Supreme Court New South Wales Medium Neutral Citation: Kumar Motors (Bankstown) Pty Ltd v Insurance Australia Ltd t/as NRMA Insurance; Insurance Australia Ltd t/as NRMA Insurance v Kumar Motors (Bankstown) Pty Ltd [2016] NSWSC 1874 Hearing dates: 5 - 8 and 13 December 2016 Decision date: 20 December 2016 Jurisdiction: Equity Before: Stevenson J Decision: Claim and cross-claim dismissed Catchwords: CONTRACTS – construction – plaintiff appointed agent of defendant to sell CTP policies – whether plaintiff's entitlement to renewal commissions survived termination of the contract – whether plaintiff in breach of obligation not to sub-contract agency; REPRESENTATIONS – whether defendant represented that entitlement to renew commissions would survive termination – whether plaintiff relied on representation – whether plaintiff suffered detriment by reason of any such reliance Legislation Cited: Trade Practices Act 1974 (Cth) Competition and Consumer Act 2010 (Cth) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; HCA 7 Gates v City Mutual Life Assurance Society Limited (1986) 160 CLR 1; HCA 3 Houssein v Under Secretary, Dept of Industrial Relations & Technology (NSW) (1982) 148 CLR 88; HCA 2 HP Mercantile Pty Ltd v Hartnett [2016] NSWCA 343 Marks v GIO Australia Holdings Limited (1998) 196 CLR 494; HCA 69 McDonald v Dennys Lascelles Limited (1933) 48 CLR 457; HCA 25 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; HCA 37 Re Golden Key Ltd [2009] EWCA Civ 636 Recoveries Corporation Group Ltd v American Express Australia Ltd [2016] NSWSC 771 Roy Hill Holdings Pty Ltd v Samsung C&T Corporation [2015] WASC 458 SCN Pty Ltd v Smith [2006] QCA 360 Silovi Pty Ltd v Barbaro (1988) 13 NSWCA 466 Simic v New South Wales Land and Housing Corporation [2016] HCA 47 Waltons Stores (Interstate) v Maher (1988) 164 CLR 387; HCA 7 Westralian Farmers Ltd v Commonwealth Agricultural Service Engineers Ltd (1936) 54 CLR 361; HCA 6 Texts Cited: K Lewison and D Hughes, The Interpretation of Contracts in Australia, (2012, Lawbook Co) Category: Principal judgment Parties: Kumar Motors (Bankstown) Pty Ltd (Plaintiff/Cross-Defendant) Insurance Australia Ltd trading as NRMA Insurance (Defendant/Cross-Claimant) Representation: Counsel: S Y Rueben (Plaintiff/Cross-Defendant) D H Mitchell (Defendant/Cross-Claimant) Solicitors: LHD Lawyers (Plaintiff/Cross-Defendant) Minter Ellison (Defendant/Cross-Claimant) File Number(s): SC 2014/373115 Judgment 1. Since 1989, the plaintiff, Kumar Motors (Bankstown) Pty Ltd, has operated a motor dealership in Bankstown. 2. On or about 7 June 2006 it entered into an "Agency Agreement" with the defendant, Insurance Australia Ltd trading as NRMA Insurance, pursuant to which NRMA appointed Kumar Motors as its non-exclusive agent to provide "Agency Services" related to the issue by NRMA of Compulsory Third Party ("CTP") policies. 3. Under the agreement, Kumar Motors was entitled to be paid a commission when it caused a CTP policy to be issued by NRMA. It was also entitled to be paid a commission each time any such policy was renewed. Those commissions are known as "renewal commissions" (sometimes referred to as "trailing commissions"). 4. The agreement was terminable at will on 30 days' written notice. NRMA terminated the agreement with effect on 15 May 2014. 5. During the life of the agreement (that is between June 2006 and May 2014) NRMA paid Kumar Motors both new business and renewal commissions. 6. There is no dispute between the parties about Kumar Motors' entitlement to those commissions or to the quantum of those commissions. 7. What divides the parties is the entitlement of Kumar Motors to renewal commissions in relation to CTP policies written during the life of the agreement but renewed after its termination. 8. Kumar Motors claims that, on the proper construction of the agreement, its right to ongoing renewal commissions for CTP policies sold by it under the agreement had been "unconditionally acquired", in the sense described by Dixon J (as his Honour then was) in McDonald v Dennys Lascelles Limited (1933) 48 CLR 457; HCA 25 at 476-477, once the CTP policy was sold, and that such entitlement would endure so long as the policy was renewed. 9. Kumar Motors also claims that it entered the agreement on the basis of representations made to it by two employees of NRMA, Mr John Munday and Mr David Thomas, concerning the circumstances in which Kumar Motors would be entitled to renewal commissions following termination of the agreement. 