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Seven Network Limited v News Limited

Seven Network Limited v News Limited

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FEDERAL COURT OF AUSTRALIA
Seven Network Limited v News Limited [2007] FCA 2059
COSTS – Respondent entitled to costs on a party and party basis – application for a gross sum costs order – assessment of a gross sum pursuant to Federal Court Rules, O 62 r 4(2)(c) – relationship between assessment of a gross sum and principles of taxation
Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1
Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119
Canvas Graphics Pty Ltd v Kodak (Australasia) Pty Ltd (unreported, O’Loughlin J, 23 January 1998)
Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629
Datadot Technology Ltd v Alpha Microtech Pty Ltd [2003] FCA 1449
Hadid v Lenfest Communications Inc [2000] FCA 628
Harrison v Schipp (2002) 54 NSWLR 738
Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23
Leary v Leary [1987] 1 All ER 261
Nine Films and Television Pty Ltd v Ninox Television Ltd [2006] FCA 1046
Seven Network Ltd v News Ltd [2007] FCA 1062
Seven Network Ltd v News Ltd [2007] FCA 1489
Sony Entertainment (Australia) Limited v Smith [2005] FCA 228
Sparnon v Apand Pty Ltd [1998] FCA 164
Stanley v Phillips (1966) 115 CLR 470
Williams Advanced Materials Inc v Target TechnologyCo LLC [2004] FCA 1405
Federal Court of Australia Act 1976 (Cth) s 43(2)
Federal Court Rules O 62 r 3(1), O 62 r 4, O 62 r 12, O 62 r 19, Sch 2
SEVEN NETWORK LIMITED & ANOR V NEWS LIMITED
NSD 1223 of 2002
SACKVILLE J
20 DECEMBER 2007
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1223 of 2002

BETWEEN:

SEVEN NETWORK LIMITED
First Applicant

C7 PTY LIMITED
Second Applicant

AND:

NEWS LIMITED
First Respondent

SKY CABLE PTY LIMITED
Second Respondent

TELSTRA MEDIA PTY LIMITED
Third Respondent

FOXTEL MANAGEMENT PTY LIMITED
Fourth Respondent

TELSTRA CORPORATION LIMITED
Fifth Respondent

TELSTRA MULTIMEDIA PTY LIMITED
Sixth Respondent

PUBLISHING AND BROADCASTING LIMITED
Seventh Respondent

NINE NETWORK AUSTRALIA PTY LIMITED
Eighth Respondent

PREMIER MEDIA GROUP PTY LIMITED
Ninth Respondent

AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED
Twelfth Respondent

NATIONAL RUGBY LEAGUE INVESTMENTS PTY LIMITED
Thirteenth Respondent

NATIONAL RUGBY LEAGUE LIMITED
Fourteenth Respondent

FOXTEL CABLE TELEVISION PTY LIMITED
Fifteenth Respondent

OPTUS VISION PTY LIMITED
Sixteenth Respondent

AUSTAR UNITED COMMUNICATIONS LIMITED
Seventeenth Respondent

AUSTAR ENTERTAINMENT PTY LIMITED
Eighteenth Respondent

IAN HUNTLY PHILIP
Nineteenth Respondent

NEWS PAY TV PTY LIMITED
Twentieth Respondent

PBL PAY TV PTY LIMITED
Twenty-First Respondent

SINGTEL OPTUS PTY LIMITED
Twenty-Second Respondent

OPTUS VISION PTY LTD
First Cross Claimant

SINGTEL OPTUS PTY LIMITED
Second Cross Claimant

SEVEN NETWORK LIMITED
First Cross Respondent

C7 PTY LIMITED
Second Cross Respondent

JUDGE:

SACKVILLE J

DATE OF ORDER:

20 DECEMBER 2007

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.Pursuant to Federal Court Rules, O 62 r 4(2)(c), the third, fifth and sixth respondents (‘Telstra’) are entitled as against the applicants (‘Seven’) to a gross sum of $13 million instead of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2007] FCA 2059
Decision Date: 20 December 2007

CaseChat Overview and Summary

The case of Seven Network Limited v News Limited involved a dispute over costs between Seven Network Limited, an applicant, and Telstra, a respondent. The matter was before the Federal Court of Australia, which was required to determine the appropriate costs to be awarded to Telstra for the proceedings. The key legal issue was the method of assessing and awarding costs, particularly in light of the substantial costs incurred by Telstra and the differing views of the parties on the appropriate amount to be awarded. The court had to decide whether to award costs on a taxed basis or in a gross sum, and if the latter, the appropriate figure.

The court reasoned that while the traditional approach would be to tax the costs item by item, the nature of the case and the significant costs involved warranted a gross sum assessment. The court noted that the total costs claimed by Telstra were $16 million, but after considering various deductions, including professional costs, unqualified contributors, counsel’s fees, and experts' fees, it was appropriate to reduce the amount to $13 million. This figure represented approximately 62.75 per cent of Telstra's actual costs and disbursements. The court found that this percentage was within an appropriate range, given the circumstances of the case, and thus awarded Telstra a gross sum of $13 million in costs.

