Food Channel Network Pty Ltd v Television Food Network GP (No 3)
[2010] FCA 1112
FEDERAL COURT OF AUSTRALIA
Food Channel Network Pty Ltd v Television Food Network GP (No 3) [2010] FCA 1112
Citation: Food Channel Network Pty Ltd v Television Food Network GP (No 3) [2010] FCA 1112 Parties: FOOD CHANNEL NETWORK PTY LTD (ACN 079 015 339) v TELEVISION FOOD NETWORK G.P. File number(s): QUD 18 of 2007 Judge: PERRAM J Date of judgment: 28 September 2010 Catchwords: JUDGMENTS AND ORDERS – Appeal – Money paid under orders subsequently reversed on appeal – Nature of right of recovery – Procedure for recovery Legislation: Federal Court Rules (Cth) O 37, rs 7, 8
Trade Marks Act 1995 (Cth)
Uniform Civil Procedure Rules 1999 (Qld) Rs 260A, 857Cases cited: Commonwealth v McCormack (1984) 155 CLR 273 cited
Guthrie v Robertson (1987) 13 FCR 336 distinguished
Rodger v The Comptoir d’Escompte de Paris (1871) LR 3 PC 465 citedDate of hearing: 28 September 2010 Date of last submissions: 28 September 2010 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 40 Counsel for the Applicant: Mr M L Stephens with Mr S Collins Solicitor for the Applicant: Potts & Co Lawyers Solicitor for the Respondent: Ms N Braad of Bennett & Philp Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
QUD 18 of 2007
BETWEEN: FOOD CHANNEL NETWORK PTY LTD (ACN 079 015 339)
ApplicantAND: TELEVISION FOOD NETWORK G.P.
Respondent
JUDGE:
PERRAM J
DATE OF ORDER:
28 SEPTEMBER 2010
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The motion be stood over for further directions on Thursday 28 October 2010 at 9.30 am via video link.
2.The applicant pay the respondent’s costs of the motion for 28 September 2010 fixed forthwith at $500.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
QUD 18 of 2007
BETWEEN: FOOD CHANNEL NETWORK PTY LTD (ACN 079 015 339)
ApplicantAND: TELEVISION FOOD NETWORK G.P.
Respondent
JUDGE:
PERRAM J
DATE:
28 SEPTEMBER 2010
PLACE:
SYDNEY
REASONS FOR JUDGMENT
By a notice of motion dated 17 August 2010, Food Channel Network Pty Ltd (“the applicant”) seeks a number of prayers for relief. The relief it seeks may be usefully divided into three categories.
The first is an order that the court enter judgment for the sum of $8039.97, together with some interest. The basis for the making of that order is that it follows from some orders made by the Full Court in proceeding number QUD 132/2009. In that decision of Keane CJ, Stone and Jagot JJ, the Full Court allowed an appeal from some orders made by Collier J, set aside a costs order made by her Honour on 5 February 2008, and ordered the respondents to the appeal (“Television Food Network”) to meet the appellant’s costs of the trial and of the appeal. The consequence of the appeal being allowed and the costs order being set aside is that the amount which was paid under that costs order is no longer legally due. The applicant says that it is entitled to have the money it has paid under that costs order refunded to it.
The second matter which arises is an ex parte application by the applicant for an order requiring the proper officers of a number of television‑related corporations to give a signed statement of details of earnings owed to the respondent, Television Food Network.
The third matter is a corresponding series of freezing orders against Television Food Network which would have the effect of preventing it removing cash or other assets from the jurisdiction, or from assigning, disposing, or dealing with certain trade marks (I interpolate that the trade marks were the subject matter of the proceedings in the Full Court). The present application has been made ex parte, but upon it being called on, Ms Braad appeared for the respondent and sought to be heard. Mr Stephens, who appeared with Mr Collins for the applicant, objected to her appearance. In the situation which obtains, I do not find it necessary to deal with that question.
