Network Ten Pty Limited v van Onselen

[2023] NSWSC 829

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Network Ten Pty Limited v van Onselen [2023] NSWSC 829

Hearing dates:

29 June 2023

Date of orders:

14 July 2023

Decision date:

14 July 2023

Jurisdiction:

Equity

Before:

Hammerschlag CJ in Eq

Decision:

Declaration that the publication in The Australian Business Review section of The Australian newspaper on 29 May 2023 of the article headed “Paramount woes raise questions about the long term viability of Network 10” was a breach by the defendant of cl 7.1 of the Deed entered into by the plaintiff and the defendant on 3 March 2023

Catchwords:

CONTRACTS — construction — on the termination of the defendant’s employment with the plaintiff, the parties executed a Deed of Release (the Deed) containing a non-disparagement clause — the defendant, a journalist and academic, published a newspaper article (the Article) disparaging of the plaintiff — whether on the proper construction of the Deed, disparaging comments were captured only if they related to the defendant’s employment with the plaintiff or its termination — whether the Article was not disparaging because it was based on public information and concerned matters where the plaintiff’s reputation had already been tarnished — RESTRAINT OF TRADE — Restraints of Trade Act 1976 (NSW) ss 2(2), 4(1), 4(3) — whether the non-disparagement clause is a restraint of trade and, if so, whether it is against public policy — EQUITY — equitable defences — unclean hands — whether the plaintiff has approached the Court with unclean hands because of representations said to have been made by it to the defendant concerning the operation of the non-disparagement clause — REMEDIES — whether a declaration should be made and an injunction granted — HELD — on its proper construction, the defendant breached the non-disparagement clause — the non-disparagement clause is not a restraint of trade but, if it is, it is not against public policy — the alleged representation concerning operation of the non-disparagement clause was not made out and in any event, the plaintiff does not have unclean hands — declaration as to breach should be made but no injunction granted

Legislation Cited:

Restraints of Trade Act 1976 (NSW)

Cases Cited:

Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; [1973] HCA 36

Boddington v Lawton [1994] ICR 478

Electricity Generation Corporation Ltd v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7

Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd [1968] AC 269

Fermiscan Pty Ltd v James [2009] NSWCA 355; (2009) 261 ALR 408

Fermiscan v James [2009] NSWSC 546

McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; [2000] HCA 65

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37

Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35

Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; [2001] HCA 45

Petrofina (Great Britain) Ltd v Martin [1966] Ch 146

Re New South Wales Bar Association [2014] NSWSC 1695; (2014) 315 ALR 146

Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; [2005] HCA 17

Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530; [2004] HCA 56

Category:

Principal judgment

Parties:

Network Ten Pty Limited (ABN 91 052 515 250) (Plaintiff)
Dr Peter van Onselen (Defendant)

Representation:

Counsel:
A Moses SC and P Sharp (Plaintiff)
S Chrysanthou SC and A B Gotting (Defendant)

Solicitors:
Baker McKenzie (Plaintiff)
Laxon Lex Lawyers (Defendant)

File Number(s):

2023/00177027

Index

INTRODUCTION

BACKGROUND

Events leading up to the Deed

The Deed

Events after the Deed including publication of the Article

The proceedings

THE PARTIES’ POSITIONS

Ten’s position

Dr van Onselen’s position

Ten’s response

DISPOSITION

Credit

Operation of cl 7.1 and was it breached?

Restraint of trade

Clean hands

RELIEF

CONCLUSION

JUDGMENT

INTRODUCTION

1. The plaintiff (Ten or the Company) is an Australian commercial television network. Since 2017, it has been part of the Paramount Global group which has its headquarters in the United States.

2. The defendant (Dr van Onselen or the Employee) is an academic, a journalist, an author and a commentator. He holds, amongst others, a doctorate in political science. Since 2011, he has been the Foundation Chair of Journalism at the University of Western Australia and, since 2018, a Professor of Politics and Public Policy at Griffith University, Queensland.

3. On 10 December 2018, Ten employed Dr van Onselen.

4. On 3 March 2023, they parted company on terms embodied in a written Deed of Release (the Deed).

5. The Deed contained (in cl 7) what the parties have described as a non-disparagement clause. Under it, both sides agreed not to disparage the other or make any statement or publication or authorise any other person to disparage or make any statement or publication which may, or which does in fact bring the other into disrepute or ridicule, or which may otherwise adversely affect their respective reputations.

6. On 29 May 2023, there was, published in The Australian Business Review section of The Australian newspaper, an article (the Article) written by Dr van Onselen. Ten contends that the Article, in breach of the Deed, disparages it.

7. Ten seeks a declaration that Dr van Onselen has breached cl 7.1 of the Deed and a permanent injunction restraining him from further breaching it. The Summons makes no claim for damages.

BACKGROUND

Events leading up to the Deed

8. From 2010, Dr van Onselen regularly appeared on television as a political commentator and host. When he was with Ten, he co-hosted television programs called The Project and The Sunday Project. He might, in the circumstances, be described as ‘high profile’.

9. On 10 December 2018, Ten employed Dr van Onselen as Network Political Editor.

10. On 31 January 2022, one Tegan George – who had, at one time, been employed by Ten – initiated proceedings against Ten in the Fair Work Division of the Federal Court of Australia in which she makes a series of workplace complaints, including complaints directed at alleged conduct on the part of Dr van Onselen (the Proceedings).

11. In early 2023, Ten requested Dr van Onselen to relocate to Canberra in order to retain his role. He was not prepared to do so. This resulted in Ten making his position redundant.

12. Ten and Dr van Onselen then negotiated the terms of his departure.

13. Dr van Onselen retained a solicitor, Mr Chris Gianatti (Gianatti), to advise him and engage in communications with Ten with respect to those terms.

