PARTIES:	NT CREDIT SOCIETY LTD

		v

		TERRITORY INSURANCE OFFICE

TITLE OF COURT:	SUPREME COURT OF THE 
		NORTHERN TERRITORY

JURISDICTION:	TERRITORY JURISDICTION - 			APPEAL FROM DECISION OF 			MASTER

FILE NO:	184/95 (9518583)

DELIVERED:	13 May 1997

HEARING DATES:	7 April 1997

JUDGMENT OF:	BAILEY J

REPRESENTATION:

Counsel:

	Appellant:	Mr S Southwood
	Respondent:	Mr A. Wyvill

Solicitors:

	Appellant:	Ms D Kelly
	Respondent:	Mr P Cavanagh

Judgment category classification:	C
Judgment ID Number:	BAI97003
Number of pages:	10

BAI97003

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

No. 184/95 (9518583)

		BETWEEN:

		NT CREDIT SOCIETY LTD
						Appellant

		AND:

		TERRITORY INSURANCE OFFICE
						Respondent

CORAM:	BAILEY J

REASONS FOR JUDGMENT

(Delivered 13 May 1997)

This is an appeal by the defendant from the decision of the Master, delivered 13 February 1997, that there be summary judgment for the plaintiff on the defendant’s counterclaim.
The appeal, pursuant to rule 77.05, is by way of a hearing de novo, unfettered by decision of the Master but otherwise according it “due weight”:  Southwell v Specialised Engineering Services (1990) 70 NTR 6.
Background
In 1989 the plaintiff, a credit society, and the defendant, an insurance company, entered into an agreement (called the “Co-operative Agreement”) with the objective of mutually exploiting commercial opportunities by, inter alia, promoting the marketing and sale of each other’s services.  One such opportunity was the offer of a domestic insurance policy (called “Redicover”) underwritten by the defendant and offered to the plaintiff’s members.  A particular feature of this arrangement was that members of the plaintiff could have their domestic insurance premiums paid automatically on a fortnightly or monthly instalment basis from their accounts with the plaintiff.  In respect of such insurance premiums, a commission would be payable to the plaintiff by the defendant.
The Co-operative Agreement between the parties was terminated on a mutual basis on 30 August 1993.  The plaintiff claims that it is owed commissions on certain Redicover policies under the Co-operative Agreement.  The plaintiff’s claim, made in a Statement of Claim filed on 13 February 1996, is resisted by the defendant.  In addition, the defendant has counterclaimed for damages for breach of contract arising out of events very shortly after the termination of the Co-operative Agreement.
In essence, the counterclaim concerns a letter posted by the plaintiff on or about 2 September 1993 to persons then holding insurance policies issued by the defendant.  The letter suggested that such persons change to a new product (“Valupak”) of a similar type offered by the plaintiff under the Co-operative Agreement, but issued not by the defendant but another insurance company.
The plaintiff seeks summary judgment pursuant to rule 23.03 in respect of the defendant’s counterclaim for damages for breach of contract arising out of the Co‑operative Agreement, alleging that:
“12.	It was a term of the Co-operative Agreement, expressed in Clause 4.8 therein, that neither party would, subsequent to the termination of the Co‑operative Agreement approach a client, customer or member of the other who was not then a client, customer or member of that party for any business-related purpose where it had only become aware of the name of such client, customer or member through information supplied by or obtained from the other.
 13.	The Co-operative Agreement was terminated as at 30 August 1993 by letter from the plaintiff to the defendant dated 18 August 1993.
 14.	In breach of the said term the plaintiff did so approach customers of the defendant for business-related purposes.
PARTICULARS
On or about 31 August 1993 the plaintiff wrote and sent letters to several persons who were customers of the defendant seeking to persuade them to cancel or not renew their insurance cover with the defendant and to take up fresh insurance about to be offered by CIC Insurances Limited pursuant to a fresh arrangement being negotiated between CIC Insurances Limited and the plaintiff.
 15.	By reason of the said breach the defendant has suffered loss and damage full particulars of which will be supplied prior to the hearing.”
The terms of clause 4.8 of the Co-operative Agreement, referred to in paragraph 12 above of the counter claim are:
“4.8	NO APPROACH TO THE OTHER’S CLIENTS; MEMBERS