It is then necessary to deal with the questions which arise in the order I have set them out. Mr Stephens contended that he was entitled to proceed to have judgment entered against the respondent for the sum of $8039.97 in the absence of the respondent on the basis of O 37, r 8, which provides:
A party interested in the execution or enforcement of an order may apply to the Court ex parte for directions as to its execution or enforcement.
Mr Stephens stated that a broad view should be taken of the orders of the Full Court made on 2 June 2010. For completeness I set those orders out, they are as follows:
THE COURT ORDERS THAT:
1.The appeal be allowed
2.The order for costs dated 5 February 2008 be set aside.
3.The respondent pay the appellant’s costs of the trial and of the appeal.
4.Parties at liberty to make further written submission on costs, to be filed within 7 days.
He submitted that in substance the respondent was disobeying those orders and that he was accordingly entitled pursuant to O 37, r 8, to call in aid of those orders by way of execution or enforcement.
There is, I think, little doubt that the applicant has a cause of action entitling it to recover the moneys which it paid under the order made by Collier J. The entitlement to recover moneys paid under a reverse judgment has long been established: see Rodger v The Comptoir d’Escompte de Paris (1871) LR 3 PC 465 applied with approval by the High Court in Commonwealth v McCormack (1984) 155 CLR 273 at 276-277 per Murphy, Wilson, Brennan, Deane and Dawson JJ. On that occasion the High Court took the view that the appropriate course was for the application of the slip rule. In that case the High Court itself had not been informed during the hearing of the appeal that moneys had been paid under pre-existing orders. That fact was then brought to the attention of the Court on the slip rule application and the Court held that it was empowered under the slip rule to give judgment for that sum.
A slightly different view of the cause of action involved was taken by the Court of Appeal in Heydon v NRMA Ltd (No 2) (2001) 53 NSWLR 600 at 603-604 [14] per Mason P (Beazley JA and Ipp AJA agreeing), who expressed the opinion that the cause of action which arose in relation to moneys paid under a judgment subsequently reversed (by whatever means) was a restitutionary cause of action and presumably it would follow from that that separate proceedings could be asserted seeking to recover it.
That last observation, of course, suggests that the bringing of such an application may be attended by the respondent pleading a defence. For example, it is possible that the defence of change of position may be available where moneys have been paid under a judgment subsequently reversed. I am not suggesting that that would be the case here but it is simply to draw attention to the fact that there are defences available to restitutionary causes of action. That observation emphasises, I think, the point that attempting to enter judgment by this mechanism ex parte is procedurally surprising.
The question then is whether the text of O 37, r 8 provides a warrant for embarking upon that procedurally surprising course. The argument of the applicant put by Mr Stephens will be one which can be embraced if one can describe the entry of the judgment which is the subject of the application as being one for the “execution or enforcement” of an order. That rule requires one to identify with some clarity what the order whose execution or enforcement is called in aid of is. It seems to me here that that must be Order 2 made by the Full Court, that is, the order setting aside Collier J’s earlier costs order.
The expression “execution or enforcement” are words having a legal connotation and that connotation is a reasonably well-known one. It suggests the existence or bringing of remedies relating to the enforcement of pre-existing orders by way of writs of possession or execution or the levying of distress. That is, one needs to identify an order which can have a civil, monetary consequence and one then needs to posit some form of remedial procedure which can be seen as acting in aid of that order.
Mr Stephens took me very usefully to a decision of Spender J in this court entitled Guthrie v Robertson (1987) 13 FCR 336. In that case Mr Robertson had been fined on a number of offences totalling $21,000 and Spender J had ordered that those fines be paid. The Director of Public Prosecution then sought to examine Mr Robertson as to his position and in doing so specifically acted pursuant to O 37, r 8, that is, the rule presently under consideration.
