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

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

SUPREME COURT OF QUEENSLAND

CITATION:

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

PARTIES:

FRONTIER NETWORKS PTY LTD

(applicant)

v

PHILADELPHIA DEVELOPMENTS PTY LTD

(respondent)

FILE NO:

BS No 14453 of 2022

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

25 August 2023

DELIVERED AT:

Brisbane

HEARING DATE:

27 January 2023

JUDGE:

Davis J

ORDERS:

  1. 1.Paragraphs 5A(c), (d) and (e), 6, 6A(c) and (d), 7, 11(c), 12, 13, 15, 16(b) and 17(a) of the amended defence are struck out.
  2. 2.It is declared that the defendant’s purported termination of the Master Development Agreement and the Site Licence and Access Agreement on 7 October 2022 was ineffective.
  3. 3.The application is otherwise dismissed.
  4. 4.By 4.00 pm on 1 September 2023, the defendant file and serve any material and submissions on costs.
  5. 5.By 4.00 pm on 8 September 2023, the plaintiff file and serve any material and submissions on costs.
  6. 6.Each party has leave to file and serve any application for leave to make oral submissions on costs by 4.00 pm on 15 September 2023.
  7. 7.In the absence of any application being filed by 4.00 pm on 15 September 2023, the question of costs will be determined on the written submissions without further oral hearing.

CATCHWORDS:

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

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

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

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR PLAINTIFF – GENERALLY – where the defendant purported to terminate the MDA and the SLAA –  where the plaintiff sought summary judgment on part of its claim – where there was no factual dispute between the parties – where the issue was the proper construction of the MDA and the SLAA – whether the defence had any reasonable prospects of success – whether there was need for a trial

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR PLAINTIFF – IN ACTIONS FOR SPECIFIC PERFORMANCE – where the plaintiff claimed specific performance of the MDA and SLAA – whether damages are an adequate remedy – whether specific performance would require supervision by the court – whether an order for specific performance was appropriate – whether an order for specific performance ought to be made summarily

Uniform Civil Procedure Rules 1999, r 5, r 171, r 292, r 681

Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41, followed

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266; [1977] UKPC 13, cited

Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337; [1982] HCA 24, cited

Commonwealth Bank of Australia v Barker (2014) 253 CLR 169; [2014] HCA 32, cited

Coulls v Bagot’s Executor & Trustee Co Ltd (1967) 119 CLR 460; [1967] HCA 3, cited

Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438, considered

Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232; [2005] QCA 227, followed

Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1999] HCA 1, cited

Elderslie Property Investments No 2 Pty Ltd v Dunn [2007] QSC 192, cited

Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7, cited

Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10; [1995] HCA 19, cited

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69, cited

Gray v Morris [2004] 2 Qd R 118; [2004] QCA 5, followed

Haggarty v Wood (No 2) [2015] QSC 244, cited

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37, followed

Nichols Constructions Pty Ltd v Mt Marlow Pty Ltd & Anor [2016] QSC 1, cited

Patrick Stevedores Operations No2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; [1998] HCA 30, cited

Reid v Moreland Timber Co Pty Ltd (146) 73 CLR 1; [1946] HCA 48, cited

Watson v Scott [2016] 2 Qd R 484; [2015] QCA 267, followed

Wilson v Northampton and Banbury Junction Railway Co (1874) 9 Ch App 279; [1874] UKLawRpCh 24, cited

COUNSEL:

M A Windsor for the applicant/plaintiff

L J Tassell for the respondent/defendant

SOLICITORS:

King & Wood Mallesons for the applicant/plaintiff

Greystones Lawyers as town agents for Noble Law for the respondent/defendant

  1. [1]
    The plaintiff, Frontier Networks Pty Ltd (Frontier) applies for summary judgment on part of its claim and also seeks orders that various paragraphs of the amended defence of the defendant, Philadelphia Developments Pty Ltd (Philadelphia), be struck out.

Background

  1. [2]
    Philadelphia is the developer of a residential unit complex called “Pearl Main Beach” (the building).  Frontier is in the business of designing, constructing and operating fibre-based telecommunications networks.
  2. [3]
    On 8 September 2021, the parties entered into two agreements.  One is called the Master Development Agreement (MDA).  The other is called the Site Licence and Access Agreement (SLAA).[1]
  3. [4]
    The terms of both agreements are critical to the present application and are analysed later in these reasons.  In broad summary, the MDA provides that Frontier will design, build and install the network and then provide services on either a wholesale basis to retail service providers or directly to end users being those who have purchased residential units in the building.[2]  The SLAA gives Frontier access to the building for the purposes of installing, generating and maintaining the equipment which is the subject of the MDA.[3]
  4. [5]
    On 7 October 2022, Philadelphia purported to terminate the Agreements.  The purported termination was not accepted by Frontier who commenced these proceedings against Philadelphia. 
  5. [6]
    Importantly, Philadelphia advances three reasons why the termination was justified.[4]
  6. [7]
    Philadelphia relies upon clause 97 of the MDA[5] and alleges that on a proper construction of that agreement, if Philadelphia itself commits an “Insolvency Event”, it may terminate the Agreements.[6]  It pleads that an Insolvency Event occurred and therefore the right to terminate arose and Philadelphia availed itself of that right (the first defence).[7]
  7. [8]
    Clause 55 of the MDA refers to “Frontier’s terms and conditions at www.frontiernetworks.com.au”.[8]  Philadelphia pleads that Frontier’s terms and conditions are incorporated into the MDA and provide a right to terminate without cause but on notice (the second defence).[9]
  8. [9]
    Philadelphia asserts in the alternative that there was an implied term in the MDA that either it or Frontier could terminate the MDA at will with immediate effect, or alternatively, upon reasonable notice.[10]  It is alleged that the term is implied by operation of law, or alternatively, in fact and that the implied term justified the termination (the third defence ).[11]

