Nova 96.9 Pty Ltd v Natvia Pty Ltd

[2019] NSWSC 791

Supreme Court

New South Wales

Medium Neutral Citation:	Nova 96.9 Pty Ltd v Natvia Pty Ltd [2019] NSWSC 791
Hearing dates:	19 June 2019
Decision date:	26 June 2019
Jurisdiction:	Equity - Corporations List
Before:	Black J
Decision:	Judgment for the Nova Companies in the specified amounts. Order that the Defendant pay the Nova Companies’ costs on an indemnity basis, as agreed or as assessed.
Catchwords:	CONTRACT – breach of contract – damages.
Legislation Cited:	- Civil Procedure Act 2005 (NSW) s 100
Cases Cited:	- Maher v Network Finance Limited (1986) 4 NSWLR 694
Category:	Principal judgment
Parties:	Nova 96.9 Pty Ltd (First Plaintiff) Nova 106.9 Pty Ltd (Second Plaintiff) Nova 100 Pty Ltd (Third Plaintiff) Natvia Pty Ltd (Defendant)
Representation:	Counsel: C Alexander (Plaintiffs) No appearance (Defendant)   Solicitors: CCSG Legal (Plaintiffs)
File Number(s):	2016/302220

Judgment

1. By Further Amended Statement of Claim filed on 17 September 2018, the Plaintiffs, Nova 96.9 Pty Ltd, Nova 106.9 Pty Ltd and Nova 100 Pty Ltd (“Nova Companies”) bring a claim to recover amounts invoiced to the Defendant, Natvia Pty Ltd (“Natvia”) in respect of radio advertising services. It is uncontroversial that the Nova Companies are wholly owned subsidiaries of Nova Entertainment Pty Ltd (“Nova Entertainment”) and operate radio stations and broadcast radio advertising, including commercial advertising. Natvia is or was in the business of selling artificial sweetener products and goods.

2. These proceedings were originally listed for hearing in the District Court of New South Wales and that hearing was vacated when an issue arose as to the jurisdiction of that Court to hear commercial matters, which has since been remedied; the proceedings were then listed for hearing in this Court in March 2019, and the proceedings were again vacated when Natvia’s solicitors sought leave to withdraw immediately prior to the hearing and, after that leave was declined, Natvia terminated their retainer. The proceedings were again listed to be heard for 3 days commencing on 19 June 2019, but Natvia did not comply with the Court’s directions in respect of service of submissions or objections to evidence; did not appear at the hearing or read any evidence in defence of the proceedings or in support of its Cross-Claim.

Affidavit evidence

3. The Nova Companies read the affidavit dated 31 July 2017 of Ms Jodie Martin, who is the National Client Executive for the Nova Companies. She referred to her responsibilities in that role and set out the process by which the advertising contract between the Nova Companies and Natvia was formed. She also referred to an exchange of emails between her and representatives of Natvia, and to a meeting between herself and Mr Hanna, a former director of Natvia on 15 February 2016 when Mr Hanna signed a document described as the “Short-form Schedule”. Ms Martin also referred to an exchange of emails in relation to variations to Natvia’s advertising schedule made in May 2016, and to the circumstances in which Natvia’s account with the Nova Companies fell into arrears. She also addressed a meeting at Natvia’s premises on 27 July 2017, at which Natvia sought “make-goods” or “additional advertising” as an inducement to pay its bill; Ms Martin declined to provide them, and Mr Hanna indicated that the Nova Companies were “never going to get [their] money” and were “just going to be next in line”. There is nothing intrinsically implausible in Ms Martin’s evidence in that respect, and I accept it where Natvia did not seek to lead evidence to controvert it.

4. The Nova Companies also relied on the affidavit dated 14 July 2017 of Mr Elias Chebl, the Accounts Receivable Team Leader for the Nova Companies. Mr Chebl referred to the process adopted to open a credit account with the Nova Companies; the process adopted for booking advertising with those companies on credit terms and the “Post-Time Reports” maintained by the Nova Companies on a software platform which records advertisements broadcast on the relevant radio stations; and the invoicing process adopted by those companies. Mr Chebl also referred to invoices issued by the Nova Companies to Natvia, of which several had been paid and others remained unpaid. Mr Chebl’s evidence was that the total invoiced amount by the three Nova Companies was $428,009.83; payments of $280,933.36 had been paid; and the total outstanding was $147,076.47, the amount claimed in the proceedings. Mr Chebl in turn led evidence of the invoices issued by each of the Nova Companies and the amount that remains due to each of them.

5. By a second affidavit of Mr Chebl dated 12 July 2018, he provided further information in respect of the process for generating contract confirmations from the software platform that recorded the broadcast of advertisements, and exhibited contract confirmations in respect of the provision of the relevant services. By a third affidavit dated 17 June 2019, Mr Chebl corrected several typographical errors in respect of exhibit references in his earlier affidavit, and exhibited additional copies of invoices which had been paid, in addition to the invoices that were unpaid and exhibited to his first affidavit.