It seems to me that that decision is distinguishable from this case because in that case there was, in fact, an order of a monetary kind which O 37, r 8 could be seen as giving effect to. Mr Stephens placed a particular reliance upon a particular passage (13 FCR at 337-338) which was in these terms:
It is obviously crucial to the efficiency of the Court’s process that its orders be obeyed, and the court should be astute to lend whatever assistance it can to enable its orders to be enforced
The point to be emphasised there is that one needs to identify an order which can be described as being disobeyed. Lastly, for similar reasons to those which I have already given, I do not think that the order of the Full Court setting aside Collier J’s costs order is one which can presently be said to be disobeyed by the respondent in not paying the $8000, and in those circumstances it seems to me that O 37, r 8 is not capable of providing a juridical basis for relief. That having been said, however, this is not to say that the applicant is not entitled, upon the opponent being heard, to an order that the moneys it has paid under a judgment which has been reversed should be refunded to it. My quick reference to the authorities this morning shows that the existence of that cause of action is relatively straightforward.
Of course, some of the correspondence to which I was taken to suggested that the respondent might itself be contemplating the very kinds of defences to which I have earlier made reference, and namely in this case, the possibility of various set-offs. That possibility underscores the necessity of a proceeding of that kind not being conducted on an ex parte basis.
I turn then to the question of whether orders requiring persons to provide statements of financial dealings should be made, and whether there should be freezing orders. Mr Stephens brought my attention to O 37, r 7(1), which provides:
Subject to the Rules, and without limiting any other means of enforcement which may be available, the Court may, in order to enforce a judgment or order of the Court, make any order, issue any writ or take any other step that could be made, issued or taken, by the Supreme Court of the State or Territory in which the judgment or order is to be enforced if the judgment or order had been made by that Supreme Court.
That rule equips this court with the equivalent powers which a State Supreme Court would have in similar circumstances. Reliance was placed upon two rules. The first of which is Rule 857 of the Uniform Civil Procedural Rules 1999 (Qld), which is in the following terms:
Attendance of, or information about, the enforcement debtor
For deciding whether to issue an enforcement warrant authorising redirection of an enforcement debtor's earnings, the court may –
(a) order an enforcement hearing under part 2; or
(b) order a person whom the court considers may owe earnings to the enforcement debtor to give to the court a signed statement of details of the earnings owing to the enforcement debtor (an earnings statement).
Mr Stephens made plain that his client proposed the orders sought under rule 857(b).
Three corporations are suggested as being appropriate to provide those statements. These are XYZ Networks Pty Ltd, Foxtel Cable Television Pty Ltd and SBS Television. The reasons why orders of that kind should be made were displayed in an affidavit of Mr Hauff sworn on 16 August 2010. Mr Hauff deposed in paragraph [21] of his affidavit:
During the course of the trial, the respondent provided copies of confidential licence agreements it had with Continental Programming Australia LP and XZY [sic] Network Pty Ltd, which appear to have now expired but the respondent’s programs continue to be shown on Foxtel cable television, Austar satellite television and Special Broadcasting Service (“SBS”) free to air television.
As I apprehended the point, it was likely that those three entities were continuing to pay royalties to the respondent. Those royalties, going overseas to the respondent (it being located in the United States) were a species of property which the Court might make a freezing order in respect of, and therefore, one in which it ought to at least make an order under Rule 857 for the provision of information. The making of orders of the kind in Rule 857 to third parties to litigation involves an interference with those parties’ rights to go about their business unmolested by a compulsory process of a court.
In this case, the orders which are sought if made would require some work and some effort on the part of those receiving it to provide details of particular financial arrangements. Obviously enough, the interference with third parties in that way is something which should be kept to a minimum. On the other hand, there is much to be said for the view that subpoenas are often issued without notice, and the interference which is constituted thereby is not thought to be sufficient, at least in the first instance, to prevent the orders being made.
In the present case, I am content to make orders 3, 4 and 5 of the proposed orders but with a textual variation which will be to the effect that those affected parties may apply on short notice to set aside the orders if they are so advised.