14. In the negotiations, Ten was represented primarily by Mr Anthony John McDonald (McDonald), Vice President Human Resources Australia and New Zealand for Paramount Australia & New Zealand.

15. McDonald gave affidavit evidence of a telephone conversation in which Dr van Onselen said that he was concerned that Ten was going to “hang me out to dry on the Tegan George matter. But if I can negotiate something on that I’ll take the redundancy”.

16. On 22 February 2023, McDonald sent Dr van Onselen redundancy calculations, a draft Deed of Release and a draft announcement that would “position” Dr van Onselen’s “exit as a resignation”.

17. The draft made provision for the payment to Dr van Onselen of $165,491.03, made up of a payment in lieu of $58,145.50, a redundancy payment of $35,781.85 and an ex gratia payment of $71,563.68.

18. Dr van Onselen sent the proposed Deed to Gianatti. It contained a non-disparagement clause.

19. Dr van Onselen says that after receiving the document, he had a conversation with McDonald to the following effect:

Dr van Onselen:   I assume the deed doesn’t shut down my right to comment forever about the network. I mean, I’m not suggesting this obviously, and it’s deliberately extreme, but if the CEO fucked a goat and everyone was piling on Ten for not sacking them, surely I can pile it on too?

McDonald:      Of course mate, that sounds fair.

Dr van Onselen:   This deed is all about everyone just putting their guns down and walking away, so that with the distance of time you’re not silenced forever. I mean I’m still going to be a commentator and I teach media. I can still, within reason, say whatever I want, yes?

McDonald:       Of course, but hopefully you don’t ever want to anyway.

Dr van Onselen:   How is it at Ten with all the shit going on?

McDonald:Yeah, it’s tough but hopefully we can get through it and come out the other side stronger.

20. McDonald disputes Dr van Onselen’s version. He denies that a conversation to the effect recounted by Dr van Onselen occurred. He says that a conversation to the following effect took place:

Dr van Onselen:   This is without prejudice.   

McDonald:      I understand, yes.   

Dr van Onselen:   I see the deed has a disparagement clause. After the deed is signed I take it that the Network will not be saying negative things in relation to myself about Tegan George or how I have come to leave the Network.

McDonald:   The Network has no intention of making negative public comments about you but how the deed works to deal with that issue is a matter for the lawyers to deal with not me.

Dr van Onselen:   I will raise it with my lawyer.

21. I shall refer to this conversation (whatever its terms) as the Conversation.

22. Dr van Onselen gave affidavit evidence that he recalled the Conversation as he thought it was important to his living as a journalist, commentator and academic to ensure that, in signing the Deed, he was not precluded from providing fair comment in respect of Ten. His evidence is that based upon the Conversation, he assumed that he was not so precluded, and that McDonald was of the same assumption. His evidence is further that had he thought differently or that had McDonald not agreed with his assumption, he would have either negotiated an express carve out from the non-disparagement clause or, if that carve out was refused, he would not have signed the Deed.

23. McDonald gave evidence of another conversation with Dr van Onselen in which the effect of the proposed deed was discussed and in which McDonald said it was not for him to resolve such issues but that these were a matter for the lawyers. He says that Dr van Onselen agreed with this.

24. On 27 February 2023, having consulted Gianatti, Dr van Onselen sent McDonald an Amended Deed of Release with tracked changes. The changes included amendments to the non-disparagement clause. McDonald emailed Dr van Onselen that he had received the amended document and had sent it onto the lawyers and agreed, “let the lawyers do their thing!”

25. Mr Stuart Thomas, Ten’s Vice President, Legal and Corporate Affairs, communicated with Gianatti on 1 March 2023, providing him with a further Amended Deed of Release.

The Deed

26. The final version of the Deed was executed on 3 March 2023.

27. The Preamble records that the Company had employed the Employee since 10 December 2018; that on 22 February 2023, the parties agreed that on the Termination Date (which the Deed defines to be 3 March 2023) the Employee’s position would become redundant and the employment of the Employee will terminate; and that the parties had agreed to formalise their separation on the terms set out in the Deed.

28. The Deed provides for the Company to pay the Employee amounts set out in Schedule 1.

29. The presently relevant clauses of the Deed are set out or described below:

1.    Definitions and Interpretation

…

1.5.   Proceedings means any proceedings brought by Tegan George against the Company including Federal Court of Australia proceedings Number NSD49/2022 (including any appeal, cross-claim or related proceedings that are brought in any court or tribunal relating to such proceedings).

…

1.8.   Related Bodies Corporate has the meaning given to that term in section 50 of the Corporations Act 2001 (Cth).

…

5.   Release

5.1.    In consideration for the Company’s agreement under clause 3.2 to pay the Employee a redundancy payment of an amount that exceeds the statutory entitlement, the Employee hereby releases and discharges the Company, its Related Bodies Corporate and their respective officers and employees (the Releasees) from all Claims against any of them and acknowledges that the company holds the benefit of this release on behalf of the Releasees.

5.2.    In consideration for the Employee’s promises in this deed, the Company hereby on behalf of itself and on behalf of its Related Bodies Corporate releases and discharges the Employee from all Claims (excluding Claims of the nature described in clause 5.3) against him.

…

7.    Non-Disparagement

7.1.    Subject to clause 7.3, the Employee agrees not to disparage the Company or any of the Releasees or make any statement or publication, or authorize any other person to disparage or make any statement or publication, whether oral or in writing, which may or which does in fact bring the Company or any Releasees into disrepute or ridicule or which may otherwise adversely affect their respective reputations.

7.2.    Subject to clause 7.3, the Company agrees not to disparage the Employee or make any statement or publication, or authorize any other person (including the Releasees) to disparage or make any statement or publication, whether oral or in writing, which may or which does in fact bring the Employee into disrepute or ridicule or which may otherwise adversely affect the Employee's reputation.

