoned him. According to Mr Green, he asked Mr Miller whether he had read the emails between the parties, and spoken to Ms Cunningham. Mr Green stated that the charges imposed were based on 2 people occupying the office, and “all the girls on the floor know there is only one person in the suite”. According to Mr Green, Mr Miller stated that Servcorp’s position was that the applicant was liable to pay the account because the applicant had “signed the agreement” and was “bound to pay” the account. According to Mr Green, Mr Miller stated that the respondent’s position was “final”.

46. Mr Green stated that he “consulted a few colleagues” about the dispute with the respondent, and felt “mislead and bullied”. Mr Green stated that he started to perform “research” about the respondent, including a matter in the Consumer Trader and Tenancy Tribunal (a predecessor of NCAT) in 2005. Mr Green asserts that he feared the applicant would be “locked out”.

47. At 2.02 pm on 25 October 2016, Ms Toms sent Mr Green an email “following up” her email of 20 October 2016. Ms Toms requested the applicant pay its account “urgently, as it is now extremely overdue” and “please do not hesitate to give me a call or come by my office if you have any questions”.

48. At 6.10 pm on 25 October 2016, Mr Green sent Ms Toms and email stating that the applicant was “seeking advice” and that the respondent should clarify its position in respect of “the other charges mentioned in the final paragraph of section 2 of our (sic) email to you of 8 October 2016”, including how the charges were calculated.

49. At 9.56 am on 26 October 2016, Ms Toms responded to Mr Green’s email of 25 October 2016. Ms Toms acknowledged and thanked the applicant for payment of $1,422.95. Ms Toms stated that “section 2 of your email dated 8 October 2016” had been addressed in the email of 17 October 2016, as the charge for “telephone service of Servcorp ($170.00 per month) would be credited to the next invoice (a $340.00 credit) and that “voicemail to email and messages taken by your request as per the call handling instructions which are controlled by you through My Servcorp will not be credited”. Ms Toms states that, after credits that will be applied by the respondent to the next invoice, there remained an “outstanding balance of $1,384.74” and concludes: “Could you please confirm your intentions by 28 October 2016 (Seven days from our position being confirmed by Dirk Miller) as we cannot continue to service with outstanding amounts”.

50. On the evening of 26 October 2016 Mr Green attended the office suite with a friend and removed all of the applicant’s belongings from the office suite. The Mr Green made 2 trips to the office suite. The last trip was concluded after midnight. Mr Green states that he took a video of the suite after he had removed all of his belongings.

51. On 27 October 2016, Mr Green sent the respondent a 3 page letter. The letter is headed “without prejudice save as to costs”. Mr Green stated in his affidavit that part of the letter was redacted because it contained a reference to an offer that the applicant made, but did not want disclosed to the Tribunal. The letter refers to a number of provisions of the ACL. The letter asserts that the respondent breached the agreement by charging for services it was not entitled to charge for under the contract; that assertion of a right to payment was a repudiation of the contract; that the applicant had accepted the repudiation and elected to terminate the contract; and the applicant sought damages to be “put back into our pre-contract position” including a refund of the security deposit; costs associated with changing addresses and stationary; and refund of monies paid by the applicant in respect of the “October invoice”.

52. The applicant’s documents also contain various electronic funds transfer records from the applicant’s account, which the applicant relies upon in respect of seeking damages for the cost of relocating offices. On 27 October 2017, an electronic funds transfer of $367.50 occurred from the applicant’s account to “Compass Offices Sydney”. Mr Green states in is affidavit that this was in respect of the applicant setting up a “virtual office”. Mr Green states that in “early November 2016” he paid a “holding fee” to move into a new office and that the applicant had “moved into a new premises as at 4 December 2016”. The applicant’s documents contain an electronic funds transfer to “Za Management” on 24 November 2016 in the sum of $6,794.35 for what is described as “rent”.

APPLICANT’S SUBMISSIONS

53. The applicant filed a written outline of submissions on 18 January 2017, and Mr Green stated at the hearing that this document comprehensively set out the submissions of the applicant. As discussed previously, the document is not paginated, but is of 122 paragraphs in length (20 pages).

54. The written submissions are lengthy and repetitive. Some of the issues dealt with at length, including the issues of jurisdiction and leave to appear, are not issues that required lengthy dissertation. On the salient issues of the terms of the contract; the manner in which the contract came to an end; and the provisions of the ACL relied upon, the applicant’s submissions can be summarised as follows:

1. The written contract dated 17 June 2016 is “incomplete and ambiguous”.

2. Pre-contact negotiations and representations (i.e. Mr Green’s discussions with Ms Cunningham) can be considered in respect of construction of the contract (Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 at 347-352).