	In the event this agreement or any ancillary agreement is terminated (for whatever reason) neither party shall, subsequent to such termination, approach a client, customer or member of the other, who is not then a client, customer or member of that party for any business-related purpose where it has only become aware of the name of such client, customer or member through information supplied by or obtained from the other.”
It is common ground that on its proper construction, for the defendant to prove a breach of 4.8 it must establish each of the following
a.	the termination of the agreement;
b.	the subsequent approach by the NTCS to a client, customer or member of the TI0;
c.	the person approached was ‘not then’ a client customer or member of the NTCS;
d.	the approach was for a ‘business related purpose’; and
e.	the NTCS only became aware of the name of the person approached through information supplied by or obtained from the TI0.
For the purposes of the present appeal, the plaintiff admits elements (a), (b) and (d), i.e. the termination of the agreement on 30 August 1993, the subsequent approach to customers of the defendant by the plaintiff by a pro forma letter mailed on 2 September 1993 and the nature of that approach being for a “business related purpose”.
The plaintiff submits that on the basis of affidavit evidence, elements (c) and (e) have not been established.  Indeed, the plaintiff submits further that facts which would establish elements (c) and (e) are not alleged in the counterclaim.  Accordingly, the plaintiff seeks summary judgment pursuant to rule 23.03 or in the alternative, that the defendant’s counterclaim be struck out under rule 23.02 because of the defendant’s failure to plead two essential elements of the cause of action.
For its part, the defendant concedes that its pleadings are defective, the present particulars being insufficient as they stand to support the allegation of the breach.
In the usual course of events, it would be possible by way of amendment to plead all the facts relied upon.  It is also arguable that the present defects could be overcome by the provision of additional particulars.  The essential issue, however, is the plaintiff’s submission that it is entitled to summary judgment on the basis of the evidence.
The plaintiff relies upon the following affidavits:
(a)	affidavit of P. J. Cavanagh, affirmed on 29 January 1997, annexing a copy of the Co-operative Agreement;
(b)	affidavits of G. D. Whalan, affirmed on 26 November 1996 and 26 March 1997.  Mr Whalan is the General Manager of the plaintiff;
(c)	affidavit of C. C. Thiel, affirmed on 2 April 1997.  Ms Thiel is the Assistant General Manager of the plaintiff; and
(d)	affidavit of G. C. Lawrence, affirmed on 4 April 1997.  Mr Lawrence was employed as the Information Services Officer by the plaintiff during August 1993.
Mr Whalan’s affidavit of 26 March 1997 and those of Ms Thiel and Mr Lawrence were not before the Master.  I granted special leave for the plaintiff to rely on these affidavits following an application by consent.  Special leave following a similar application was also granted for the defendant to rely on two affidavits which were not before the Master:
	1.	affidavit of K. G. Hatfield, an employee of the defendant, sworn on 31 	January 1997; and
	2.	affidavit of B. S. Pratt, sworn on 4 April 1997.  Mr Pratt is the Senior 	Manager, Personal Insurance, of the defendant.
In addition, the defendant relied upon an affidavit of D. M. Kelly, sworn on 31 January 1997, which was before the Master.
In Mr Whalan’s affidavit of 26 November 1996, he deposes that on 2 September 1993 he mailed a copy of the letter attached to a statutory declaration (annexed to his affidavit) to “any member of the Credit Society, who, at 26 August held a Redicover Payment Authority”.  He deposes that the pro-forma letter was sent to members of the plaintiff on whose behalf the plaintiff held a Redicover periodic payment authority as at 26 August 1993 and that it is his belief that the letter annexed to the statutory declaration sets out the text of the letter referred to by the defendant in paragraph 14 of the counterclaim.
Mr Whalan also deposes that identification of the members who were sent the letter was based on information obtained solely from the plaintiff’s own records and that the plaintiff did not rely on any information supplied by or obtained from the defendant.