The court further ordered that Seven pay Telstra $13 million in respect of the costs incurred in the proceedings and that all previous costs orders between Seven and Telstra be vacated. The court also suggested that each party should bear its own costs incurred after the date of the Principal Judgment, considering that Telstra’s application for indemnity costs had not succeeded.

Orders

Orders of the court

1. Pursuant to Federal Court Rules, O 62 r 4(2)(c), the third, fifth and sixth respondents (‘Telstra’) are entitled as against the applicants (‘Seven’) to a gross sum of $13 million instead of taxed costs.

2. Seven pay to Telstra its costs of the proceedings assessed in the sum of $13 million.

3. All subsisting costs orders between Seven and Telstra be vacated.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

SACKVILLE J

The result is that I think it appropriate to reduce the amounts allowed to Telstra by Ms Ashe in respect of the costs of engaging expert witnesses by about $200,000, in round numbers. CONCLUSION A gross sum costs order in favour of Telstra should reflect, in a very broad sense, a number of deductions from the figure of $16 million supported by Telstra. The deductions, which have been explained earlier in this judgment, are as follows:· Professional costs : $1.0 million;· Unqualified contributors : $0.3 million· Counsel’s fees : $1.5 million· Experts’ fees : $0.2 million$3.0 million These deductions suggest that it would be appropriate, pursuant to O 62 r 4(2)(c), to order Seven to pay Telstra’s costs in a gross sum of $13 million. This figure represents 62.75 per cent of Telstra’s actual costs and disbursements incurred up to the date of the Principal Judgment. If the matter is viewed simply as an assessment by reference to the percentage of total costs and disbursements an award of approximately 63 per cent seems to me well within the appropriate range, taking into account the particular circumstances of this case. As I have explained, the assessment of a gross sum costs order requires a broad brush. I do not wish to create the impression that the exercise is in truth more precise than it is. The figures supported by Ms Ashe and Ms Harris, which I have taken as my starting points, involve matters of evaluation and judgment. I have used those figures as the basis for my analysis because to do so is consistent with the approach taken by the parties. It also has the advantage of concentrating on the narrow range of issues identified by the parties in their submissions. The fact that some of the figures I have used are precise down to the last dollar should not obscure the elements of evaluation and judgment in my own assessment. I propose to make an order pursuant to O 62 r 4(2)(c) that Seven pay Telstra the sum of $13 million in respect of the costs incurred by it in the proceedings. All previous costs orders between Seven and Telstra should be vacated. Any such orders were taken into account by the experts in preparing their reports and have also been taken into account by me in my assessment. Telstra invited me to include in the gross sum an allowance for costs that have been incurred since the delivery of judgment, including the costs incurred in relation to indemnity costs application. I have insufficient material before me to do this. However, my impression is that an order requiring each party to bear its own costs incurred after the date of the Principal Judgment would be a fair and reasonable result, bearing in mind that Telstra’s application for indemnity costs did not succeed. In any event, the parties should be able to resolve this issue without further recourse to the Court.

Ratio Decidendi

Legal Principle Established

Established by: SACKVILLE J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1223 of 2002

BETWEEN:	SEVEN NETWORK LIMITED First Applicant C7 PTY LIMITED Second Applicant
AND:	NEWS LIMITED First Respondent SKY CABLE PTY LIMITED Second Respondent TELSTRA MEDIA PTY LIMITED Third Respondent FOXTEL MANAGEMENT PTY LIMITED Fourth Respondent TELSTRA CORPORATION LIMITED Fifth Respondent TELSTRA MULTIMEDIA PTY LIMITED Sixth Respondent PUBLISHING AND BROADCASTING LIMITED Seventh Respondent NINE NETWORK AUSTRALIA PTY LIMITED Eighth Respondent PREMIER MEDIA GROUP PTY LIMITED Ninth Respondent AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED Twelfth Respondent NATIONAL RUGBY LEAGUE INVESTMENTS PTY LIMITED Thirteenth Respondent NATIONAL RUGBY LEAGUE LIMITED Fourteenth Respondent FOXTEL CABLE TELEVISION PTY LIMITED Fifteenth Respondent OPTUS VISION PTY LIMITED Sixteenth Respondent AUSTAR UNITED COMMUNICATIONS LIMITED Seventeenth Respondent AUSTAR ENTERTAINMENT PTY LIMITED Eighteenth Respondent IAN HUNTLY PHILIP Nineteenth Respondent NEWS PAY TV PTY LIMITED Twentieth Respondent PBL PAY TV PTY LIMITED Twenty-First Respondent SINGTEL OPTUS PTY LIMITED Twenty-Second Respondent OPTUS VISION PTY LTD First Cross Claimant SINGTEL OPTUS PTY LIMITED Second Cross Claimant SEVEN NETWORK LIMITED First Cross Respondent C7 PTY LIMITED Second Cross Respondent
JUDGE:	SACKVILLE J
DATE OF ORDER:	20 DECEMBER 2007
WHERE MADE:	SYDNEY