10. Kumar Motors claims that if the agreement, on its proper construction, does not provide for the payment of renewal commissions, those representations constituted misleading or deceptive conduct by NRMA for the purposes of s 52 of the Trade Practices Act 1974 (Cth) and/or s 18 of the Australian Consumer Law (set out in Sch 2 of the Competition and Consumer Act 2010 (Cth)) and that it is entitled to damages in the order of $423,000 for losses to date, and a further $366,000 as the present value of its estimated future loss. Alternatively Kumar Motors contends that NRMA is thereby estopped from denying Kumar Motors' entitlement, post termination, to renewal commissions in respect of CTP policies it sold. 11. The agreement provided that Kumar Motors "may not appoint Sub-Agents to sell CTP Policies". 12. NRMA contends that, contrary to this provision, Kumar Motors appointed other motor dealers as its sub-agents to sell CTP policies. NRMA claims it has thereby suffered damage because the payments it has made under policies sold by those allegedly unauthorised sub-agents (including renewals) exceed the premiums that NRMA has and will in the future receive in respect of those policies (and their renewals). 13. By its cross-claim, NRMA claims damages in the order of $3.6 million. Parties' agreement that questions of liability be determined first 1. Kumar Motors and NRMA both served actuarial evidence quantifying their damages claims. 2. Ultimately, for reasons it is not necessary for me to set out, it was agreed that I should first decide issues of liability on Kumar Motors' claim and on NRMA's cross-claim. 3. On 8 December 2016 I made an order under Uniform Civil Procedure Rules 2005 (NSW) r 28.2 to give effect to that agreement. Decision 1. In my opinion both Kumar Motors' claim and NRMA's cross-claim should be dismissed. The agreement and its proper construction 1. There was no dispute before me as to the principles to be applied when construing the agreement. 2. Recently, the High Court reiterated the relevant principles. Thus, in Simic v New South Wales Land and Housing Corporation [2016] HCA 47 the plurality (Gageler, Nettle and Gordon JJ) said at [78]: "The proper construction of [the agreement] is to be determined objectively by reference to its text, context and purpose [Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; HCA 7 at [35]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; HCA 37 at [46]–[52]]. As was stated in Electricity Generation Corporation v Woodside Energy Ltd [at [35]]: [T]he objective approach [is] to be adopted in determining the rights and liabilities of parties to a contract. The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean … [I]t will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating'. As Arden LJ observed in Re Golden Key Ltd [[2009] EWCA Civ 636 at [28]], unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption 'that the parties…intended to produce a commercial result'. A commercial contract is to be construed so as to avoid it 'making commercial nonsense or working commercial inconvenience'. (footnotes omitted)." 1. Even more recently, the principles were elegantly summarised by Leeming JA (albeit in dissent on the facts) in HP Mercantile Pty Ltd v Hartnett [2016] NSWCA 343 at [128]ff. 2. Kumar Motors claims that, on the proper construction of the agreement, its right to ongoing renewal commissions for CTP policies sold by it under the agreement had been "unconditionally acquired", in the sense described by Dixon J (as his Honour then was) in McDonald v Dennys Lascelles at 477 that: "[W]hen a party to a simple contract, upon breach by the other contracting party of a condition of the contract, elects to treat the contract as no longer binding upon him, the contract is not rescinded as from the beginning. Both parties are discharged from the further performance of the contract, but rights are not divested or discharged which have already been unconditionally acquired. Rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected." 1. However, as Emmett AJA said recently in Recoveries Corporation Group Ltd v American Express Australia Ltd [2016] NSWSC 771 at [63]: "[I]t is open for the parties to provide in advance for such an event and to stipulate some different consequences. When the parties themselves have provided for the determination of the contract on a given contingency, and provide for particular consequences, the consequences flow from their contractual stipulation and are governed by their intention, either actual or imputed." 