7.3.    For the avoidance of doubt, clauses 7.1 and 7.2 do not limit or restrict the truthful statements made by each party respectively in relation to the Proceedings.

30. References below to clauses are, unless otherwise stated or the context indicates differently, references to clauses in the Deed.

31. Under cl 10, Dr van Onselen warranted that, other than as set out in the Deed, Ten had not made any promises and representations or inducements to him to enter into the Deed.

32. Under cl 12.1, the parties agreed that the Deed constitutes the entire agreement between them to the exclusion of any prior agreement, whether written or oral, express or in any way implied.

Events after the Deed including publication of the Article

33. In an exchange of correspondence on 22 March 2023 between Dr van Onselen and Bronwyn Fardon, Ten’s Head of Corporate Communications, Dr van Onselen foreshadowed that he proposed to write an article which would include comments about Ten’s financial performance. He wrote that he was doing “relative decline across free to air as well as where the good and bad points are for all three commercials” (meaning commercial television networks).

34. On 29 May 2023, The Australian Business Review section of The Australian newspaper published the Article which was (except for the title) written by Dr van Onselen. It reads:

Paramount woes raise questions about the long term viability of Network 10

PETER VAN ONSELEN

Follow @vanOnselenP

______________________________________________________________

By PETER VAN ONSELEN

CONTRIBUTING EDITOR

Follow .@vanOnselenP

7:53AM MAY 29, 2023

Even though Channel 10 has long been the minnow of Australian commercial

television - out gunned and out rated by 7 and 9 now more than ever - when CBS (now Paramount) took the little Aussie battler over a few years back I assumed its future was bright.

Supported by a massive US media player - now rebranded Paramount - was a

distinct advantage the other Aussie networks don't have. It was one of the reasons I accepted the job as 10's Political Editor, a role I walked away from earlier this year.

Paramount also has a streaming platform with international credentials, again an advantage domestic competitors don’t have. Another reason to have thought the network's future was bright.

But the latest news coming out of the US is reason to doubt its long term viability. Paramount's share price has plummeted more than 30 per cent in the past month, down more than 50 per cent in just a year. At its zenith just a few years ago the share price was above $97. Today it's below $15. And the latest announcement from its American headquarters was an 80 per cent cut to its dividend followed by a hiring freeze to save some coin. Understandable given the more than a billion dollar first quarter loss posted this year, with more losses forecast.

You could choose to be a little more upbeat about Paramount (and Network 10's) future if the streaming part of the business was firing, but it's not. That's actually where the losses are centred, but it's also where the hope for growth has long been too. Subscription growth hasn't been strong enough to make streaming profitable yet, and while Paramount+ is big by Australian standards, and growing, it is dwarfed by others in the US, playing catch-up since entering the streaming business later than its major competitors. A missed opportunity to be an early adopter by management.

The likes of Netflix, Disney and Warner are much bigger and better established

operators, doing better than Paramount. It's so concerning that Paramount's biggest shareholder, Warren Buffett who owns 15 per cent of the business, has intimated that he doesn't think streaming is the future for Paramount, unless scale can be brought to bear and quickly.

That's simply not going to happen, which begs the obvious question what does one of the world's most acclaimed investors choose to do with his stake in Paramount? If he dumps it the share price will tank even more than it already has. Buffett exiting a business is a certain way to cause panic, and Paramount is already in panic mode. It would be a disaster for current management.

Irrespective of what Buffett does or doesn't do (his shares have already halved in value and Buffet has shown a willingness to realise losses before when he loses faith in management) analysts have by and large put a sell order on Paramount shares, seeing far more downside risks than upside opportunities with the stock.

So what does all of this mean for Network 10? It could be fine, limping along with little attention paid to it by its big overseas owner (or its domestic competitors to be frank). It's such a small part of Paramount that losses or gains at 10 matter little to its American owners. But even big companies that are struggling tend to cut their losses, dumping unprofitable parts of their businesses. There certainly won't be the sort of investments in the brand once thought likely when the CBS takeover was announced. Since that time the network's ratings have slowly ebbed lower and lower, elongating the divide between it and its more successful commercial rivals in Australia. In Sydney just this month 10's news share dropped to a meagre 6 per cent, a new low that one rival news executive told me he'd "never seen in 30 years in the business".

That's despite Australia's number one female news anchor, Sandra Sully, hosting. A sure sign the problem is the brand and management, not the host.

Back in the US, Paramount executives are trying to remain upbeat, claiming that a return to profitability isn't too far away. Maybe they are right. But you'd be brave to bank on such predictions given that those same executives didn't predict the failures of the present.

If they had, the failures could have been minimised and not spooked the market

resulting in a collapse of the share price. Whatever happens one thing is certain: Warren will be watching.

Peter van Onselen is a professor of politics and public policy in the business faculties at the University of Western Australia and Griffith University.

PETER VAN ONSELEN, CONTRIBUTING EDITOR

Dr Peter van Onselen has been the Contributing Editor at The Australian since

2009. He is also a professor of politics and public policy at the University of

Western Australia and was appointed its foundation chair.

35. On 30 May 2023, Ten’s solicitors wrote to Gianatti complaining about the Article and making various demands, including for written undertakings. The letter foreshadowed an urgent application to the Court.

36. On 31 May 2023, Dr van Onselen (apparently with the assistance of his wife, who is a lawyer) emailed Mr Andrew Stewart of Ten’s solicitors. It is appropriate to set the email out in full:

To Ms A Stewart

I refer to the two letters you have sent to Mr Chris Gianatti. Mr Gianaitti acts for me in relation to the Proceedings (as defined by the Deed) but not in relation to the matters referred to in your two letters.

I provide a broad response to your unsubstantiated claims as follows:

On your interpretation clause 7.1 of the Deed of Settlement purports to deny my freedom of speech and opinion (and right to publish that opinion) in relation to Network Ten and it's managers ad infinitum and into perpetuity. This is clearly ultra vires and the clause (perhaps in fact the whole deed) in my view would therefore be interpreted as an unfair term/ contract.

