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Seven Network Ltd v News Ltd (No 4)

Seven Network Ltd v News Ltd (No 4)

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FEDERAL COURT OF AUSTRALIA
Seven Network Limited v News Limited (No 4) [2005] FCA 244
PRACTICE and PROCEDURE – application for summary dismissal – whether the nexus between contraventions of the Trade Practices Act 1974 (Cth) and the ‘structural relief’ sought must be spelt out – basis for the structural relief sought tolerably clear – Trade Practices Act 1974 (Cth) ss 50, 80(1), (5), 81(1) – Federal Court Rules (Cth) O 20 r 2
PRACTICE and PROCEDURE – pleadings – striking out – exclusive dealing by entering into an agreement containing an exclusionary provision – particulars contain allegations of object and purpose – whether embarrassing and vexatious – Trade Practices Act 1974 (Cth) ss 4(1), 45(2)(b)(ii), 47(1) – Federal Court Rules (Cth) O 11 r 16
Trade Practices Act 1974 (Cth) ss 4, 4L, 45, 46, 47, 50, 80, 81, Pt XIC
Federal Court Rules (Cth) O 11 r 16, O 20 r 2
Dey v Victorian Railways Commissioners (1949) 78 CLR 62 followed
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 followed
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 887 followed
Australian Building Industries Pty Ltd v Stramit Corporation Ltd [1997] FCA 1318 cited
Lonrho Plc v Fayed (No 2) [1992] 1 WLR 1 cited
Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] FCA 918; 34 ACSR 672 cited
Trade Practices Commission v Australia Meat Holdings Pty Ltd [1988] FCA 338; ATPR 40-876 cited
Australia Meat Holdings Pty Ltd v Trade Practices Commission [1989] FCA 25; ATPR 40-932 cited
Rieson v SST Consulting Services Pty Ltd [2005] FCAFC 6 cited
Tradestock Pty Ltd v TNT (Management) Pty Ltd (No 2) (1978) 32 FLR 420 cited
Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 cited
SEVEN NETWORK LIMITED & ANOR v NEWS LIMITED & ORS
NSD 1223 of 2002
SACKVILLE J
SYDNEY
16 MARCH 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…

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: [2005] FCA 244
Decision Date: 16 MARCH 2005

CaseChat Overview and Summary

In Seven Network Ltd v News Ltd (No 4), the applicants sought to establish that certain conduct by the respondents contravened the Trade Practices Act. The court was required to determine whether the applicants' claims for structural relief were clear enough to proceed to trial and if particular allegations about the purpose of the respondents' actions were necessary. The applicants argued that their claims for structural relief were sufficiently clear and that the respondents could adequately respond to them. They also contended that specific allegations regarding the respondents' purposes were not necessary for their case. The court found that the applicants' claims for structural relief were clear enough to proceed to trial, despite the respondents' objections. The applicants had sufficiently detailed their claims in their pleadings, and the respondents were capable of responding to them. The court also determined that the applicants did not need to plead the specific purposes of the respondents for their case, as the definition of 'giving effect to' in the Trade Practices Act did not require proof of motive. The court struck out particular allegations about the respondents' purposes as unnecessary and potentially time-consuming at trial.

The court ruled that Telstra's summary dismissal application failed, but it struck out certain particulars in the applicants' statement of claim that referred to the objectives or purposes of Telstra Multimedia or Foxtel. The applicants had withdrawn a previous application to amend these particulars, and including them would not advance the resolution of the issues at trial. The court proposed to grant the applicants leave to file a further amended statement of claim, unless any respondent objected. The court indicated that it would not make an order for costs on Telstra's motion unless the parties wished to argue the question of costs.

Orders

Orders of the court

The applicants bring in short minutes of order giving effect to this judgment.