3. There was no express term of the written contract that allowed the applicant to charge for 2 “Servcorp Connect” fees and 2 beverage packages, and such charges were inconsistent with the representations of Ms Cunningham.

4. There was no contractual provision that allowed the respondent to charge for administrative services and telephone services that the applicant had not agreed to, and for services not provided.

5. There was an implied term in the contract that the respondent could not charge for services the cost of which had not been disclosed, and which had not been provided (BP Refinery (Westernport) Pty Lt v Hastings Shire Council (1977) 180 CLR 266 at 283).

6. The respondent had repudiated the contract by insisting on payment for services that had either not been provided; or had been provided without consent; or had been overcharged. The conduct of the respondent was a repudiation of the contract because the respondent had acted in a manner that demonstrated it only intended to fulfil its obligations in a manner substantially inconsistent with the contract (Shevill v Builder’s Licencing Board [1982] HCA 47; (1982) 149 CLR 620 at 625-626).

7. The applicant was entitled to accept the repudiation and terminate the contract. The applicant was entitled to rescind the contract ab initio, and be entitled to damages to put it back into the position it was prior to entering the contract (Kirkwood & Ors v Drinkwater [2000] NSWCA 126; Commissioner of Taxation v Reliance Carpet Co Pty Ltd [2008] HCA 22; (2008) 236 CLR 324 at 2).

8. The conduct of the respondent was misleading or deceptive, or likely to mislead or deceive in breach of Section 18 and 29 of the ACL due to the representation of Ms Cunningham that the applicant would not be charged for a second “Servcorp Connect” and beverage package until a second person was employed by the applicant and working in the office (Clarke & Ors v Great Southern Finance Pty Ltd & Ors [2014] VSC 516).

9. The conduct of the respondent was unconscionable, in breach of Section 21 of the ACL.

10. The respondent had invoiced for unsolicited services, in breach of Section 40 of the ACL.

55. The submissions of the applicant also contain lengthy submissions as to why the applicant should be awarded costs under Section 60 of the ACL.

RESPONDENT’S EVIDENCE AND DOCUMENTS

56. The only documents filed and served by the respondent was the written contract dated 17 June 2016 and invoices from the respondent to the applicant dated 1 August 2016; 1 September 2016; 1 October 2016; and 1 November 2016.

57. The respondent did not file and serve any written statements; statutory declarations; or affidavits from any of its employees.

58. At the hearing, Mr Moufarrige gave brief oral evidence that each client of the respondent had access to an online “portal” in which they could access their account at any time. However, no other evidence was given by the respondent in respect of this “portal” or any of the practices of the respondent in respect to its provision of services or charges rendered.

59. The respondent did not cross examine Mr Green in any detail on the contents of his affidavit, or any of the documents filed and served by the applicant.

RESPONDENT’S SUBMISSIONS

60. The respondent submitted that it had not breached any term of the written contract, and the amounts it had invoiced were in respect of services provided. The respondent submitted that it was clear from the written contract that the applicant had agreed to pay for the “Servcorp connect” and “beverage package” for 2 persons. The respondent submitted that it was the applicant who had breached the contract by vacating the office within the fixed term, which had occurred just as the 4 month rent free period was about to expire.

JURISDICTION

61. The starting point for determination of jurisdiction of the Tribunal is Part 6A of the Fair Trading Act 1987 (‘the FTA’). Under Section 79D(c) of the FTA, “consumer” includes a “small proprietary company”. Under Section 79H of the FTA, a person or body is presumed to be a “consumer” until the contrary is proved, and the other party bears the onus of proving the applicant is not a “consumer”. In this matter, the respondent did not submit that the applicant was not a “consumer” within the meaning of Part 6A of the FTA.

62. Under Section 79I of the FTA, a “consumer” may apply to the Tribunal in respect of a “consumer claim”. Under Section 79(1) of the FTA, a “consumer claim” includes a supply of goods or services to a “consumer” arising under a contract or agreement, or collateral contract, between the parties. Under Section 79G of the FTA, “supply” includes the supply of goods by way of sale, lease or exchange, and the supply of “services”. Under Section 79F(i) of the FTA, “services” includes “rights (including rights in relation to, and interests in, property), benefits, privileges, or facilities that are, or are to be, provided, granted or conferred in trade or commerce”. “Trade or commerce” is defined in Section 4 of the FTA as including “any business or professional activity”.