My interpretation of this clause is that I have agreed for a small sum to not disparage Network Ten or its managers in relation to the specifics of my exit at Ten or the Proceedings. The Article has not breached this interpretation.

My comments are based on matters of public record and are unrelated to my employment or the Proceedings. I have not disclosed confidential or sensitive information obtained during the course of my employment, and I have no intention of doing so. Network Ten's woes and its parent companies declining share price are a matter of public record.

This was something I specifically asked network management about both before and after signing the deed, given I make my livelihood as both an opinion writer and media and politics professor - roles that I have had long before, during and after my employment at Network Ten. An actual breach of the deed could be, for example, to publish the many text messages and commentary sent to me whilst an employee by various high profile network employees and senior managers over the years about each other and the company, which are highly disparaging. Something I have not done.

By attempting to permanently deny me of my right to comment on matters of public record, it is akin to a restraint of trade.

I also note that Network Ten do not come to this matter with clean hands. I have numerous examples with evidence of senior Network 10 employees and mangers having breached the deed post it's execution by disparaging me, but because I've moved on I have chosen to ignore these flagrant breaches which have been brought to my attention.

In relation to The Daily Mail article your claims are unsubstantiated and I request further particulars. At this stage your assertions appear to be based on speculation. You also seem not to have realised that all quotes from me in

that piece are simply lifted from my article in The Australian.

I put Network Ten on notice that by your actions you are harassing a former employee in a concerted campaign to silence them. This is on top of the continued harassment, bullying and lack of regard for my well being by managers that I endured whilst an employee which I have previously put Network Ten on notice of. I reserve my rights in relation to a future workers compensation claim.

I also reserve my rights as a whistle blower to instigate a public campaign to out such corporate bad behaviour if this harassment continues.

Dr Peter van Onselen

The proceedings

37. On 2 June 2023, Ten sued out of this Court, a Summons seeking both interlocutory and final relief. Ten seeks final relief in the form of a declaration and an injunction in the following terms:

Final Relief

7   A declaration that the defendant has breached clause 7.1 of the Deed of Release.

8   An order that the defendant be restrained, by himself, his servants or agents, from disparaging or making any statement or publication, or authorising any other person to disparage or make any statement or publication, whether oral or in writing, which may or which does in fact bring into disrepute or ridicule, or which may otherwise adversely affect the respective reputations of:

a.   the plaintiff;

b. Related Bodies Corporate of the plaintiff (as that term is defined in section 50 of the Corporations Act 2001 (Cth)); and

c.    each of their respective officers and employees.

38. On 3 June 2023, Dr van Onselen’s present solicitors wrote to Ten’s solicitors making the following offer:

Without admission:

1. The defendant undertakes to the plaintiff to comply with clause 7.1 of the Deed of Release.

2. Each party pay its and his own costs of the proceedings.

3. An order in the form sought in paragraph 9 of the Summons.

4. The proceedings otherwise be dismissed.

Our client will delete all his social media posts referring to the Australian article. However, to be clear, it is not within his power to cause Nationwide News to remove the Australian Article from its website.

39. The offer was not really meaningful because Dr van Onselen was arguing that cl 7.1 did not capture the statements made in the Article.

40. Pending the hearing, however, the parties reached an interim arrangement. On 5 June 2023, I fixed the hearing to commence on 29 June 2023. The hearing was completed in one day.

41. The Court had the benefit of written submissions from both sides.

42. McDonald and Dr van Onselen gave evidence and were cross-examined. Dr van Onselen gave evidence remotely from Europe.

THE PARTIES’ POSITIONS

Ten’s position

43. Ten argues that the Article breaches cl 7.1 by disparaging Ten’s financial position, the viability of its US parent, its Australian brand and its management.

44. It argues that the Article conveys that:

1. Ten is weak, commercially unviable and/or worthless;

2. its Sydney news rating performance is embarrassingly poor;

3. Ten’s management is directionless, lacks competence and is to blame for its poor ratings;

4. Ten’s US management lacks skill, competence and foresight; and

5. Ten’s US parent company is commercially unviable.

45. In its written submissions, Ten described the Article as containing “colour, gloss and sting”.

46. Ten argues that cl 7.1 is an enforceable negative stipulation, the breach of which provides a prima facie basis for the grant of an injunction. It argues that there are no good reasons why an injunction should not be granted.

Dr van Onselen’s position

47. First, Dr van Onselen argues (based on a combination of the written and oral submissions made on his behalf) that the Article does not disparage Ten or any of its related bodies corporate, officers or employees within the meaning of cl 7.1 because:

1. on a business-like construction, against the background of the fact that Dr van Onselen’s occupation was known, the clause is not to be construed as capturing statements made by him in good faith that “in the most generalised of senses” discredit or lower the estimation of Ten or its holding company, but captures only statements in bad faith that go beyond fair comment;

2. the true purpose of the Deed was to stop negative commentary by Dr van Onselen about his employment, or commentary about Ten as an employer or the circumstances in which his employment was terminated, or about the Proceedings; [1]

3. the Article merely restates information which is already publicly available; and

4. Ten’s (and for that matter, presumably its holding company’s) reputation had already been tarnished or exposed by the “very widely discussed exposition of the same facts” before the Article, [2] so that its reputation could not be tarnished by the re-exposition of those matters in the Article.

   1. Tcpt, 29 June 2023, p 17(17-22). He asserted something similar in his 31 May 2023 email.

   2. Tcpt, 29 June 2023, p 78(3-6).

48. Second, he argues that cl 7.1 is a restraint of trade within the meaning of s 2(2) of the Restraints of Trade Act 1976 (NSW) (the Act) and is invalid under s 4(1) of the Act because it is against public policy. Section 4(1) of the Act provides:

4 Extent to which restraint of trade valid

(1)   A restraint of trade is valid to the extent to which it is not against public policy, whether it is in severable terms or not.