The pleadings and the prayer for relief

  1. [10]
    In its statement of claim Frontier pleads:
  1. 1.its incorporation;[12]
  2. 2.Philadelphia’s incorporation;[13]
  3. 3.the making of the MDA and the SLAA;[14]
  4. 4.various provisions of the MDA[15] including clause 95 which gives a right of termination upon breach, and clause 97 which appears at paragraph [32] of these reasons;
  5. 5.that no right to terminate the MDA exists beyond clauses 95 and 97;[16]
  6. 6.various terms of the SLAA including clauses 2.3 and 9.1.[17]  Clause 2.3 provides for termination upon effluxion of time and clause 9.1 provides for termination in the event of the other party going into liquidation or having a receiver appointed. 
  7. 7.that no right to terminate the SLAA exists beyond clauses 2.3 and 9.1;[18]
  8. 8.that Frontier performed its obligations under the Agreements;[19]
  9. 9.Philadelphia purported to terminate the Agreements;[20]
  10. 10.there were no grounds justifying termination by Philadelphia;[21]
  11. 11.Frontier rejected the purported termination, but Philadelphia maintained its position that the Agreements are at an end;[22] and
  12. 12.Frontier is ready, willing and able to perform the Agreements.[23]
  1. [11]
    The prayer of relief claims:
  1. “1A declaration that:
  1. (a)
    the Agreements are binding and enforceable as between the Plaintiff and the Defendant;
  2. (b)
    the Defendant’s purported termination of the Agreements on 7 October 2022 was ineffective; and
  3. (c)
    the Plaintiff is the exclusive operator of the Network for the current and all future Stages of the Development and has an exclusive royalty free perpetual licence to occupy the Allocated Space for the purpose of installing, maintaining and operating the Network.
  1. 2An order that, unless and until the MDA is validly terminated, or the Plaintiff otherwise agrees in writing, the Defendant be restrained from:
  1. (a)
    engaging any person other than the Plaintiff to deliver any infrastructure similar in nature to the Network or for internet, telephone, television or similar services for the Development; and
  2. (b)
    engaging any person other than the Plaintiff to provide a Certificate of Network Completion for the Development; or
  3. (c)
    otherwise obtaining and relying upon a Certificate of Network Completion for the Development issued by any other person.
  1. 3Specific performance of the Agreements.
  2. 4Alternatively to the relief claimed in paragraphs 2 and 3 above:
  1. (a)
    damages in the amount of $435,441.36 for breach of the MDA; and
  2. (b)
    interest on the abovementioned amount pursuant to section 58 of the Civil Proceedings Act 2011 (Qld).
  1. 5Costs.
  2. 6Such further or other orders as the Court considers fit.”
  1. [12]
    Material facts in support of the damages claim are pleaded at paragraphs 21 to 23 of the statement of claim.  Specific performance is claimed in paragraph 3 of the prayer for relief.  As already observed, the Agreements are pleaded as is Philadelphia’s stance that it will not perform them.  There are no further pleas in support of an order for specific performance.  For example, it is not pleaded that damages are an inadequate remedy and there are no facts pleaded to suggest that would be the case.
  2. [13]
    By its amended defence, Philadelphia:
  1. 1.admits it entered into the Agreements;[24]
  2. 2.admits paragraph 6 of the statement of claim which alleges various terms of the MDA[25] but pleads further terms including the definition of “Insolvency Event” (which appears at paragraph [35] of these reasons), clause 55 (which appears at paragraph [51] of these reasons), section 4 of the general terms and conditions (which appears at paragraph [53] of these reasons) and pleads both the first defence and the second defence;[26]
  3. 3.pleads an implied term, namely “that either party was entitled to terminate the MDA at will with immediate effect, or alternatively, upon reasonable notice,[27] which is the third defence;
  4. 4.accepts that it purported to terminate the Agreement but alleges that it was entitled to do so.[28]

Terms of the amended application

  1. [14]
    Apart from a claim for costs and ancillary relief, the amended application claims:
  1. “1Pursuant to rule 292 of the Uniform Civil Procedure Rules 1999 (Qld) (‘UCPR’), the Plaintiff be granted judgment against the Defendant on paragraphs 1 and 3 of its claim.
  2. 2Alternatively:
  1. (a)
    pursuant to rule 292 of the UCPR, the Plaintiff be granted judgment against the Defendant on paragraph 1 of its claim; and
  2. (b)
    pursuant to rule 171 of the UCPR, paragraphs 5A(c), (d) and (e), 6, 6A(c) and (d), 7, 11(c), 12, 13 15, 16 and 17(a) of the amended defence be struck out.”
  1. [15]
    Paragraphs 5A(c), (d) and (e), 6, 6A(c) and (d), 7, 11(c), 12, 13, 15, 16(b), 17(a) are the paragraphs which set up the three defences.

Relevant principles

  1. [16]
    The application for summary judgment is made under r 292 of the Uniform Civil Procedure Rules 1999 (UCPR).  Rule 292 provides:

“292 Summary judgment for plaintiff

  1. (1)
    A plaintiff may, at any time after a defendant files a notice of intention to defend, apply to the court under this part for judgment against the defendant.
  2. (2)
    If the court is satisfied that—
  1. (a)
    the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and
  2. (b)
    there is no need for a trial of the claim or the part of the claim;

the court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.”

  1. [17]
    The guiding principle under the UCPR is enshrined in r 5 which provides:

“5 Philosophy—overriding obligations of parties and court

  1. (1)
    The purpose of these rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.
  2. (2)
    Accordingly, these rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality and facilitating the purpose of these rules.
  3. (3)
    In a proceeding in a court, a party impliedly undertakes to the court and to the other parties to proceed in an expeditious way.
  4. (4)
    The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court.

Example—

The court may dismiss a proceeding or impose a sanction as to costs, if, in breach of the implied undertaking, a plaintiff fails to proceed as required by these rules or an order of the court.”

  1. [18]
    Various cases decided after the introduction of the UCPR have considered whether the power to grant summary judgment has been widened by the operation of r 5.  Two principles have emerged from the decided cases:
  1. (a)
    The text of r 292 must be applied.  To achieve judgment summarily, the plaintiff must demonstrate that the defendant has “no real prospect of succeeding on the defence” and “there is no need for a trial”.[29]
  2. (b)
    In applying the test, regard must be had to the fact that an order for summary judgment denies the party suffering the order from putting its case and so an order should only be made in the clearest of cases.
  1. [19]
    On that second point, Gaudron, McHugh, Gummow and Hayne JJ said in Agar v Hyde:[30]
  1. “57.It is, of course, well accepted that a court whose jurisdiction is regularly invoked in respect of a local defendant (most often by service of process on that defendant within the geographic limitations of the court’s jurisdiction) should not decide the issues raised in those proceedings in a summary way except in the clearest of cases. Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.” (footnotes omitted)
  1. [20]
    That statement of principle is not new and was established in earlier decisions of the High Court such as Dey v Victorian Railways Commissioners[31] and General Steel Industries Inc v Commissioner for Railways (NSW).[32]
  2. [21]
    While those, and many other authorities,[33] strongly warn that caution must be exercised, a detailed analysis of the case may be justified in determining whether there are real prospects of success and whether a trial is necessary.[34]
  3. [22]
    Mr Tassell, counsel for Philadelphia, cited Watson v Scott[35] in support of his submission that summary judgment ought not be given where the relevant provisions of the contracts are ambiguous.  However, the issue on a summary judgment application is whether there is a real prospect of the defendant defending the claim and whether a trial is necessary.  If the ambiguity is not sought to be resolved at trial by evidence,[36] then resolution of the ambiguity becomes a question of construction of the written terms of the Agreements.  If that can be achieved so that it is determined that the defence has no real prospects and there is no need for a trial,[37] then judgment may be given.
  4. [23]
    Mr Tassell was not prepared to concede that there was no factual dispute between the parties relevant to the present application.[38]  He submitted that any ambiguity in the terms of the Agreements might need to be resolved by evidence.[39]  However, no reliance upon facts beyond the terms of the written agreements is pleaded and no evidence was produced.[40]  There was no submission that the defence could or should be repleaded.
  5. [24]
    Mr Tassell then submitted that as the statement of claim pleads that there were pre‑contract discussions between the parties, there might be relevant facts not yet disclosed.[41]  Representatives of Philadelphia were parties to those discussions, yet no relevant evidence is produced.[42]
  6. [25]
    Philadelphia admits the Agreements and does not identify a single fact beyond their written terms which might be relevant to their construction.  The only pleaded facts in relation to the implication of the term (the third defence) are those which appear at paragraph [65] of these reasons. 
  7. [26]
    Frontier is prepared, for the purposes of this application, to concede that an “Insolvency Event” occurred in relation to Philadelphia.[43] 
  8. [27]
    Whether or not any of the three defences have any prospect of success depend upon questions of construction having regard to nothing beyond the terms of the Agreements themselves taken in the context of their function as reflecting commercial arrangements.[44]
  9. [28]
    The application to strike out the various paragraphs of the pleadings is brought under r 171 of the UCPR which provides:

“171 Striking out pleadings

  1. (1)
    This rule applies if a pleading or part of a pleading—
  1. (a)
    discloses no reasonable cause of action or defence; or
  2. (b)
    has a tendency to prejudice or delay the fair trial of the proceeding; or
  3. (c)
    is unnecessary or scandalous; or
  4. (d)
    is frivolous or vexatious; or
  5. (e)
    is otherwise an abuse of the process of the court.
  1. (2)
    The court, at any stage of the proceeding, may strike out all or part of the pleading and order the costs of the application to be paid by a party calculated on the indemnity basis.
  2. (3)
    On the hearing of an application under subrule (2), the court is not limited to receiving evidence about the pleading.”
  1. [29]
    Reliance is made by Frontier on r 171(1)(a).  It is sought to strike out the relevant paragraphs on the basis that they do not disclose a defence.  As will be seen, the strike out application will only succeed if Frontier can establish that the pleaded grounds for terminating the Agreements cannot succeed.  In that way, the strike out application is only made ancillary to the main issue which is whether Philadelphia has an arguable case that it justifiably terminated the Agreements.
  2. [30]
    There is, therefore, no necessity to explore the limits of r 171.

Questions raised by the application.

  1. [31]
    The questions for determination are:
  1. 1.In relation to each of the three defences:
  1. (a)
    does Philadelphia have reasonable prospects of success; and
  2. (b)
    is there a need for a trial?
  1. 2.If the answer in relation to some, but not all of the three defences is “no” to the two questions, then should the paragraphs of the amended defence relevant to the defences with no prospect be struck out?  For the reasons already explained,[45] the answer will inevitably be “yes”.
  2. 3.If the answer in relation to all three of the defences is “no” to the two questions, then:
  1. (a)
    should the declaration sought be made;
  2. (b)
    should an order for specific performance be made?
  1. 4.If either of the two forms of relief are not given summarily, then should the relevant parts of the amended defence be struck out?  For the reasons already given,[46] the answer will, inevitably, be yes.

The first defence:  Termination for an Insolvency Event

  1. [32]
    Clause 97 of the MDA provides:

“Termination upon occurrence of insolvency Event

  1. 97)
    Either party may terminate this Agreement, with immediate effect, by written notice to the other party, given at any time after the occurrence of an Insolvency Event in relation to the other party.” (emphasis added)
  1. [33]
    In reliance upon clause 97, Philadelphia pleads:
  1. “iv.the defendant was subject to an Order of the of the Federal Court of Australia dated 1 October 2021 restraining the defendant from disposing of, dealing with or diminishing the value of any property, including the Development (Freezing Order);

PARTICULARS

The Freezing Order was entered by Justice Collier on 1 October 2021 in Federal Court of Australia Proceedings No OUD310 of 2021.

  1. v.the Freezing Order constituted an Insolvency Event for the purposes of the MDA.”[47]

And:

  1. “i.the defendant validly terminated the MDA:
  1. A.in accordance with clause 97 of the MDA upon the occurrence of an Insolvency Event…”[48]
  1. [34]
    Clause 97 provides a right to terminate. The right to terminate is triggered by the commission of a “Insolvency Event”.
  2. [35]
    Under a heading “Definitions” the term “Insolvency Event” is defined in the MDA  as:

“Insolvency Event means, in relation to the Developer, any of the following events occurring:

…

  1. o)
    any writ of execution, garnishee order, mareva injunction or similar order is made, levied or issued against, or in relation to, any asset of the party; or …” (emphasis added)
  1. [36]
    Within the MDA there is a provision headed “Interpretation” (the Interpretation Clause).  It provides:

“Interpretation

  1. 131)
    In this Agreement:
  1. a)
    headings are for convenience only and do not affect interpretation;
  2. b)
    unless the context indicates a contrary intention:
  1. i)
    words in the singular include the plural and vice versa;
  2. ii)
    if a word or phrase is defined its other grammatical forms have corresponding meanings;
  3. iii)
    ‘includes’ means without limitation;
  1. c)
    no rule of construction will apply to a clause to the disadvantage of one party merely because that party put forward the clause or would otherwise benefit from it;
  2. d)
    if a party has a right, it may exercise or not exercise that right in its absolute discretion;
  3. e)
    a reference to:
  1. i)
    a person includes a partnership, joint venture, unincorporated association, corporation, government, statutory body or authority and the person’s legal personal representatives, successors, assigns and persons substituted by novation;
  2. ii)
    any legislation includes subordinate legalisation under it and includes that legislation and subordinate legislation as modified or replaced;
  3. iii)
    an obligation includes a warranty or representation and a reference to a failure to comply with an obligation includes a breach of warranty or representation;
  4. iv)
    a right includes a benefit, remedy, discretion or power;
  5. v)
    ‘$’, ‘AUD’ or ‘dollars’ is a reference to Australian currency;
  6. vi)
    this or any other document includes the document, agreement, deed or legal instrument as novated, varied or replaced and despite any change in the identity of the parties;
  1. f)
    this Agreement includes all schedules and exhibits to it; and
  2. g)
    if the date on or by which any act must be done under this Agreement is not a Business Day, the act must be done or by the next Business Day; and
  3. h)
    where time is to be calculated by reference to a day or event, that day or the day of that event is excluded.” (emphasis added)
  1. [37]
    Frontier submits that the provisions operate in this way:
  1. 1.if either of the two parties commit an “Insolvency Event”, then:
  2. 2.a right arises in the other party to terminate; and
  3. 3.that right is exercisable by the party who has the right to terminate serving a notice of termination upon the party who has committed the “Insolvency Event”.
  1. [38]
    Philadelphia submits:
  1. 1.an “Insolvency Event” can only be committed by it;
  2. 2.if it commits an “Insolvency Event”, then either it or Frontier may terminate the agreement; and
  3. 3.the termination is effected by written notice by the party seeking to terminate to the party who is not seeking to terminate.
  1. [39]
    In Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd,[49] French CJ, Nettle and Gordon JJ followed Codelfa Construction Pty Ltd v State Rail Authority (NSW)[50] and Electricity Generation Corporation v Woodside Energy Ltd[51] and summarised the relevant principles in construing a commercial agreement as follows:
  1. “46The rights and liabilities of parties under a provision of a contract are determined objectively,[52] by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.[53]
  2. 47In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean.[54] That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.[55]”[56]
  1. [40]
    That process may include access to evidence external to the contract.[57]  No party has identified any material external to the contract which is alleged to be relevant to its construction.
  2. [41]
    The interpretation clause is of no assistance in determining the status of a defined term under the MDA.  The clause only mentions defined words or phrases once, and that is in clause 131(b)(ii) which has no relevance here.
  3. [42]
    Clause 97 gives rights of termination so, by clause 131(d), that right is exercisable in the “absolute discretion” of the party who holds the right.  That does nothing to assist in resolving whether a right enures under clause 97 to Philadelphia.
  4. [43]
    The definition of “Insolvency Event” is a partial definition.  It defines the term “in relation to the Developer”, which is Philadelphia.  It is silent in relation to Frontier.
  5. [44]
    Therefore, if a question arose as to the meaning of “Insolvency Event’ where that term was “in relation to” Frontier, that question would be determined upon the well‑settled principles of construction as summarised in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd[58] and the cases cited there.
  6. [45]
    Application of those principles of construction also lead inextricably to acceptance of the construction of clause 97 which is advanced by Frontier.
  7. [46]
    The right to terminate is triggered by an “Insolvency Event”.  Termination is effected by a party giving notice to “the other party”, ie the one who has committed the Insolvency Event.  The notice of termination may be given “after the occurrence of an Insolvency Event in relation to the other party”, namely the party who has committed the Insolvency Event and the party to receive the notice of termination. 
  8. [47]
    The use of the term “either party” as the opening words of clause 97 does not mean that if an Insolvency Event occurs, then either party (including the one who has committed the Insolvency Event) may terminate.  The reference to “either party” does no more than confirm that the right under s 97 may be exercised by “either party” depending upon the circumstances.  “Either party” may acquire a right to terminate if the “other party” commits an “Insolvency Event”. 
  9. [48]
    Therefore, on a proper construction of clause 97 of the MDA:
  1. 1.if a party commits an Insolvency Event;
  2. 2.the other party has a right to terminate;
  3. 3.that right is exercisable by the party who has not committed the Insolvency Event giving notice of termination to the party who has;
  4. 4.no right arises in a party who has committed an Insolvency Event to terminate for that reason.
  1. [49]
    The proper construction of clause 97 as I have determined it, is consistent with the MDA as a whole, including its commercial purpose.[59]  The MDA obliges Philadelphia to pay substantial sums of money to Frontier.  However, the contract also obliges Frontier to perform substantial work.  The insolvency of either of them has the potential to inhibit or prevent fulfilment of their obligations and thereby damage the other party.  There is no identifiable commercial reason why clause 97 would not apply so as to give Philadelphia a right of termination if Frontier committed an Insolvency Event.  Against that background, clause 97 gives “either party” a right to terminate if the other becomes insolvent.
  2. [50]
    The first defence has no prospect of success and there is no need for a trial of any issue concerning the first defence.