1. That language captures what was stated by Dixon and Evatt JJ in Westralian Farmers Ltd v Commonwealth Agricultural Service Engineers Ltd (1936) 54 CLR 361; HCA 6 at 379 that: "When a contract comes to an end by reason of the occurrence of an event upon which the parties have by an express provision made it terminate, the question whether an inchoate liability arising thereunder does or does not become enforceable must in the end be governed by the intention of the parties. It is a rule of law that when a simple contract is discharged by the election of one party to treat himself as no longer bound after the other has committed a breach of the contract, rights and obligations which have already arisen from the partial execution of the contract shall remain unaffected [McDonald v Dennys Lascelles]. No doubt it is open to the parties to provide in advance for such an event and by a stipulation to the contrary to provide some other effect." 1. It follows that whether there was an "unconditionally acquired" right requires consideration of the proper construction of the contract in accordance with the ordinary principles of contractual interpretation (see [19]). 2. As I have mentioned, by the agreement, NRMA appointed Kumar Motors as its agent to provide "Agency Services". I will return to the meaning of that expression below. 3. The appointment was non-exclusive from NRMA's point of view and exclusive from Kumar Motors' point of view. That is, NRMA was free to appoint other dealers as its agent to sell NRMA CTP policies, but Kumar Motors could not sell or promote any other insurer's CTP policies (see Recital A and cl 2.3). 4. Clause 3 read: "This Agreement will commence on the Commencement Date [7 August 2006] and will continue with full force and effect unless terminated in accordance with Clause 23." 1. Clause 23.1 provided for "termination for convenience" on 30 days' written notice. Clause 23.2 provided for "termination for cause" without notice. 2. The agreement was thus for an indefinite duration and, in effect, terminable by either party without cause on short notice. 3. The critical provision is cl 7.1 which provided, relevantly: "[NRMA] will pay [Kumar Motors] Commission for each New Business CTP Policy sold by [Kumar Motors] under this Agreement." 1. "Commission" was defined to mean "7% of Gross Premium" for both a "New Business CTP Policy" and a "Renewal CTP Policy". The agreement thus contemplated that NRMA would pay Kumar Motors commission in connection with two types of policy; a "New Business" policy and a "Renewal" policy. 2. There is no dispute that the effect of cl 7.1, when read in conjunction with the definition of "Commission", was that when Kumar Motors "sold" a CTP policy it was entitled to a new business commission, and that (at least while the agreement was on foot) it was entitled to a renewal commission each time that policy was renewed. 3. Although cl 7.1 spoke of a CTP policy "sold by" Kumar Motors, the expression "New Business CTP Policy" was defined to mean a "new business policy sold by NRMA" under the agreement. In fact, what the agreement contemplated was that Kumar Motors would introduce new CTP business to NRMA (and thus "sell" the policy in that sense) but that NRMA would actually issue the policy (and "sell" it in that sense). 4. The entitlement to new business and renewal commissions was the only consideration given to Kumar Motors by agreement for performing the Agency Services. 5. It was a mutually known fact that: 1. CTP policies are, normally, for a term of 12 months and are issued in respect of a particular motor vehicle; 2. CTP policies are assignable by the insured party (typically when the vehicle in question is sold); and 3. except in limited circumstances, CTP insurers, such as NRMA, are obliged to renew CTP policies no matter what claims are made under them during the preceding year. 1. Kumar Motors' obligation under the agreement was to provide the "Agency Services". 2. Those obligations included: 1. collecting premiums for new CTP policies; 2. assisting insureds and prospective insureds seeking such policies; 3. promoting NRMA's CTP policies; 4. directing claims and complaints under CTP policies to NRMA (although, by reason of cl 12 of the agreement, Kumar Motors was not authorised and, indeed, was forbidden from receiving claims on NRMA's behalf). 1. The agreement did not authorise Kumar Motors to issue renewal notices for CTP policies. Indeed, cl 12 provided that NRMA would issue such renewal notices. Obviously, it was NRMA that actually renewed the policies. 2. Subject to these matters, Kumar Motors' entitlement to renewal commission for a policy it introduced to NRMA did not depend on it taking any further step in relation to that policy. So long as the agreement subsisted, each time a CTP policy that it introduced to NRMA was renewed, it was entitled to, and was paid, a renewal commission. 