Seven Network (Operations) Limited v Cricket Australia
[2022] FCA 1290
•28 October 2022
FEDERAL COURT OF AUSTRALIA
Seven Network (Operations) Limited v Cricket Australia [2022] FCA 1290
File number: VID 369 of 2022 Judgment of: O'BRYAN J Date of judgment: 28 October 2022 Catchwords: PRACTICE AND PROCEDURE – pleadings – allegations in defence that certain allegations in the statement of claim are “vague and embarrassing” – whether such allegations are a permissible form of pleading – order for defence to be amended to remove the allegations
PRACTICE AND PROCEDURE – discovery – whether discovery applications should be deferred until after the filing of evidence
Legislation: Federal Court of Australia Act 1976 (Cth) ss 37M, 37N
Federal Court Rules 2011 (Cth) rr 16.02(1)-(2), 16.07, 16.21(1), 16.45, 20.11, 20.14, 20.15
Cases cited: Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279
Dare v Pulham (1982) 148 CLR 658
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 24 Date of hearing: 28 October 2022 Counsel for the Applicant: Mr D Thomas SC with Mr D Birch and Mr H Atkin Solicitor for the Applicant: Atanaskovic Hartnell Counsel for the Respondent: Mr J J Gleeson KC with Mr A M Dinelli, Mr B Petrie and Ms X Teo Solicitor for the Respondent: K&L Gates ORDERS
VID 369 of 2022 BETWEEN: SEVEN NETWORK (OPERATIONS) LIMITED (ABN 65 052 845 262)
Applicant
AND: CRICKET AUSTRALIA (ABN 53 006 089 130)
Respondent
ORDER MADE BY:
O'BRYAN J
DATE OF ORDER:
28 OCTOBER 2022
THE COURT ORDERS THAT:
Pleadings
1.Within 14 days, the respondent amend its defence dated 22 August 2022 to remove all statements to the effect that an allegation in the applicant’s statement of claim is “vague and embarrassing” and file and serve an amended defence in accordance with the Federal Court Rules 2011 (Cth).
Statements of Facts
2.By 12 December 2022, the parties file any agreed statement of facts.
Evidence
3.By 31 March 2023, the applicant file and serve the affidavits, expert evidence and a list of documents on which it intends to rely at trial.
4.By 26 May 2023, the respondent file and serve the affidavits, expert evidence and a list of documents on which it intends to rely at trial.
Discovery
5.The parties are to exchange any proposed orders for discovery by 16 June 2023.
6.Any application for discovery is to be filed and served by 7 July 2023.
Further Case Management Hearing
7.The proceeding be listed for a further case management hearing at 9.30am on 21 July 2023 to determine any application for discovery and to make further directions for the preparation of the matter for hearing.
Other Matters
8.Costs be reserved.
9.There be liberty to apply.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
O’BRYAN J:
Overview
This proceeding is a dispute between Seven Network (Operations) Limited (Seven) and Cricket Australia in respect of a media rights agreement entered into between them on or about 20 November 2019.
These reasons concern orders made at a case management hearing today. The orders concerned two principal matters:
(a)whether orders for discovery should be made at this stage of the proceeding, or should await the filing of evidence by both parties; and
(b)whether it is permissible for Cricket Australia to state in its defence that a particular allegation made by Seven in its statement of claim is “vague and embarrassing” and that Cricket Australia “is not therefore able to properly plead to the allegation”.
The media rights agreement conferred rights to broadcast certain cricket matches organised and conducted by Cricket Australia, namely all men’s test matches, all women’s international matches, and a number of the men’s and women’s Big Bash League (BBL) matches for each season during the term of the agreement (being from 13 April 2018 until 31 March 2024). Each season is the period between 1 September in one calendar year and 31 March in the next calendar year.
Seven filed its statement of claim on 30 June 2022. Cricket Australia filed its defence on 22 August 2022 and Seven filed a reply on 12 September 2022. Pleadings have now closed.