The second defence:  Incorporation of the General Terms and Conditions

  1. [51]
    Clause 55 of the MDA provides:
  1. “55)Frontier will operate the Network for the purpose of delivering the Wholesale Services in accordance with Frontier’s terms and conditions at www.frontiernetworks.com.au.”
  1. [52]
    In relation to its reliance upon clause 55 and Frontier’s terms and conditions, Philadelphia pleads that it:
  1. “c.says further that, pursuant to clause 55 of the MDA, the following terms of the plaintiff’s Standard Form of Agreement (Standard Form of Agreement) were incorporated into the MDA:
  1. i.by clause 1 ‘Document Structure and Precedence’:

2.1 Depending on which services have been purchased by the Customer, different documents may apply.

(a) The General Terms and Conditions apply to ALL Frontier Customers.”[60]

  1. [53]
    Philadelphia then pleads sections 4.1, 4.2 and 4.4 of Frontier’s standard terms and conditions.  Section 4 in its entirety is:

“Section 4.  Commencement and termination of this Agreement

  1. 4.1Commencement of Agreement
  1. (a)
    We ask you to note that this Agreement commences on the date that you sign or submit an Application Form. The term of your Service commences on the date we complete installation of all Broadband Transmission Facilities required under the agreement with you and activate your service in our system.
  1. 4.2Application Cancellation
  1. (a)
    You may cancel an application made for a service at any time prior to the commencement of the service. To avoid doubt it should be emphasised that cancellation requests received subsequent to the commencement of those services are service cancellation requests and clause 4.4 will therefore apply.
  2. (b)
    Application cancellation requests must be made in writing and sent by email to 

[email protected].

  1. (c)
    Upon receipt of your cancellation request we will issue you with a ticket number by email, confirming that we have received your request. The date of your request is deemed to be the date when this confirmation email is sent by us. If you have not received your ticket number within 24 hours of sending your request then you should assume that we have not received the request and you should make contact with us to follow this up.
  2. (d)
    To ensure that you[61] cancellation request is processed promptly, once you have received your ticket number, phone Frontier Customer Service on 1300 85 85 35 and quote your ticket number to confirm.
  3. (e)
    Upon cancelling an application you will be charged the Application Cancellation Fee unless a Cooling Off Period applies to you in which case you will only be charged the Application Cancellation Fee if you cancel after the Cooling Off Period has ended.
  4. (f)
    Where a Cooling Off Period applies to you we may choose to delay commencement of installation work for the service until after the Cooling Off Period has ended.
  1. 4.3Our right to suspend or terminate a service
  1. (a)
    We may suspend or terminate your Service if:
  1. (i)
    you are in serious breach of this Agreement (you will be in serious breach if you breach your obligation to pay our charges for the Service, breach the Acceptable Use Policy or breach clauses 1.1(c), 1.1(d), 1.1(e), 1.1(g), 9.4, 10.3 or 13.2 of this Agreement); and
  2. (ii)
    we have notified you in writing of your breach and you have failed to remedy the breach within 30 days of our notice (if the breach can be remedied).
  3. (iii)
    If the breach is something which cannot be remedied, we may immediately terminate your Service with notice to you.
  4. (iv)
    Engaging in conduct that breaches the Acceptable Use Policy or breaching clauses 1.1(d), 1.1(g), 9.4, 10.3 or 13.2 of this Agreement are breaches that are not capable of remedy.
  1. (b)
    In addition, we may suspend or terminate your Service if you do not pay the charges by the due date. If we lift the suspension on your Service, a $30 administration fee applies.
  2. (c)
    If we terminate your Service under clause 4.3(a) during your Contract Term, you must pay us the Cancellation Fee.
  3. (d)
    We may suspend the Service to you during the 30 day period before we terminate your Service under clause 4.3(a). If we do suspend your Service, we will reimburse any monthly fees (pro-rated if necessary) that you paid during the suspension.
  4. (e)
    If we terminate the Service for any reason, you must still pay us for any charges incurred before the termination.
  5. (f)
    We may also terminate the Service at any time by giving you 30 days prior written notice.
  6. (g)
    If we terminate your service under the provisions of clause 3.2(b) and you fail to settle your account within 90 days we may, at our sole discretion, retain or sell any equipment of yours that is in one of our data centres as part payment of your account.
  1. 4.4We understand that, at some stage, you may no longer wish to continue with your Service for a number of reasons. Your rights when cancelling your service are as follows:
  1. (a)
    All cancellation requests must be made in writing and sent by email to [email protected].
  2. (b)
    You may make a cancellation request under this agreement at any time provided you give us at least 28 days notice, unless you are cancelling under clause 4.4(f).
  3. (c)
    If you cancel this Agreement before the end of your Contract Term, you must pay us the Cancellation Fee unless you are cancelling under clause 4.4(f) in which case you do not have to pay the Cancellation Fee.
  4. (d)
    Upon receipt of your cancellation request we will issue you with a ticket number by email, confirming that we have received your request. The date of your request is deemed to be the date when this confirmation email is sent by us. If you have not received your ticket number within 24 hours of sending your request then we are deemed not to have received the request and you should follow up with us.
  5. (e)
    Your cancellation request will take effect on your next service anniversary date following the expiry of the 28 day notice period, unless you are cancelling under clause 4.4(f).
  6. (f)
    In certain circumstances you may request that your Service be cancelled immediately. ‘Immediate cancellation’ means that no notice period applies so your cancellation request will take effect on your next service anniversary date following the date of your request. Immediate cancellation requests may be made when:
  1. (i)
    we are in serious breach of this Agreement; that is, if we breach our obligation to use reasonable care and skill in providing the Service and our obligations under clause 5.2); and
  2. (ii)
    you have notified us in writing of our breach and we have failed to remedy the breach within 30 days of receiving your notice.
  1. 4.5At certain times, we need to perform maintenance on or protect our networks to keep providing a high performing service to users. This means that we may sometimes need to suspend your Service if it is necessary for the purpose of maintenance, integrity, protection or restoration of our networks or the users of our networks. If we need to suspend your Service under this clause, we endeavour to ensure that the suspension is for as short a period as is reasonably possible.
  2. 4.6Unfortunately, we cannot control some external events that may affect our provision of the Service to you. If a Regulatory Event occurs, we may not be able to continue providing the Service to you at all or may not be able to provide it on the same terms as set out in this Agreement. If this happens, we will give you as much notice as we reasonably can and we may need to terminate this Agreement. You will not pay any Cancellation Fee is your Service is terminated under this clause.
  3. 4.7Exercise of our rights under clauses 4.5 and 4.6 does not affect your Contract Term.
  4. 4.8The effect of termination
  1. (a)
    We need to make sure that certain things occur if you or we terminate this Agreement. So, if this Agreement is terminated:
  1. (i)
    any software licences granted to you under this Agreement will immediately terminate and you must return to us or destroy the Software and all copies as we direct; and
  2. (ii)
    you must immediately return any of our property to us.
  1. (b)
    If we terminate this Agreement under clause 4.2 and, at your request, we later agree to provide you with the Service again, you will need to pay us a disconnection fee set out in the Plan Table.
  2. (c)
    If you fail to return our property to us within 28 days of termination of this agreement you will be liable for the full retail price of the property.” (emphasis added)
  1. [54]
    Philadelphia then pleads:
  1. “ii.the defendant was entitled to terminate the MDA at will with immediate effect, or alternatively, upon 28 days’ notice, at any time prior to the plaintiff commencing operation of the network (Standard Form of Agreement Termination Right)”[62]

