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Seven Network Ltd v Australian Competition and Consumer Commission

Seven Network Ltd v Australian Competition and Consumer Commission

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Case Copied 6 October 2004 45 min read

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FEDERAL COURT OF AUSTRALIA
Seven Network Limited v Australian Competition and Consumer Commission [2004] FCAFC 267
TRADE and COMMERCE – Trade Practices Act 1974 (Cth) s 155(1) – notice to furnish information – whether notice invalid – whether matters identified in the notice capable of constituting a contravention – whether notice discloses the basis for requiring the information – whether s 155 notice can be used to identify witnesses
Trade Practices Act 1974 (Cth) ss 6, 51A, 52, 53, 65A(1), 155, 163A
Riley McKay Pty Ltd v Bannerman (1977) 15 ALR 561 distinguished
George v Rockett (1990) 170 CLR 104 cited
SA Brewing Holdings Ltd v Baxt (1989) 23 FCR 357 followed
WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175 followed
The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 cited
Pyneboard Pty Ltd v Trade Practices Commission (1982) 57 FLR 368 cited
Bannerman v Mildura Fruit Juices Pty Ltd cited (1994) 2 FCR 581 cited
Panelboard Pty Ltd v Trade Practices Commission (1981) 59 FLR 395 cited
TNT Australia Pty Ltd v Fels [1992] ATPR 41-190 cited
Melbourne Home of Ford Pty Ltd v Trade Practices Commission (1979) 36 FLR 450 cited
Hussien v Chong Fook Kam [1970] AC 942 cited
Cassidy v Saatchi & Saatchi Australia Pty Ltd [2004] ATPR 41-980 cited
Australian Ocean Line Pty Ltd v West Australian Newspapers Ltd (1983) 66 FLR 453 cited
Australian Ocean Line Pty Ltd v West Australian Newspapers Ltd (1985) 58 ALR 549 cited
Universal Telecasters (Qld) Ltd v Guthrie (1978) 18 ALR 531 cited
Gianni Versace SpA v Monte (2002) 119 FCR 349 cited
Yorke v Lucas (1985) 158 CLR 661 cited
Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 cited
Commissioners of Inland Revenue v Maple & Co (Paris) Ltd [1908] AC 22 cited
Oceanic Life Ltd v Chief Commissioner of Stamp Duties (1999) 168 ALR 211 cited
McGuinness v Attorney-General of Victoria (1940) 63 CLR 73 cited
SEVEN NETWORK LIMITED (ACN 052 816 789) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
NSD 1174 of 2004
TAMBERLIN, SACKVILLE and EMMETT JJ
SYDNEY
6 OCTOBER 2004

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1174 of 2004

BETWEEN:

SEVEN NETWORK LIMITED
(ACN 052 816 789)
APPELLANT

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
RESPONDENT

JUDGES:

TAMBERLIN, SACKVILLE and EMMETT JJ

DATE OF ORDER:

6 OCTOBER 2004

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

The appeal be dismissed.

The appellant pay the respondent’s costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1174 of 2004

BETWEEN:

SEVEN NETWORK LIMITED
(ACN 052 816 789)
APPELLANT

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
RESPONDENT

JUDGES:

TAMBERLIN, SACKVILLE and EMMETT JJ

DATE:

6 OCTOBER 2004

PLACE:

SYDNEY

REASONS FOR JUDGMENT
TAMBERLIN J:

I have read the Reasons for Judgment of Sackville and Emmett JJ and I agree with…

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: [2004] FCAFC 267
Decision Date: 6 OCTOBER 2004

CaseChat Overview and Summary

Seven Network Ltd sought declarations and orders regarding a notice served by the Australian Competition and Consumer Commission (ACCC) under section 155 of the Trade Practices Act 1974 (Cth) (TP Act). The ACCC had required Seven Network to furnish certain information relating to three matters, which were thought to constitute or may constitute contraventions of section 52 of the TP Act. These matters involved broadcasts and related website content concerning a mentoring program marketed as 'Wildly Wealthy Women'. The primary judge dismissed Seven Network's application, and Seven Network appealed to the court.

The legal issues before the court were whether the matters identified in the Notice could constitute contraventions of section 52 of the TP Act, and whether the Notice was authorised and valid. A key issue was the applicability of section 65A of the TP Act, which provides exemptions for certain prescribed information providers, to the matters in question.

The court examined whether the exemption under section 65A precluded the matters from being considered contraventions of section 52. The court found that while section 65A applied to Seven Network, it did not extend to all forms of publication by Seven Network, such as advertisements or publications made pursuant to a contract for the supply of services. Therefore, the matters identified in the Notice were not precluded from constituting contraventions of section 52. Consequently, the court held that the Notice was authorised and valid, and dismissed the appeal.

The court further ordered that the appeal be dismissed and that Seven Network pay the ACCC's costs.