Seven’s allegations against Cricket Australia are in two broad categories. The first category is based on cl 6.9(b) of the media rights agreement which requires Cricket Australia to “use all reasonable endeavours to organise and conduct all Seven Matches on average across a Season to a quality and standard which is at least equal to the highest quality and standard in the world for such type of Matches and, in any event, to a quality and standard for the Season which is overall no less than the prior year’s Season”. Seven alleges that Cricket Australia breached cl 6.9(b) in each of the 2019/2020, 2020/2021 and 2021/2022 seasons in a number of ways, including in respect of:
(a)the scheduling of other international cricket matches at competitive times to BBL matches;
(b)imposing certain rules of the BBL competition including the salary cap and overseas player restrictions for each team and failing to conduct a player auction to allocate players to each team; and
(c)scheduling BBL matches in a manner that prevented certain well-known players from participating and, conversely, requiring lesser-known players to be included in teams.
The second category of allegations concerns the scheduling of international matches in the 2020/2021 season and particularly the dates for the first men’s test match between Australia and India in that season. Seven alleges that at various points in time between May and August 2020, Cricket Australia made misleading representations to Seven, or otherwise misled Seven, with respect to the scheduling of international matches in the 2020/2021 season. Seven alleges that, by its misleading conduct, Cricket Australia has breached s 18 of the Australian Consumer Law (ACL) and various provisions of the media rights agreement.
By way of relief, Seven seeks damages, declarations that Cricket Australia has breached the media rights agreement and s 18 of the ACL and a declaration that Seven is entitled to terminate the media rights agreement.
By its defence, Cricket Australia admits many of the events that occurred during the 2019/2020, 2020/2021 and 2021/2022 seasons but denies the allegations that it breached the media rights agreement and s 18 of the ACL and denies Seven’s claims for relief.
Discovery
Each of Seven and Cricket Australia filed applications for discovery. Seven sought an order for standard discovery under r 20.14 of the Federal Court Rules 2011 (Cth) (Federal Court Rules) and Cricket Australia sought an order for non-standard discovery (by the use of categories) under r 20.15.
Rule 20.11 stipulates that a party must not apply for an order for discovery unless the making of the order sought will facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible. The rule reflects the overarching purpose of civil practice and procedure in the Court, which is to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible: ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth).
At the case management hearing today, I informed the parties that I considered that the overarching purpose would be best promoted by deferring any application for discovery until after Seven and Cricket Australia had filed and served their evidence in chief, including affidavits of witnesses, any expert reports to be relied upon and a list of documents to be relied upon. That view was formed having regard to the following features of this proceeding:
(a)it is a dispute between two large, relatively well-resourced and sophisticated entities;
(b)the dispute relates to a commercial agreement between the entities, the media rights agreement;
(c)the relevant events the subject of the dispute are, for the most part, known to the parties;
(d)a significant part of the dispute concerns the interpretation of the media rights agreement and the rights and obligations of the parties to the agreement; and
(e)another significant part of the dispute concerns the question whether Seven has suffered loss and damage as claimed.
Having regard to the above features of the case, I consider that the efficient preparation of the proceeding for trial will be best promoted by requiring the parties to file and serve their evidence in chief. That approach will better define the case sought to be made by each party and thereby better define the issues for determination at trial. It will also more rapidly enable the parties to assess their respective positions and engage in commercial discussions aimed at resolving their differences. Any applications for discovery can be made following the filing of the primary evidence in chief. I expect any such applications to be framed in light of the evidence that has been filed and the real issues in dispute.
By the conclusion of the case management hearing, the approach outlined above was supported by Cricket Australia and not strenuously opposed by Seven. For the reasons stated above, I made orders in that form.
Pleadings
In its defence, Cricket Australia makes numerous statements to the effect that a particular allegation made by Seven in its statement of claim is “vague and embarrassing” and that Cricket Australia “is not therefore able to properly plead to the allegation”. In many such instances, Cricket Australia then “otherwise denies the allegation”.
Statements of that kind have become increasingly common in pleadings filed in the Federal Court; colourfully, they might be described as a cancerous growth. In my view, statements of that kind are not a proper form of pleading and should be excised.
Requirements for the form and content of pleadings are set out in Pt 16 of the Federal Court Rules. Relevantly, subss (1) and (2) of r 16.02 provide as follows:
(1)A pleading must:
(a)be divided into consecutively numbered paragraphs, each, as far as practicable, dealing with a separate matter; and
(b) be as brief as the nature of the case permits; and
(c) identify the issues that the party wants the Court to resolve; and
(d) state the material facts on which a party relies that are necessary to give the opposing party fair notice of the case to be made against that party at trial, but not the evidence by which the material facts are to be proved; and
(e) state the provisions of any statute relied on; and
(f) state the specific relief sought or claimed.