[Further debate ensued]
I have just pronounced reasons for judgment, in which I indicated that I was willing, in principle, to make orders in accordance with prayers 3, 4, and 5 of the applicant’s notice of motion, provided that those orders were amended so as to provide a regime under which the parties named in those orders and the respondent could apply to have them set aside. The basis upon which I made those orders was that the prejudice caused to the third parties was not so great as not to warrant making an order to aid recovery. The power I have proceeded to make that order under was Rule 857 of the Queensland Uniform Civil Procedure Rules 1999, which is set out above.
The terms of that order require one to attend to the identification of something which is to be enforced. The applicant applied, this morning, to me for judgment in the sum of $8039.97, or, at least, for an order that the respondent pay the applicant that sum. Had that order been made, it is likely that it would have amounted to a judgment within the meaning of Rule 857. However, I have declined to make that order. It follows that the power is not enlivened.
Mr Stephens has foreshadowed the making of an application, pursuant to the slip rule, to vary the orders of the Full Court to require repayment in the style done in Commonwealth v McCormack. There has also been some discussion of the possibility of the bringing of a separate proceeding based on a restitutionary cause of action.
When the true nature of the orders in 3, 4, and 5 is identified as being directed to facilitating the process of procuring the judgment in prayer 1, a different light is put upon the inconvenience to third parties caused by those orders. In circumstances where there is not, presently, a judgment, where there has been indication, from the respondent’s part, that questions of set‑off may be explored, and where the evidence of dissipation is at the lower end of the spectrum, it seems to me that it would be inappropriate to make orders in the form of 3, 4, and 5, even if there were power to make them. Accordingly, I revise my reasons.
The third set of orders sought by the applicant are orders in the nature of freezing orders. The applicant put its case on the basis of O 37, r 7 again, this time combined with Rule 260A of the Queensland Uniform Civil Procedure Rules 1999, which states:
260A Freezing order
(1) The court may make an order (a freezing order) for the purpose of preventing the frustration or inhibition of the court's process by seeking to meet a danger that a judgment or prospective judgment of the court will be wholly or partly unsatisfied.
(2) A freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets.
The freezing orders sought are ones which would restrain Television Food Network or any of its associated entities, including Scripps Networks LLC, first from assigning, disposing or dealing with particular trade marks, secondly, diminishing the value of any of its assets, cash debts or securities in Australia, or removing any such assets or securities from Australia and thirdly, a freezing order against the Registrar of Trade Marks from registering any assignment of any such trade marks in accordance with the provisions of the Trade Marks Act 1995 (Cth).
Rule 260A, unlike Rule 857, does not require a judgment – a prospective judgment will do. It is to be borne in mind, however, that the present application is made ex parte. The powers of the court to make freezing orders ex parte is undoubted, but it is to be noted that, ordinarily, the kind of evidence which will be necessary to justify the making of such orders will be evidence which suggests a strong risk of dissipation of assets or a likelihood of defalcation or some other species of behaviour warranting a departure from the ordinary rules of procedural fairness. The evidence of Mr Hauff, I think it may be said, demonstrates an uneasiness about the position of the respondent. That uneasiness was fuelled by a number of factors.
For example, Mr Hauff noted the corporate structure of the respondent as involving a complex web of United States companies, some of which were in Chapter 11 bankruptcy, and some of which involved obscure limited partnerships under the law of Delaware. So too, Mr Hauff noted that despite the relatively modest amount of $8000 being sought from the respondent, and despite its prior protestations as to being an entity of means, nevertheless, that relatively modest amount of money remained unpaid. The gravamen of those observations was, as I understood it, to suggest that there was an air of suspicion said to be hanging over the respondent.