3. Clause 7.1 of the agreement does not say, in terms, that NRMA's obligation to pay Kumar Motors a renewal commission on a CTP policy introduced by Kumar Motors to NRMA during the life of the agreement would endure beyond termination of the agreement; that is, beyond the time during which Kumar Motors was obliged to provide the Agency Services. 4. I do not find that surprising. Payment of commissions, including renewal commissions, was the reward to which Kumar Motors was entitled in consideration of it performing the Agency Services. It is not surprising that, having introduced an item of CTP business to NRMA, and for so long as it was providing Agency Services to NRMA, it would, without taking any further step, receive renewal commissions as long as the relevant policy was renewed. 5. But it would be surprising if the parties agreed that Kumar Motors would be entitled to receive ongoing renewal commissions for policies it introduced to NRMA after (and possibly long after) the agreement was terminated, and thus after it was no longer providing NRMA with any Agency Services. If Kumar Motors' construction of the agreement is correct, it would have been entitled to ongoing renewal commissions even if NRMA terminated the agreement by reason of some breach by Kumar Motors; for example, referring CTP business to a rival insurer contrary to its obligation of exclusivity referred to at [26] above. 6. In my opinion, a reasonable business person in the position of the parties reading the words of cl 7.1, when considered in the context of the agreement as a whole, would not understand the agreement to have this effect. 7. There is a further factor pointing to the improbability of the parties intending the agreement to have the effect contended for by Kumar Motors, and that is that the agreement did provide, in terms, that other obligations would survive termination of the agreement. 8. Thus: 1. clause 22.8 provided that on termination of the agreement the other party will return or destroy all forms of "Confidential Information". Clause 22.9 provided that "each party's obligation of confidentiality [as defined earlier in cl 22] will survive termination of the Agreement"; 2. clause 23.6 provided that "this clause" (obviously a reference to cl 23.5 which obliged Kumar Motors, on termination of the agreement, to return to NRMA documents and materials in its possession, cease marketing, promoting and selling CTP policies, cease accessing a named computer network, and continue to administer all current CTP policies until their expiry date) "survives the expiration or termination of this Agreement"; and 3. clause 25.10 provided that "[t]he indemnities contained in [cl 17 of] this Agreement [concerning liabilities arising out of both Kumar Motors and NRMA sale of CTP policies] will survive the expiration or termination of this Agreement". 1. To some extent, at least in relation to cll 22.9 and 23.6, it may not have been necessary for the parties to have stated that the obligations referred to in those clauses survived termination. So much may have been obvious in any event. 2. But the fact that in those clauses the parties addressed, in terms, the question of their survival once the agreement was terminated, suggests that if the parties intended that a right or obligation under the agreement be "unconditionally acquired" (or imposed) they would have said so. 3. As McPherson JA said in SCN Pty Ltd v Smith [2006] QCA 360 at [7]: "…it is hardly necessary to clothe the thought in authority or in Latin garb. If one alternative is expressly and specifically mentioned, it rationally tends to exclude the implication of another or of any other." 1. I appreciate that each agreement must be judged in accordance with the words which appear in it, and that McPherson JA was not expressing any rule of law, but merely a canon of construction which, like all other canons of construction, cannot be rigidly applied (see generally discussion in K Lewison and D Hughes, The Interpretation of Contracts in Australia, (2012, Lawbook Co) at [7.06]). 2. However, in this case, this factor, when taken together with the matters I have earlier mentioned, persuades me that, looking at the matter objectively, the words that the parties have used and the context in which those words have been used, that the correct conclusion is that, on its proper construction, the agreement, in cl 7.1 in particular, does not entitle Kumar Motors to renewal commissions beyond termination of the agreement. 3. Thus, although the right to renewal commissions was "unconditionally acquired" (see [8] above) by Kumar Motors once it "sold" (see [33]) a CTP policy to NRMA and if that policy was renewed, that "unconditionally acquired" right did not survive termination of the agreement. 