Seven Network v Cricket Australia

Case [2021] FCA 1031

FEDERAL COURT OF AUSTRALIA

Seven Network v Cricket Australia [2021] FCA 1031

File number: VID 764 of 2020
Judgment of: ANASTASSIOU J
Date of judgment: 27 August 2021
Catchwords:

PRACTICE AND PROCEDURE – preliminary discovery application pursuant to r 7.23 of the Federal Court Rules 2011 (Cth) – whether Federal Court of Australia has jurisdiction to hear and determine prospective proceeding – whether there is a matter that arises under federal law or a right, duty or obligation that owes its existence to federal law or depends upon federal law for its enforcement – jurisdiction established

PRACTICE AND PROCEDURE – consideration of three limbs of r 7.23(1) – whether prospective applicant has grounds for reasonable belief in potential right to obtain relief – grounds established – whether prospective applicant has made reasonable inquiries and does not have sufficient information to decide whether to commence proceedings – reasonable inquiries made and insufficient information received – whether prospective respondent has or is likely to have documents that are directly relevant – such documents likely to exist and would assist prospective applicant in making a decision about whether to commence a proceeding – discretionary considerations for refusing relief under r 7.23(2) – relevance of court documents being allegedly leaked to media – orders made for preliminary discovery of documents pending agreement or determination of appropriate categories

Legislation:

Acts Interpretation Act 1901 (Cth), s 15AC

Australian Consumer Law being Schedule 2 to the Competition and Consumer Act 2010 (Cth), s 18

Biosecurity Act 2015 (Cth)

Broadcasting Services Act 1992 (Cth), ss 12, 36, 41C

Copyright Act 1968 (Cth)

Corporations Act 2001 (Cth), ss 119, 124, 1378

Judiciary Act 1903 (Cth), s 39B(1A)(c)

Trade Marks Act 1995 (Cth)

Federal Court Rules 2011 (Cth), rr 7.23, 7.29

Cases cited:

Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Constitution Place Case) [2020] FCA 1070

Australian Solar Mesh Sales Ltd v Anderson [2000] FCA 864; 101 FCR 1

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as The Australian Manufacturing Union (AMWU) v BR & I Pty Ltd [2020] FCA 1498

BCI Media Group Pty Ltd v Corelogic Australia Pty Ltd [2020] FCA 1556

BHP Billiton Iron Ore v The National Competition Council [2007] FCAFC 157; 162 FCR 234

Bramco Electronics Pty Ltd v ATF Mining Electrics Pty Ltd [2013] NSWCA 392; 86 NSWLR 115

Burns v Corbett [2018] HCA 15; 265 CLR 304

Clarence City Council v Commonwealth of Australia [2020] FCAFC 134; 382 ALR 273

Cromwell Corporation Limited v ARA Real Estate Investors XXI Pte Ltd [2020] FCA 1492

Crosby v Kelly [2012] FCAFC 96; 203 FCR 451

Davidson v Suncorp-Metway Limited (No 3) [2020] FCA 1593

Essential Energy v Rose [2020] FCA 722; 145 ACSR 106

Eureka Funds Management Ltd v Freehills Services Pty Ltd [2008] VSCA 156; 19 VR 676

Fencott v Muller [1983] HCA 12; 152 CLR 570

Gold Coast Marine Aquaculture Pty Ltd v HTC…

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Details
AGLC
Seven Network v Cricket Australia [2021] FCA 1031
Case
[2021] FCA 1031
Decision Date

CaseChat Overview and Summary

The Federal Court of Australia was tasked with determining the jurisdiction it held over a prospective proceeding between Seven Network and Cricket Australia. This case arose from a Media Rights Agreement (MRA) signed between the two parties, which included provisions for broadcasting rights over a series of seasons. The dispute centred around the 2020-21 season and whether the Court had the jurisdiction to hear claims related to the MRA. The legal issues the Court needed to resolve included whether the matter arose under federal law or if a right, duty, or obligation depended upon federal law for its enforcement. Additionally, the Court had to consider the three limbs of rule 7.23(1) of the Federal Court Rules 2011 (Cth) to determine if preliminary discovery should be granted. The Court found that it had jurisdiction over the prospective proceeding as the MRA's existence and obligations relied on federal law. The various limbs of rule 7.23(1) were also satisfied, leading the Court to order preliminary discovery of documents. The Court emphasised the importance of the parties reaching an agreement on the categories of documents to be discovered or, if no agreement was reached, allowing the Court to determine these categories. The Court also highlighted that the leaking of court documents to the media was not a relevant discretionary consideration for refusing relief.

