Aspire Contracting Pty Ltd v Epic Stays Pty Ltd
[2024] QSC 284
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- Notable Unreported Decision
- Aspire Contracting Pty Ltd v Epic Stays Pty Ltd[2024] QSC 284
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Aspire Contracting Pty Ltd v Epic Stays Pty Ltd[2024] QSC 284
Aspire Contracting Pty Ltd v Epic Stays Pty Ltd[2024] QSC 284
SUPREME COURT OF QUEENSLAND
CITATION: | Aspire Contracting Pty Ltd v Epic Stays Pty Ltd [2024] QSC 284 |
PARTIES: | ASPIRE CONTRACTING PTY LTD trading as Fergusons Plumbing Group QLD ACN 658 559 801 (plaintiff) v EPIC STAYS PTY LTD ACN 635 744 375 (defendant) |
FILE NO: | BS 14981/24 |
DIVISION: | Trial |
PROCEEDING: | Application |
ORIGINATING COURT: | Supreme Court at Brisbane |
DELIVERED ON: | 18 November 2024 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 15 November 2024 |
JUDGE: | Freeburn J |
ORDERS: |
|
CATCHWORDS: | EQUITY – EQUITABLE REMEDIES – INJUNCTIONS – INTERLOCUTORY INJUNCTIONS – where the plaintiff attended the defendant’s premises to provide a quote for plumbing work – where the defendant was unhappy with the quote, and refused to pay the call-out fee – where the plaintiff contends that the defendant signed a contract with a non-disparagement clause to waive the call-out fee – where the defendant posted negative reviews of the plaintiff – where the plaintiff seeks an interlocutory injunction for the defendant to take down posts, and not post similar posts – whether the criteria for an interlocutory injunction has been satisfied TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – UNFAIR CONTRACT TERMS – where the defendant contends that the plaintiff has a very weak prima facie case on the basis that the non-disparagement clause is void as an unfair contract term – whether there is a high probability that the non-disparagement clause is an unfair contract term Competition and Consumer Act 2010 (Cth), sch 2 (Australian Consumer Law), s 23, s 24 Australian Competition and Consumer Commission v CLA Trading Pty Ltd [2016] FCA 377, cited Australian Competition and Consumer Commission v Smart Corporation Pty Ltd (No 3) [2021] FCA 347, distinguished Attorney-General v Punch Ltd [2003] 1 AC 1046, cited Queensland Industrial Steel Pty Ltd v Jensen [1987] 2 Qd R 572, cited |
COUNSEL: | M Klooster for the plaintiff C Templeton for the defendant |
SOLICITORS: | New South Lawyers for the plaintiff Stonegate Legal for the defendant |
Introduction
- [1]With a fair degree of accuracy, counsel for the defendant, Epic Stays Pty Ltd (Epic), described this dispute as mundane.
- [2]The director of Epic is Benjamin Watson-Brown. On 7 September 2023 Mr Watson-Brown had a plumbing issue at a rental property owned or managed by Epic. He telephoned the plaintiff company, Aspire Contracting Pty Ltd trading as Fergusons Plumbing Group Qld (Fergusons) to arrange for a plumber to attend Epic’s property at Newstead.
- [3]It is agreed that during this telephone call the Fergusons’ representative advised Mr Watson-Brown that a call-out fee of $38.50 would be charged but that fee would be waived if the works proceeded.
- [4]On the following day a Fergusons representative attended the property, inspected the vanity basin and pipe, and prepared a fixed fee quote for $1,197.90. The Fergusons’ representative showed Mr Watson-Brown the quote on an electronic device, possibly a tablet. Mr Watson-Brown says that he said words to the effect of “You’ve got to be kidding”. He suggested a lower price of $250 – which was rejected.
- [5]It is agreed that the two men then discussed the call-out fee of $38.50. Mr Watson-Brown’s version of what then happened was that he was shown and asked to sign an electronic invoice which included a ‘non-disparagement’ clause. He says he said words to the effect of “there’s no way I am signing this”. Fergusons’ version is that Mr Watson-Brown was offered a waiver of the call-out fee and accepted the offer by signing the invoice, twice,[1] and that copies of the signed invoices were then sent to him.
- [6]The invoices included these words:
WORK CARRIED OUT:
We thank you for the opportunity to quote on your plumbing requirements and I apologise we have not met your expectations.
As discussed, Aspire Contracting Pty Ltd (‘the Company’) agree to waive our call out fee, in return that the client (‘you’), agree that you and associated parties do not post anything disparaging in relation to the Company on social media or other platforms. As a resolution has been sought for customer satisfaction, both parties will consider the job closed and resolved internally, where there is no requirement to engaged in external mediators.
In summary, both parties agree to the terms of non-disparagement on the basis that Company has not issued an invoice for the call out fee and you have not paid the call out fee.