63. Under Section 4 of the FTA, the definition of “consumer” has the same definition as contained in the Australian Consumer Law 2010 (‘the ACL’). Under Section 3 of the ACL, the definition of “consumer” includes the acquisition of goods or services if the amount paid, or payable, for the goods or services does not exceed $40,000.00. In this matter, the total value of the contract between the applicant and respondent for the fixed term licencing agreement is for an amount that does not exceed $40,000.00.

64. I am satisfied that the Tribunal has jurisdiction in the matter.

APPLICATION OF LEGAL PRINCIPLES TO FACTS

65. Under Section 28 of the FTA, the ACL is a law of NSW. In the circumstances of this matter, the Tribunal has jurisdiction to apply the provisions of the ACL, as well as common law principles pertaining to the law of contract (Sacks v Hammoud [2016] NSWCATAP 225).

Construction of the Contract-Relevant Principles

66. There is no dispute that there was a written contract between the parties dated 17 June 2016. What is in dispute is the terms of the contract; whether the respondent has breached the contract; and whether any breach is repudiatory.

67. When assessing the meaning of written terms of a contract, the Tribunal must apply an objective rather than subjective approach. As Gleeson CJ, Gummow, Hayne , Callinan and Heydon JJ stated in Toll (FCGT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40]:

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

68. In Gordon & Gotch Australia Pty Ltd v Horwitz Publications Pty Ltd [2008] NSWCA 257, the Court of Appeal (Allsop P and Sackville AJA; Beazley JA agreeing) discussed the dichotomy between interpreting the written terms of a contract and implying terms into the contract as follows (at [36]-[37]):

“Interpretation is the ascertainment of the meaning which a document would convey to a reasonable person in the context: Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; 219 CLR 165 at 179 [40]. That interpretation can shade into implication and, indeed, that both may perhaps be seen as part of the one process of the construction of words in a document to identify linguistic and legal meaning can be accepted. However, the distinction between interpretation and implication of terms is recognised (even if the limits of each are not capable of clear definition): see Codelfa Construction Pty Limited v State Rail Authority(NSW) [1982] HCA 24; (1982) 149 CLR 337 at 345 (per Mason J, with whom Stephen and Wilson JJ agreed in this respect); Martin-Baker Aircraft Co Ltd v Canadian Flight Equipment Ltd[1955] 2 QB 556 at 578; National Commercial Bank Jamaica Ltd v Guyana Refrigerators Ltd(Jamaica) [1998] UKPC 14 at [12] (Lord Steyn speaking on behalf of himself and Lord Browne-Wilkinson, Lord Slynn of Hadley, Lord Hutton and Sir Christopher Staughton); Equitable Life Assurance Society v Hyman[2002] 1 AC 408 at 458-459; and South Australian Asset Management Corporation v York Montague Ltd [1996] UKHL 10; [1997] AC 191 at 212.

37 As Steyn LJ said in P & O Property Holdings Ltd v Norwich Union Life Assurance Society (unreported, England and Wales Court of Appeal, 1 April 1993, extracted in [1995] LMCLQ at 19) speaking for himself, Dillon and Rose LJJ:

... [I]t is important never to forget the purpose of the process of interpretation. It is to assign to the language chosen by the parties the most appropriate meaning which the words can legitimately bear ... [b]ut interpretation must not become a route to supplementing or changing the contractual regime which the parties have chosen by the language appearing above their signatures. That is an end which can only be achieved by implication, in law or fact, of a term into the chosen language of the parties. That process can, however, only be pressed into service if the implication is essential to make the contract work, or if it is otherwise entirely obvious.”

69. The context in which the contract was signed is that it involved a commercial agreement, and the person signing the agreement for the applicant was legally trained and qualified. In such circumstances, it is immaterial whether Mr Green read and understood the document before signing it, subject to any vitiating factor such as misrepresentation or fraud (Toll (FGCT) Pty Limited v Alphapharm Pty Limited[2004] HCA 52; 219 CLR 165 at 179 at [49]-[67]).

70. Under the parol evidence rule, if the parties have adopted a written contract that sets out all of the expressly agreed terms, extrinsic evidence is inadmissible to interpret the written terms, unless there is ambiguity in the written terms. As Mason J stated in Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 148 CLR 337 at 352:

“The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract where it has plain meaning”.