(2) A pleading must not:
(a)contain any scandalous material; or
(b)contain any frivolous or vexatious material; or
(c)be evasive or ambiguous; or
(d)be likely to cause prejudice, embarrassment or delay in the proceeding; or
(e)fail to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or
(f) otherwise be an abuse of the process of the Court.
Rule 16.07 prescribes the permitted responses to allegations in another party’s pleading:
(1)A party pleading to an allegation of fact in another party’s pleading must specifically admit or deny every allegation of fact in the pleading.
(2) Allegations that are not specifically denied are taken to be admitted.
(3) However, a party may state that the party does not know and therefore cannot admit a particular fact.
(4) If a party makes a statement mentioned in subrule (3), the particular fact is taken to be denied.
As has been stated many times, the purpose of pleadings is to define the issues in the proceeding with sufficient clarity to enable the parties to understand, and therefore, have the opportunity to meet, the case brought against them: Dare v Pulham (1982) 148 CLR 658 at 664. By defining the issues to be determined, pleadings play an important function in ensuring the proceeding is conducted both fairly and efficiently: Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 286.
Statements in a defence of the kind referred to above, that an allegation in a statement of claim is vague and embarrassing and, for that reason, cannot be responded to, are not pleas that are consistent with the requirements of rr 16.02 and 16.07. Nor do such statements serve the purpose of defining the issues in the proceeding or ensuring that the proceeding is conducted both fairly and efficiently. The statements are evasive. They are no more than an assertion that there is a deficiency in respect of an allegation in the statement of claim and a refusal to plead responsively on the basis of the asserted deficiency. The inclusion of such statements in a defence is not consistent with the overarching purpose of civil practice and procedure, which is to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible: ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth).
On the occasions when an allegation in a statement of claim (or other pleading) is deficient, for example by being vague or embarrassing, there are procedures available to have the deficiency remedied. If necessary, a party may apply to the Court under r 16.21(1) for an order that all or part of a pleading be struck out on the ground that the pleading:
(a)contains scandalous material;
(b)contains frivolous or vexatious material;
(c)is evasive or ambiguous;
(d)is likely to cause prejudice, embarrassment or delay in the proceeding;
(e)fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or
(f)is otherwise an abuse of the process of the Court.
In many cases, deficiencies in a pleading can be remedied by the provision of particulars. If a party refuses to provide proper particulars, an order for particulars can be made under r 16.45.
This is not to encourage pleading disputes between parties to civil litigation. Parties are expected to comply with the requirements of Pt 16 concerning the form of pleadings, including the provision of all necessary particulars under r 16.41. While the Court will resolve pleading disputes where it is necessary, experience has shown that pleading disputes themselves are frequently an ill-founded and wasteful exercise. In recent years, the Court has shown less tolerance for unnecessary pleading disputes.
It may be that the growing practice of including in a defence a statement of the kind referred to above, that an allegation in a statement of claim is vague and embarrassing and, for that reason, cannot be responded to, is a response to the Court’s reduced tolerance for unnecessary pleading disputes. Respondents may be unwilling to make an application to strike out allegations in a statement of claim or seek further particulars of an allegation, and instead include in their defences a statement of the kind referred to above. If that is the case, in my view it is misguided. Such statements serve no proper function in pleadings. They do not aid in the clarification of issues in dispute and often serve to evade a proper response. If an allegation in a statement of claim is truly vague and embarrassing and, for that reason, cannot be responded to, the correct approach is to have the matter remedied either by seeking an amendment to the pleading or by seeking particulars. If the complaint about the allegation does not rise to that level, the respondent should plead properly to the allegation in accordance with the rules of pleading.
For the reasons given above, I consider that the statements in Cricket Australia’s defence to the effect that a particular allegation made by Seven in its statement of claim is “vague and embarrassing” and that Cricket Australia “is not therefore able to properly plead to the allegation” are evasive and therefore contrary to the requirements of r 16.02. I therefore made orders that Cricket Australia is to amend its defence to remove all such statements and file and serve an amended defence in accordance with the Federal Court Rules. Cricket Australia did not oppose such an order being made.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Bryan. Associate:
Dated: 28 October 2022
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