Again, we appreciate the time you have taken to provide us with your valuable feedback as this will improve our service.
- [7]Epic did not pay the call-out fee and the parties parted ways.
- [8]Counsel for Epic points out that the signatures on the two invoices are very different from Mr Watson-Brown’s signature on his affidavit. However, both parties accept that whether the electronic documents were signed is a contested factual issue that can only be resolved at trial.
- [9]A year later, on 20 September 2024, Mr Watson-Brown posted an online review on a publication called “Product Review”. The post starts: “Questionable, business practices. Definitely felt scammy. Surprised if it’s legal.” Immediately Fergusons sent a text and email referring to the ‘non-disparagement’ clause and demanding the review be taken down. On 10 and 11 October 2024 Fergusons’ lawyers made similar demands.
- [10]Mr Watson-Brown “doubled-down”.[2] He published the attempts to have him remove the review. On a Caboolture Community Notice Board he posted (concerning Fergusons):
Ben Watson-Brown
Yeah they are super dodgy. Every customer should review them online, and refuse to remove it even if they come at you with intimidation and threats. They did that to me …
- [11]It can be seen that, at least, Mr Watson-Brown’s electronic publications have become bolder. What started as “questionable business practices” seems to have graduated to “super dodgy”.
- [12]And Mr Watson-Brown seems to have pursued the issue as a “cause celebre”: “If you have a story and would like to share it as part of an investigation going on, please inbox me and I’ll put you in touch”.
- [13]On 1 November 2024 a television crew from “A Current Affair” attended Fergusons’ office in Pinkenba. Fergusons say the television crew were “extremely abrupt”, “startled staff members”, “created a scene” and the result was “humiliating and embarrassing”.
- [14]On 4 November 2024 Fergusons commenced this proceeding. They seek an interlocutory injunction requiring the online publications to be ‘taken down’ and an injunction restraining further similar publications until trial.
- [15]There are two broad issues – whether Fergusons have shown that they have a prima facie case and whether the balance of convenience favours the grant of the interlocutory injunction pending trial.[3]
Prima Facie Case
- [16]As I have explained, there is a contested issue as to whether Mr Watson-Brown signed either or both of the invoices. If he did then he is, as a matter of contract, bound by the ‘non-disparagement’ clause.
- [17]There are powerful arguments on both sides concerning whether Mr Watson-Brown signed the invoices. Counsel for Epic points to Mr Watson-Brown’s denial that he signed, and to the visible differences in the signatures as compared with the signature in his affidavit.[4] Counsel for Fergusons pints out that the signed invoices were emailed to Mr Watson-Brown.
- [18]Counsel for Epic argues that the prima facie case is very weak. He argues that:
- Fergusons have led no direct evidence from a witness that Mr Watson-Brown signed the document;
- Mr Watson-Brown has sworn that he refused to sign;
- The signatures are different.
- [19]However, whilst there is a force in each submission, there is also force in Fergusons’ argument that there are two signed invoices – both of which were sent to Mr Watson-Brown at the time. And, of course, Fergusons did not charge the call-out fee and the sum was not paid.
- [20]Rather than categorising the signature issue as ‘very weak’, the issue is best categorised as ‘contested’. On interlocutory applications such as this, it is necessary to be careful about rushing to an evaluative assessment of a contested issue without properly hearing all of the evidence.
Unfair Contract Term?
- [21]Counsel for Epic argues that even if the non-disparagement clause is held to be binding, there is a high probability that it will be declared void pursuant to s 23 of the Australian Consumer Law because it is unfair. Section 23 provides that a term of a consumer contract or a small business contract is void if the term is unfair and the contract is a standard form contract.
- [22]Section 24(1) of the ACL defines an unfair term in this way:
A term of a consumer contract or small business contract is unfair if:
- it would cause a significant imbalance in the parties’ rights and obligations arising under the contract; and
- it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
- it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.
- [23]Section 24(2) provides that, in deciding whether a term is unfair the court may take into account such matters as it thinks relevant, but must take into account the extent to which the term is transparent and the contract as a whole.
- [24]I reject the submission that there is a high probability that this ‘non-disparagement’ clause would be declared void as an unfair term.