71. However, pre-contractual negotiations are relevant if there is a collateral contract (i.e. a contract preliminary to the making of the main contract, the consideration for which is the making of the main contract: Heilbut, Symons & Co v Buckleton [1913] AC 30) or if they are relevant to implied terms. The applicant does not submit in the circumstances of this matter that Mr Green’s discussions with Ms Cunningham constitute a collateral contract.

72. The applicant submits that there are implied terms in the contract. The written submissions of the applicant do not set out with clarity and precision what are the implied terms, but I discern the primary submission to be that no services would be provided by the respondent without the prior consent of the applicant (in respect of the ‘telephone intercept’ charge and administrative charges) and no monthly internet connection fee and beverage package would be charged other than for the number of persons actually occupying the office.

73. Terms can be implied into a contract by statue (e.g. the consumer guarantee provisions of the ACL) or the common law. At common law, in a commercial contract, a term will not be implied into a contract unless it is capable of clear expression; it is so obvious it goes without saying; it is necessary to give business efficacy to the contract; and does not contradict any express term of the contract: (BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283.

The Provisions of the Written Contract

74. The written document entitled “service agreement” is effectively in 2 parts. The bottom of the first page of the agreement and the second page of the agreement contain 24 paragraphs of terms and conditions. The first page of the agreement contains 8 paragraphs setting out information including details of the parties and the duration of the agreement. Page 1 of the agreement also includes a “comments” section.

75. Section 6 on page 1 of the contract is headed “Initial Invoice Details”. It states “Your Office Fees Include: Executive Office rental; Executive Office furniture as listed in section 8 (below); cleaning; electricity and air conditioning (during business hours and excluding Public Holidays); complimentary day office usage for five days per month…daily mail delivery; reception daily newspapers; 24 hour lift access pass and key per suite”. The paragraph then lists as follows:

Details	Quantity	Price
Office(s) fee first month	4 months free	1	$0
Outgoings	External facing office	1	$400.00
Servcorp Connect	1 person Connect	2	$650.00
Beverage Pack	$60.00 per person	2	$120.00
Activation Fees	Once off setup fee	1	$650.00

76. Section 7 on page 1 of the contract is headed “Accommodation and Service Details”. Relevantly, it states as follows:

Office to be occupied (‘the Offices’)	Office 16
Monthly office fee (see comments)	$3,000.00
Term commencement date	1 July 2016
Initial term ending date (refer to Service Continuation clause 4 overleaf)	30 June 2017
Term of the Agreement (‘Initial Service Agreement Term’)	12 months
Notice period (refer to Service Continuation clause 4 overleaf)	2 month
Number of persons	1 person

77. In the “Comments” section, it is stated as follows:

“Monthly office fee shall be FREE for 4 months from 01/07/2016 to 31/10/2016 per month during the Initial Service Agreement term. Monthly Office Fee will thereafter revert to discounted monthly office fee of $3,000.00 from 01/11/2016 as per section 7 of this Service Agreement. Monthly Office fee listed in section 7 will accommodate 2 persons. Activation fees shall apply for additional people after the commencement date. In addition, Beverage and Servcorp Connect packages shall increase to correlate with the number of persons occupying the suite. Servcorp Connect 2 person will include $650.00 worth of free local, national, international and mobile telephone calls as well as 20GB worth of internet usage thereafter billed at $0.15 per MB thereafter. Access to Suite 16 will be provided at any time from 1st of July 2016 after the Service Agreement and direct debit (or Credit card authorisation form) is signed and the initial invoice is paid in full”.

78. Clause 1 of the written agreement states the respondent will: “(ii) Provide core services including but not limited to Servcorp Connect which comprises Unified Communications, Servcorp Broadband Connections and Servcorp Online and Beverage Package per person comprising coffee, tea, and filtered water (hereinafter referred to as the ‘Core Services’) and (ii) Provide other ancillary services as requested by the client and agreed to by Servcorp, the contents of which shall be separately designated by Servcorp (hereinafter referred to as the ‘Ancillary Services’). The Core Services and Ancillary Services including, at Servcorp’s absolute discretion, Client entries on the building directory board, car parking, lockers, shower and bike rack facilities and any other amenity within the building that Servcorp has the right to use and/or access under the lease of the premises within that building shall be referred to collectively as the “Services”. The client shall pay Servcorp a fee for the services”.