6. The Nova Companies also relied on an affidavit dated 18 June 2019 of their solicitor, Ms Warren, supporting their calculation of interest under s 100 of the Civil Procedure Act 2005 (NSW), and an affidavit dated 19 June 2019 of their solicitor, Mr Murtanovski, which annexed a company search for Natvia that indicated that it did not appear to have been placed in insolvency administration as 18 June 2019 and also annexed correspondence between the parties prior to the hearing.

The Nova Companies’ pleaded case and the common ground as to the facts

7. Mr Alexander, who appears for the Nova Companies, points out that substantially all the relevant facts emerge from matters which are admitted by Natvia, by the pleadings or in response to a notice to admit facts and authenticity of documents issued by the Nova Companies (Ex P1).

8. It is common ground that, on 16 February 2016, Natvia entered into an agreement with Nova Entertainment and each of the Nova Companies to provide advertising products and services (“Services”) to Natvia on credit terms (Further Amended Statement of Claim (“FASOC”) [3]; Defence [3]). Although Natvia pleaded that agreement was not wholly in writing, and sought to rely on oral conversations to amend it, there is no evidentiary support for that contention where it did not appear and did not lead any evidence.

9. Nova pleads (FASOC [4]) the terms of a Credit Agreement between the Nova Companies and Natvia, which are admitted by Natvia (Defence [4]) subject to the contention that it was not wholly in writing, required Natvia to pay amounts invoiced by the Nova Companies in respect of advertising services on or before the due date (as defined). That agreement also provided for the circumstances in which an event of default would arise from non-payment of an invoiced amount and the consequences of an event of default.

10. The Nova Companies plead and Natvia does not admit (FASOC [5]; Defence [5]) that Natvia entered into a further agreement (“Advertising Agreement”) with Nova Entertainment and each of the Nova Companies on 18 February 2016 by which it agreed to pay the Nova Companies a fixed sum of $429,000 (inclusive of GST) as consideration for their providing Natvia with the Services between February 2016 and June 2016. As Mr Alexander points out, subject to Natvia’s representational case, which it did not lead evidence to support, it appears that the terms of the Advertising Agreement are found in emails and enclosures passing between Natvia and the Nova Companies on 17 and 18 February 2016.

11. By notice to admit facts and authenticity of documents and a responsive notice disputing facts and authenticity of documents (Ex P1), Natvia admitted that it had entered into the Advertising Agreement with each of the Nova Companies by which it would pay them the amount of $429,000 (GST inclusive) as consideration for their providing advertising services to Natvia. That admission was subject to the matters raised in paragraphs 3–4 and 7A–7B of Natvia’s Defence, namely the suggested additional representations made on behalf of the Nova Companies, which have not been established where Natvia led no evidence to support them. Natvia also admitted (Ex P1), subject to the matters raised in paragraphs 3–4 and 7A–7B of its Defence (which have not been established for the reasons noted above), that the terms of the Advertising Agreement are contained in emails and a standard form document titled “Nova Entertainment Pty Ltd – Advertising Terms and Conditions” on which the Nova Companies relied.

12. The Nova Companies also plead and Natvia does not admit (FASOC [5A]–[5B]; Defence [5A]–[5B]) a variation in respect of the balance of Services (as defined in the FASOC) to be provided under the Advertising Agreement on or about 12 May 2016, rescheduling the balance of the Services. It does not appear that anything material turns on that variation. The Nova Companies also plead and Natvia denies (FASOC [7]; Defence [7]) that, from February 2016 to June 2016, they provided the Services to Natvia, and rely on “post-time” reports and “Contract Confirmation” documents in support of that contention.

13. Natvia responded to the claims against it, in paragraphs 7A–7J of its Defence, by pleading claims for misleading and deceptive conduct or the existence of a collateral contract, and contending that it suffered loss because of the Nova Companies’ breach of the collateral contract. That claim cannot be established in the absence of evidence led by Natvia to support it.

14. The Nova Companies plead and Natvia denies (FASOC [10]; Defence [10]) that Natvia is indebted to them, with an amount of $52,233.44 being due and owing to the First Plaintiff; an amount of $42,237.65 being due and owing to the Second Plaintiff; and an amount of $51,605.38 being due and owing to the Third Plaintiff. The Nova Companies respectively claim judgment in the amount due to them, and interest and costs payable on an indemnity basis in accordance with cl 3.2 of the Credit Terms and Conditions.