In her affidavit of 2 April 1997, Ms Thiel, who at August 1993 was the Marketing Manager of the plaintiff, deposes to the arrangements she made for sending out the pro-forma letter referred to in Mr Whalan’s affidavit of 26 November 1996.  In particular, Ms Thiel deposes that the sending out of the pro-forma letter was restricted to members of the plaintiff who had provided a Redicover Insurance periodic payment authority, but no other members.  She also deposes that she is not aware of any other pro forma letter being sent out to members of the plaintiff at that time and that it would be most unlikely, if not impossible, that any such letters would have occurred without coming to her attention.  Further, Ms Thiel deposes that the plaintiff’s computer database (which was used to identify to whom the pro forma letter was to be sent) contains information relating to its members and it would not have been possible to print out and send a mailout to non-members using the steps set out in a memorandum (annexed to the affidavit) used to send out the pro forma letter.
The affidavit of Mr Lawrence, sworn on 4 April 1997, deposes to his role in preparing a list of the names and addresses of members of the plaintiff who at the time had given Redicover periodic payment authorities.  He deposes that the plaintiff’s database contained information relating to the plaintiff’s members and that there was no information relating to the business of the defendant on it other than the reference number and premium deduction amount necessary to make such deductions for Redicover premiums.
The evidence of the plaintiff may be summarised as follows:
(a)	following the termination of the Co-operative Agreement, the plaintiff sent out on 2 September 1993 a pro forma letter to clients or customers of the defendant for a business-related purpose;
(b)	such letters were sent only to then existing members of the plaintiff;
(c)	the plaintiff was aware of the names of the persons to whom it sent the letters from its own database; and
(d)	no other approaches were made to clients, customers or members of the defendant after the termination of the Co-operative Agreement.
For its part, the defendant has not sought to contradict any of the above matters.  The primary submission of the defendant is that a narrow interpretation should be given to the definition of who was an existing “client, customer or member” of the plaintiff at the date of termination of the Agreement.
The defendant submits that the arrangements between the plaintiff and the defendant were such that there were two “streams” of customers for the purpose of domestic insurance policies issued by the defendant, i.e.
•	customers who entered into insurance arrangements with the defendant through the plaintiff acting under an agency agreement (‘agency initiated policies’ i.e. Redicover policies); and
•	customers who entered into insurance arrangements with the defendant directly and who paid insurance premiums on a periodic basis through the plaintiff (‘TIO initiated policies’ known as “Pay Plan” policies but sharing common terms and conditions in all respects with Redicover policies).
In simple terms, the defendant submits that clause 4.8 of the Co-operative Agreement is intended to distinguish between those policy holders to whom the plaintiff had a role in marketing the defendant’s domestic insurance products and those policy holders who used the plaintiff’s facilities to pay their premiums on similar, but differently named policies, by instalments, but in respect of whom the plaintiff had no role in the decision to enter into domestic insurance policies with the defendant.
In support of its submissions, the defendant referred to various provisions of the Co‑operative Agreement (in particular clauses 9.2 and 9.3) which define an ‘agency initiated policy’ and a ‘TIO initiated policy’ and require the plaintiff to make available facilities for periodic deduction of insurance premiums for holders of TIO initiated policies.  Further, limits are imposed on the extent to which the defendant could offer consumer loans to the holders of agency initiated policies.
For present purposes, it is unnecessary to consider such provisions in any detail having regard to clause 2.10 of the Co-operative Agreement, which is in the following terms:
	“2.10.	A reference to ‘members’ of the Society includes a reference to non-	shareholder depositors.”