The Court's reasoning was grounded in the principle that a federal matter arises if a right, duty, or obligation in the dispute owes its existence to federal law or depends upon federal law for its enforcement. The Court referred to previous cases to support its findings, including Oliver, LNC Industries Limited v BMW (Australia) Limited, Hafertepen v Network Ten Pty Limited, and Clarence City Council v Commonwealth of Australia. The Court also noted the principle of judicial comity, which requires single judges of the Court to follow decisions of other single judges unless they are plainly or clearly wrong. The Court ordered Seven Network to provide proposed minutes of order by a specific date, and outlined the process for the parties to follow if they could not agree on the categories of documents to be discovered. The Court further directed that if Cricket Australia intended to apply for its reasonable costs and expenses of making discovery, it must do so within a specified timeframe, with corresponding deadlines for submissions from both parties. The Court concluded by stating that if Seven Network did not commence a proceeding within six months of the order, Cricket Australia would be entitled to its costs of the preliminary discovery application.

Orders

Orders of the court

1. On or before 4:00pm on 10 September 2021, the Prospective Applicant is to provide the Prospective Respondent with proposed minutes of order reflecting the reasons for judgment and proposing:

(a) the categories of documents in respect of which the Prospective Respondent is to provide discovery;

(b) the time by which the Prospective Respondents is to provide discovery of the documents; and

(c) the time by which the Prospective Respondent is to produce the documents for inspection.

2. In the event that the Prospective Applicant’s proposed orders are agreed, the Prospective Applicant is to provide proposed minutes of order by way of email to associate.anastassiouj@fedcourt.gov.au and ea.anastassiouj@fedcourt.gov.au by no later than 4:00pm on 24 September 2021.

3. Subject to further order, in the event that the Prospective Applicant’s proposed orders are opposed, the Prospective Applicant is to provide proposed minutes of order referring the dispute to a Registrar of the Court. Those proposed minutes of order are to be provided by way of email to associate.anastassiouj@fedcourt.gov.au and ea.anastassiouj@fedcourt.gov.au by no later than 4:00pm on 24 September 2021.

4. If the Prospective Respondent intends to make an application for its reasonable costs and expenses of making discovery pursuant to r 7.29(b) of the Federal Court Rules 2011 (Cth), it must make such application within seven (7) days of the categories of documents being agreed between the parties or determined by the Court.

5. If the Prospective Respondent makes the application referred to in order 4, the Prospective Respondent is to file and serve any written submissions, limited to two pages, by no later than seven (7) days after the making of the application.

6. If the Prospective Respondent makes the application referred to in order 4, the Prospective Applicant is to file and serve any written submissions, limited to two pages, by no later than 14 days after the making of the application.

7. Subject to order 8, the costs of the Prospective Applicant and Prospective Respondent of and incidental to the preliminary discovery application be that party’s costs in the cause in any proceeding commenced by the Prospective Applicant against the Prospective Respondent concerning claims the subject of the preliminary discovery application.

8. If a proceeding against the Prospective Respondent concerning claims the subject of the preliminary discovery application is not commenced by the Prospective Applicant within six (6) months of the date of this order, or such further period as the Court allows, the Prospective Respondent shall be entitled to its costs of and incidental to the preliminary discovery application, to be agreed or in default of agreement assessed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