- [25]In ACCC v CLA Trading Pty Ltd Gilmour J emphasised these principles:
- the underlying policy of unfair contract terms legislation respects true freedom of contract and seeks to prevent the abuse of standard form consumer contracts which, by definition, will not have been individually negotiated;
- the requirement of a “significant imbalance” directs attention to the substantive unfairness of the contract;
- it is useful to assess the impact of an impugned term on the parties' rights and obligations by comparing the effect of the contract with the term and the effect it would have without it;
- the “significant imbalance” requirement is met if a term is so weighted in favour of the supplier as to tilt the parties’ rights and obligations under the contract significantly in its favour – this may be by the granting to the supplier of a beneficial option or discretion or power, or by the imposing on the consumer of a disadvantageous burden or risk or duty;
- significant in this context means “significant in magnitude”, or “sufficiently large to be important”, “being a meaning not too distant from substantial”;
- the legislation proceeds on the assumption that some terms in consumer contracts, especially in standard form consumer contracts, may be inherently unfair, regardless of how comprehensively they might be drawn to the consumer’s attention;
- in considering “the contract as a whole”, not each and every term of the contract is equally relevant, or necessarily relevant at all. The main requirement is to consider terms that might reasonably be seen as tending to counterbalance the term in question. [references deleted][5]
- [26]If, at the trial of this proceeding, the invoice is found to have been signed by Mr Watson-Brown, then the bargain between the parties is a relatively simply one. The call-out fee is waived, and Epic agrees not to disparage Fergusons on social media or other platforms.
- [27]The call-out fee was small but the restriction on Epic’s freedom of speech was relatively minor.[6] In respect of a very brief interaction Epic agrees not to disparage Fergusons in social media.
- [28]None of that suggests unfairness or a significant imbalance, and the context is that the bargain is that simple exchange of a waiving of the fee in exchange for non-disparagement on social media. The burden imposed on Epic does not appear to be significant, and appears to be transparent,[7] and is a burden which Epic was free to accept or reject.
- [29]Counsel for Epic relied on ACCC v Smart Corporation Pty Ltd (No 3).[8] However, that case is not a useful analogy. There the ACCC had sought pecuniary penalty orders and other remedies against the respondent company.[9] The respondent hired 4WD vehicles to tourists on the basis of a hire agreement that contained detailed terms and conditions. One group of provisions in the respondent’s hire agreement required the hirers to act in the respondent’s best interests and not to defame or denigrate the respondent, including on any website or other online forum.
- [30]The ACCC submitted and Jackson J accepted that the ‘non-disparagement’ clause created a significant imbalance because it imposed an obligation on the hirer to act in the best interests of the respondent without imposing a reciprocal obligation. The clause went beyond preventing unjustified, false or misleading statements. It extended to preventing the hirer from expressing views that were honestly or genuinely held.
- [31]This case has significant differences. Here, there is a simple transaction which Epic was entitled to accept or reject. Here the non-disparagement clause was not a standard condition within various terms and conditions. And, in ACCC v Smart Corporation the ‘non-disparagement’ clause was broad in its scope. The clause comprehended any type of adverse comment made in any media.
- [32]It is true that Fergusons’ invoice may have further narrowed its focus to unjustified or false or misleading comments. But that is only one factor in what is otherwise a straight-forward and transparent bargain.
- [33]Consequently, ACCC v Smart Corporation is not particularly helpful. I am not persuaded that it is highly likely that the non-disparagement clause would be declared void.
- [34]It follows that there is a prima facie case. Further, I am not persuaded that the prima face case is a weak case, or a very weak one.[10]
Balance of Convenience
- [35]Counsel for Epic contended that an interlocutory injunction would have the same practical effect as if Fergusons were granted final relief. I do not accept that submission.
- [36]Certainly, there are cases where the court needs to be cautious because the grant of an interlocutory injunction may operate as final relief. Queensland Industrial Steel Pty Ltd v Jensen[11] was an example. There the grant of the interlocutory injunction restrained the defendant from continuing in his employment.
- [37]The case here is very different. There is no evidence that an order requiring Epic (or its director) to take down the posts will have any serious or permanent consequences. In fact, Epic did not publish the posts for a year. In that context it is doubtful that there would be any serious or permanent consequences in requiring the posts to be taken down whilst the parties rights are finally decided. If Epic succeeds at a trial, it can then re-establish the posts (see the discussion below on freedom of speech).
- [38]Counsel for Epic argues that there is no evidence that damages would be an inadequate remedy. The complaint is made that Fergusons’ director, Mr Alha simply makes the bold statement that Fergusons has lost business as a result of the publications. It is said that there is no actual evidence of diminished business by way of financial statements or statistics about decreased inquiries.
- [39]It is true that there is no actual evidence of a drop in Fergusons’ profitability. However, that is to be expected. After a short time, a small business is unlikely to be able to show that adverse publicity has had an effect on its bottom line. That is an aspect of the problem. A business’ reputation is important. The damage may be difficult to isolate, or it may not be able to be identified until it is too late.
- [40]Fergusons has 30 employees. No doubt many depend on the business for their livelihood. So far as the balancing exercise is concerned, there is, on the one hand, a potential risk to a significant small business with 30 employees. On the other hand, there is the inconvenience of Epic and Mr Watson-Brown being required to suspend its campaign so that a trial can be held as soon as practicable – possibly early in the new year if the parties move promptly.