49. The thrust of this argument appears to be that:

1. Ten (and its US holding company) constitute a sizeable corporate organisation which “cannot protect its reputation as far as the tort of defamation is concerned”; [3]

2. the interest sought to be protected by cl 7.1 cannot be protected because any other journalist could have written the Article;

3. cl 7.1 impinges on Dr van Onselen’s right of free speech and therefore prevents him from exercising his professional occupation; and

4. consequently, the clause is against public policy.

   3. Tcpt, 29 June 2023, p 81(7-9).

50. Third, he argues that relief should be refused because Ten comes to Court with unclean hands by reason of its representations to Dr van Onselen on the operation of the non-disparagement clause. I take this submission to entail the proposition that Ten is seeking to enforce cl 7.1 inconsistently with how McDonald represented it would operate. For this submission, Dr van Onselen obviously relies on his version of the Conversation.

51. Fourth, he argues that the injunction sought should not be granted because it is not certain and is so excessively broad that compliance would be impossible or otherwise oppressive.

52. Finally, he argues that an injunction should not be granted because there is no, no realistic, or no demonstrated risk that if his construction of the Deed is rejected (and the Article is found to have breached cl 7.1) he will breach it again.

53. I interpolate that in his written submissions and initially at the hearing, Dr van Onselen put that Ten is estopped from asserting that cl 7.1 applies to statements in the Article, by virtue of Dr van Onselen having adopted an assumption to the contrary effect based primarily on the Conversation. The estoppel contention (which, according to counsel for Dr van Onselen, was put “mildly”) had obvious insuperable difficulties (even if Dr van Onselen’s version of the Conversation were to be accepted), not least of all because of the presence in the Deed of cls 10 and 12.1. It was correctly abandoned during oral argument. No cross-claim for rectification of the Deed was made.

54. However, Dr van Onselen still relies on his version of the Conversation as relevant to “what risk he poses as to his genuine state of mind in relation to his understanding of the deed”. [4] I take this to mean that it is relied upon as being relevant to the question as to whether, if Dr van Onselen breached the Deed, there is a realistic risk that he will do so again. He also relies on the Conversation as founding his unclean hands defence, which is pressed. [5] The consequence of this is that, in the manner in which the defence has been conducted, the Court is required to assess the respective credit of McDonald and Dr van Onselen in relation to the Conversation.

    4. Tcpt, 29 June 2023, p 89(1-9).

    5. Tcpt, 29 June 2023, p 88(1-16).

Ten’s response

55. With respect to the restraint of trade submissions, Ten argues that cl 7.1 is not a restraint of trade within the meaning of s 4 of the Act because it does not limit Dr van Onselen’s ability to work and earn income as a political commentator (and presumably as an academic). Ten argues that a non-disparagement clause is a category of agreements which should not be considered restraints of trade. It also argues the restriction cl 7.1 imposes is de minimis and is insufficient to make cl 7.1 a restraint of trade.

56. Additionally, Ten argues that, if cl 7.1 is a restraint of trade, it is not against public policy, but a legitimate means for the protection of Ten’s goodwill and reputation.

DISPOSITION

Credit

57. Each side attacked the credit of the other’s witness in relation to the Conversation.

58. I believe McDonald and not Dr van Onselen.

59. There are a number of factors standing in the way of accepting Dr van Onselen’s evidence.

60. Dr van Onselen’s position is that McDonald agreed that, within reason, Dr van Onselen could say whatever he wanted (that is, even if it was disparaging of Ten or subjected it to ridicule), a significant and plain departure from the operation of the terms of the provision to which he later put his signature.

61. Yet, even though he says McDonald agreed to it, he took no step to ensure that the written agreement reflected what he says was the common position (in respect of which he could have expected to encounter no resistance from McDonald if the conversation he recounts actually occurred). His evidence was that, if McDonald had not agreed, he would have insisted on an express carve out. It is difficult to understand why he did not, in light of what he says McDonald said, do so. Draft terms of the Deed were exchanged with tracked changes and then finalised via the parties’ respective lawyers, including the terms that do not reflect what Dr van Onselen says was his understanding of how the Deed would work in an important respect. On his version, he let Gianatti go ahead in ignorance of the important Conversation.

62. Moreover, if the reach of the non-disparagement clause was, as Dr van Onselen would have it, of significant concern to him, to the extent even of being important to his living as a journalist, one would have expected his first port of call to have been his own lawyer to make sure the provision he was agreeing to, operated in the way he says he understood it would. Yet, he did not discuss this important issue with him.

63. At the end of Dr van Onselen’s cross-examination, the following exchange took place with the Court which revealed, in my view, that he did not have the acute concern about the operation of the non-disparagement clause which he earlier said he did. I think it also calls into question his evidence that, if McDonald had not agreed and there had not been a carve out, he would not have entered into the Deed.

HIS HONOUR

Q:   In the two minutes and 40 seconds which are left of this cross-examination, I just want to ask a few of my own questions.

A:   Yes, your Honour.

Q:   This is in relation to the conversation that you had with Mr McDonald on or around 22 February, which is in paragraph 29 of your affidavit.  Just the first thing:  who is Anthony Murdoch?

A:   He was my line manager at Network Ten for my employment.   

Q:   In this conversation, the way I read this - just tell me if I'm right - was you were concerned about the reach or the potential reach of the non-disparagement clause?

A:   I was concerned about it, but I just - I - rightly or wrongly, I wasn't overly concerned. I just wanted to check it because I couldn't believe that something could apply that way.

Q:   Mr McDonald, you say, gave you what you considered to be an assurance that it wouldn't operate that way?