In contrast to the clauses referred to by the defendant (in particular clauses 9.2 and 9.3) this definition is of general application and, in particular, applies to clause 4.8.
The defendant submits that, having regard to the Co-operative Agreement as a whole, the reference in clause 4.8 of the Co-operative Agreement to “a client, customer or member (of the plaintiff) who is not then either a client, customer or member” (of the plaintiff) should be read as excluding such a client, customer or member “for the purposes of domestic insurance initiated by the TIO”.  Having regard to the definition of “member” of the plaintiff in clause 2.10, there is no basis for adopting the narrow definition contended for by the defendant.  In reaching this conclusion, I have had regard to the affidavit of Mr Pratt, sworn on 4 April 1997, much of which is (and is accepted by counsel for the defendant to be) no more than submissions on how Mr Pratt believes the Co-operative Agreement should be interpreted.
I am satisfied that there is nothing in the Co-operative Agreement or the evidence as a whole to displace the ordinary meaning of the words in clause 4.8.  In short, following a termination of the Co-operative Agreement, the plaintiff would be free to approach its then clients, customers or members for business-related purposes (and in particular to offer them new arrangements for periodic payments of domestic insurance premiums under policies issued by someone other than the defendant).
Aside from its submissions with respect to how clause 4.8 should be interpreted, the defendant relied upon Mr Hatfield’s affidavit of 31 January 1997.  Mr Hatfield deposes that he is an employee of the defendant and entered into an arrangement with the TIO for his domestic insurance in 1989 or 1990.  In 1990, he opened a deposit account with the plaintiff to take advantage of the facility for automatic periodic payments of his insurance premiums.  He deposes that he received the pro forma letter from the plaintiff in 1993 inviting him to enter into new insurance arrangements with someone other than the defendant.
The defendant sought to rely upon Mr Hatfield’s evidence to contend that the plaintiff’s pro forma letter had been forwarded to a person who was not a member of the plaintiff and who held a “TIO initiated policy” rather than an “agency initiated policy”.  In the light of what I have said above, the distinction between such policies is not relevant in the present context.  What is relevant is that Mr Hatfield deposes to opening a deposit account with the plaintiff.  As I have noted, the Co-operative Agreement defines “members” of the plaintiff for the purposes of clause 4.8 to include a “non-shareholder depositor”.  Accordingly, Mr Hatfield was a “member” of the plaintiff for the purposes of clause 4.8 at the date of termination of the Co-operative Agreement.  However, further documents (Exhibits 1 and 2) were admitted into evidence which indicate that, in fact, Mr Hatfield was a shareholding member of the plaintiff.  Following the hearing of the appeal, it was confirmed by the defendant that Mr Hatfield had become a shareholding member of the plaintiff in January 1990 and continued to be a member at and after the date of the termination of the Co-operative Agreement.
The defendant did not seek to produce any other evidence that persons who were not members of the plaintiff at the relevant date received the pro forma letter.  Neither did the defendant suggest that any other letters of a similar nature were sent out by or on behalf of the plaintiff.
I am satisfied that the plaintiff’s pro forma letter was sent out only to members of the plaintiff.  I am also satisfied that no other similar approaches were made by or on behalf of the plaintiff to clients, customers or members of the defendant.
Summary judgment should only be granted if it is clear that there is no arguable claim or defence:  Fancourt v Mercantile Credits (1983) 154 CLR 87 at 99, Civil and Civic Pty Ltd v Pioneer Concrete (NT) Pty Ltd (1991) 1 NTLR 43 at 53; and ANZ Banking Group v David (1991) 1 NTLR 93 at 96.  In the present case, I am satisfied that there is no real question to be tried on the defendant’s counterclaim.  I am also satisfied that there is no other reason for such a trial.  Accordingly, the appeal of the defendant is dismissed and there will be judgment for the plaintiff on the counterclaim.  I also order that the defendant pay the plaintiff’s costs in respect of both the appeal and the application before the Master.