Zintix (Australia) Pty Ltd v Employsure Pty Ltd [2018] NSWSC 924

Supreme Court New South Wales

Medium Neutral Citation: Zintix (Australia) Pty Ltd v Employsure Pty Ltd [2018] NSWSC 924 Hearing dates: 24 November 2017 Date of orders: 19 June 2018 Decision date: 19 June 2018 Jurisdiction: Common Law Before: Walton J Decision: The Court makes the following directions:

(1) The plaintiff shall file and serve within 14 days of this judgment, draft orders reflecting the judgment of the Court. In the event of any dispute as to the form of any order corresponding to the issues identified in [143] and [144] of the conclusion of this judgment, the draft orders shall be accompanied by a short written submission addressing any disputed question in that respect.

(2) The defendant shall file and serve a short submission and any alternative orders proposed within 14 days of the service of the draft orders and/or submissions in accordance with (1) above.

(3) Any disputed question, with respect (1) above, shall be resolved on the papers, unless, in written submissions filed in accordance with the allocated timetable, either party seeks an oral hearing. In that event, the matter will be listed for directions. Catchwords: APPEAL – contract – leave to appeal – construction of a contract is a question of law – whether a term of the contract was a penalty – relevant provision operates on breach – acceleration principle – whether a debt was owing at the time the contract was entered into – authority in O'Dea v Allstates Leasing System (WA) Pty Ltd (1983) 152 CLR 359 – no relevant distinction recent matter – businesslike interpretation of a contract – no express provision that an immediate debt was owed by the plaintiff to the defendant – construction of contract as a whole – notion of total fee – post execution requirements – clause found not to be a genuine pre-estimate of costs – clause found to be a penalty and therefore unenforceable – nature of services provided – no option for payment in full – no provision for early termination – impermissible to examine post-contract conduct for the purposes of construing a contract –decree for specific performance unlikely to be ordered – clause in the contract found to be a penalty – inconsistent with realistic commercial reading that a debt was immediately due – burden arises irrespective of nature of breach or service offered – provision unenforceable – appeal allowed Legislation Cited: Local Court Act 2007 (NSW) Cases Cited: AMEV-UDC Finance Ltd v Austin (1986) 162 CLR 170 Andrews v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205; [2012] HCA 30 Campbell Discount Co Ltd v Bridge [1962] AC 600 Co-Operative Insurance Society Ltd v Argyll Stores (Holding) Ltd [1998] AC 1 Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 Doherty v Allman (1878) 3 App Cas 709 Downe v Sydney West Area Health Service (No 2) (2008) 71 NSWLR 633; [2008] NSWSC 159 Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79 Fermiscan Pty Ltd v James (2009) 261 ALR 408; [2009] NSWCA 355 Francis v Lyon (1907) 4 CLR 1023 Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407 Geeveekay Pty Ltd v Director of Consumer Affairs Victoria (2008) 19 VR 512; [2008] VSC 50 Geys v Société Genérale [2013] 1 AC 523 Gregory v Philip Morris Ltd (1988) 80 ALR 455 Hawkins v Bank of China (1992) 26 NSWLR 562 Hill v C A Parsons & Co Ltd [1972] Ch 305 International Advisor Systems Pty Ltd v XYYX Pty Ltd [2008] NSWSC 2 International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151; [2008] HCA 3 J C Williamson Ltd v Lukey (1931) 45 CLR 282 Johnson v America Home Assurance Co (1998) 192 CLR 266; [1998] HCA 14 Lamson Store Service Co Ltd v Russell Wilkins & Sons Ltd (1906) 4 CLR 672 Lumley v Wagner (1852) 1 De G M & G 604 McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; [2000] HCA 65 McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 Network Ten Pty Ltd v Seven Network (Operations) Ltd [2014] NSWSC 274 O'Dea v Allstates Leasing System (WA) Pty Ltd (1983) 152 CLR 359 Page One Records Ltd v Britton [1968] 1 WLR 157 Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1; [1998] HCA 30 Protector Loan Co v Grice (1880) 5 QBD 529 Ruddenklau v Charlesworth [1925] NZLR 161 Turner v Australasian Coal and Shale Employees' Federation (1984) 6 FCR 177 Texts Cited: I C F Spry, The Principles of Equitable Remedies: Specific Performance, Injunctions, Rectification and Equitable Damages (LawBook Co, 9th ed, 2014) I Neil and D Chin, The Modern Contract of Employment (Thomson Reuters, 2nd ed, 2017) J D Heydon, M J Leeming and P G Turner, Meagher, Gummow & Lehane's Equity Doctrines & Remedies (LexisNexis Butterworths, 5th ed, 2015) J W Carter, LexisNexis, Carter on Contract (at September 2017) Category: Principal judgment Parties: Zintix (Australia) Pty Ltd trading as Italian Foods Aust (Plaintiff) Employsure Pty Ltd trading as Employsure (Defendant) Representation: Counsel: DL Cook SC and V Cha (Plaintiff) C Wood and R Perla (Defendant)