A:   Yes, your Honour.

Q:   Would I be right in thinking you must have been concerned that on one view, it could have operated that way, otherwise you wouldn't have asked him?

A:   That's true, but I was - I wasn't - clearly, in hindsight, I should've been more concerned because we're here, but I just was seeking to - almost in a relaxed way, just double-check that that can't be right, because for my, you know, sort of future life, I guess.

Q:   I understand, but then the question which perhaps might be thought to arise on this is, if you had a concern and Mr McDonald was apparently amenable to the deed operating in the way that you conveyed via use of your colourful language it wouldn't operate, why didn't you ask Ten or their lawyer through your lawyer to make sure the deed read the way you say it intended to operate?

A:   Your Honour, it just seemed - it seemed - getting the reassurance of Mr McDonald was nice to get but it just - even if I hadn't got it, I just couldn't believe that that's the way that it could apply, in a way that would sort of shut me down forever. So, I was just looking to get there and get the deed signed and, you know, move on.

[emphasis added]

64. I think that it is significant that in his email dated 31 May 2023, he made no express reference to the Conversation, upon which he now places such importance. I detected a plain reluctance on Dr van Onselen’s part to repeat his extreme comments in Court.

65. McDonald gave evidence that the Conversation alleged by Dr van Onselen did not take place and that he would have recalled a conversation “with extreme comments like that”.

66. McDonald was unshaken in cross-examination and his evidence sits more comfortably with the inherent probabilities and the parties’ contemporaneous behaviour (or lack thereof), than does Dr van Onselen’s.

67. Corroborative of McDonald is that the parties did leave it to their lawyers, which is what he suggested in his version of the Conversation.

68. Finally, I did not find Dr van Onselen a convincing witness.

Operation of cl 7.1 and was it breached?

69. The Deed, including cl 7, is a commercial contract which is to be given a business-like interpretation. Interpreting it requires attention to the language used by the parties, the commercial circumstances which it addresses, and the objects which it is intended it secures. The meaning of the words chosen is determined objectively by reference to its text, context, and purpose, the question being what a reasonable businessperson would have understood them to mean. Preference is given to a construction supplying a congruent operation to the various components of the whole, so as to avoid commercial inconvenience. Where language is open to more than one construction, the Court will prefer a construction which avoids consequences which are capricious, unreasonable, inconvenient or unjust. See Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; [1973] HCA 36; McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; [2000] HCA 65 at [22]; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 at [22]; Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530; [2004] HCA 56 at [82]; Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; [2005] HCA 17 at [15]; Electricity Generation Corporation Ltd v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [47]-[51].

70. The non-disparagement clause ultimately agreed upon, on its plain wording, makes no exception for disparagement which may be fair comment or for the party bound by it to say whatever he or it wanted, even if disparaging, provided it was within reason (whatever that may be considered to mean).

71. Dr van Onselen’s submissions do not identify any constructional choice to be made. He accepts that disparaging includes lowering the estimation of, treating slightingly or belittling and that bringing into disrepute includes discrediting, ridiculing or deriding. It is not suggested that any ambiguity or lack of clarity is involved in construing the provision. There is no warrant to read it down.

72. Good faith and Dr van Onselen’s known occupation do not intrude into the question of whether the Article meets the contractual description of disparaging or bringing Ten or the Releasees (as defined in cl 5.1) into disrepute or ridicule or adversely or possibly adversely affecting their reputation.

73. This is not a defamation case. It is a claim for breach of contract. There is no defence of fair comment. This is a case about the right to free speech, but only to the extent that, by the Deed, Dr van Onselen bargained that right away. The question is whether Dr van Onselen breached the contract he made with Ten.

74. In support of his submission on construction, Dr van Onselen placed reliance on the decision of McDougall J in Fermiscan v James [2009] NSWSC 546 at [105]ff, and the decision of the Court of Appeal dismissing an appeal from it: Fermiscan Pty Ltd v James [2009] NSWCA 355; (2009) 261 ALR 408 at [96]-[97], [104]-[108] (collectively “Fermiscan”). Fermiscan concerned a medical scientist having made a number of statements in an article submitted for publication in the International Journal of Cancer and in other documents concerning problems with the use of a diagnostic test for breast cancer. These statements were asserted to be in breach of a written agreement in not dissimilar terms to the Deed.

69. At [109], McDougall J referred to the fact that none of the statements under consideration were phrased in a slighting or deprecating way or in a way that was calculated to bring discredit on the plaintiffs.

70. At [117]-[119], his Honour said:

Particularly in the case of medical science, it is in the public interest that those who undertake research should be able to reveal and discuss their findings, and the hypotheses (or conclusions) to be drawn from them. Where that discussion takes place in a rational and scientific form then, even though it may be conducted in clear and forthright terms, I do not think that it would be regarded by the reasonable reader (of necessity, someone having an understanding both of the matters to which I have referred and of the particular field of scientific endeavour) to be disparaging.

I do not accept that it is necessarily disparaging for one scientist to say, of the work of another, that the work contains flaws or mistakes, or is inaccurate: at least when that is done in good faith and on the basis of experimental findings that support what is said.

There is no suggestion in this case that any of the statements made by Dr James were made in bad faith, or with the intention of harming the plaintiffs, their tests, their employees et cetera. Nor was it put that they were made without a proper basis in the science. On the contrary, so far as I understand the science, it seems to be clear that her comments were soundly based on the material then known to her (and others).

77. The first instance decision was upheld by the Court of Appeal. At [119]-[120], Allsop P (as his Honour then was), with whom Ipp JA and Handley AJA agreed, said:

Nor do I see how the statements could have had a tendency to injure or damage the reputation or standing of their businesses, other than through having a tendency to injure or damage the reputation or standing of the diagnostic tests comprised in the first invention. None of the statements tended otherwise to affect the goodwill or good name of Fermiscan or Fermiscan Aust. Rather, the submissions of the appellants concentrated upon the fact that criticisms were said about the tests themselves and in particular their limitations and the overcoming of those limitations by the second invention.