79. Clause 2 (a) of the written agreement states that the “Accommodation Service” fee must be paid monthly in advance by way of direct debit, and cancellation of the direct debit is a fundamental breach of the agreement. Clause 2 (b) states that “Services” are to be paid “seven days after the date of invoice”. The clause further states that the Client “will notify Servcorp in writing of any dispute and the reasons for it” within seven days of the date of the invoice. The clause further states: “If the parties agree there is a disputed amount, the Client shall pay the undisputed portion of the invoice(s) on or before the due date. Any invoice issued by Servcorp shall constitute formal demand for payment”.

80. Clause 3 of the written agreement pertains to the security deposit. Relevantly, it provides that Servcorp is entitled to deduct from the security deposit any monies owed to Servcorp under the service agreement.

81. Clause 4 of the written agreement pertains to “Services Continuation” (i.e. the circumstances in which the agreement continues after the fixed term). Relevantly, it states that Servcorp must give the Client at least one month’s written notice prior to the end of the fixed term, and the Client give Servcorp a minimum of 2 months’ notice prior to the end of the fixed term, but that the client remains liable up to the end of the fixed term period.

82. Clause 9 of the written agreement pertains to “Services”. Clause 9 (a) states that the client agrees “To pay during the term of the Service Agreement all charges for the Services rendered by Servcorp to the Client at the rates stipulated by Servcorp from time to time. Servcorp reserves the right to change, review or vary any of the service charges”. Clause 9 (c) states: “The client must provide one month’s notice to terminate monthly Core and Ancillary service rentals (i.e. not limited to Servcorp Connect, Fax, Parking, Furniture Rental, Directory Board Listing, and any other optional or ancillary service provided and charged on a recurring monthly basis). To terminate the Accommodation Service, refer to Section 7 overleaf and clause 4b”.

83. Clause 13 of the written agreement pertains to termination. Clause 13 (a) states that Servcorp may terminate by giving one month’s written notice to the client “at any time”. Clause 13 (b) states that Servcorp has the right to withhold services and re-enter the office premises without prior notice. Clause 13 (f) states that, at the time of termination, a maximum fee of up to 2 months office rental may be charged for office and administrative costs relating to the termination of the agreement. Clause 13 (g) states that if the Client fails to demand refund of the security deposit within 360 days the security deposit is deemed forfeited to Servcorp. Clause 13 (g) further states that at the time of termination “the Client will be required to pay a call administration fee equivalent to the Virtual Office Membership for a period of 3 months from the date of termination.”

Was the Monthly Internet Connection Fee and Beverage Package Fee Charged In Breach of Contract?

84. The written service agreement contains an ambiguity, because Section 7 of the agreement refers to there being “1 person” in the office; and in Section 6 of the agreement refers to “1 person Connect” and “Quantity 2”. I am satisfied that it is appropriate to consider evidence of pre-contractual discussions and emails in respect of construction of the written contractual terms.

85. Mr Green asserts in his affidavit that he told Ms Cunningham there would be only one person in the office, and Ms Cunningham agreed that the respondent would charge the applicant only for the cost of one internet connection and beverage package (other than in the costs of setting the office up for 2 persons) until Mr Green employed another person to work with him in the office.

86. However, the emails between Mr Green and Ms Cunningham after the conversation on 9 June 2016 indicate that “2 persons” would be in the office. Mr Green’s email of 11 June 2016 states “there will be 2 people in the office initially”. Ms Cunningham’s 2 emails of 14 June 2016 refer to “two people in the office” and that the respondent had provided a discounted monthly office fee “based on 2 people”. Such correspondence, assessed objectively (and not on the basis of the subjective views of Mr Green as to what meaning he intended to convey in the emails) is consistent with there the applicant agreeing to be charged for services on the basis there were 2 persons in the office, not one. On the basis of the representation of Mr Green in his email of 11 June 2016 that there would be 2 persons in the office and he would “sign up for connect 2”, the respondent offered to reduce the monthly office rent from $3,360.00 to $3,000.00.