And later:

  1. “b.says that, as at 7 October 2022:
  1. i.the defendant had paid all amounts owing to the plaintiff as at that date under the terms of the Agreements;
  2. ii.the licence term of SLAA had not commenced;
  3. iii.the plaintiff had not:
  1. A.constructed, installed, commissioned or commenced operation of any works comprising the Network in the Development;
  2. B.entered into any agreements with any retail Service Providers in respect of the Network in the Development;
  3. C.paid the Licence Fee to the defendant;”[63]
  1. [55]
    Philadelphia’s submission seriously misconceives how the MDA operates.  By the MDA, Philadelphia is the “Developer”.[64]  Clauses 1 to 9 provide:

“Background

  1. 1)
    The Developer owns the land the subject of the Development.
  2. 2)
    The Developer needs a licensed telecommunications carrier to design, build and operate telecommunications network Infrastructure in the Development.
  3. 3)
    Frontier is a licensed carrier expert in design, build and operating telecommunications Infrastructure.

Appointment

  1. 4)
    The Developer appoints Frontier to design, build and operate the Network in the Development.
  2. 5)
    The Developer acknowledges that the Network will be owned by Frontier and operated by Frontier in accordance with its wholesale carrier terms and conditions published from time to time on Frontier’s website www.frontiernetworks.com.au.

Scope and Exclusivity

  1. 6)
    The appointment of Frontier is for the current and all future Stages of the Development. The Developer may not engage an alternative provider in any future Stage.
  2. 7)
    If the Developer acquires land adjacent to the land on which the Development is built, the scope of this agreement and the meaning of Development are extended to include the development of that adjacent land.
  3. 8)
    Frontier is appointed as the exclusive operator of Network and has the exclusive right to negotiate and charge Retail Service Providers in the Development. The Developer has not and will not enter into any agreements, arrangements or understandings with other providers for the delivery of any infrastructure similar in nature to the Network or for internet, telephone or entertainment services similar in nature to the Service for the Development.
  4. 9)
    The Developer will do all things reasonably necessary to assist Frontier to enforce its rights as the exclusive operator of Network in the Development, including appointing Frontier as its agent to respond to requests for access from alternate providers.” (emphasis added)
  1. [56]
    Clause 10 obliges Fronter and Philadelphia to consult and cooperate with each other.  Clauses 11 to 15 then provide:

“Frontier’s key obligations

  1. 11)
    Frontier must design, install and commission the Network in each Stage in accordance with the Project Management Plan and the Scoping Document.
  2. 12)
    Frontier will prepare the Telecommunications Package of Works documents including:
  1. a)
    Cabling and Facilities Standards;
  2. b)
    External Interface Requirements Specification;
  3. c)
    Installation and Set to Work Procedures; and
  4. d)
    Site Specific Drawings,
  5. e)
    to enable the Developer to fulfill its obligations to deliver Pit and Pipe, Pathways, Communications Rooms and other facilities in accordance the Telecommunications Package of Works.
  1. 13)
    Frontier will coordinate construction and installation of the Network in accordance with the Project Documents and the Construction Program for each Stage (in so far as reasonably practicable and subject to the cost and impact of Delays below).
  2. 14)
    Frontier will integrate the Network with Frontier’s carrier network to support delivery of the Wholesale Services and integration with one or more third party carrier networks as required to enable the delivery of Retail Services to each Stage.
  3. 15)
    Frontier will rectify any Network Defects identified during the applicable defects liability period under this Agreement and maintain the Network in accordance with good engineering practice and Frontier’s Standard Form of Agreement.” (emphasis added)
  1. [57]
    Various clauses follow which deal with the construction of the network by Frontier and payment for that work by Philadelphia.  Clause 54 obliges Frontier to provide a certificate to Philadelphia certifying the completion of the construction of the network. 
  2. [58]
    Then follows a series of provisions under the heading “Network Operation, Maintenance and Improvements”.  Clause 55, which appears at paragraph [51] of these reasons, is the first clause which appears under that heading.  Clauses 56 to 59 are as follows:
  1. “56)
    Frontier will enable the provision of Wholesale Services to one or more Retail Service Providers on reasonable commercial terms.
  2. 57)
    Frontier will ensure the Network operates in compliance with all applicable laws, industry codes and technical standards.
  3. 58)
    Frontier will perform maintenance services in respect of the Network so it operates in accordance with accepted telecommunications industry practice.
  4. 59)
    Frontier or its successors or assigns will continue to operate and maintain the Network after this agreement expires.”
  1. [59]
    Clauses 60 to 64 concern network defects and clauses 65 to 67 deal with design improvements.  Clauses 68 to 71 provide:

“End Users of the Network

  1. 68)
    The Developer must assist Frontier to fulfil its obligations under this agreement, including,
  1. a)
    providing information to purchasers of lots in the Development,
  2. b)
    explaining to purchasers the Services provided by Frontier and any Retail Service Provider and relevant terms and conditions; and
  3. c)
    ensuring purchasers install and maintain facilities necessary for the safe operation and integrity of the Network,
  4. d)
    inserting appropriate clauses in Sale of Land Contracts to obtain the benefit of this assistance;
  5. e)
    enforcing those clauses for the benefit of Frontier.
  1. 69)
    The Developer acknowledges that Frontier will enter into wholesale earner agreements with Retail Service Providers for access to the Network and that Frontier will charge connection fees and ongoing services in respect of each connection to the Network under those agreements.
  2. 70)
    The Developer acknowledges that Retail Service Providers will enter into agreements with end users of the Network for the provision of Retail Services.
  3. 71)
    The Developer must obtain the consent of purchasers of lots in the Development to disclose to Frontier the Personal Information of the purchaser, in accordance with Privacy Laws, and disclose that Information to Frontier at the end of each month.”
  1. [60]
    What is contemplated by the provisions up to and including clause 54 is the construction of the network.  What is contemplated by the provisions in clauses 55 and following[65] is the operation of the network. 
  2. [61]
    The end users of the network are those people who purchase lots in the development.  They will be provided with services via the network either by Frontier or by retail service providers supplied by Frontier.
  3. [62]
    Clause 55 concerns the delivery of “Wholesale Services in accordance with Frontier’s terms and conditions”.  Frontier’s terms and conditions contemplate different services being provided on different terms.  Part 1, section 1.1 provides:

“1.1 Frontier’s Terms and Conditions are dictated by a number of documents which are to be applied with the following order:

  1. (a)
    The formal service proposal signed by the Customer and accepted by Frontier;
  2. (b)
    The Acceptable Use Policy;
  3. (c)
    The Wholesale Service Level Agreement Schedule (if applicable);
  4. (d)
    The Retail Service Level Agreement Schedule (if applicable);
  5. (e)
    One of the following Service Schedules (together, the ‘Service Schedules’[66]:
  1. (i)
    Broadband Service Schedule;
  2. (ii)
    Voice Service Schedule;
  3. (iii)
    IP PBX Service Schedule;
  4. (iv)
    VillageConnect™ Service Schedule;
  5. (v)
    Connect Service Schedule; and
  6. (vi)
    Telehousing and Facilities Access Service Schedule, and
  1. (f)
    General Terms and Conditions of Service.”
  1. [63]
    Frontier’s terms and conditions then deal, amongst other things, with the supply of services to wholesale customers.[67]  The network has not been completed.  The network is not in operation and any obligation of Frontier to “operate the Network”[68] has not arisen.  Philadelphia has not applied for services to be supplied to it.[69]  There is no application for services to cancel.[70]  No services have been supplied and there are therefore no services to cancel.[71]  In any event, the cancellation of services under a service agreement does not give Philadelphia a right to terminate the MDA or the SLAA.
  2. [64]
    The second defence has no prospects of success and there is no need for a trial of any issue concerning the second defence.

The third defence:  The implied term

  1. [65]
    As to the alleged implied term, Philadelphia pleads:
  1. “e.further, or alternatively to the matters pleaded in paragraph 5A(d) above, says that it was a term of the MDA that either party was entitled to terminate the MDA at will with immediate effect, or alternatively, upon reasonable notice.

PARTICULARS

The term is implied by operation of law, or alternatively in fact, because:

  1. (a)
    it is reasonable and equitable;
  2. (b)
    it is necessary to give business efficacy to the MDA:
  3. (c)
    it is obvious;
  4. (d)
    it is capable of clear expression; and
  5. (e)
    it does not contradict any express term of the MDA.”[72]
  1. [66]
    Frontier alleges that, either by operation of law or upon the facts of the case, that a term is implied that either party may terminate the MDA at will with immediate effect, or alternatively, upon reasonable notice. 
  2. [67]
    A term will be implied by law where the nature of the contract demands it.  The implication must be necessary.[73]
  3. [68]
    In BP Refinery (Westernport) Pty Ltd v Shire of Hastings,[74] the High Court explained that for any term to be implied:

“(1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that ‘it goes without saying’; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.”[75]

  1. [69]
    In reliance upon cases such as Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd,[76] it is submitted by Philadelphia that where a commercial agreement has an undefined duration, a term may be implied to avoid it operating indefinitely.  So much can be accepted.  It is then submitted that the MDA is of an unlimited term and therefore it should be implied that either party can terminate it.
  2. [70]
    Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd was a case where the New South Wales Court of Appeal considered the reasonableness of notice to be given to terminate a commercial agreement which had no express duration.  It was not a case which considered the duration of the contract before notice of termination (which has to be reasonable) can be given.[77]
  3. [71]
    It may be that a term is implied so that the contract proceeds for a reasonable time before a party may terminate it either at will or upon reasonable notice.[78]
  4. [72]
    No term will be implied by law or in fact where the term is inconsistent with the express terms of the agreement.[79]
  5. [73]
    The MDA has two stages.  The first is that Frontier design, construct and install the network.  It then has a right to sell the services on a wholesale basis to retail providers, or to owners of the residential units.  The duration of the right to market the services is not expressly defined.  It may be that there is an implied term that, even given Frontier’s investment in the Network, the right to sell the services may only be determined upon reasonable notice.  However, the fact that the SLAA has a duration of 20 years with an extended term of 20 years no doubt informs the reasonableness of the term of the MDA or at least the reasonableness of the period of notice required to terminate it.
  6. [74]
    At present, the network is not installed.  The first stage has not been completed.  The notion that Philadelphia could, at this stage, unilaterally terminate the MDA thus denying Frontier its contractual right to ultimately market the services, is clearly contrary to the express provisions of the MDA. 
  7. [75]
    Any implied term limiting the duration of the MDA would have to accommodate the completion of the first stage and a period for Frontier to market its services (the second stage). 
  8. [76]
    The terms of the MDA need not be finally determined.  It is enough to conclude, as I do, that no implied right to terminate the Agreements arises during the construction stage of the MDA.
  9. [77]
    The third defence has no reasonable prospects and there is no need for a trial of any issue concerning the third defence.

The relief sought

  1. [78]
    Declaratory relief is a discretionary remedy.  It is inappropriate to make a declaration in terms of paragraph 1(a) of the prayer for relief.[80]  Paragraph 6A(c) of the amended defence provides:
  1. “c.says further that it was a term of the SLAA that the SLAA would be discharged if the MDA was discharged for any reason.

PARTICULARS

The term is implied by operation of law, or alternatively in fact, because:

  1. (a)
    it is reasonable and equitable;
  2. (b)
    it is necessary to give business efficacy to the SLAA;
  3. (c)
    it is obvious;
  4. (d)
    it is capable of clear expression; and
  5. (e)
    it does not contradict any express term of the SLAA.”
  1. [79]
    There is as yet, no plea by Frontier to paragraph 6A(c).
  2. [80]
    Because the rights given to Frontier by force of the SLAA are obviously given to facilitate Frontier’s actions under the MDA, there may be some force in the argument that there is an implied term like that alleged in paragraph 6A(c) of the amended defence.
  3. [81]
    It may be that no circumstances have arisen which call for a determination of whether such a term is or is not implied.  It is inappropriate to declare that “the Agreements are binding and enforceable” when there are live issues as to the terms of at least one of those agreements (the SLAA).
  4. [82]
    It is appropriate to make a declaration in terms of paragraph 1(b) of the prayer for relief.  The only support for the validity of the termination of the Agreements were the three defences.  They have failed, so it follows that the purported termination was ineffective.
  5. [83]
    It is inappropriate to make a declaration in terms of paragraph 1(c) of the prayer for relief.  It seeks a declaration effectively in terms of clause 8 of the MDA which appears at paragraph [55] of these reasons.  The question before me was as to whether the Agreements had been validly terminated.  There was no contest about the construction of clause 8 and no argument about it.
  6. [84]
    Specific performance is also a discretionary remedy.  As already observed, all that is really pleaded relevant to the specific performance claim is that Philadelphia will not perform the Agreements.[81]  No discretionary issues are pleaded by either party.
  7. [85]
    Discretionary considerations clearly exist.  For example:
  1. 1.Are damages an adequate remedy?[82]  It is not even alleged by Frontier that damages are inadequate.
  2. 2.Should specific performance be ordered of what is (at least in its first stage) a design and construct contract?[83]
  1. [86]
    Those questions cannot be answered on the material before me.
  2. [87]
    While those questions remain unresolved, it is not appropriate to grant specific performance.
  3. [88]
    As previously observed,[84] each of the challenged paragraphs of the amended defence concern the three defences.  Mysteriously, there are other paragraphs which seem only relevant to the three defences which are not challenged.[85]
  4. [89]
    It is appropriate to strike out all the challenged paragraphs including paragraph 6A(c).[86]  Although paragraph 6A(c) may one day be a live issue between the parties so the declaration sought in paragraph 1(a) of the prayer for relief should not be made,[87] the only current relevance is to the purported right to terminate the Agreements.
  5. [90]
    Frontier has been largely, but not completely, successful on the application.  I will make directions for the exchange of written submissions on costs.  Because of Frontier’s success on the application,[88] it is appropriate for Philadelphia to file the first submission.