15. Natvia admitted (Ex P1) that, again subject to the matters raised in paragraphs 3–4 and 7A–7B of its Defence (which have not been established for the reasons noted above), the Nova Companies provided advertising services to it; the First Plaintiff issued invoices totalling $143,886.57 (GST inclusive) for advertisements broadcast by it and Natvia made part payment of those invoices in the amount of $91,653.13 (GST inclusive); the Second Plaintiff issued invoices totalling $117,862.42 (GST inclusive) for advertisements broadcast by it and Natvia made part payment of those invoices in the total amount of $74,624.77; and the Third Plaintiff issued invoices and a credit note to Natvia totalling $166,260.84 for advertisements broadcast by it and Natvia made part payment of the invoices in the amount of $114,655.46. Natvia denied that it was indebted to the First Plaintiff in the amount of $52,233.44; to the Second Plaintiff in the sum of $43,237.65; or to the Third Plaintiff in the sum of $51,605.38, also by reference to the matters set out in paragraphs 3–4 and 7A–7K of its Defence, which involved the additional conversations and representations for which it contended, which have not been established in the absence of evidence led to support them.

16. Natvia also admitted (Ex P1) the authenticity of documents on which the Nova Companies relied, other than for the minutes of a meeting on 27 July 2016. The authenticity of that document is not material, given the other matters which have been admitted by Natvia and the absence of any evidence to support its misrepresentation or collateral contract case.

17. Natvia in turn filed a First Cross-Claim Amended Statement of Cross-Claim on 22 June 2018. That Cross-Claim cannot succeed where no evidence was led and no submissions made in support of it.

The Nova Companies’ submissions and determination

18. Mr Alexander submits, consistent with the evidence and admissions noted above, that the Nova Companies provided advertising services to Natvia between February 2016 and June 2016. Between 29 February 2016 to 31 May 2016, the First Plaintiff issued invoices to Natvia totalling $143,886.57 for advertisements broadcast by it. Between 29 February 2016 and 30 June 2016, the Second Plaintiff issued invoices to Natvia totalling $117,862.42 for advertisements broadcast by it. Between 29 February 2016 and 1 July 2016, the Third Plaintiff issued invoices and a credit note to Natvia totalling $166,260.84 for advertisements broadcast by it. Mr Alexander also points out that the total value of those invoices (including a credit note) is $428,009.83, and that Natvia had paid $91,653.13 to the First Plaintiff; $74,624.77 to the Second Plaintiff; and $114,655.46 to the Third Plaintiff. For completeness, Natvia’s Defence also refers to payment of a further amount of $3,300.17, but it appears that payment was made to a related company that operates another radio station and is not relevant to this claim. These figures support the amounts now claimed by the respective Nova Companies, as set out in paragraph 15 above.

19. I note, for completeness, that the amount of the principal amount claimed by the Second Plaintiff was incorrectly stated as $42,237.65 (rather than $43,237.65) in Ms Warren’s affidavit dated 18 June 2019, in respect of interest calculations. I have disregarded that error in determining the principal, given both parties’ pleadings as to the correct amount. The Second Plaintiff fairly accepts that the interest allowed to it should be calculated by reference to the lower figure in Ms Warren’s affidavit, and I have adopted that course, which is more favourable to Natvia.

20. In oral submissions, Mr Alexander submitted, and I accept that, the Court should give judgment in accordance with the short minutes of order proposed by the Nova Companies, where it has been established that the relevant contracts are in writing, namely the Credit Agreement and the Advertising Agreement; the Services have been rendered and the invoices have been issued, and there is no contest about their content; the unpaid balance that is sued upon has been established and the amount of interest payable has been established. Mr Alexander points out that Natvia’s Cross-Claim must be dismissed where Natvia made no attempt to sustain it.

21. Mr Alexander also submitted, and I also accept, that a party may be answerable for legal costs as a result of a contract or statutory obligation as well as by curial order: Maher v Network Finance Limited (1986) 4 NSWLR 694 at 698A. Under cl 3.2(d) of the Credit Agreement and cl 8.2 of the Advertising Agreement, on an event of default, the Nova Companies may recover “all costs, fees and disbursements relating to any action taken … to recover moneys owing”. Mr Alexander submitted, and I also accept, that that clause extends not only to the Nova Companies’ costs of the FASOC but also the costs of the Cross-Claim which related to the recovery action brought against Natvia. I also read the reference to “all costs” in that clause as extending to costs on an indemnity basis, since an order for costs on an ordinary basis would not permit the Nova Companies to recover all of their costs of the proceedings.

Orders

22. I therefore make the following orders:

1.   Judgment for the First Plaintiff against the Defendant in the sum of $60,589.10 inclusive of interest up to Judgment and GST.

2.   Judgment for the Second Plaintiff against the Defendant in the sum of $49,994.30 inclusive of interest up to Judgment and GST.

3.   Judgment for the Third Plaintiff against the Defendant in the sum of $59,860.56 inclusive of interest up to Judgment and GST.

4.   Order that the Amended Cross-Claim filed 22 June 2018 be dismissed.

5.   Order the Defendant pay the First, Second and Third Plaintiffs’ costs of the proceedings, including the costs of the Cross-Claim.

6.   Order that, pursuant to clause 3.2 of the Credit Agreement dated 16 February 2016, the costs of the proceedings, including the costs of the Cross-Claim, be assessed on an indemnity basis.

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Decision last updated: 01 July 2019