Dataquest (Australia Pty Ltd) v Dataquest Inc

[1996] FCA 690

CATCHWORDS

PRACTICE AND PROCEDURE - application to restrain issue of media release by applicant - ex-parte application  - whether threats of publication of the media release is an abuse of process or contempt of court - whether threatened media release is bringing undue pressure to bear on the respondents to settle proceedings - privilege ordinarily attaching to "settlement" negotiations cannot be relied on where court concerned with undue or unfair pressure - whether publication intended to inhibit legal proceedings - language fair and temperate - documents initiating court process are available to public - public interest considerations - publication not substantially inaccurate, immoderate or without foundation - freedom of speech - not permissible to expose party to public abuse or obloquy, or prejudgment of issues to be canvassed in proceedings - insufficient evidence of a real risk of the respondents' conduct being influenced.

In Re Daintrey; Ex parte Holt (1893) 2 QB 116, cited

Davies & Davies v Nyland & O'Neil (1974) 10 SASR 76, cited

J A McBeath Nominees Pty Limited v Jenkins Development Corp Pty Ltd [1990] Australian Current Law 346 (Qld Supreme Court, 15 December 1989), cited

Commercial Bank of Australia Ltd v Preston [1981] 2 NSWLR 554, distinguished.

Ballina Shire Council v Ringland (1994) 33 NSWLR 680, applied

Civil Aviation Authority v Australian Broadcasting Corporation (unreported, New South Wales Court of Appeal, 29 June 1995), cited

Attorney-General v Times Newspapers Ltd [1974] AC 273, cited

Attorney-General (NSW) v TCN Channel Nine Pty Ltd (1990) 20 NSWLR 369, cited

Suzanne B McNicol, Law of Privilege, 1992

DATAQUEST (AUSTRALIA PTY LIMITED) V
DATAQUEST INC, GARTNER GROUP ASIA INC, GARTNER GROUP PACIFIC PTY LIMITED & CARL DE ROME

No VG 458 of 1996

Tamberlin J
Sydney
8 August 1996

IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIAN DISTRICT REGISTRY      )    No. VG 458 OF 1996  GENERAL DIVISION                  )

BETWEEN:          DATAQUEST (AUSTRALIA)
  PTY LIMITED
  (ACN 067 721 653)
  Applicant

AND:              DATAQUEST INC
  First Respondent

GARTNER GROUP ASIA INC
  (ARBN 065 169 593)
  Second Respondent

GARTNER GROUP PACIFIC
  PTY LIMITED
  (ACN 003 708 601)
  Third Respondent

CARL DE ROME
  Fourth Respondent

CORAM:       TAMBERLIN J
PLACE:       SYDNEY
DATED:       8 AUGUST 1996

REASONS FOR JUDGMENT

TAMBERLIN J

On Friday, 2 August 1996, I dismissed the Notice of Motion. I now set out my reasons.

The Notice of Motion was filed on 2 August 1996 by the first, second and third respondents ("the three respondents") to restrain the applicant issuing a media release which reads as follows:

"MEDIA RELEASE: FOR IMMEDIATE DISTRIBUTION

Thursday 3rd August 1996

'AUSTRALIAN MARKET INTELLIGENCE COMPANY ISSUES FEDERAL COURT WRIT AGAINST GARTNER PACIFIC AND DATAQUEST INC.'

Melbourne 30th July 1996

Dataquest (Aust) Pty Limited, (ACN 067 721 653)("Dataquest Australia"), a wholly Australian owned and independent research company, announced today that it has filed a statement of claim and application in the Federal Court of Australia against Dataquest Inc., Gartner Group Asia Inc and Gartner Group Pacific Pty Limited - Dun and Bradstreet owned market research companies, (and another).

"Dataquest Australia" was established to conduct market research in Australia and New Zealand on behalf of Vaux Computer Enterprises Pty Limited under an Agreement with Dataquest Inc.  Dataquest Inc was subsequently acquired by another Dun and Bradstreet Company - The Gartner Group.

The Statement of claim alleges, among other things, that after business links were severed between "Dataquest Australia" and Dataquest Inc, parties in the Gartner Group;

1. made misleading and deceptive statements to third parties about the quality of the research undertaken by Dataquest Australia for Dataquest Inc.;

1. made defamatory statements about "Dataquest Australia";

1. wrongfully obtained confidential information belonging to "Dataquest Australia" through a former employee of "Dataquest Australia" who, without notice, resigned to take up employment with a Gartner Group Company and used that information for that company's benefit.

