Seven Network Ltd v News Ltd (No 10)

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FEDERAL COURT OF AUSTRALIA

Seven Network Limited v News Limited (No 10)
[2005] FCA 1721

PRACTICE AND PROCEDURE – client legal privilege – waiver of privilege – whether the applicants waived privilege by putting in issue their state of mind to which legal advice may have contributed

Evidence Act 1995 (Cth), Part 3.10, ss 118, 119, 122
Federal Court Rules, O 33 rr 11, 14

Mann v Carnell (1999) 201 CLR 1, considered
Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49, cited
Seven Network Ltd v News Ltd [2005] FCAFC 125, cited
Telstra Corporation Ltd v BT Australasia Ltd (1998) 85 FCR 152, followed
Chen v City Convenience Leasing Pty Ltd [2005] NSWCA 297, cited
DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499, discussed
Wayne Lawrence Pty Ltd v Hunt [1999] NSWSC 1044, followed
Benecke v National Australia Bank (1993) 35 NSWLR 110, cited
Lillicrap v Nalder & Son [1993] 1 All ER 724, cited
Thomason v Council of the Municipality of Campbelltown (1939) 39 SR (NSW) 347, cited
Wyadra Pty Ltd v Mailler (No 2) [2005] NSWSC 88, cited
Nine Films and Television Pty Ltd v Ninox Television Ltd (2005) 65 IPR 442, cited

SEVEN NETWORK LIMITED and ANOR v NEWS LIMITED and ORS
NSD 1223 of 2002

SACKVILLE J
SYDNEY

30 NOVEMBER 2005


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1223 of 2002

BETWEEN:

SEVEN NETWORK LIMITED
(ACN 052 816 789)
FIRST APPLICANT

C7 PTY LIMITED
(ACN 082 901 442)
SECOND APPLICANT

AND:

NEWS LIMITED
(ACN 007 871 178)
FIRST RESPONDENT

SKY CABLE PTY LIMITED
(ACN 069 799 640)
SECOND RESPONDENT

TELSTRA MEDIA PTY LIMITED
(ACN 069 279 027)
THIRD RESPONDENT

FOXTEL MANAGEMENT PTY LIMITED
(ACN 068 671 938)
FOURTH RESPONDENT

TELSTRA CORPORATION LIMITED
(ACN 051 775 556)
FIFTH RESPONDENT

TELSTRA MULTIMEDIA PTY LIMITED
(ACN 069 279 072)
SIXTH RESPONDENT

PUBLISHING AND BROADCASTING LIMITED
(ACN 009 071 167)
SEVENTH RESPONDENT

NINE NETWORK AUSTRALIA PTY LIMITED
(ACN 008 685 407)
EIGHTH RESPONDENT

SPORTS INVESTMENTS AUSTRALIA PTY LIMITED
(ACN 065 445 418)
NINTH RESPONDENT

NETWORK TEN PTY LIMITED
(ACN 052 515 250)
TENTH RESPONDENT

AUSTRALIAN FOOTBALL LEAGUE
(ACN 004 155 211)
ELEVENTH RESPONDENT

AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED
(ACN 003 107 293)
TWELFTH RESPONDENT

NATIONAL RUGBY LEAGUE INVESTMENTS PTY LIMITED
(ACN 081 778 538)
THIRTEENTH RESPONDENT

NATIONAL RUGBY LEAGUE LIMITED
(ACN 082 088 962)
FOURTEENTH RESPONDENT

FOXTEL CABLE TELEVISION PTY LIMITED
(ACN 069 008 797)
FIFTEENTH RESPONDENT

OPTUS VISION PTY LIMITED
(ACN 066 518 821)
SIXTEENTH RESPONDENT

AUSTAR UNITED COMMUNICATIONS LIMITED
(ACN 087 695 707)
SEVENTEENTH RESPONDENT

AUSTAR ENTERTAINMENT PTY LIMITED
(ACN 068 104 530)
EIGHTEENTH RESPONDENT

IAN HUNTLY PHILIP
NINETEENTH RESPONDENT

NEWS PAY TV PTY LIMITED
(ACN 085 095 487)
TWENTIETH RESPONDENT

PBL PAY TV PTY LIMITED
(ACN 084 940 367)
TWENTY-FIRST RESPONDENT

SINGTEL OPTUS PTY LIMITED
(ACN 052 833 208)
TWENTY-SECOND RESPONDENT

JUDGE:

SACKVILLE J

DATE OF ORDER:

30 NOVEMBER 2005

WHERE MADE:

SYDNEY

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Details
Case
[2005] FCA 1721
Decision Date

CaseChat Overview and Summary

In the case of Seven Network Ltd v News Ltd (No 10), the dispute revolves around the alleged waiver of legal professional privilege by Seven Network Ltd in relation to certain confidential communications. The primary legal issue before the court was whether Seven had waived its legal professional privilege over specific categories of documents by disclosing certain information to Optus, a third party. The court had to determine whether the actions of Seven amounted to a waiver of privilege, thereby allowing Optus to access the privileged documents.

