State Mercantile Pty Ltd v Oracle Telecom Pty Ltd - [2017] QDC 52

DISTRICT COURT OF QUEENSLAND

CITATION:

State Mercantile Pty Ltd v Oracle Telecom Pty Ltd [2017] QDC 52.

PARTIES:

STATE MERCANTILE PTY LTD
(plaintiff)

v

ORACLE TELECOM PTY LTD
(defendant)

FILE NO/S:

BD 3275/2013

DIVISION:

PROCEEDING:

Civil Trial

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

10 March 2017

DELIVERED AT:

Brisbane

HEARING DATE:

21-23 November 2016

JUDGE:

McGill SC DCJ

ORDER:

Judgment that the plaintiff pay the defendant $32,921.98, including $7,833.12 by way of interest.

CATCHWORDS:

CONTRACT – Construction and interpretation – standard form of agreement published on website – whether incorporated in contracts.
CONTRACT – Construction and interpretation – provision of telephone services – whether right to transfer services to different provider – whether transfer terminates contract – whether contract repudiated.
CONTRACT – Breach – Damages – loss of benefit of bargain – effect of right in other party to terminate contract or transfer services – contractual early termination fee – whether penalty.

Evidence Act 1977 s 129A

Bartercard Ltd v Myallhurst Pty Ltd [2000] QCA 445 – cited.
Cavendish Square Holding BD v Makdessi [2015] 3 WLR 1373 – cited.
Coghill v Indochine Resources Pty Ltd (No 2) [2015] FCA 30 – cited.
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 – cited.
Dasreef Pty Ltd v Hawchar (2011) 85 ALJR 694 – applied.
Donovan v TIC Realty Pty Ltd [2011] QCA 90 – cited.
Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd [1915] AC 79 – cited.
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 – cited.
PT Thiess Contractors Indonesia v PT Arutmin Indonesia [2015] QSC 123 – cited.
Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28, 90 ALJR 835 – considered.
Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 – distinguished.
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 – cited.
Watson v Scott [2015] QCA 267 – applied.
Wilton v Farnworth (1948) 76 CLR 646 – cited.

COUNSEL:

A.P.J Collins for the plaintiff

S Hogg for the defendant

SOLICITORS:

Burns and Associates for the plaintiff

JHK Legal for the defendant

The defendant is a retailer of telephone services. It has in the past provided such services to the plaintiff, it alleges under certain contracts, but in 2012 the relationship broke down. This occurred after a director of the plaintiff left the plaintiff and moved to a competitor, which was also a customer of the defendant. There was a dispute between the parties as to the terms of the contract at the time the relationship came to an end, as to the circumstances in which it came to an end, and as to whether the defendant is entitled to any and what payment, the right to which accrued under the contract prior to or upon its coming to an end, or as damages for breach of contract. At the trial the plaintiff nonsuited its claim against…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2017] QDC 52
Decision Date: 10 March 2017

CaseChat Overview and Summary

The plaintiff, State Mercantile Pty Ltd, brought an action against the defendant, Oracle Telecom Pty Ltd, for breach of contract and damages. The case involved the interpretation of a standard form of agreement published on the defendant’s website and its incorporation into their contracts. Specifically, the dispute centred on whether the defendant had the right to transfer the plaintiff’s telephone services to a different provider, whether such a transfer terminated the contract, and if the defendant's actions constituted a repudiation of the contract. Additionally, the matter considered whether the plaintiff could recover damages for the loss of the benefit of the bargain, the impact of the defendant’s right to terminate the contract or transfer services, and the validity of a contractual early termination fee as a penalty.

The court was required to determine the legal effect of the standard form agreement published on the defendant’s website and whether it was incorporated into the contracts between the parties. The primary issue was whether the defendant could unilaterally transfer the plaintiff’s telephone services to another provider, whether such a transfer would terminate the contract, and if the defendant's actions amounted to a repudiation of the contract. The court also had to consider the plaintiff's claim for damages for the loss of the benefit of the bargain, the implications of the defendant’s right to terminate the contract or transfer services, and whether the early termination fee constituted a penalty.

In delivering the judgment, the court held that the standard form agreement published on the defendant’s website was incorporated into the contracts between the parties. The court found that the defendant did have the right to transfer the plaintiff’s telephone services to another provider, and such a transfer did not necessarily terminate the contract. However, the court found that the defendant’s actions did not amount to a repudiation of the contract. The court also determined that the plaintiff could recover damages for the loss of the benefit of the bargain. In relation to the early termination fee, the court concluded that it did not constitute a penalty but was a legitimate pre-estimate of loss.

The court ordered that the plaintiff pay the defendant $32,921.98, including $7,833.12 by way of interest.

Orders

Orders of the court

Judgment that the plaintiff pay the defendant $32,921.98, including $7,833.12 by way of interest.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	State Mercantile Pty Ltd v Oracle Telecom Pty Ltd [2017] QDC 52.
PARTIES:	STATE MERCANTILE PTY LTD (plaintiff) v ORACLE TELECOM PTY LTD (defendant)
FILE NO/S:	BD 3275/2013
DIVISION:
PROCEEDING:	Civil Trial
ORIGINATING COURT:	District Court at Brisbane
DELIVERED ON:	10 March 2017
DELIVERED AT:	Brisbane
HEARING DATE:	21-23 November 2016
JUDGE:	McGill SC DCJ
ORDER:	Judgment that the plaintiff pay the defendant $32,921.98, including $7,833.12 by way of interest.
CATCHWORDS:	CONTRACT – Construction and interpretation – standard form of agreement published on website – whether incorporated in contracts. CONTRACT – Construction and interpretation – provision of telephone services – whether right to transfer services to different provider – whether transfer terminates contract – whether contract repudiated. CONTRACT – Breach – Damages – loss of benefit of bargain – effect of right in other party to terminate contract or transfer services – contractual early termination fee – whether penalty. Evidence Act 1977 s 129A Bartercard Ltd v Myallhurst Pty Ltd [2000] QCA 445 – cited. Cavendish Square Holding BD v Makdessi [2015] 3 WLR 1373 – cited. Coghill v Indochine Resources Pty Ltd (No 2) [2015] FCA 30 – cited. DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 – cited. Dasreef Pty Ltd v Hawchar (2011) 85 ALJR 694 – applied. Donovan v TIC Realty Pty Ltd [2011] QCA 90 – cited. Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd [1915] AC 79 – cited. Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 – cited. PT Thiess Contractors Indonesia v PT Arutmin Indonesia [2015] QSC 123 – cited. Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28, 90 ALJR 835 – considered. Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 – distinguished. Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 – cited. Watson v Scott [2015] QCA 267 – applied. Wilton v Farnworth (1948) 76 CLR 646 – cited.
COUNSEL:	A.P.J Collins for the plaintiff S Hogg for the defendant
SOLICITORS:	Burns and Associates for the plaintiff JHK Legal for the defendant