1. caused, procured, aided or abetted the former employee to contravene the Corporations Law.

Mr Barry Vaux of "Dataquest Australia" said that his company alleges that these actions had occurred in the context of Dataquest Inc. terminating its business links with "Dataquest Australia", and attempting to compete with "Dataquest Australia" in Australia under the Dataquest name."

A further order is sought to restrain the applicant from publishing details regarding any of the orders sought in the application to the allegations of the Statement of Claim until further order.

I am satisfied that the solicitors for the applicant were informed of the proceeding before me this afternoon and that they indicated that the applicant did not propose to appear.   
Background

On 24 July 1996 the three respondents were served with an Application and Statement of Claim filed in this Court.  The first Directions hearing is set down for 20 August next.

The applicant is an Australian corporation which carries on business in the field of information technology. Gartner Group Inc is the sole shareholder of Gartner Group Pacific Pty Limited and it has the controlling interest in Dataquest Inc and Gartner Group Asia Inc.

On 8am Tuesday 30 July 1996, Mr John Currie, solicitor for the three respondents was informed by Mr Vaux, director of the applicant, that he was concerned that there was confusion in the market place arising from the activities of the respondents and that it was proposed to issue a press release in the form set out above.

On 31 July 1996, a fax was sent by the solicitors for the applicant offering a compromise if certain  moneys were paid. The fax stated that the applicant would undertake not to issue the above media release until the close of business on Friday 2 August 1996, in order to enable instructions to be obtained regarding the offer. The applicant's solicitors said that they were further instructed that their clients were willing to discuss a reasonable settlement of the matter in the event of a counter-offer and that, if a reasonable offer were forthcoming, the applicant would undertake not to issue the media release until at least Friday 9 August 1996.

Although this letter was expressed to be "Without Prejudice", I consider that it is necessary to consider its contents because the basic contention is that the letter evidences an abuse of process or could arguably amount to a contempt of court by bringing undue pressure to bear on the respondents to settle the proceeding.

The authorities indicate that where the issue is whether a party to negotiations has exerted unfair pressure on the other party to accept an offer, the Court will admit evidence of such pressure and the privilege ordinarily attaching to "settlement" negotiations in these circumstances cannot be relied on. See the Law of Privilege by Suzanne B McNicol, 1992 at 482 and In Re Daintrey; Ex parte Holt (1893) 2 QB 116. Where statements are made in the nature of admissions, not with a view to seeking compromise but rather in the nature of an ultimatum to the other side, privilege will not attach. See Davies & Davies v Nyland & O'Neil (1974) 10 SASR 76 per Wells J and J A McBeath Nominees Pty Limited v Jenkins Development Corp Pty Ltd [1990] Australian Current Law 346 (Qld Supreme Court, 15 December 1989).

Mr Currie asserts that the three respondents for whom he acts do not believe they have acted wrongfully towards the applicant and that they have sought particulars of the Statement of Claim. Until answers are received the respondents are not in a position to properly answer the allegations. The respondents believe that many if not all of the allegations are without foundation. Mr Currie expresses his clients' concern that they must retain credibility and confidence within the information technology industry because they obtain information on a confidential basis from users and suppliers  within the industry as well as financiers.

It is then said that publication of the allegations in the media release will give rise to a real risk of damage to the reputations of the three respondents. Therefore, the proposed publication of the allegations is something that the three respondents have to consider carefully in their approach to the defence of the proceedings and the foreshadowed publication would be an important factor in considering any settlement.

Reliance is placed on the decision of Hunt J in Commercial Bank of Australia Ltd v Preston [1981] 2 NSWLR 554, where his Honour granted an injunction on the basis that the statements and activities in question were intended to put pressure on the bank in relation to guarantee proceedings against the defendant and he considered that the publication was calculated to apply this pressure.

That case is clearly distinguishable from the present insofar as the statements in question were extreme and were cast in highly emotive language. A short extract will suffice to reflect the tenor and tone of the pamphlet handed out by the defendant in that case to members of the public, outside the bank's offices:

"C.B.A. BANK, YOU CAN'T BE PROUD .....

THIS IS YOUR DISGRACEFUL RECORD.

....

The CBA BANK manager, Mr John Alcorn, lied in court and swore the affidavit, known to him and the C.B.A.BANK to be false.

The C.B.A. BANK and their solicitors, SLY & RUSSELL, used the evidence and the affidavit, which they knew to be false, to mislead the court for the C.B.A. BANK'S gain and to discredit me.