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 applicants do not press par 15 in its present form, but are content to limit its application to ‘any respondent or its related bodies corporate’ instead of seeking an order that extends to ‘any person’. Paragraph 15, so Mr Myers explained, relates only to the free-to-air television rights the subject of the News/AFL Licence: that is, the free-to-air television rights to AFL matches for the period 2002 to 2006. The remedy in par 15 will be sought only if the contracts by which the AFL rights were acquired are set aside. The FFASC pleads matters that, if established, might justify such relief (pars 445-463, 569-571). If the contracts are set aside, the relief sought in par 15 is intended to ensure that the process of re-bidding will be unaffected by anti-competitive conduct. A similar justification was offered for par 25.CONCLUSION In the light of these explanations and on the assumption that the applicants can establish the pleaded contraventions of the TP Act, I think that the basis for the structural relief sought by the applicants is tolerably clear. Indeed, in his submissions in reply Mr Archibald seemed to do an admirable job of identifying the issues that will need to be addressed at the trial in order to determine whether the requisite ‘nexus’ exists between the contraventions and the relief sought. Mr Archibald protested that he had only been able to identify the issues because he had had the advantage of hearing the applicant’s contentions. Be that as it may, I do not accept that Telstra is unable to make an informed judgment about the additional evidence, if any, it needs to tender in order to meet the applicant’s claim for structural relief. Needless to say, I express no view as to whether the applicants will be able to establish the requisite ‘nexus’ between any contraventions of the TP Act and the relief sought by them. The applicants may or may not be able to establish the factual allegations they have made and their legal arguments may or may not prove to be sound. But a summary dismissal application is not the occasion to explore these issues. In my opinion, Telstra has fallen well short of making out a case for summary dismissal of those paragraphs of the Amended Application that are the subject of its motion. Nor am I persuaded that the applicants should be required to formulate a detailed statement of issues and contentions. The pleadings and supporting particulars are detailed. While I am by no means satisfied that elaboration of the applicants’ claim for structural relief was necessary in order to understand the basis of their claim, the submissions made on the current application have made the position clear. I am satisfied that Telstra is well able to proceed to trial on the structural relief issue.REASONING ON THE PURPOSE ISSUE Mr Archibald submitted that the applicants’ case, as pleaded, does not include any allegation that Telstra had an anti-competitive purpose in refusing to provide C7 with access to the Foxtel Cable. The relevant allegations are that Telstra and Foxtel gave effect to cl 5.2 of the BCA in contravention of s 45(2)(b)(ii) of the TP Act, and engaged in the practice of exclusive dealing in contravention of s 47(1). The exclusive dealing comprised entering into an agreement containing an exclusionary provision (that is, cl 5.2). Thus, so Mr Archibald contended, Telstra’s purpose forms no part of the applicants’ case.

Ratio Decidendi

Legal Principle Established

Established by: SACKVILLE J

On 23 January 2004, the applicants informed the other parties that they no longer pressed the amendment and therefore no longer sought discovery of documents relating to the amendment. In a letter dated 23 November 2004, the applicants in relation to a discovery dispute, stated that the purpose of requiring certain documents was ‘to show that the complexity of issues in an access dispute makes the process capable of being frustrated, not that your clients deliberately tried to frustrate the process during the access arbitration involving C7’. (Emphasis added.) The definition of ‘give effect to’ in s 4(1) of the TP Act, in relation to a provision of a contract, arrangement or understanding, includes:‘do an act or thing in pursuance of or in accordance with or enforce or purport to enforce’. It follows from the definition that a corporation ‘gives effect to’ a contract if it does something ‘in accordance with’ the contract, regardless of whether its officers had the contract in mind when they acted in a particular way. The precise motive for the conduct is irrelevant. As Smithers J said in Tradestock Pty Ltd v TNT (Management) Pty Ltd (No 2) (1978) 32 FLR 420, at 432:‘What is prohibited by [s 45(2), read with the definition] does not turn on whether the motives of the persons concerned are good or bad or desirable from their own or the community’s interests.’See also Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1, at 6, 23-24, per Franki J. In my view, particulars (e)(1) and (e)(2) to par 71 of the FFASC are embarrassing. They plead a purpose or objective that is not a necessary part of the applicants’ case. The applicants withdrew a previous application to amend par 71 so as to include an allegation of a particular purpose. To allow the allegations to remain in the particulars to par 71 would open up an inquiry likely to take considerable time at the trial without advancing resolution of the issues upon which the case will turn. I should add that I do not think that the impugned particulars can be supported by par 141(e) of the FFASC. That sub-paragraph deals with a different issue. The particulars to par 71 must be assessed by reference to the series of allegations of which par 71 forms part. I propose to strike out particulars (e)(1) and (e)(2) to par 71 insofar as they refer to the objective or purpose of Telstra Multimedia or Foxtel.CONCLUSION Telstra’s summary dismissal application fails. However I propose to strike out the particulars to par 71 of the FFASC insofar as they refer to the objective or purpose of Telstra Multimedia or Foxtel. The applicants have filed a motion seeking leave to file a Fourth Further Amended Application. Unless Telstra or one of the other respondents wishes to raise any further argument in opposition to leave being granted, I shall grant that leave. My present inclination is that I should make no order for costs on Telstra’s motion, both parties having enjoyed some success (and experienced some failure). However, if the parties with to argue the question of costs, they shall have the opportunity to do so.

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