87. The written agreement refers, at Section 7, to “1 person Connect”, but under “Quantity” is written “2”. The price is listed as “650.00”. In the ‘Comments” section of the agreement, it is stated that office fees are in respect of “2 person” and “Servcorp Connect 2 will include $650.00 worth of free…calls (and) internet…” In the full context of the written agreement, and the evidence of the negotiations prior to execution of the written agreement, the written agreement is clear that the applicant would be charged $650.00 per month for the ‘Servcorp Connect’ internet service and a beverage package of $120.00 per month, and that a further fee would be payable if any further persons occupied the suite. Assessed objectively, the terms of the written agreement are clear, and the respondent was entitled to charge for ‘Servcorp Connect’ and the ‘beverage package’ on the basis of the fees set out in the written agreement, irrespective of whether or not one person was occupying the office, or two.

88. Accordingly, the position expressed by the respondent in the emails of Ms Toms to Mr Green on 17 October 2016 and 26 October 2016 that the respondent would charge the applicant the ‘Servcorp Connect 2’ and ‘2 person beverage package” for the period from 1 July 2016 to 31 October 2016 is consistent with the terms of the written agreement. The position of the respondent that it would charge the applicant a reduced fee for the provision of ‘Servcorp Connect 1” and a ‘1 person beverage package’ from 1 November 2016 onwards is consistent with Clause 9 (c) of the written agreement, that the substance of the applicant’s email correspondence from 5 October 2016 to 26 October 2016 was in a termination in writing the ‘Servcorp Connect 2’ and ‘2 person beverage package’ with one month’s notice.

89. Unless the applicant terminated the ‘Servcorp Connect 2’ and ‘2 person beverage package’ service in accordance with Clause 9 (c) of the written agreement, the applicant remained liable to pay for the services under Clauses 1, 2 and 9 of the written agreement.

90. In circumstances where the provisions of the written agreement apply to the issue in dispute as to whether or not the ‘Servcorp Connect 2’ and ‘2 person beverage package’ was payable by the applicant, it is impermissible to imply into the agreement a term that is inconsistent with the written terms of the agreement.

91. The applicant has failed to establish that the respondent breached the contract in respect of asserting a right to payment in respect of the ‘Servcorp Connect 2’ and ‘2 person beverage package’. Having failed to establish breach of contract, no issue arises whether any breach is of a type that entitled the applicant to terminate the contract in respect of the dispute involving payment of the ‘Servcorp Connect 2’ and ‘2 person beverage package’ fees.

Was the Fee for Scanning Documents Before Photocopying When Preparing Appeal Books at the Request of the Applicant Levied in Breach of Contract?

92. Under Clause 9 (a) of the written agreement, the respondent had the right to charge for services provided in respect of activities including photocopying and scanning documents at the rates “stipulated by Servcorp”. However, such services are “ancillary services” within Clause 1 (a) (iii) of the written agreement. Accordingly, such services must be requested by the applicant, although if services are requested, the respondent has the contractual right to charge and demand payment for its fees in providing the service.

93. Although Mr Green stated in an email that he did not want “scanning” as he did not believe it was necessary, it is clear that he requested the service of urgent preparation of the Appeal Books. The email of Ms Vosinthavong dated 6 October 2016 clearly sets out that she believed it was necessary to scan the documents before photocopying to save time and expense to the applicant, and had the documents been prepared without scanning, the fees charged by the respondent would have been significantly higher.

94. In such circumstances, the conduct of the respondent is not in breach of Clause 1 (a) (iii) of the written agreement, because the service that was requested by the applicant was the urgent preparation of Appeal Books, and in accordance with Clause 9 of the written agreement the respondent was entitled to charge for providing such a service, including using the most cost efficient method of providing the service.

95. In any event, even if the respondent had breached Clause 1 (a) (iii) of the written agreement, the respondent had rectified the breach by informing Mr Green in Ms Toms email of 17 October 2016 that the fee would be waived and the respondent’s account re-credited for the amount that had been disputed by Mr Green.

Was the Fee for Sending an Account By Email Charged in Breach of Contract?

96. The respondent charged the applicant $4.80 for sending its account by email. The usual practice of the respondent was that its clients could access their accounts by access to the internal internet portal. Mr Green stated in oral evidence that he had difficulty in operating the portal, and that is why he requested accounts be sent by email. However, Mr Green was clearly able to access the accounts dated 1 August 2016 and 1 September 2016, as he paid both accounts “without checking them”. In his email of 13 September 2016, Mr Green states that the reason that he wanted accounts emailed to him was that he was “hopeless at remembering account details”, not that he could not access the internal internet portal.

97. Mr Green requested that accounts be emailed to him, and I am satisfied that the respondent had the contractual right under Clause 9 of the written agreement to charge the applicant the amount of $4.80 for sending the account of 1 October 2016 by email.

