Ny o> IN THE FEDEPAL COURT OF AUSTPALTA ) a. QUEENSLAND DISTRICT PEGISTRY ) OLD. G203 of 1387 ) QLD. G212 of 1987 ) GENERAL DIVISTON BETWEEN : McCAFFERTY .WATERS & WARD (a Firm) Applicant AND: AUSTRALIAN TELECOMMUNICATIONS COMMISSION trading as TELECOM AUSTRALIA Respondent SPENDER J. BRISBANE " 4 DECEMBER 1987. EXTEMPORE REASONS FOR JUDGMENT ne In these proceedings, Messrs. McCafferty, Waters and Ward, a well "known firm of 'solicitors in Brisbane seeks an injunction, until the determination ..of the respondent's claim against the applicant for Eélephone service charges in the sum of $16,644.70, restraining the respondent from disconnecting at the telephone exchange 12 enumerated telephone services. In a parallel proceeding, the applicant seeks an order of review under s.5(l)(e) of the Administrative _ Decisions (Judicial Review) Act 1977 of the decision of the respondént, the ek N Australian Telecommunications Commission trading as Telecom Australia, to disconnect the telephone services of the applicant, such decision being made on 10 November 1987 and contained in a letter from the respondent to the applicant. By way of arrangement, no action was taken concerning the disconnection of the telephone services to the applicant pending the resolution of the applications for interlocutory relief. This morning, on the hearing of that claim, the Parties agreed that I should treat the matter in a final way. A jurisdictional point was taken on behalf of the Commission that it was not, for the purposes of §.39B of the Judiciary Act 1903, an officer of the Commonwealth. I think that point is well taken, but an amendment might be permitted restraining Mr. Look, who is the manager of the credit billing of the metro central district of the Australian Telecommunications Commission, and who is authorized by the Commission to make decisions relating to, and to authorize the disconnection of, telephone services under the By-laws of the Telecommunications (General) By-laws. It was his decision, on the basis of the non payment of the accounts rendered to the applicant and the period of non payment under the provisions of BHy-law 146(3), to disconnect the telephone services if payment was not made by a specified time. These proceedings arise out of an unfortunate and serious error in the listing of the 1986 White Pages Brisbane Telephone Directory. Messrs. McCafferty, Waters and Ward had previously conducted business under that name at 46 Old Cleveland Road, Stones Corner, until 1 March 1986. From that date, the office of the applicant was transferred to 300 Queen Street, Brisbane. For about six weeks after that date, the office at Stones Corner was kept open, but from 1 March 1986 the practice was principally conducted from premises at 300 Queen Street, Brisbane, and by the middle of May exclusively from those premises. McCafferty, Waters and Ward was entered in the 1985 White Pages Telephone Directory issued on behalf of Telecom Australia, and that entry was in its correct alphabetical sequence, showing its address as its then address, 46 Old Cleveland Road, Stones Corner. The 1986 White Pages showed the applicant, not in its usual alphabetical sequence before the entry for McCafferty's Express Coaches, but at page 506 of the directory, after an entry for Mac B.L. and before an entry for Mac H.K. The entry should have been two pages further back immediately before the entry for McCafferty''s Express Coaches. Mr. Ward, a partner of the applicant, received the white pages shortly before 27 August 1986 and wrote to Telecom on 27 August, complaining of the error. That letter said in part: "We are presently formulating a claim for damages and also intend to make representations to the appropriate authorities with respect to the matter. In view of the negligence we are giving consideration to withholding payment of all telephone accounts rendered with respect to the connection at 300 Queen Street and would not expect your organization to take any steps to disconnect such service in view of such withholding of payment." The applicant claims that, as a result of the incorrect listing, it has suffered damages and continues to suffer damages, not only by way of loss of clients through inability to ascertain the whereabouts and telephone number of the firm during the currency of the 1986 White Pages Directory, but also as a consequence of the general inconvenience and disruption caused by the omission of the correct entry in the directory by Telecom. Notwithstanding that there is evidence deposing to inconvenience by clients and a significant number of complaints by persons of the difficulty they had in locating the applicant aS a result of the erroneous entry, the extent of any claim that the applicant might have had is very much at large. While difficulty in assessing quantum ought not to be a bar to recovery, here there is very little material, if any, on which an assessment, even of the range of damages that might have been suffered by the applicant as a result of the erroneous entry, could be made. In early October 1986, the applicant received accounts for a number of its telephone services, and on 7 October Mr. Ward again wrote to Telecom, advising the damages that had been 5. suffered and again suggesting that no steps be taken to disconnect those services. The letter quite baldly said: ",...in view of the damages we have suffered and are continuing to suffer due to the negligent listing of our name in the 1986 Directory, we do not intend to pay these accounts." On 28 October 1986, the applicant received from Telecom a reply dated 24 October 1986, which indicated that the error was the result of "incorrect computer operation which has gone undetected." The letter said: "Your correct directory listing ig available on Telecom's Directory Assistance network, the 1987 Brisbane Yellow Pages and there are $09 post-paid courtesy cards available for posting to your clientele. In addressing your claim for compensation, Telecom Australia's by-Law 146(3) specifically covers such actions. It states - 'The Commission undertakes no responsibility and will not admit any Claim for compensation on account of any refusal to insert an entry in, or of any amendment or deletion of an entry in, or omission from, a directory.'" It has been noted that this citation of the by-law is, in itself, incorrect. On 29 October, Mr. Ward again wrote to Telecom disputing the application of By-law 146(3) to the present circumstances. On 4 December 1986, Telecom Australia wrote to the applicant. The letter included, in part:- "With regard to the matter of withholding payment of current telephone bills, I can only reiterate that under existing legislation Telecom is unable to entertain any claims for compensation for consequential Losses incurred as the result of any error in a telephone directory." The letter concluded: "In the circumstances, Telecom considers that everything practicable to assist your business has been done. Please accept my apologies for the incorrect insertion of your firm's listing and my assurance that it will be correctly listed in the next issue of the Brisbane White Pages." On 24 December 1986, Mr. Ward again wrote and said, in part:- "After considering the Telecommunications Act 1975 and in particular By-Law 146(3) we have come to the view that we are entitled to claim a "set off" On 20 March 1987, the Australian Government Solicitor wrote to the applicant referring to 146(3) of the By-laws and s.101 of the Telecommunications Act 1975 and repeating on behalf of Telecom its previous denial of liability. There was further correspondence culminating in a letter of 13 October 1987 which said: "Unless satisfactory arrangements for payment are made within seven (7) days of the date hereof, you may expect my client Commision (sic) to proceed accordingly." . 7. Telecom itself wrote, by letter of 10 November 1987, advising that: ",,.unless payment in full of $16,644.70 is received by 4.00pm on Wednesday 18 November 1987 all services are liable to be disconnected at the telephone exchange without further notice." After the refusal to supply undertakings that such a course would not be followed, these proceedings were commenced. There is an initial difficulty in that the power of Telecom to disconnect the services is not dependent on a judgment in respect of unpaid accounts. It is necessary, in the circumstances to refer to a number of statutory provisions. Telephone services provided by Telecom to the applicant constitute a telecommunications service within the meaning of s.3 of the Telecommunications Act 1975. Section 101 of the Act provides :- "Proceedings do not lie against the Commission, an officer or employee of the Commission, a person acting for or on behalf of the Commission under a contract with the Commission or an employee of such a person in respect of any loss or damage suffered by a person - (ad by reason of any default, delay, error, omission or loss, whether negligent or otherwise, in the transmission or delivery of a telecommunications message by the Commission; or (b) by reason of any default, delay, error or omission, whether negligent or otherwise, in respect of the provision, maintenance or operation of a telecommunications service." 8. It was not pressed by counsel appearing for Telecom that s.101(b) provided protection in the present circumstances notwithstanding the reference to this section in correspondence between the applicant and the Australian Government Solicitor. am of the opinion that s.101(b) is not sufficiently wide provide protection to the Commission for the error in insertion of the entry in the directory. Any default, error omission was not in respect of the provision, maintenance, operation of a telecommunications service, which is the area which the protection of that section applies. Section lll provides:- "(1) The Commission may make By-laws, not inconsistent with this Act and the regulations, prescribing all matters which are required or permitted to be prescribed by the By-laws, and making provision for, or with respect to - (a) the establishment, maintenance, operation and provision of telecommunications services and facilities; (b) the terms and conditions governing the provision to or use by any person of telecommunications services or facilities; (c) the terms and conditions governing the use by a person of a telecommunications service or facility provided in part by the Commission and in part by that person; (d) the protection of the telecommunications network, services or facilities from injurious interference from an electric line or installation or by reason of the operation of electrical apparatus, machinery or equipment; (e) the publication of telecommunications directories; (f) the receipt, transmission and delivery of inland telegrams; I to the or or to 9. (g) the terms and conditions of employment of officers and employees; and (nh) penalties by way of a fine not exceeding $1,000, or imprisonment not exceeding 6 months, or both, for a breach of a By-law. By-law 11 provides:- "CL) All applications for a service or for authority to provide or use a service shall be deemed to have been made subject to the provisions of these By-laws in force from time to time. (2) Subscribers provided with a service or persons authorised to provide or use