However, the only actual evidence of dissipation to which I was taken was the suggested payments by Foxtel, SBS and XYZ Networks to the respondent in relation to the matters in paragraphs [21] of Mr Hauff’s affidavit. Those payments, assuming they can be counted as acts of removing assets from the jurisdiction, are in the character, so it seems to me, of payments made pursuant to ordinary arrangements and it is difficult to give them the flavour of wrongful dissipation in the face of a judgment of the court or to put the matter, perhaps, on the basis of the Civil Procedure Rules, the dissipation of assets with a view to avoiding the consequences of a judgment.
I do not say that when the respondent is heard that the making of such a freezing order might not be appropriate, but as the evidence stands, I do not think that the interference with the respondent’s right ordinarily to be heard before an order is made against it is outweighed by the material which has been placed before me. In those circumstances, I decline to deal with prayers 6, 7 and 8 of the applicant’s notice of motion at this stage in the absence of the respondent. In that case the only order I will make is that the proceeding standover for further directions to Thursday, 28 October at 9.30 am by video link
The respondent applies for its costs of the hearing this morning. The notice of motion was not served by the applicant upon the respondent and the applicant sought to proceed ex parte. The respondent came to be present in court by reason of the diligence of Ms Braad, who noticed that the matter was in the list this morning and who attended on behalf of the respondent. When she appeared, Mr Stephens objected to her appearing, and I, in the circumstances which then obtained, determined not to deal with that question at that time.
I have subsequently pronounced reasons why, in the first instance, I was minded to make orders 3, 4, and 5 of the notice of motion, but otherwise not to make orders 1, 2, 6, 7, and 8 in the absence of the parties mentioned in those prayers. My first set of reasons did indicate a willingness to make orders 3, 4, and 5. I then heard from Ms Braad as to what her attitude was to those orders.
She indicated, understandably enough, that she had had no time to prepare the matter and that she had had no opportunity to take instructions, and was, therefore, in those circumstances, substantially disabled from making submissions which would be of any utility to the Court. Having made that introductory remark, however, she pointed out that the absence of a judgment sum having been entered by me, pursuant to prayer 1 of the notice of motion, threw into a different light the ability to make, or the utility in making, orders in accordance with prayers 3, 4, and 5 of the applicant’s notice of motion.
Thereafter I reconsidered my reasons and, in subsequence, embraced that submission. The consequence is that none of the orders which were sought in the notice of motion have been made. It is in that circumstance that Ms Braad applies for her costs. It is true, she says, that she was not required to be here, but her presence, so she submitted, has had an impact upon the orders which have been made. Mr Stephens, on the other hand, submits that the respondent was not invited and essentially was not welcome at this morning’s proceeding.
The fact remains that the respondent is a party to the proceeding and there was nothing inappropriate or improper about the solicitor for the respondent noticing the matter was in the court list and attending. Indeed, one can readily imagine that a solicitor who became aware that a proceeding in which she was acting was before the court would be perhaps remiss in her duties if she did not attend.
The filing of the application and the bringing of the matter before the court inevitably meant that it would be placed in the court list and that carried with it a concomitant risk that there would be an attendance by the respondent. I might be inclined to put that attendance at nil, save for the fact that Ms Braad was in fact successful in persuading me from making the orders, which I had otherwise indicated I was willing to make. In those circumstances, it would, in principle, be appropriate to make an order that the applicant pay the respondent’s costs.
Mr Stephens put the submission, however, that that would be unfair in circumstances where the respondent had not been invited to the proceeding and where the amount of money involved, being only $8000, would be readily consumed in whole or in part by the costs of Ms Braad. I do not think in circumstances where Ms Braad had no notice that the proceeding was coming on – in fact has just literally turned up having seen it in the court list – that her costs are likely to be particularly large. Certainly, they will not involve any element of preparation. In those circumstances, having regard to the small amount of those costs, I think it is appropriate that the applicant pay the respondent’s costs of this morning, which I fix forthwith at $500.
I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate:
Dated: 13 October 2010
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