Orders

Orders of the court

1. The appeal be dismissed.

2. The appellant pay the respondent’s costs.

Background

Background to the litigation

Section 155 of the TP Act relevantly provides as follows:‘(1) …if the Commission, the Chairperson or the Deputy Chairperson has reason to believe that a person is capable of furnishing information … relating to a matter that constitutes, or may constitute, a contravention of this Act … a member of the Commission may, by notice in writing served on that person, require that person:(a)to furnish to the Commission, by writing signed by that person or, in the case of a body corporate, by a competent officer of the body corporate, within the time and in the manner specified in the notice, any such information;…(5) A person shall not:(a)refuse or fail to comply with a notice under this section;…(6A)A person who contravenes subsection (5) … is guilty of an offence …’BACKGROUND On about 24 March 2004, the ACCC served a notice on Seven Network purportedly pursuant to s 155(1)(a) of the TP Act (‘the Notice’). The Notice required Seven Network to provide certain information said to relate to three matters that constituted or might constitute contraventions of s 52 of the TP Act. Two of the three matters related to broadcasts on 31 October 2003 and 30 January 2004, respectively, of items on Channel 7’s Today Tonight television program. The items featured a so-called mentoring program marketed under the name ‘Wildly Wealthy Women’ (the ‘WWW Program’). The third matter related to the publication on the Today Tonight website of material relating to the WWW Program. Seven Network promptly instituted proceedings (on 8 April 2004) in this Court seeking declarations pursuant to s 163A of the TP Act that:(i)the Notice was unauthorised, invalid and of no effect; and(ii)Seven Network was not required to furnish to the ACCC the information specified in the Schedule to the Notice. Seven Network also sought an order in the nature of certiorari in relation to the issue of the Notice. The primary Judge dismissed the application on 9 July 2004: [2004] FCA 885. Seven Network’s appeal was expedited and the hearing of the appeal took place on 31 August 2004.THE STATUTORY FRAMEWORK Section 52(1) of the TP Act, which is within Div 1 of Part V, provides that:‘A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.’Section 51A(1) of the TP Act provides that for the purposes of Div 1 of Part V:‘… where a corporation makes a representation with the respect to any future matter … and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading’.Section 51A(2) states that, for the purposes of the application of s 51A(1) in relation to a representation with respect to any future matter, ‘the corporation shall, unless it adduces evidence to the contrary, be deemed not to have reasonable grounds for making the representation’. Section 6(3) of the TP Act extends the application of the provisions of Div 1 of Part V, including s 52. They have the effect they would have if:‘(a) those provisions … were, by express provision, confined in their operation to engaging in conduct to the extent to which the conduct … takes place in a radio or television broadcast; and(b)a reference in those provisions to a corporation included a reference to a person not being a corporation’.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In the Notice, the Chairman requires Seven Network to furnish to the ACCC the following information specified in the Schedule:‘1.State the name and address of the person who was the Executive Producer of the Today Tonight television program broadcast on 31 October 2003.2.State the name and address of the person who was the Executive Producer of the Today Tonight television program broadcast on 30 January 2004.3.State the name and address of each person responsible for the content of the item broadcast on Channel 7’s Today Tonight television program on 31 October 2003 which featured a mentoring program marketed under the name ‘Wildly Wealthy Women’.4.State the name and address of each person responsible for the content of the item broadcast on Channel 7’s Today Tonight television program on 30 January 2004 which featured a mentoring program marketed under the name ‘Wildly Wealthy Women’.5.State the name and address of the compere of the item broadcast on Channel 7’s Today Tonight television program on 31 October 2003 which featured a mentoring program marketed under the name ‘Wildly Wealthy Women’.6.State the name and address of the compere of the item broadcast on Channel 7’s Today Tonight television program on 30 January 2004 which featured a mentoring program marketed under the name ‘Wildly Wealthy Women’.7.State the name and address of each person responsible for:(a) the text; and(b) the publication;of the content on the website in respect of the Wildly Wealthy Women’ mentoring program at any time in the period 1 October 2003 to the date of this Notice’.THE PRIMARY JUDGMENT The primary Judge first addressed Seven Network’s contention that the matters identified in the Notice were incapable of constituting contraventions of s 52 of the TP Act by reason of the exemption provided by s 65A for prescribed information providers. Her Honour observed that the first two matters identified in the Notice involved assertions that:(a)Seven Network (or one of its subsidiaries) may have contravened s 52 of the TP Act;(b)the promoters of the WWW Program may have contravened s 52 of the TP Act; or(c)Seven Network (or one of its subsidiaries) and the promoters together may have contravened s 52 of the TP Act. Her Honour pointed out that s 65A could have no operation in respect of the promoters’ conduct, which came within s 52 because of the extended operation given to that section by s 6(3) of the TP Act. Her Honour accordingly rejected the contention that the promoters’ conduct was incapable of constituting a contravention of s 52. The primary Judge noted the ACCC’s concession that s 65A applied to Seven Network. But that did not mean, in her Honour’s view, that Seven Network was incapable of contravening s 52 by reason of the items broadcast on the Today Tonight program. The protection accorded by s 65A to a prescribed publication by a prescribed information provider did not extend, for example, to the publication of an advertisement (s 65A(1)(b)) or to the publication of matter in connection with the possible supply of services where the publication was made pursuant to a contract, arrangement or understanding with a person who supplies services of the relevant kind (s 65A(1)(a)). It was at least ‘theoretically possible’ that investigations would reveal that publication of the items came within s 65A(1)(a) or (b). It followed that the first two matters were not incapable of constituting contraventions of s 52 by Seven Network. Her Honour considered that the same reasoning applied to the third matter identified in the Notice.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1174 of 2004

BETWEEN:	SEVEN NETWORK LIMITED (ACN 052 816 789) APPELLANT
AND:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION RESPONDENT
JUDGES:	TAMBERLIN, SACKVILLE and EMMETT JJ
DATE OF ORDER:	6 OCTOBER 2004
WHERE MADE:	SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1174 of 2004

JUDGES:	TAMBERLIN, SACKVILLE and EMMETT JJ
DATE:	6 OCTOBER 2004
PLACE:	SYDNEY