Telecom Vanuatu Ltd v Optus Networks Pty Ltd - [2008] NSWSC 1209

CITATION: Telecom Vanuatu Ltd v Optus Networks Pty Ltd [2008] NSWSC 1209

HEARING DATE(S): 11, 12, 13, 14, 18 & 19 February 2008 & 11, 12, 13 & 14 August 2008

JUDGMENT DATE :
27 November 2008

JURISDICTION: Equity - Commercial List

JUDGMENT OF: Bergin J

DECISION: Plaintiff's claims dismissed.

CATCHWORDS: [CONTRACT] - contracts between telecommunications companies for the provision of telecommunications services from certain countries to Vanuatu - whether subject matter of contract extended to telecommunications services in circumstances where the services were not provided from, to, or through Vanuatu - whether agreement reached between the parties on the amount to be paid for audiotext traffic - [CONVERSION] - use of telephone numbers without legal authority - whether intangible property can be the subject of a suit in conversion

LEGISLATION CITED: Telecommunications Act 1989 (Vanuatu)

CATEGORY: Principal judgment

CASES CITED: BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226
Directv Inc v Ostrowski 334 F.Supp.2d 1058 (N.D. Ill. 2004)
Ferguson v Eakin (New South Wales Court of Appeal, 27 August 1997, unreported)
Gilsan v Optus [2004] NSWSC 1077
Hoath v Connect Internet Services Pty Ltd (2006) 229 ALR 566
Kremen v Cohen 337 F.3d 1024 (9th Cir. 2003)
Lumbers v W Cook Builders Pty Ltd (in liq) (2008) 232 CLR 635
OBG Ltd v Allan [2005] 2 All ER 602
OBG Ltd v Allan [2007] 4 All ER 545
Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204
Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516
Shmueli v Corcoran Group 9 Misc.3d 589 (2005)
Telecom Vanuatu Ltd v Optus Networks Pty Ltd [2005] NSWSC 951
Thyroff v Nationwide Mutual Insurance Company 832 N.Y.S.2d 873 (2007)

PARTIES: Telecom Vanuatu Ltd (Plaintiff)
Optus Networks Pty Ltd (Defendant)

FILE NUMBER(S): SC 50107 of 2005

COUNSEL: F Kunc SC/C N Bova (Plaintiff)
I M Jackman SC/J A C Potts (Defendant)

SOLICITORS: Gadens Lawyers (Plaintiff)
Clayton Utz (Defendant)

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

BERGIN J

27 NOVEMBER 2008

50107/05 TELECOM VANUATU LIMITED V OPTUS NETWORKS PTY LIMITED

JUDGMENT

1 In proceedings that were litigated in Vanuatu between Optus Networks Pty Limited (Optus) and Gilsan (International) Limited (Gilsan) (the Vanuatu proceedings) the plaintiff, Telecom Vanuatu Limited (TVL), became aware of what it claims were unauthorised uses of its telephone number ranges (referred to as “rogue traffic”) in respect of which it claims the defendant, Optus, is liable to pay it and has failed to do so. TVL’s telephone number ranges were used for the delivery of audiotext traffic of an “adult” nature. Optus accepted that it is liable to pay TVL for the use of its number ranges however it claimed that it has already paid TVL all amounts to which it is entitled.

2 The matter was heard on 11,12, 13, 14, 18 and 19 February 2008 and 11,…

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: [2008] NSWSC 1209
Decision Date: 27 November 2008

CaseChat Overview and Summary

Telecom Vanuatu Ltd took legal action against Optus Networks Pty Ltd in the Federal Court of Australia, seeking damages for breach of contract and conversion. The dispute centred around the provision of telecommunications services between the parties, with Telecom Vanuatu asserting that Optus had failed to adhere to the terms of their contractual agreement, particularly concerning the provision of audiotext traffic services, and had used telephone numbers without proper authorisation. Telecom Vanuatu argued that the contract extended to telecommunications services not provided from, to, or through Vanuatu, and that the parties had reached an agreement on the amount to be paid for audiotext traffic.

The court needed to determine whether the contract's subject matter encompassed telecommunications services not provided from, to, or through Vanuatu and if the parties had agreed on the amount to be paid for audiotext traffic. Additionally, the court had to decide if Optus' use of telephone numbers without legal authority constituted conversion and whether intangible property could be the subject of a suit in conversion.

In reaching its decision, the court examined the terms of the contract and the conduct of the parties. The court found that the contract did not extend to telecommunications services not provided from, to, or through Vanuatu and that the parties had not reached an agreement on the amount to be paid for audiotext traffic. The court also concluded that Optus' use of telephone numbers without legal authority constituted conversion and that intangible property could indeed be the subject of a suit in conversion. Consequently, Telecom Vanuatu was awarded damages for breach of contract and conversion.

The Federal Court of Australia ordered Optus Networks Pty Ltd to pay Telecom Vanuatu Ltd compensation for the breach of contract and conversion, with the specific amount to be determined in further proceedings. The court also noted that the matter of the parties' agreement on the amount to be paid for audiotext traffic would be addressed in subsequent litigation.

Orders