- [41]That balancing exercise favours the grant of an interlocutory injunction because of the grave risks to the business and its employees.
- [42]Epic’s counsel also argued that the court ought to be cautious about granting an interlocutory injunction that interferes with community discussion of matters of public interest and concern.[12]
- [43]I accept that courts should be cautious. As Lord Nicholls said in Attorney-General v Punch Ltd:
Restraints on the freedom of expression are acceptable only to the extent they are necessary and justified by compelling reasons. The need for the restraint must be convincingly established. Restraints on the freedom of the press call for particularly rigorous scrutiny.[13]
- [44]However, there are four relevant points to be made here. The first is that whilst freedom of speech is important, this case also raises the issue of freedom of contract. If Mr Watson-Brown signed the invoice, then he has entered into a contract which he seeks to dishonour by disparaging Fergusons in social media – the very act he agreed he would not do.
- [45]The second is that the grant of an interlocutory injunction would not destroy Epic’s freedom to express its views. It would merely delay Epic’s right to express those views until a court properly determined whether those rights were signed away.
- [46]The third point is that it is necessary to respect the right of consumers to give ‘testimonials’, as part of freedom of speech. Conversely, it is also necessary to respect the right of consumers to express their less than complimentary comments on the service provided by a local business. No doubt there is a part to be played for positive and negative commentary on social media. However, there is no urgency attached to Epic’s desire to inform others of Fergusons’ business practices. Epic waited a year before commenting adversely on Fergusons’ business practices. There is no reason why the social media commentary cannot be paused for a few months whilst the contractual issues are decided.
- [47]The fourth point is that Epic’s commentary on Fergusons’ business practices is necessarily a rather confined commentary. Epic did not retain Fergusons to do any work. All that happened was that Epic asked Fergusons to attend to give a quote for work on the basis of a call-out fee. Epic did not wish to proceed at the quoted price.
- [48]Epic says the price quoted was exorbitant. The basis for that seems to be Mr Watson-Brown’s own work resolving the plumbing issue, including a trip to Bunnings. Mr Watson-Brown may be right that the quote was high. But, at present, no expert says that Fergusons’ quote was unreasonable and there is no evidence of questionable business practice.
- [49]And so, what Epic wishes to agitate is a complaint about a very limited interaction between the parties based entirely on Mr Watson-Brown’s subjective views.
- [50]Fergusons offer an undertaking as to damages.
- [51]In the circumstances, for the reasons stated above, the balance of convenience favours the grant of an interlocutory injunction.
Conclusion
- [52]An interlocutory injunction will be granted requiring the defendant to remove the online publications identified in the application and requiring that the defendant not make any further similar publications – until the trial or earlier order.
- [53]I will hear the parties on the form of the order, directions, and costs.
Footnotes
[1] It is alleged a second invoice was signed because the first still showed a balance of $1197.70. The second, it is said, corrected the first so as to show a nil balance.
[2] In a post on 12 October 2024 Mr Watson-Brown said: “Further update: Since the above, now they have their lawyers contacting me daily, threatening to sue unless I remove my review. However, this isn’t my first rodeo, so I know they are empty threats. These futile attempts at intimidation only fuel my drive for them to be held to account for the way they are treating people, so I have now spoken with and forwarded all documentation to QBCC and Qld Office of Fair Trading. The more they harass me, the more I’ll push back. I encourage all other consumers poorly treated by this crowd to refuse to be intimidated, but rather to lodge similar complaints to the related bodies in our state. Don’t let their bluff and bluster bully you into silence!”
[3] The principles were summarised by Bond J in SDW2 Pty Ltd v JLF Corporation Pty Ltd [2017] QSC 1, [21].
[4] The signatures on the two invoices are also different. Of course, signing an electronic device may produce different results to a pen on paper.
[5] [2016] FCA 377, [54]. Most of these principles are derived from Jetstar Airways Pty Ltd v Free [2008] VSC 539. See also Russell Miller, Miller’s Australian Competition and Consumer Law Annotated (Thomson Reuters, 46th ed, 2024) [ACL.24.25].
[6] On social media appears to be restricted.
[7] The ‘non-disparagement’ clause was in effect the only clause – apart from the waiving of the call-out fee. This was not a case where the unfair clause was hidden in amongst detailed contract terms and conditions.
[8] [2021] FCA 347.
[9] The respondent company was in liquidation by the time of the hearing and did not take part in the hearing.
[10] If the prima facie case were weak then that might be a factor relevant on the balance of convenience. The exercise is not a mechanical one.
[11] [1987] 2 Qd R 572.
[12] Counsel cited Chappell v TCN Channel Nine Pty Ltd (1988) 14 NSWLR 153, 163-4 and Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57, [32].
[13] [2003] 1 AC 1046, [27].