aie service shall in all cases be deemed to have agreed to be bound by the provisions of these By-laws in force from time to time." By-law 146 provides:- "(1) The Commission may refuse the insertion of any entry, amend any entry, or delete any entry in a directory at any time. (2) A subscriber, when required by the Commission, shall furnish evidence of proper registration at law as a company, firm or business name. (3) The Commission undertakes no responsibility and will not admit any claim for compensation on account of any refusal to insert an entry in, or of any amendment or deletion of the entry in, or en account of any error in, or omission from, a directory." The primary argument for the applicant is that the exclusion provided by By-law 146(3) is not sufficiently wide to exempt Telecom from liability in ert independently of abdh fr whether it is sufficiently wide in respect Ae nwo mages for breach of contract. It was not submitted by the yeplicant that the By-law was invalid and, in my opinion, while it is expressed in 10. broad terms, the consequence of the By-law is that the Commission is not liable with respect to a claim in negligence. The reference to compensation clearly, in my view, indicates that the exclusion provided by By-law 146(3) extends to liability in negligence and the exclusion is "on account of any error in, or omission from, a directory". The second argument, expressed in the alternative by the applicant, is this: Even if By-law 146(3) does provide an exemption to Telecom in respect of negligence, the consequence of which is that the applicant cannot sue in negligence or counterclaim in negligence, the applicant is entitled, in a claim by Telecom for the service charges, to set off the damages suffered by it as a consequence of the erroneous entry in the directory. Reliance was placed, by analogy, on the judgment of the High Court in Pavey & Matthews Pty.Ltd. v. Paul (1987) 61 A.L.J.R. 151 where a statutory prohibition on the enforceability of a building contract contained in s.45(1) of the Building Licensing Act 1971 (N.S.W.) was held not to preclude a builder from pursuing a claim "indebitatus assumpsit. However, in my opinion, the circumstances of that case and those in the present case differ, as here it is not a question of concurrent claims; w one at common law indebitatus assumpsit and the other in respect fod of an oral contract rendered unenforceable by the statute. ll. The claim of the applicant is that, while it is prevented by the terms of By-law 146(3) from suing or counter-claiming for damages, that does not preclude it from setting off any unliquidated damages it has suffered by virtue of the negligence of the respondent. No cases in support of this Proposition were cited and, in my opinion, the submission cannot be entertained. In Westpac Banking Corporation v. Eltran Pty.Limited. (1987) A.T.P.R. 40-802 Fox and Burchett JJ. in their joint judgment at 48,719 said:- "In Stehar Knitting Mills Pty.Ltd. v. Southern Textile Converters Pty.Ltd. (1980) 2 N.S.W.L.R. 514 the nature of a set-off was analysed and it was held (as Hutley J.A. put it at p. 521) that 'claiming to set off a sum of money is commencing a proceeding .... t is ... a claim.' (See also Hanak v. Green [1958] 2 QO.B. 9 at pp.23-24; Henriksens Rederi A/S v. P.H.Z. Rolimpex (The Brede) C1974] 1 Q.B. 233 at pp.250-252, 260-261; Aries Tanker Corporation v. Total Transport Ltd. C19773 1 All E.R, 398 at p.405, per Lord Wilberforce.) Equity permits certain privileged cross-claims to put on the armour of a set-off, but they do not therefore lose the character of cross-claims. They operate to extinguish the debt, not by ceasing to be cross-claims, but by virtue of being cross-claims which possess additional features." In my opinion, the applicant is not entitled to set off, in any claim by Telecom, an amount said to be the damages suffered by it by virtue of Telecom's negligence in the listing of the applicant's name in the 1986 white pages. Further, the rights given to Telecom pursuant to By-law 23 are separate and distinct from its right to recover rental service Ist other charges. Ina _ sense the applicant seeks to force an action by Telecom to recover the charges for the lease of those telecommunication services. 12. By-law 23 provides:- "If a subscriber fails to vay the rental, service fe) charges or ther charges due by him within fourteen days of the due date, the Commission may disconnect the service or cancel the service and remove all lines, apparatus, equipment, instruments and fittings belonging to the Commission, without prejudice to the right of the Commission to recover such rental, service charges or other charges." One can understand and sympathize with the applicant who, as a consequence of the erroneous listing in the telephone directory, has been put to difficulty and expense and has suffered damages, quantification of which is difficult. However, in my opinion, By-law 146(3) provides an exclusion to the Commission from liability in respect of that error and further, the Commission is entitled, pursuant to By-law 23, to disconnect the telephone services independently of whether it pursues a claim for the recovery of rental charges in respect of the telecommunications services provided to the applicant. For these reasons, the claims for injunctive relief and review under the Administrative Decisions (Judicial Review) Act 1977 are refused. I order that the applicant pay the respondent's costs, to be taxed if not agreed. | certify thac this and the I preceding pages are a true copy of the reasons for judgment herein of the Cour eb. al < WMacldasd 4 | ia YF Associate Dated