The C.B.A. BANK lost the court case and it's (sic) evidence was rejected with all costs against them.

....."

His Honour had no doubt that publication of the pamphlet was either intended or calculated to inhibit the bank in legal proceedings between the bank and the defendant.

In the present case, in contrast, the proposed media release states that a Statement of Claim and Application have been filed in the Federal Court; that Dataquest (Australia) Pty Limited was established to conduct market research in Australia and New Zealand; four specific allegations are then set out and, finally, it is alleged that the actions occurred in the context of a termination of a business arrangement. In all, the language is fair and temperate. It is made clear that the specific matters referred to are in the nature of "allegations" and it has not been demonstrated to represent a false summary of the court process.

In the normal course, documents initiating court process are open to members of the public to peruse. Normally it will be in the public interest that such information is made publicly available provided it is not substantially inaccurate, immoderate or without any foundation. The public interest is to be found in both the protection of the open administration of justice and in the proper and reasonable discussion of the way in which that process is carried out.

As Mahoney JA points out in Ballina Shire Council v Ringland (1994) 33 NSWLR 680 at 719-720:

"The freedom to speak freely is a great public good. It stands high in the scale of values in our society and the law recognises it as such. In my opinion, no qualification of that freedom can be justified except by the need to protect equally important values.

The right to speak freely is a universally ... recognised good. Subject to qualifications, it is enshrined in international instruments:

....

But free speech is not a slogan, the articulation of which makes thought unnecessary. It is a value to be measured and weighed against other ends which the citizens of a society desire to achieve...

There are well-established limitations to absolute freedom of speech or expression. These include, among others, the law of defamation and the law relating to contempt of court and abuse of process. See Civil Aviation Authority v Australian Broadcasting Corporation (unreported, New South Wales Court of Appeal, 29 June 1995).

What is not permitted, under the banner of free speech, is the use of legal proceedings in a way calculated or intended to influence a party or to frustrate the impartial consideration by the court of issues. Further, it is not permissible to expose a party to public abuse or obloquy nor to risk the prejudgment of the issues on the merits which will be canvassed in proceedings that are pending or which have been instituted.  Attorney General v Times Newspapers Ltd (1974) AC 273 (the thalidomide case). There is no suggestion of trial by media or of anything sensational, scandalous or abusive in the present case. Cf Attorney-General v TCN Channel Nine Pty Ltd (1990) 20 NSWLR 369 at 379. Nor is there any suggestion that the summary of the Statement of Claim is in any way inaccurate. Rather, the gravamen of the complaint goes to its timing. It is said that the threat is to issue the media release before particulars are given and a defence is filed and that both the intention and consequence of such a threat is to influence the respondents in the way they approach and conduct the litigation.

In my view, no sufficient case has been made out as to any real risk of influencing the respondents in the conduct of the litigation so as justify the issue of an injunction. The relevant considerations are as follows:

Firstly, the summary of the process is not in substance an unfair or inaccurate outline of the allegations. It is also made clear that the claims are in the nature of allegations and the language used is fair and temperate.

Secondly, it has not been shown that there is a likelihood that the respondents will be impeded or constrained in the preparation or prosecution of a full and complete defence.

Thirdly, if some evidence is available to show that the claims or any of them are without foundation the respondents are not without a remedy.  An application can be made to strike out

any offending claims. Due publicity would then, no doubt, be given to such an application.

Fourthly, the strong public interest in the open administration of justice calls for such information to be made available except in special cases. No case has been made out as to the proposed release being in contempt of court, defamatory, or otherwise unlawful.

Fifthly, the information has been in the public domain since filing. Normally initiating process is open for perusal by the public and there has been no application to prevent court access to public access to the initiating process.

In all negotiation there is an element of bargaining and leverage which takes place. In the present case, I do not consider that reference to the proposed media release can be said in any way to amount to unfair or improper bargaining.

Accordingly, for the above reasons, I dismissed the Notice of Motion on Friday, 2nd August 1996.

I certify that this and
the preceding nine (9)
pages are a true copy of the
Reasons for Judgment herein of
his Honour Justice Tamberlin.

Associate:

Date:  8 August 1996  

Counsel for Applicant:  Ms J Baird 
Solicitor for Applicant:  Henry Davis York
Date of Hearing:  2 August 1996
Date Judgment Delivered:  2 August 1996
Date Reasons for Judgment Delivered:              8 August 1996