Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Invenio Pty Ltd v Brad Jones Racing Pty Ltd [2015] NSWCATAP 165 Hearing dates: 26 May 2015 Date of orders: 12 August 2015 Decision date: 12 August 2015 Jurisdiction: Appeal Panel Before: Mr L P Robberds QC Senior Member Ms K Rosser Senior Member Decision: Appeal allowed. Declaration made by Tribunal member on 5 November 2014 set aside. Each party to pay party's own costs. Catchwords: Contract – one party alleges it was unaware of a document referred to in the contract which imposed obligations on the parties – that document incorporated by signature of the contract Legislation Cited: Civil and Administrative Tribunal Act 2013 Consumer Claims Act 1998 Cases Cited: L'Estrange v F. Graucob Ltd [1934] 2 KB 394 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd 219 CLR 165 Category: Principal judgment Parties: Invenio Pty Ltd (Appellant) Brad Jones Racing Pty Ltd (Respondent) Representation: Counsel: Solicitors: Johnson Lawyers Legal Practice Pty Ltd (Appellant) File Number(s): AP 15/05309 Publication restriction: No Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 5 November 2014 Before: A. A. Morris, Tribunal Member File Number(s): GEN 14/39284 REASONS FOR DECISION 1. On 5 August 2014 Brad Jones Racing Pty Ltd (BJR) lodged with the Tribunal an application for an order that it did not have to pay to Invenio Pty Ltd (Invenio) the sum of $14,385. This was in reality an application under s.8 (1) (d) of the Consumer Claims Act 1998, seeking an order declaring that a specified sum of money was not due and owing by BJR to Invenio. 2. After a contested hearing, the Tribunal made a declaration on 30 December 2014 that BJR was not obligated to make the payment sought. 3. On 3 February 2015 Invenio lodged with the Tribunal a notice of appeal against that declaration. Two of the many grounds of appeal were: 1. an alleged error of law in that the Tribunal member was said to have failed to afford procedural fairness to the appellant in that he allowed the respondent the opportunity to present physical evidence during the hearing not previously disclosed or shown to the appellant in which the appellant's representative could not observe or provide a response to, as they were heard by telephone; and 2. an alleged error of fact in that the Tribunal member found that an end user license agreement (EULA) was not binding on BJR. Background 1. In 2005, BJR entered into a sponsorship arrangement with Concentric Asia Pacific (Concentric), where Concentric supplied and installed the Dassault Systemes (Dassault) software at BJR. That arrangement continued until Concentric closed in 2009. 2. In early 2010, BJR was contacted by Invenio and was informed that Invenio would be servicing BJR in regard to Dassault products. At that time Mr Kim Jones, a part owner and director of BJR was asked to sign a change of provider of support services letter which he did on 19 April 2010. The letter was also signed on behalf of Invenio and Dassault. 3. That letter was an agreement between BJR, Invenio and Dassault. It recorded that BJR, Concentric and Dassault had entered into one or more end-user license agreements. It also recorded that as of November 2009 Concentric ceased to be an authorised reseller of Dassault products and therefore, effective as of the date of the letter, Invenio would provide support services to BJR for the licensed programs, in accordance with the terms of the applicable EULA listed in exhibit A to the letter and the letter agreement itself. 4. Invenio acknowledged that it had received a copy of the EULA and that the terms and conditions thereof applied in all respects to, and should be binding upon Invenio, as from the date of the letter, 9 April 2010. The letter contained other terms which it is unnecessary to detail here. 5. 8 On 17 September 2010 Mr Kim Jones signed an end-user order form (EU0F). Included in that form were the following statements: by duly signing and submitting to VAR this end-user order form, Licensee acknowledges and agrees: (i) that the terms and conditions of the end-user license agreement "agreement" of DS (Dassault Systemes K.K) are hereby irrevocably and unconditionally accepted by the Licensee and that (ii) as the VAR is not acting as an agent of DS, the conclusion of the agreement is subject to final acceptance by DS. In the event this End User Order Form relates to a licence for a 3D Live product (distributed under any Brand), Licensee also acknowledges and agrees that the provisions of the supplemental terms and conditions for 3D Live are hereby irrevocably and unconditionally accepted by the Licensee. Licensee acknowledges and agrees that the licenses ordered pursuant to this form are subject to the terms and conditions of the EULA Australia/NZ Pre-2008. Mr Kim Jones signed the form on behalf of "Licensee". 