The notion of a reputation or standing of a diagnostic test is not entirely straightforward. Nevertheless, they are the words used in the contract and business meaning must be given to them. In my view, in that context, they mean the reputation or standing of the tests for efficacy as diagnostic tests. It was in that sense that the appellants put their submissions that any criticism of them as diagnostic tests necessarily tended to injure or damage their reputation or standing because such statements pointed out limitations or drawback on effectiveness.

78. It will readily be appreciated that Fermiscan is not this case.

79. The criticisms in the Article are hardly expressed in neutral terms.

80. Particular statements in the Article are, but more importantly, the Article as a whole is, undoubtedly, disparaging. To the extent that it is relevant, it is plain that it was intended to be so.

81. The tenor of the Article is to cast doubt on Ten’s long-term viability and to convey that its holding company may cut its losses by dumping unprofitable parts of its business (of which Ten is one).

82. It is to be observed that the Article commences with the following two paragraphs:

Even though Channel 10 has long been the minnow of Australian commercial television - out gunned and out rated by 7 and 9 now more than ever - when CBS (now Paramount) took the little Aussie battler over a few years back I assumed its future was bright.

Supported by a massive US media player - now rebranded Paramount - was a distinct advantage the other Aussie networks don't have. It was one of the reasons I accepted the job as 10's Political Editor, a role I walked away from earlier this year.

83. One of the clear implications of these paragraphs, read with what follows them, is that Dr van Onselen took up the position because Ten’s future looked bright, but he “walked away” from it because this turned out not to be the case. To my mind, this is a disparaging comment in the context of Dr van Onselen’s employment and its termination. If this is so, it is a statement which, on his own submission, was intended to be embargoed by the Deed. “Walked away”, as used in the Article, is not a neutral or analytical term.

84. The Article uses terms such as “plummeted” (not merely decreasing) and refers to the possibility of Ten “limping along with little attention paid to it by its big overseas owners (or its domestic competitors to be frank)”.

85. This type of disparagement can self-evidently undermine the confidence of investors or potential investors in Ten. That is not a trivial or insignificant matter.

86. It is also to be observed that in writing about his personal experience in walking away, Dr van Onselen entered into a subject about which, contrary to what was put on his behalf, not “any other journalist” could have written.

87. I reject Dr van Onselen’s submission that the Article consists only of publicly documented information and also his submission that the Article does not breach cl 7.1 because the disparaging material was already in the public arena.

88. The Article is not a mere recitation of publicly available information. It conveys analysis, comments, views, inferences and conclusions, brought together in a pejorative whole.

89. The fact that something disparaging has been said earlier makes it no less disparaging if it is repeated, although the consequences may be different. Those consequences may be less by virtue of the earlier disparagement, but they may be exacerbated by public repetition, particularly by a high profile ex-employee.

90. I find that in publishing the Article, Dr van Onselen breached cl 7.1 of the Deed.

Restraint of trade

91. The first issue is whether cl 7.1 is, on its proper characterisation, a restraint of trade within the meaning of the Act.

92. In Petrofina (Great Britain) Ltd v Martin [1966] Ch 146 (“Petrofina”) at 180, Diplock LJ said:

A contract in restraint of trade is one in which a party (the covenantor) agrees with any other party (the covenantee) to restrict his or her liberty in the future to carry on trade with other persons not parties to the contract in such a manner as he or she chooses.

93. In Boddington v Lawton [1994] ICR 478 at 485, Sir Donald Nicholls VC said:

In the instant case the relevant underlying principle, stated shortly, is that a contract, here a rule, is in restraint of trade if its effect is to bind or coerce a worker not to work when otherwise he might wish to do so. Plainly, coercion by imposing a financial or other sanction can be just as effective in deterring a person from breaking ranks as an express rule to that effect.

94. In Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd [1968] AC 269 (“Esso”) at 333ff, Lord Wilberforce spoke of established instances of types of transactions where the restraint of trade doctrine has been understood to have had no application. Lord Wilberforce’s speech made no reference to non-disparagement provisions, whether in the context of employment or otherwise.

95. Neither counsel referred me to any case in which a non-disparagement provision has been considered to be a restraint of trade. Ten submitted that such clauses are common in redundancy deeds and in settlement agreements to ensure that disputes are not exposed to the risk of being reopened. It was put that any determination that a non-disparagement clause may amount to a restraint of trade may run counter to the legitimate expectations of employers and commercial parties generally.

96. Whether cl 7.1 is or is not in restraint of trade is to be determined having regard to the practical working of the alleged restraint rather than to its legal form: see Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126 at 134 [14]; [2001] HCA 45.

97. There is no conceptual reason why, depending on its field of operation, a non-disparagement provision could not be in restraint of trade.

98. However, when it comes to cl 7.1, I do not consider that the practical work it has to do, makes it in restraint of trade.

99. Clause 7.1 limits Dr van Onselen only to making statements which are disparaging of his former employer and its related corporations, officers and employees. Leaving aside the fact that it does not muzzle him entirely, in the universe of discourse in which Dr van Onselen is or may be involved, realistically viewed, it does not restrain him in his trade or calling in any, or any meaningful, way. It imposes no barrier to him exercising his profession or calling and, if it does, the barrier is de minimis. The connection between that restraint and any supposed economic prejudice is too remote to result in it being fairly viewed as in restraint of trade: see Re New South Wales Bar Association [2014] NSWSC 1695 at [70]; (2014) 315 ALR 146 per Brereton J (as his Honour then was).

100. But if, contrary to my view, cl 7.1 is in restraint of trade, I consider that it goes no further than is necessary to protect Ten’s legitimate interests in protecting its goodwill against disparagement from a former senior and high-profile employee.