98. In any event, even if the respondent was in breach of the written agreement, any breach was rectified by informing Mr Green in Ms Toms email of 17 October 2016 that the fee would be waived and the applicant’s account re-credited.

Was the ‘Telephone Intercept’ Fee of $170.00 per month For a 2 Month Period Charged in Breach of Contract?

99. The respondent provided no evidence by any of its employees as to what type of service constituted the “telephone intercept”, or that the applicant had requested the service. Mr Green denied in his affidavit that any such service was requested, and it was not canvassed in his discussion with Ms Cunningham, or any other employee of the respondent.

100. The email of Ms Toms dated 6 October 2016 refers to the fee being in respect of telephone calls being taken by the respondent’s receptionist, and “announced” to Mr Green, rather than the call simply being put through to Mr Green. Ms Toms email states that this service was “discussed” between Ms Whyte and Mr Green. However, the respondent has provided no evidence from Ms Whyte that the service was requested by the applicant.

101. Accordingly, I am satisfied that the applicant has established that the respondent breached Clause 1 (a) (iii) of the written agreement by charging the applicant for a “telephone intercept” fee of $170.00 per month in 2 of the accounts sent to the applicant (the accounts of 1 August 2016 and 1 September 2016). However, the breach had been rectified by informing Mr Green in Ms Toms email of 17 October 2016 that the fee would be waived and the applicant’s account re-credited.

Are There Any Other Contractual Breaches By the Respondent?

102. Although Mr Green referred in evidence to other “administrative fees” charged, and the difficulty he had in accessing the internal internet portal to check his account, I am not satisfied that the applicant has established any other breach of contract by the respondent other than the charge in respect of the telephone intercept fee. The applicant could not point to any other fees in the accounts other than the ‘Servcorp Connect 2’; ‘2 person beverage package’; scanning fees; ‘telephone intercept’ fees; and fee for sending an account by email were allegedly in breach of contract. There was limited evidence in respect of why Mr Green could not access the internal internet portal, and his email of 13 September 2016 indicates that a reason for failure to access the internal internet portal was Mr Green’s difficulty in remembering his account details.

Did the Conduct of the Respondent Entitle the Applicant to Terminate the Contract?

103. The applicant has only established breach of contract in respect of the ‘telephone intercept’ fees levied for a 2 month period, and the respondent rectified the breach in any event prior to the applicant vacating the respondent’s premises.

104. A party is only entitled to terminate a contract if the breach either (i) breach of an essential term; or (iii) a serious or fundamental breach of an intermediate term; or (iii) repudiation of the contract (Carter’s Guide to Australian Contract Law; 3rd ed; (2016) LexisNexis pp 254-284).

103. An essential term of a contract is a term which assessed objectively, a party would not have entered the contract without being assured of a strict or substantial performance of that term (Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632 at 641-2).

104. I am not satisfied that the applicant has established the respondent breached an essential term of the contract by levying fees for ‘telephone intercept’. As set out in the email of Ms Toms dated 6 October 2016, the respondent believed applicant had requested the service. The applicant has established that Mr Green did not request the service, so the belief of the respondent was erroneous. The levying by the respondent of a fee in error for a period of 2 months is not breach of an essential term of the written agreement. The written agreement provides that the applicant was able to dispute any fees, and any fees which the parties did not agree were in dispute remained payable. The applicant disputed the fees and the respondent agreed to re-credit the fees to the applicant’s account. The conduct of the respondent, when assessed objectively, does not constitute breach of an essential term of the written agreement.

105. Further, I am not satisfied that the conduct of the respondent in levying the charge for ‘telephone intercept’ is a fundamental breach of an intermediate term of the written agreement, for the same reasons as set out above in respect of breach of an essential term. A fundamental breach of an intermediate term requires consequences which are sufficiently serious by reason of the breach (Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115). In the circumstances of this matter, the respondent informed the applicant that it would waive the fees levied and re-credit the applicant’s account. Accordingly, there were no serious consequences arising from the breach.

106. I am not satisfied that the conduct of the respondent was a repudiation of the written agreement. The written submissions of the applicant deal at great length with the issue of repudiation. Repudiation involves conduct by a party evincing an intention to be no longer bound by the contract, or an intention to fulfil the contract only in a manner substantially inconsistent with its obligations and in no other way (Shevill v Builder’s Licensing Board [1982] HCA 47; (1982) 149 CLR 620 at 625-626).