6. Mr Kim Jones signed a statutory declaration dated 2 September 2014 and it was used as evidence before the Tribunal member. In that declaration he stated in effect that when he signed those two documents, at no time was he given or had explained to him anything about a EULA. The Tribunal member appears to have accepted that evidence and made findings of fact in accordance with it. Mr Jones also stated in that declaration that at no time was he given or had explained to him anything about a EULA from 2005 to 29 July 2013. The Tribunal member appears to have also accepted that evidence. 7. It was not disputed in the hearing before the Tribunal member that if the EULA applied, in 2013, the anniversary of the effective date when the next ALC payment was due, was 30 August 2013. 8. Part of the evidence relied upon by Invenio in the hearing before the Tribunal member, was a statutory declaration made by Ivan Meisel. In that declaration Mr Meisel stated that the EULA accompanied a hard copy of the software which was initially sent to clients for installation on to their computers. However Mr Meisel was a director of Invenio and he did not give evidence of any personal knowledge of how a hard copy of the software was sent to customers prior to November 2009 when Concentric ceased to be an authorised distributor of Dassautl products in Australia. Mr Meisel pointed out in his declaration that the change of provider agreement acknowledged in its opening paragraph that BJR, Concentric and Dassault entered into one or more EULAs. 9. BJR did not give to Invenio a notice which would have terminated its right to receive future releases and support services until 20 October 2013. 10. By letter dated 13 June 2014, lawyers acting for Invenio wrote to BJR stating that they noted that licenses were initially provided to BJR by Concentric and that the licensed software was initially provided to BJR in hard copy for installation on to their computers. It was said that at that time BJR would have been notified that the licenses were provided pursuant to the 2007 end-user license agreement. It was said that the packaging containing the licenses put BJR on notice that by opening the packet and making use of the software, BJR was agreeing to be bound by the terms and conditions set out in the EULA. 11. By letter dated 7 May 2014 written by the lawyers to BJR, the lawyers drew attention to the amount of $11,800.80 said to be owing by BJR on an invoice. The letter also made a claim for interest of $1,888.13. The total amount claimed was $14,488.93 and $800 was claimed towards their client's legal expenses. 12. The letter set out the basis of the claim for the $11,800.80 as follows: "Clauses 6 and 12 of the EULA provide that termination may be effected by giving at least 1 month prior notice of termination from the anniversary of the Effective Date when the next ACL payment is due. The Effective Date of when the next ACL payment was due was 30 August 2013 and accordingly any such notice had to be received by no later than 30 July 2013 to be effective for the period 30 August 2013 to 29 August 2014. Notwithstanding that Brad Jones Racing had been put on notice, by way of the Invoice, that the XM1, GAS, ME2 and RM2 would be payable to our client if the ALC and associated support services were not terminated, our client did not receive notice of Brad Jones Racing's termination until 20 October 2013." 1. Before the Tribunal member, the defence of BJR was to the effect that neither Invenio nor anyone else had brought to the attention of BJR the terms of the EULA and that as a result BJR was not liable to pay the amount of the invoice or interest. In his statutory declaration Mr Jones stated that he was sent an email (from Invenio) on 1 October 2013 that contained an unsigned copy of the EULA and that this was the first time he had sighted a EULA. The Tribunal's decision 1. So far as this appeal is concerned, paragraphs 22 – 25 are the relevant parts of the Tribunal member's reasons for decision. Those paragraphs are in the following terms: 22 However, it is my view that as Mr Jones and BJR had never been made aware that they had to give a prescribed period of notice – and I do not dispute that that was indeed a provision in the EULA, they are not bound by it. 23 Certainly Invenio were bound in respect of what they had to provide. But I do not accept that they can assert their agreement to the EULA against BJR when it is a term onerous to BJR. 24 Furthermore, I am satisfied that neither Invenio nor their principal, DSKK has actually suffered any disadvantage from this concatenation of events. They did not provide a special service, nor did they actually provide next year's key "on approval" or in advance of payment. All they did was persist in asking for the money. This is not an unreasonable thing to do in business, but the failure of BJR to actually pay the sum does not represent any unjust enrichment to BJR or any loss to Invenio (other than a failure to maintain an existing client). 25 Accordingly, in the absence of any ability to BJR reasonably to know the terms of the agreement, either by direct information, or by inference, I hold that BJR is not bound by this term, and is accordingly not obligated to make the payment sought. The law 1. 