4. For completeness, I should add that Mr Reuben, who appeared for Kumar Motors, drew my attention to the decision of Le Miere J in Roy Hill Holdings Pty Ltd v Samsung C&T Corporation [2015] WASC 458, especially at [25] where his Honour drew attention to the note of caution sounded by the High Court in Houssein v Under Secretary, Dept of Industrial Relations & Technology (NSW) (1982) 148 CLR 88; HCA 2 at 94 that: "That maxim [expressio unius] must always be applied with care, for it is not of universal application and applies only when the intention it expresses is discoverable upon the face of the instrument". [Citations omitted] 1. In my opinion, this is such a case. 2. Further, the contract that Le Miere J considered in Roy Hill was in quite different terms to that under consideration here. His Honour's conclusion that the arbitration clause under consideration in that case survived termination (notwithstanding that it was not expressly stated to do so) was understandable and, if I may respectfully say so, quite clearly correct. The representations 1. Mr Dilip Kumar is one of two directors of Kumar Motors. 2. Mr Kumar gave evidence that he was induced to enter the agreement by a representation made to him in May or June 2006 by Mr John Munday, then an employee of NRMA that: 3. "For every new policy sold, you will receive trailing commissions on renewals in the future…so long as the insured renews the policy with the NRMA… Commissions on renewals will always be paid so long as any new business policy sold by you is renewed by the insured with the NRMA." 4. Mr Munday, who is no longer employed by NRMA, and now works for one of its competitors, was called in Kumar Motors' case and gave a slightly different account of the conversation as follows: 5. "Renewal commissions will always be paid so long as an NRMA policy remains current for that vehicle... These renewal commissions will continue through 3 changes of ownership of the vehicle as long as the policy is renewed with NRMA Insurance." 6. On neither of these versions of the representation was it expressly stated that renewal commissions would be paid beyond termination of the agreement. 7. Kumar Motors' case is that a representation that its entitlement to renewal commissions was not dependent on the continuation of the agreement is to be implied from what was said; presumably, from the use of the word "always". 8. I see a number of difficulties in relation to this aspect of Kumar Motors' case. 9. The first is that, assuming that Mr Munday said to Mr Kumar something to the effect of the words to which they depose, and that the implied representation to which I have referred arises, there is no evidence that Kumar Motors relied on any such implied representation. 10. Mr Kumar said he entered into the agreement in reliance on the representations. 11. But in cross-examination Mr Kumar gave this evidence: "Q. The first time you spoke to Mr Munday about the effect that termination would have on your right to renewal commissions was in 2014, after NRMA had terminated your contract? A. Yep, that would be right. Q. Prior to that you had not turned your mind to termination at all, had you? A. No, I didn't need to. Q. That's because from the time that you first approached NRMA, by the time you entered into the contract with them and up until the termination, you were expecting a long and happy relationship? A. Exactly." 1. Later Mr Kumar gave this evidence in answer to questions from me: "Q. Can I ask you this? NRMA terminated the agreement in May 2014? A. Correct, your Honour. Q. After that happened, did you notice after some period of time that they were not paying any trailing commission? A. Yeah, I think it was immediate. Q. So you noticed pretty much straight away that they weren't paying any trailing commissions. A. Yeah. Q. Was that the first time it had occurred to you that NRMA's position would be no commissions after termination? A. It was the first time it occurred to me when they stopped paying me. Q. That hadn't crossed your mind as a possibility before that? A. No, no." 1. And later, in cross-examination: "Q. Your position now in hindsight is that you wouldn't have entered into business with NRMA or any other insurer if they one, had a right to terminate at will and, two, you didn't get commissions after termination? A. Yes, that would be right. Q. That's your position now as well you wouldn't do the same thing now? A. I think, I think the situation has changed now since my action I believe all deal agreements have been changed and now the NRMA is insisting that no continuation of commissions, it wasn't the case at that time. So, as such the situation is different now. Q. Well, you didn't actually turn your mind to it at the time. A. No." 1. Thus, the effect of Mr Kumar's evidence was that, at the time he caused Kumar Motors to enter into the agreement, he was expecting a long and happy relationship with NRMA and did not turn his mind to the question of the consequence of termination so far as concerned renewal commissions. 