Apple Communications v Optus Mobile [2001] NSWSC 635

New South Wales Supreme Court

CITATION : Apple Communications v Optus Mobile [2001] NSWSC 635 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 3157/01 HEARING DATE(S) : 16 & 17 July 2001 JUDGMENT DATE : 26 July 2001

Apple Communications Limited (Plaintiff/Cross Defendant) PARTIES : Optus Mobile Pty Limited (First Defendant/First Cross-Claimant) Optus Internet Pty Limited (Second Defendant/Second Cross-Claimant) Cable & Wireless Optus Limited (Third Defendant) JUDGMENT OF : Windeyer J at 1

COUNSEL : Mr N Rein SC with him Mr V Kerr (Plaintiff/Cross-Defendant) Mr N Cotman SC with him Mr D B Studdy (Defendants/Cross-Claimants SOLICITORS : Horowitz & Bilinsky (Plaintiff/Cross-Defendant) Minter Ellison (Defendants/Cross-Claimants) CATCHWORDS : CONTRACT - implied terms - that power be exercised in good faith and not unreasonably - contract terminated pursuant to right under contract but for reasons in contemplation when contract entered into - whether breach of good faith term - CONTRACT - estoppel - estopped by convention - requires state of affairs assumed by both parties CASES CITED : Alcatel Australia Limited v Scarcella (1998) 44 NSWLR 349 Thompson v Palmer (1933) 49 CLR 507 DECISION : See Paragraphs 22 and 23

1 IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION WINDEYER J

THURSDAY 26 JULY 2001

3157/01 APPLE COMMUNICATIONS LIMITED V OPTUS MOBILE PTY LIMITED AND 2 ORS

JUDGMENT

General Outline 1 The plaintiff, Apple Communications Limited (Apple) entered into a distribution agreement with the Optus companies on 23 November 2000. The agreement was for a term of three years, but provided that Optus could terminate it for any reason upon thirty days' notice. The question for decision is whether the agreement was validly determined by notice of termination served on 28 June 2001. Basic Facts 2 Optus Mobile Pty Limited and Optus Internet Pty Limited are subsidiaries of Cable & Wireless Optus Limited. The first company supplies a range of pre-paid mobile telephone products and the second provides pre-paid Internet products. This action concerns pre-paid mobile telephone products, but no point is made about there being three defendants and I will refer to the defendants as Optus. 3 In November 2000, Mr Cheng, the chief executive of Apple, had negotiations with Mr Damien Kay, the national account executive of Optus, about the re-supply of pre-paid mobile and Internet products of Optus. This resulted in a contract being entered into between Apple and Optus on 23 November 2000 under which Apply was appointed as a distributor for certain Optus products. The agreement consisted of two parts; the first described as "agency details" and the second as "agency terms". Recital F to the details recorded that the agency details set out the variable information for the agency and the agency terms the contract terms that applied. The details provided for a commencement date of 1 December 2000 and an initial term of three years, with the agency being a non-exclusive one. The agency terms included the following: 1.2 Definitions : In this Agreement: … Term means the term of this Agreement determined in accordance with clause 2 … 2. TERM OF AGREEMENT