18 The change of provider of support services letter is clearly a contractual document. It includes the words: 'Invenio Pty Ltd shall provide Support Services to Licensee for the Licensed Programs, in accordance with the terms of the applicable EULA (s) listed in Exhibit A and this Letter Agreement.' It includes the words: "By executing this letter, we agree as follows:… 2. For periods after the Effective Date of the Licensed Programs, Licensee shall make ALC payments to Invenio Pty Ltd for the Licensed Programs in the amounts agreed upon by Invenio Pty Ltd and Licensee.' 2. Immediately above Mr Jones's signature are these words: "Agreed to and Accepted by: Brad Jones Racing Pty Ltd." 3. BJR was described as the LICENSEE in the letter and "Effective Date" meant "effective as of the date of this letter." 4. The end-user order form is also clearly a contractual document. Towards the top of page 1 of that document are the words: "Agreement EULA Australia/NZ Pre-2008" . The form also contains the words which are set out in paragraph 8 above. 5. The relevant legal principle applicable in this appeal was stated by Scrutton LJ in L'Estrange v F. Graucob Ltd [1934] 2KB 394 at 403 in these terms: when a document containing contractual terms is signed, then, in the absence of fraud, or misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the document or not. That statement of principle was cited with approval by the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd 219 CLR 165 at [46]. 6. The appeal panel is of the view that the change of provider of support services letter made it clear that the EULA was part of the contract which existed between BJR and Invenio. 7. The appeal panel is also of the view that the end-user order form made it abundantly clear that the EULA was part of the contract between BJR and Invenio. 8. In those circumstances the L'Estrange v F. Graucob principle applies. It is irrelevant that Mr Jones may not have read the EULA. 9. The appeal panel is therefore of the view that the Tribunal member fell into error in paragraphs 22, 23 and 25 of his reasons for decision. 10. As the relevant one month's notice had not been given by BJR to Invenio, BJR was contractually obliged to pay to Invenio a further 12 months ALC payment. Thus the question whether Invenio had suffered any disadvantage from what the Tribunal member described as "this concatenation of events", was irrelevant. The appeal panel is of the view that none of the matters which the Tribunal member referred to in paragraph 24 of his reasons for decision, were relevant. 11. The appeal panel is of the view that a declaration should not be made that the amount of the license payment is not due and owing by BJR. 12. The ground of appeal which we have dealt with, involved, in our view, an error of law. In view of our decision on that ground, it is unnecessary for us to deal with any of the other grounds of appeal. We note that apart from the ground of appeal referred to in paragraph 3 (1) above, all of the other grounds of appeal were said to be errors of fact, for which leave to appeal would be required. Costs 1. Section 60 (1) and (2) of the Civil and Administrative Tribunal Act 2013 (the Act) in effect provide that each party is to pay the party's own costs but the Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. 2. Section 60 (3) sets out 7 circumstances which the Tribunal may have regard to in determining whether there are special circumstances warranting an award of costs. 3. At the hearing of the appeal, it was submitted on behalf of the appellant that the appeal panel should make an order for costs in its favour. It was submitted that the Tribunal member allowed the respondent to present new physical evidence namely old open boxes, which had not been previously disclosed and this came about as a result of a breach by the respondent of directions given by the Tribunal prior to the hearing before the Tribunal member. It was also submitted that if all of the evidence had been considered by the Tribunal member, he would have found in favour of Invenio. It was submitted that if Invenio had been given the opportunity to deal with the boxes which had been presented in evidence, the Tribunal member would have found in favour of Invenio. 4. Even if it be assumed that those submissions are correct, we are not persuaded that they or any other matter, amount to special circumstances within the meaning of s60 of the Act. We are of the view that there are no special circumstances which convince us to make an order different from that set out in s60 (1) of the Act namely each party is to pay the party's own costs. 5. The appeal panel makes the following orders: 1. The appeal is allowed. 2. The declaration made by the Tribunal member on 5 November 2014 is set aside. 3. The application lodged with the Tribunal by Brad Jones Racing Pty Ltd on 5 August 2014 is dismissed. 4. Each party is to pay the party's own costs. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 August 2015