The court examined the principle of waiver of legal professional privilege as articulated in Mann v Carnell, which emphasises that waiver occurs when there is inconsistency between a client's conduct and the maintenance of confidentiality. The court noted that waiver may be express or implied, with implied waiver arising when there is a discrepancy between the client's actions and the protection of confidentiality. The court also highlighted that waiver is determined by the inconsistency perceived by the courts, not by overarching fairness principles.

In this case, the court found that Seven had not waived its legal professional privilege. The court concluded that the evidence did not demonstrate any inconsistency in Seven's conduct that would imply a waiver of privilege. The court dismissed Optus' application for orders requiring Seven to produce the contested documents for inspection, thereby upholding the privilege protection over the specified communications.

The final orders of the court reflect this decision, maintaining the confidentiality of the privileged communications and preventing their disclosure to Optus. This ruling underscores the importance of maintaining the integrity of legal professional privilege, ensuring that privileged communications remain protected unless there is clear evidence of waiver.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

There is no dispute between the parties that privilege attaches to the communications contained in these documents, unless that privilege has been waived. (As was pointed out in Mann v Carnell (1999) 201 CLR 1, at [16], per Gleeson CJ, Gaudron, Gummow and Callinan JJ, legal professional privilege applies to communications, not the pieces of paper on which they are written.) I have not been invited to inspect the relevant documents, doubtless because I am hearing the substantive proceedings.BACKGROUND The CPSA was entered into on 30 June 1998 between (relevantly) the second applicant (‘C7’) and the sixteenth respondent (‘Vision’). The CPSA required C7 to provide to Vision a sports programming service for broadcast on Vision’s pay television service. AFL matches constituted an important element of the programming to be provided by C7 to Vision. The CPSA was to continue until 31 December 2008, unless terminated earlier in accordance with its terms. Clause 16.2 of the CPSA allowed Vision to terminate the agreement in the event of C7 losing the pay television rights to AFL. Clause 16.2(a) provided as follows:‘Vision may, by notice in writing to [C7], terminate this agreement with effect immediately on receipt of that notice by [C7], if [C7] or a related body corporate does not have, or loses, the pay television rights to AFL games for any reason’. The CPSA also contained a number of express representations and warranties by each of the parties (cl 15). Clause 27 provided that the terms of the CPSA constituted the entire agreement between the parties as to its subject matter. It further provided that the CPSA superseded any prior agreement between the parties and any prior representations made by a party. By September 2001, it was clear that C7 would not retain the AFL pay rights, although different views had been expressed as to the precise date when C7 could be said no longer to have, or to have lost, the rights. On 28 September 2001, Optus set out in a letter the terms upon which Vision and C7 were prepared to vary the CPSA. The letter recited that the parties had expressed different views as to Vision’s right to terminate the CPSA under cl 16.2. The letter included a new cl 8A to be inserted into the CPSA. Clause 8A provided for an ‘exclusivity period’ in the following terms:‘During a period from 27 September 2001 to 31 December 2001:(a)Vision must not, and must procure that its related bodies corporate do not, solicit, encourage, initiate or participate in discussions or negotiations with; or make any offers to any person other than C7 or its related bodies corporate; or enter into any contract, arrangement or understanding … with any person other than C7 and its related bodies corporate; and (b)Vision must, and must procure that its related bodies corporate, immediately cease any existing negotiations or discussions with; decline any offer made to it; and terminate any offers made by it to any person other than C7 or its related bodies corporate,in relation to the supply, sub-licensing or other incorporation into the Optus pay television platform of any sports channel …’