Orders

  1. [91]
    The orders are:
  1. 1.Paragraphs 5A(c), (d) and (e), 6, 6A(c) and (d), 7, 11(c), 12, 13, 15, 16(b) and 17(a) of the amended defence are struck out.
  2. 2.It is declared that the defendant’s purported termination of the Master Development Agreement and the Site Licence and Access Agreement on 7 October 2022 was ineffective.
  3. 3.The application is otherwise dismissed.
  4. 4.By 4.00 pm on 1 September 2023, the defendant file and serve any material and submissions on costs.
  5. 5.By 4.00 pm on 8 September 2023, the plaintiff file and serve any material and submissions on costs.
  6. 6.Each party has leave to file and serve any application for leave to make oral submissions on costs by 4.00 pm on 15 September 2023.
  7. 7.In the absence of any application being filed by 4.00 pm on 15 September 2023, the question of costs will be determined on the written submissions without further oral hearing.

Footnotes

[1] Referred to jointly as “the Agreements”.

[2] Clauses 11-15, 56 and 68.

[3] This is clear from the Site Licence and Access Agreement, Schedule “Equipment”, the “Special Conditions” and clauses 1.1, 3, 4, 5, 7, 8 and 9 (referring to “Equipment” being that installed via the MDA).

[4] The relevant pleadings appear in paragraphs [33], [52] and [65] of these reasons.

[5] Clause 97 appears at paragraph [32] of these reasons.

[6] Philadelphia pleads that there is an implied term of the SLAA that it falls if the MDA falls: See paragraph 6A(c) of the amended defence at paragraph [78] of these reasons.

[7] Paragraphs 11(b)(iv), 11(b)(v), 11(c) and 15 of the amended defence.

[8] Clause 55 appears at paragraph [51] of these reasons.

[9] Paragraph 5A(b)(i), 5A(c), 11(b), 11(c)(i)(B) and 15 of the amended defence.

[10] Paragraph 5A(e) of the amended defence.

[11] Paragraph 11(c)(i)(C) of the amended defence.

[12] Paragraph 1 of the statement of claim.

[13] Paragraph 2 of the statement of claim.

[14] Paragraphs 3 to 5 of the statement of claim.

[15] Paragraph 6 of the statement of claim.

[16] Paragraph 7 of the statement of claim.

[17] Paragraph 8 of the statement of claim.

[18] Paragraph 9 of the statement of claim.

[19] Paragraphs 11 to 14 of the statement of claim.

[20] Paragraph 15 of the statement of claim.

[21] Paragraphs 16 and 17 of the statement of claim.

[22] Paragraphs 18 and 19 of the statement of claim.

[23] Paragraph 20 of the statement of claim.

[24] Paragraph 1 of the amended defence.

[25] By paragraph 5A of the amended defence.

[26] Paragraph 5A(d) of the amended defence.

[27] The plea appears at paragraph [65] of these reasons.

[28] Paragraph 11 of the amended defence.

[29] Rule 292(2)(a) and (b) and Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 at [11] and [17], Gray v Morris [2004] 2 Qd R 118 at [46].

[30] (2000) 201 CLR 552.

[31] (1949) 78 CLR 62 at 91.

[32] (1964) 112 CLR 125 at 129-130.

[33] For example, Gray v Morris [2004] 2 Qd R 118 at 126, 127 and 133; Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 at [3] and [17].

[34] For examples of the operation of the UCPR see Haggarty v Wood (No 2) [2015] QSC 244 at [82]; Elderslie Property Investments No 2 Pty Ltd v Dunn [2007] QSC 192; and Nichols Constructions Pty Ltd v Mt Marlow Pty Ltd & Anor [2016] QSC 1.

[35] [2016] 2 Qd R 484.

[36] Watson v Scott [2016] 2 Qd R 484 at [31].

[37] Uniform Civil Procedure Rules 1999, r 292(2)(a) and (b).

[38] T 1-17-18.

[39] T 1-25-26.

[40] T 1-17 to 1-19.

[41] See paragraphs 3 and 4 of the statement of claim.

[42] T 1-26.

[43] Letter King & Wood Mallesons to Robyn Bourne of Noble Law, 20 January 2022, exhibited to the affidavit of Robyn Margaret Bourne sworn 24 January 2023.

[44] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [47].

[45] Paragraph [29] of these reasons.

[46] Paragraph [29] of these reasons.

[47] Paragraph 11(b) of the amended defence.

[48] Paragraph 11(c) of the amended defence.

[49] (2015) 256 CLR 104.

[50] (1982) 149 CLR 337.

[51] (2014) 251 CLR 640.

[52] Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 656 [35].

[53] Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 350 (citing Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989 at 995-996; [1976] 3 All ER 570 at 574), 352. See also Sir Anthony Mason, “Opening Address”, Journal of Contract Law, vol 25 (2009) 1, at p 3.

[54] Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 656 [35].

[55] Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 656-657 [35].

[56] See also Kiefel J (as her Honour then was) and Keane J at [109].

[57] Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at [35], Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at page 350 and Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [49].

[58] (2015) 256 CLR 104.

[59] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [47] and Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at [35].

[60] Paragraph 5A(c) of the amended defence.

[61] This should be “your”.

[62] Paragraph 5A(d)(ii) of the amended defence.

[63] Paragraph 11(b) of the amended defence.

[64] The Schedule at page 1 of the Master Development Agreement.

[65] At least to clause 72.

[66] Bracket missing in the original.

[67] Chapter 4 (page 24 of the agreement) and Chapter 6, Wholesale Service Level Agreement Schedule (page 32).

[68] MDA, clause 55.

[69] Frontier’s terms and conditions, Part 2, section 4.1.

[70] Frontier’s terms and conditions, Part 2, section 4.2.

[71] Frontier’s terms and conditions, Part 2, section 4.4.

[72] Paragraph 5A(e) of the amended defence.

[73] Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 30 and Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at [28], [90], [114].

[74] (1977) 180 CLR 266.

[75] BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283 and see also Codelfa Constructions v State Rail Authority of NSW (1982) 149 CLR 337 at 347.

[76] (1988) 14 NSWLR 438.

[77] Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438 at 441, part A-C and F to 442, part A.

[78] Reid v Moreland Timber Co Pty Ltd (1946) 73 CLR 1 at 13 and Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438 at 447, Parts C-D.

[79] See, for example, Kiefel J (as her Honour then was) in Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at 209-210 [90].

[80] See paragraph [11] of these reasons.

[81] See paragraph [12] of these reasons.

[82] Wilson v Northampton and Banbury Junction Railway Co (1874) 9 Ch App 279 at 284 and Coulls v Bagot’s Executor & Trustee Co Ltd (1967) 119 CLR 460.