101. As referred to earlier, Dr van Onselen put, albeit in a different context, that Ten had no legitimate interest to protect because any journalist could have said what Dr van Onselen did. Whilst I do not consider that this would mean that Ten had no legitimate interest to protect, it does point to the fact that upholding cl 7.1 involves no detriment to the public.

102. I accordingly uphold the validity of cl 7.1.

103. It is appropriate to note s 4(3) of the Act which provides:

4 Extent to which restraint of trade valid

…

(3)    Where, on application by a person subject to the restraint, it appears to the Supreme Court that a restraint of trade is, as regards its application to the applicant, against public policy to any extent by reason of, or partly by reason of, a manifest failure by a person who created or joined in creating the restraint to attempt to make the restraint a reasonable restraint, the Court, having regard to the circumstances in which the restraint was created, may, on such terms as the Court thinks fit, order that the restraint be, as regards its application to the applicant, altogether invalid or valid to such extent only (not exceeding the extent to which the restraint is not against public policy) as the Court thinks fit and any such order shall, notwithstanding sub-section (1), have effect on and from such date (not being a date earlier than the date on which the order was made) as is specified in the order.

104. Had I concluded that cl 7.1 was to any extent against public policy, the section would have enabled the Court to cut it down, but that issue does not arise.

Clean hands

105. Dr van Onselen’s unclean hands defence relies on the Court finding that the Conversation, as he alleges, took place. He has failed to persuade the Court that he should be believed.

106. It is difficult to see how the defence could have succeeded anyway because, after the Conversation, Dr van Onselen executed the Deed in its present form with the inclusion of cls 10 and 12.1.

107. The clean hands defence fails.

RELIEF

108. I have found that Ten’s construction of the Deed is the correct one and that Dr van Onselen’s construction is unsustainable. Dr van Onselen’s breach of cl 7.1 is not trivial in fashion. In the circumstances, it is appropriate for the Court to make a declaration as to his breach.

109. There is no scope to make an award of nominal damages because the Summons does not claim one.

110. Clause 7.1 is an enforceable negative stipulation. Ordinarily, such a stipulation will be enforced by injunction unless there is some good reason not to do so.

111. In the particular circumstances of this case, I have concluded that an injunction should not be ordered.

112. I do not consider that there would be any uncertainty attendant upon an appropriately framed injunction (although I consider that the injunction as framed in the Summons is somewhat wide). I also do not consider that an appropriately framed injunction would be oppressive.

113. But I have, however, concluded that there is no realistic risk or possibility that Dr van Onselen will, in the light of my findings, breach cl 7.1 again.

114. I have come to this conclusion, despite the somewhat intemperate tone of Dr Van Onselen’s 31 May 2023 email and the fact that I have not accepted his evidence in a material respect. This is because I consider it appropriate to give weight to the following submissions of Senior Counsel for Dr van Onselen, which I infer were put on express instructions:

CHRYSANTHOU:    Yes, your Honour. Relevant to whether the injunction should be ordered and the discretion are those issues of restraint and certainty and estoppel, but also the fact that there's no - as we sit here - any threat of breach. [6]

6. Tcpt, 29 June 2023, 14(39-42).

…

CHRYSANTHOU:    Yes, your Honour, but there's no threat that if your Honour resolves the question of construction differently to how he understood it when he wrote his initial response to the letter of demand that he will not comply with the terms of the deed insofar as your Honour says it should be construed, again making injunctions unnecessary. One of the arguments we have in relation to injunctions is the impossibility of my clients to comply with such an order, having regard to the number of employees. [7]

…

CHRYSANTHOU:    Well yes, your Honour, but there's no risk that my client is going to criticise no demonstrated risk. [8]

…

CHRYSANTHOU:    We would say that the breach that your Honour has been faced with and the evidence about risk of future publication wouldn't warrant and injunction to that effect either. When it comes to the terms of the injunction, because there's just no demonstrable risk that has been demonstrated that my client is likely to do that. [9]

…

CHRYSANTHOU:    There's no risk of repetition. [10]

…

CHRYSANTHOU:    But there's a difference between what I'm submitting, your Honour, as a matter of law and what the evidence is as to the risk that my client poses apparently to Network Ten and Paramount and its thousands and thousands of employees. There's none but my friend made a submission which ignores the timing of the situation. Yes, he believed at the time he signed the deed that it meant a certain thing. If your Honour informs him differently there's no reason to think that he wouldn't adhere to what your Honour has found. [11]

7. Tcpt, 29 June 2023, 22(38-44).

8. Tcpt, 29 June 2023, 82(20-21).

9. Tcpt, 29 June 2023, 84(7-11).

10. Tcpt, 29 June 2023, 87(23).

11. Tcpt, 29 June 2023, 88(3-10).

115. I am persuaded that the Article is a one-off mistake. It will also be obvious that if there were to be a further non-inadvertent breach, the assertion of lack of risk could not be legitimately put in any further proceedings seeking injunctive relief.

116. The making of a declaration is, in the particular circumstances of this case, sufficient assuagement for Ten of its grievance.

CONCLUSION

117. The Court makes the following orders:

1. The Court declares that the publication in The Australian Business Review section of The Australian newspaper on 29 May 2023 of the Article headed “Paramount woes raise questions about the long term viability of Network 10” was a breach by the defendant of cl 7.1 of the Deed entered into by the plaintiff and the defendant on 3 March 2023.

2. The Summons is otherwise dismissed.

118. By 4:00pm on 21 July 2023, the parties are to exchange brief written submissions and forward them to my Associate with respect to costs, which will be dealt with on the papers.

119. In those submissions, the parties are to draw to my attention to any issue (apart from costs) which remains to be dealt with.

120. The exhibits are to be returned.

**********

Endnotes

Decision last updated: 14 July 2023