Evidence

Evidence Before The Court

Seven also pleads that during the exclusivity period provided for by cl 8A of the CPSA (as inserted by the First Variation Agreement), Optus negotiated with Foxtel for the supply of Fox Sports channels (par 589). This conduct is said to have breached the terms of cl 8A (par 607).MR STOKES’ EVIDENCE Mr Stokes signed a total of four witness statements, each of which, subject to certain exclusions, has been admitted into evidence. In addition, Mr Stokes was cross-examined by the various respondents over a period of thirteen hearing days. In his second statement, Mr Stokes recounted a telephone conversation with Mr Wise shortly before the latter sent his email of 2 October 2001 (par 9). According to Mr Stokes (par 9), the conversation was to the following effect:‘[Mr Wise:]The negotiations with Optus have been progressing well. Our people are all confident from what Optus has told them that Optus will agree to a three year deal for the supply of C7 channels at $17 million a year. However, the SingTel directors won’t approve the deal until a review of Optus’ commitment to the pay TV business has been completed. We have negotiated a three month interim agreement with an exclusive dealing period which preserves the status quo while the review is being completed. I think the exclusivity period is an important sign of their good faith about entering into the three year deal.[Mr Stokes:]If Optus is really likely to enter into the three year deal and we are not wasting our time, then it makes sense to proceed with or interim agreement. Send the details through to me and I will give you a response’. Mr Stokes says (par 11) that when he read Mr Wise’s email, he noted the reference to an exclusive dealing period. He understood this to mean that, under the interim agreement, Optus and its related companies would be precluded from discussing, negotiating or agreeing to acquire any sports channel for pay television, except broadcasts of National Rugby League and AFL matches from the 2002 season onwards, from any other person than C7. Mr Stokes further says (par 12) that he would not have agreed to C7 entering into the First Variation Agreement without the exclusivity period, for two main reasons:‘(a)first, I considered it to be an important sign of Optus’ good faith that it intended to finalise the three year deal that had already been agreed with C7 once the review of its pay TV business was complete … ; and(b)second, the exclusivity period precluded Optus and its related companies from securing supply of any sports channel for pay television from a source other than C7, and in particular from Foxtel or Fox Sports, during the [First Variation Agreement]. As we had been advised in December 2000 that C7 had not retained the pay TV rights for the AFL from the 2002 season, there was a period of twelve months from that time (during which we still had the right to televise AFL matches on C7) for Optus to negotiate with us. I thought the exclusivity period would preserve C7’s negotiating position. If Optus terminated the [CPSA] before securing an alternative source of general Australian sporting content for its pay television platform it would have a gap in its programming which could cause it to lose subscribers and it would in a weak position from which to negotiate favourable terms for sporting content to fill that gap. On the other hand, if Optus did not terminate the [CPSA] I understood that it could lose any right of termination it had. To my mind, these factors were likely to make the three year deal proposed by C7 attractive to Optus because under that deal it could secure the sporting content it needed without risk. The importance of the exclusivity period was that it preserved this situation, and prevented Optus from using the three month interim agreement as an opportunity to secure sporting content from a source other than C7 and then terminating the [CPSA]’.

Decision

Reasons for decision

SACKVILLE J
The argument did not distinguish between legal advice on the loss of Optus’ right to terminate and advice on the date on which Optus acquired the right to terminate the CPSA. For much the same reasons as I have already explained, I do not think that Seven has waived client legal privilege in any legal advice received on this topic.CONCLUSION I conclude that Seven has not waived privilege in the three categories of confidential communications that have been the subject of argument. Accordingly, I propose to dismiss Optus’ application for orders requiring Seven to produce the three categories of documents for inspection.

Ratio Decidendi

Legal Principle Established

Established by: SACKVILLE J

In Mann v Carnell, the High Court restated the common law principles governing waiver of legal professional privilege. The joint judgment pointed out (at [28]) that ‘waiver’ is a vague term that often requires further definition according to the context. Their Honours said (at [28]-[29]) that:‘It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. Examples include disclosure by a client of the client’s version of a communication with a lawyer, which entitles the lawyer to give his or her account of the communication, or the institution of proceedings for professional negligence against a lawyer, in which the lawyer’s evidence as to advice given to the client will be received. Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is “imputed by operation of law”. This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege. … What bring about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.’ (Emphasis added; citations omitted.) Telstra v BT was decided before Mann v Carnell and Esso v FCT. As I have noted, the Full Court therefore proceeded on what has been held to be the erroneous assumption that Div 1 of Part 3.10 of the Evidence Act applies derivatively to pre-trial procedures. The majority also proceeded on the basis of what might be described as an incomplete statement of principle, in that the judgment assumes that common law waiver is essentially informed by considerations of fairness (as distinct from the inconsistency formula adopted in Mann v Carnell, at [29]). Nonetheless, Telstra v BT has been widely accepted as laying down the correct general approach to the construction of s 122 of the Evidence Act. In Chen v City Convenience Leasing Pty Ltd [2005] NSWCA 297, a case in which the Supreme Court Rules applied the Evidence Act 1995 (NSW) to pre-trial procedures, Gzell J (with whom Bryson JA and Windeyer J agreed) said (at [31]) that the interpretation put forward in Telstra v BT ‘must be correct’. Gzell J also cited (at [33]) a number of single judge decisions to the same effect: see also DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499, at [102]-[111], per Allsop J. There is, however, a second aspect to the approach taken by the majority in Telstra v BT that is material to the present case. Branson and Lehane JJ held (at 165) that common law waiver has the following operation:‘in cases in which the state of mind of a party [is] in issue in the proceedings, … evidence [can] be called to establish the terms of legal advice, relevant to that party’s state of mind, provided to that party’. (Emphasis added)