2. The second difficulty is that, assuming that Kumar Motors did enter into the agreement on the basis of the implied representation alleged, there is no evidence that it has suffered any detriment as a result: for example Gates v City Mutual Life Assurance Society Limited (1986) 160 CLR 1; HCA 3 at 12 and Marks v GIO Australia Holdings Limited (1998) 196 CLR 494; HCA 69 at [19] and [47]-[48] and Waltons Stores (Interstate) v Maher (1988) 164 CLR 387; HCA 7 at 427. 3. At the time the representations were allegedly made, Kumar Motors was an agent for Allianz Insurance Australia Ltd for the purpose of selling CTP policies on its behalf. 4. Although the agreement between Kumar Motors and Allianz was not in evidence before me, Mr Kumar said that the agreement was entered in 1989 and that it was not terminated when Kumar Motors entered the agreement with the NRMA (although Kumar Motors agreed with the NRMA that it would stop selling policies with Allianz whilst it was NRMA's agent). 5. Mr Kumar gave evidence, received without objection, that the effect of Kumar Motors' agreement with Allianz was that, in 2006 Kumar Motors was: "Receiving commissions [from Allianz] for every new business CTP policy sold as agent for Allianz as well as trailing commissions in respect of renewals, when Allianz renewed a policy sold by [Kumar Motors] in respect of the same insured and in respect of the same vehicle". 1. There is no evidence that Kumar Motors' entitlement to receive renewal commissions from Allianz would have survived termination of Kumar Motors' then current agreement with Allianz. There is in evidence an agreement that Kumar Motors entered into with Allianz on 13 August 2010 (that is during the life of the NRMA agreement) which stated in terms that no commissions were payable "after this agreement is terminated" (suggesting the probability of a like provision in the Allianz agreement on foot in 2006). 2. In any event, there is no evidence that Kumar Motors would have earned higher commissions (from Allianz) than it did under the agreement with NRMA. 3. Indeed, the evidence suggests that the contrary is the case. Mr Kumar told Mr Munday, during their May/June 2006 conversation, that Kumar Motors was selling about "200 CTP green slips per month" with Allianz. On the other hand, the evidence shows Kumar Motors was selling up to 1000 CTP policies per month under the NRMA agreement and that the renewal rate that Kumar Motors was able to achieve with NRMA was far higher than it had been able to achieve with Allianz. 4. During his oral submissions in chief, I raised this issue with Mr Reuben. He was not able to provide any satisfactory response. Mr Mitchell, who appeared for NRMA, addressed the matter in his written and oral submissions. Mr Reuben did not address the matter at all in his submissions in reply. 5. Mr Reuben submitted that any estoppel would operate so that "the contract applies". That cannot be right. Kumar Motors pleads common law estoppel by representation. Unless the representation was as to the existence of the contract it could not operate so as to enforce obligations arising out of the contract. Estoppel by representation, unlike equitable estoppel, which applies to promises or representations as to future conduct, is not a source of legal rights. As Priestley JA stated in Silovi Pty Ltd v Barbaro (1988) 13 NSWCA 466 (drawing from his Honour's observations on what was said in Waltons Stores v Maher): "Common law estoppel operates upon a representation of existing fact, and when certain conditions are fulfilled, establishes a state of affairs by reference to which the legal relation between the parties is to be decided. This estoppel does not itself create a right against the party estopped. The right flows from the court's decision on the state of affairs established by the estoppel." 1. Even if Kumar Motors had pleaded equitable estoppel the position would be no different in this sense. As Brennan J stated in Waltons Stores v Maher at 427, "equitable estoppel does not elevate non-contractual promises to the level of contractual promises". 2. For those reasons, my conclusion is that Kumar Motors' case based on the alleged representations (whether that case be viewed as one of misleading or deceptive conduct under the Trade Practices Act or the Australian Consumer Law or as estoppel by representation) must fail. The cross-claim – did Kumar Motors appoint sub-agents? 