107. As discussed above, the respondent was not in breach of contract other than in respect of levying a fee for ‘telephone intercept’ services. The respondent had rectified that breach by informing the applicant the asserted fees would be waived and the applicant’s account re-credited. The conduct of the respondent in demanding payment for its invoices (other than in respect of the amount re-credited) is consistent with Clause 2 of the written agreement. The email of Ms Toms dated 26 October 2016 reminding the applicant that its fees were overdue and the respondent could not continue to provide services is not, assessed objectively, a threat to “lock out” the applicant, but consistent with the respondent’s right under the written agreement to demand payment for its services. Further, under Clause 13 of the written agreement, the respondent had the right to terminate the contract at any time, giving one month’s written notice. The applicant has failed to establish any of the conduct of the respondent is repudiatory in nature.

Breach of the ACL

Misleading or Deceptive Conduct

110. Under Section 29 of the ACL, a person must not, in trade and commerce, make false or misleading representations of the type that are set out in Section 29 of the ACL. Under Section 18 of the ACL, a person must not engage in conduct that is misleading or deceptive, or likely to mislead or deceive. The conduct of the parties is assessed objectively in respect of whether not a representation is false, misleading, deceptive, or likely to mislead or deceive.

111. For reasons set out above, I am not satisfied the respondent engaged in any conduct in breach of contract, other than in respect of the levying of ‘telephone intercept’ fees in two of the invoices sent by the respondent in the total amount of $340.00. I am not satisfied that applicant has established that the levying of such fees constituted breach of Sections 29 or 18 of the ACL, and in any event no loss occurred because the respondent stated it would re-credit the applicant’s account in respect of such fees.

112. None of the conduct complained of by the applicant in respect of Ms Cunningham’s representations prior to the written contract being executed were in breach of Sections 29 or 18 of the ACL, in circumstances where Mr Green’s emails in the period immediately prior to the execution of the written contract refer to “2 persons” being in the office. Mr Green’s asserted belief that he would only be charged for ‘Servcorp Connect 1’ and a ‘1 person beverage package’ until he employed another person is in the full context of the negotiations that occurred and terms of the written agreement subsequently executed, assessed objectively, no more than an erroneous impression independently formed, and do not constitute misleading or deceptive conduct (Miller & Associates Insurance Broking v BMW Australia Finance [2010] HCA 31; (2010) 241 CLR 357).

Assertion of a Right to Payment for Unsolicited Services

113. Under Section 40(2) of the ACL, a person must not, in trade or commerce, assert a right to payment for unsolicited services unless the person has reasonable cause to believe there is a right to payment.

114. I am not satisfied that the applicant has established the respondent breached Section 40(2) of the ACL in respect of the ‘telephone intercept’ fees. The email of Ms Toms dated 6 October 2016 refers to the respondent believing that Mr Green had requested the service in a discussion with Ms Whyte and at the time the invoices were rendered, the respondent had a reasonable cause to believe there was a right to payment under the written agreement. In any event, even if the applicant had established breach of Section 40 (2) of the ACL, no loss arose because the respondent subsequently stated it would waive the said fees and re-credit the applicant’s account.

Unconscionable Conduct

115. Under Section 21 of the ACL, a person must not engage in conduct that is unconscionable in respect of the supply of goods or services in trade or commerce. Conduct is unconscionable if it was not done in good conscience or is irreconcilable with what is right or reasonable (ASIC v National Exchange Pty Ltd [2005] FCAFC 226; (2005) 148 FCR 132).

116. None of the conduct that the applicant asserts the respondent engaged in breaches Section 21 of the ACL. Mr Green is a Solicitor, and there was no inequality of bargaining position between himself and the respondent. There was a written agreement between the parties. The respondent acted in accordance with the terms and conditions of the written agreement, other than in respect of the ‘telephone intercept’ charges, and the respondent rectified the breach in any event.

CONCLUSION

117. The applicant has failed to establish breach of contract by the respondent entitling the applicant to terminate the contract, or a breach of any relevant provision of the ACL. The applicant has not established any loss regarding breach of contract by the respondent in levying the ‘telephone intercept’ fees, in circumstances where the applicant’s account was re-credited the amount of $340.00 that was levied.

118. Accordingly, the application is dismissed.  

G.J. Sarginson

Senior Member

Civil and Administrative Tribunal of New South Wales

27 April 2017

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 08 June 2017