[83] Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at [78]-[81] and the authorities there cited.

[84] Paragraph [15] of these reasons.

[85] For example, some of paragraphs 5A(b), some of 11(b).

[86] See paragraph [78] of these reasons.

[87] For the reasons explained at paragraphs [79]-[80].

[88] Uniform Civil Procedure Rules 1999, r 681.

Close

Editorial Notes

  • Published Case Name:

    Frontier Networks Pty Ltd v Philadelphia Developments Pty Ltd

  • Shortened Case Name:

    Frontier Networks Pty Ltd v Philadelphia Developments Pty Ltd

  • MNC:

    [2023] QSC 192

  • Court:

    QSC

  • Judge(s):

    Davis J

  • Date:

    25 Aug 2023

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Agar v Hyde (2000) 201 CLR 552
2 citations
Jump To
Cite 1 - (2000) 201 CLR 552
Cite 2 - (2000) 201 CLR 552
Agar v Hyde [2000] HCA 41
1 citation
Jump To
Cite 1 - [2000] HCA 41
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
3 citations
Jump To
Cite 1 - (1977) 180 CLR 266
Cite 2 - (1977) 180 CLR 266
Cite 3 - (1977) 180 CLR 266
BP Refinery (Westernport) Pty Ltd v Shire of Hastings [1977] UKPC 13
1 citation
Jump To
Cite 1 - [1977] UKPC 13
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) HCA 24
1 citation
Jump To
Cite 1 - (1982) HCA 24
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 C.L R. 337
5 citations
Jump To
Cite 1 - (1982) 149 C.L R. 337
Cite 2 - (1982) 149 C.L R. 337
Cite 3 - (1982) 149 C.L R. 337
Cite 4 - (1982) 149 C.L R. 337
Cite 5 - (1982) 149 C.L R. 337
Commonwealth Bank of Australia v Barker (2014) 253 CLR 169
3 citations
Jump To
Cite 1 - (2014) 253 CLR 169
Cite 2 - (2014) 253 CLR 169
Cite 3 - (2014) 253 CLR 169
Commonwealth Bank of Australia v Barker (2014) HCA 32
1 citation
Jump To
Cite 1 - (2014) HCA 32
Coulls v Bagot's Executor and Trustee Co Ltd [1967] HCA 3
1 citation
Jump To
Cite 1 - [1967] HCA 3
Coulls v Bagot's Executor and Trustee Company Ltd (1967) 119 CLR 460
2 citations
Jump To
Cite 1 - (1967) 119 CLR 460
Cite 2 - (1967) 119 CLR 460
Crawford Fitting Co. v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438
4 citations
Jump To
Cite 1 - (1988) 14 NSWLR 438
Cite 2 - (1988) 14 NSWLR 438
Cite 3 - (1988) 14 NSWLR 438
Cite 4 - (1988) 14 NSWLR 438
Deputy Commissioner of Taxation v Salcedo[2005] 2 Qd R 232; [2005] QCA 227
4 citations
Jump To
Cite 1 - [2005] QCA 227
Cite 2 - [2005] 2 Qd R 232
Cite 3 - [2005] 2 Qd R 232
Cite 4 - [2005] 2 Qd R 232
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
2 citations
Jump To
Cite 1 - (1949) 78 CLR 62
Cite 2 - (1949) 78 CLR 62
Elderslie Property Investments No 2 Pty Ltd v Dunn [2007] QSC 192
2 citations
Jump To
Cite 1 - [2007] QSC 192
Cite 2 - [2007] QSC 192
Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd and Ors [2014] HCA 7
1 citation
Jump To
Cite 1 - [2014] HCA 7
Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd and Ors (2014) 251 CLR 640
7 citations
Jump To
Cite 1 - (2014) 251 CLR 640
Cite 2 - (2014) 251 CLR 640
Cite 3 - (2014) 251 CLR 640
Cite 4 - (2014) 251 CLR 640
Cite 5 - (2014) 251 CLR 640
Cite 6 - (2014) 251 CLR 640
Cite 7 - (2014) 251 CLR 640
Esso Australia Resources Ltd v Plowman [1995] HCA 19
1 citation
Jump To
Cite 1 - [1995] HCA 19
Esso Australia Resources v Plowman (1995) 183 CLR 10
2 citations
Jump To
Cite 1 - (1995) 183 CLR 10
Cite 2 - (1995) 183 CLR 10
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
2 citations
Jump To
Cite 1 - (1964) 112 CLR 125
Cite 2 - (1964) 112 CLR 125
General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69
1 citation
Jump To
Cite 1 - [1964] HCA 69
Gray v Morris[2004] 2 Qd R 118; [2004] QCA 5
4 citations
Jump To
Cite 1 - [2004] QCA 5
Cite 2 - [2004] 2 Qd R 118
Cite 3 - [2004] 2 Qd R 118
Cite 4 - [2004] 2 Qd R 118
Haggarty v Wood (No 2) [2015] QSC 244
2 citations
Jump To
Cite 1 - [2015] QSC 244
Cite 2 - [2015] QSC 244
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37
1 citation
Jump To
Cite 1 - [2015] HCA 37
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104
6 citations
Jump To
Cite 1 - (2015) 256 CLR 104
Cite 2 - (2015) 256 CLR 104
Cite 3 - (2015) 256 CLR 104
Cite 4 - (2015) 256 CLR 104
Cite 5 - (2015) 256 CLR 104
Cite 6 - (2015) 256 CLR 104
Nichols Constructions Pty Ltd v Mt Marlow Pty Ltd [2016] QSC 1
2 citations
Jump To
Cite 1 - [2016] QSC 1
Cite 2 - [2016] QSC 1
Parsons v The Queen [1999] HCA 1
1 citation
Jump To
Cite 1 - [1999] HCA 1
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1
2 citations
Jump To
Cite 1 - (1998) 195 CLR 1
Cite 2 - (1998) 195 CLR 1
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [No 3] [1998] HCA 30
1 citation
Jump To
Cite 1 - [1998] HCA 30
Reardon Smith Line Ltd v Hansen-Tangen [1976] 3 All ER 570
1 citation
Jump To
Cite 1 - [1976] 3 All ER 570
Reardon Smith Line Ltd v Yng Van Hansen-Tangen (1976) 1 WLR 989
1 citation
Jump To
Cite 1 - (1976) 1 WLR 989
Reid v Moreland Timber Co Pty Ltd (1946) 73 CLR 1
1 citation
Jump To
Cite 1 - (1946) 73 CLR 1
Reid v Moreland Timber Co Pty Ltd [1946] HCA 48
1 citation
Jump To
Cite 1 - [1946] HCA 48
Watson v Scott[2016] 2 Qd R 484; [2015] QCA 267
4 citations
Jump To
Cite 1 - [2015] QCA 267
Cite 2 - [2016] 2 Qd R 484
Cite 3 - [2016] 2 Qd R 484
Cite 4 - [2016] 2 Qd R 484
Wilson v Northampton and Banbury Junction Railway Co (1874) 9 Ch App 279
2 citations
Jump To
Cite 1 - (1874) 9 Ch App 279
Cite 2 - (1874) 9 Ch App 279
Wilson v Northampton and Banbury Junction Railway Co [1874] UKLawRpCh 24
1 citation
Jump To
Cite 1 - [1874] UKLawRpCh 24

Cases Citing

Case NameFull CitationFrequency
Queensland Building and Construction Commission v Grenier Developments Pty Ltd (ACN 603 049 234) [2024] QDC 62 citations
1

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