1. As I have mentioned, the agreement provides that Kumar Motors "may not appoint Sub-Agents to sell CTP Policies". 2. The agreement defined a "Sub-Agent" as "any sub-agent appointed by [Kumar Motors] to assist it in providing the Agency Services". 3. It is common ground that Kumar Motors sold CTP polices to other motor dealers for the purpose of those motor dealers registering cars, owned by them, for sale. 4. Mr Mitchell pointed to evidence which showed that both Mr Kumar and Mr Munday anticipated that Kumar Motors would only sell CTP policies issued by the NRMA in conjunction with the sale by Kumar Motors of a motor vehicle to one of its customers. 5. For that reason (and there is controversy about when this happened) Mr Kumar raised with Mr Munday the possibility of Kumar Motors selling NRMA CTP policies "over the counter" (that is otherwise than in conjunction with the sale by Kumar Motors of a motor vehicle) including to other motor dealers. 6. There was controversy as to when and to what extent such permission was given. 7. However, I see nothing in the agreement to prevent Kumar Motors from selling CTP policies otherwise than in conjunction with the sale of a motor vehicle, whether to a motor dealer or otherwise. 8. During the life of the agreement, Kumar Motors sold almost 9000 CTP policies to other motor dealers. Some of those motor dealers purchased hundreds of CTP polices from Kumar Motors. One, The Japanese Car Centre, purchased over 1300 such policies. 9. Many of those motor dealers were in the Bankstown area but many were not. At least one was in Kelso (near Bathurst) and one was in Erina (on the Central Coast). 10. Mr Kumar said that the reason that so many dealers came from so far to Kumar Motors to purchase NRMA CTP polices was because it was "convenient" to do so. 11. As Mr Mitchell submitted, that evidence strains credulity. But there is no other evidence as to why so many motor dealers purchased CTP policies from Kumar Motors. 12. Mr Mitchell submitted that I should infer that Mr Kumar deliberately refrained from giving an explanation as to the true reason dealers came in such frequency and from such distance to purchase CTP policies from Kumar Motors and that I should infer that the true explanation would not assist Kumar Motors' case. Mr Mitchell submitted that I should infer that there was some kind of informal arrangement between Kumar Motors and those dealers pursuant to which those dealers assisted Kumar Motors to sell CTP policies and thereby assisted Kumar Motors to bring sales of CTP policies to the NRMA. 13. Mr Mitchell put to Mr Kumar that there was some such arrangement (although, no doubt because his instructions did not permit this), Mr Mitchell did not put to Mr Kumar any particular arrangement. 14. Mr Kumar denied the existence of any such arrangement. In the absence of any evidence pointing to what such arrangement might be, I am not prepared to reject that denial. 15. It was for NRMA to prove that Kumar Motors had appointed these motor dealers as its agent to assist it (not them) in providing the Agency Services. Relevantly to the manner in which Mr Mitchell put the case (see [89] above), this would involve proving that Kumar Motors had appointed the motor dealers as its agent to bring sales of CTP policies to the NRMA. 16. But the evidence suggests that the motor dealers purchased CTP policies from Kumar Motors for their own benefit and not to assist Kumar Motors. The evidence is that these dealers purchased CTP policies from or through Kumar Motors in respect of particular motor vehicles they owned and had for sale, on their lots, to their customers. 17. It may be that these motor dealers were attracted to Kumar Motors, as a source for CTP policies, because of the favourable terms on which NRMA offered Kumar Motors CTP policies. 18. Premiums for CTP policies are controlled and CTP insurers such as NRMA can only charge the premium allowed by government regulation. 19. However, there was at the time, some flexibility and Mr Munday explained that he procured that NRMA offer Kumar Motors a "flattened rate" by which Mr Munday meant that NRMA would not (as it was otherwise entitled to do) charge an increased premium by reason of the age of the driver or of the vehicle. That may be what attracted other dealers to Kumar Motors. 20. Whatever may be the truth of the matter, it was for NRMA to show that Kumar Motors had appointed these other motor dealers as its sub-agents within the meaning of the agreement. My conclusion is that it has not done so. Conclusion 1. The claim and the cross-claim fail and should be dismissed. 2. I will hear the parties as to costs. ********** 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: 20 December 2016