For the reasons that follow, I am satisfied that the Court has jurisdiction to hear and determine the prospective proceeding. I am further satisfied that the various limbs of r 7.23(1) have been established and preliminary discovery should be ordered, subject to appropriate categories of discovery being agreed or, in default of agreement, determined by this Court. BACKGROUND The following summary of the relevant background facts is taken from Seven’s succinct summary of those matters in its written submissions. Cricket Australia does not dispute these matters. Accordingly, I gratefully adopt the summary, which I have paraphrased below, omitting footnotes, references and any partisan characterisations of the facts. The MRA Seven and Cricket Australia entered into the MRA in November 2019 following agreement as to the principal terms in April 2018. The MRA addresses six “Seasons” from 2018-19 to 2023-24, having a “Commencement Date” of 13 April 2018 and an Expiry Date of 31 March 2024, unless terminated earlier: cll 1.1 and 2. By clause 3.1, Cricket Australia has granted to Seven “Media Rights”. Those rights are defined in cl 1.1 to mean the rights licensed to Seven under the MRA, including as detailed in Schedules 2 and 2A of the MRA. Those rights include the exclusive right to transmit “Matches”, including “Seven BBL Matches”, via free-to-air television within Australia. In turn, Seven is required to pay a rights fee to Cricket Australia in instalments throughout the term of the MRA: cl 20, Sch 4. The MRA contains detailed provisions governing the parties’ obligations in relation to the conduct of “Matches”, and the manner in which broadcasts may (or must) be produced and transmitted. Clause 6 provides a process for the scheduling of Matches. Cricket Australia is obliged to provide a draft schedule for men’s and women’s international matches by 31 March of each year and for men’s and women’s BBL (together referred to as “W/BBL”) matches by 1 May of each year: cl 6.1(c). Seven is then able to provide feedback within a prescribed period, and the parties are obliged to consult in good faith with a view to maximising television ratings, with Cricket Australia retaining ultimate control and discretion in scheduling: cl 6.1(d)-(e). Cricket Australia is then obliged to publish a final international schedule by 1 June of each year and a W/BBL schedule by 15 July of each year, known as/referred to as the “Published Schedule”: cl 6.1(f). The Published Schedule may only be changed by Cricket Australia in accordance with cl 6.3. Clause 28(a) of the MRA provides for the suspension of a party’s obligations in circumstances where that party is wholly or partially precluded from performing by reason of a “Force Majeure Event”. The party affected by a Force Majeure Event must give notice of the extent to which it is unable to perform its obligations as soon as practicable after the event arises: cl 28(b).The dispute concerning the 2020-21 Season

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

In Oliver, Lee J noted as follows at [16]: … as Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ explained in LNC Industries Limited v BMW (Australia) Limited (1983) 151 CLR 575 at 581, a federal matter arises if a right, duty or obligation in issue in the matter “owes its existence to federal law or depends upon federal law for its enforcement” including where the right claimed is in respect of a right or property that is the creation of federal law. Whether or not a matter arises does not depend upon the form of the relief sought: LNC Industries at 581. This would involve when a right or duty based on a Commonwealth statute in issue arises (even where it has not been pleaded by the parties, or a federal issue is unnecessary to decide). A common example illustrates the potential breadth of this concept. It seems to me arguable that if a respondent is a corporation, the relevant matter arises under a law made by the Parliament within the meaning of s 39B(1A)(c) of the JA. Chapter 2B of the Corporations Act 2001 (Cth) provides for the basic features of a company. As is explained in Ford, Austin & Ramsay’s Principles of Corporations Law (Lexis) at [4,050], the capacity of a company created under the Corporations Act, including its ability to be sued, is to be found in s 119 when it provides that a company on registration comes into existence as a body corporate. It is s 124(1) which gives the entity powers of a body corporate (as to a company registered before the commencement of the relevant Commonwealth law, being the Corporations Act, s 1378 provides that registration under earlier state law has effect as if it were registration under Pt 2A.2 of the Corporations Act). The ability to sue the respondent as an entity now arises under and depends upon a law of the Commonwealth. That dicta was seemingly applied and endorsed by Katzmann J in Hafertepen v Network Ten Pty Limited [2020] FCA 1456 at [38]-[44], in which her Honour observed: 38.For the following reasons I am satisfied that the Court has jurisdiction to grant specific performance of the Agreement.… 44. Further, in a case such as the present, where the respondent is a corporation, the ability to sue “arises under and depends upon a law of the Commonwealth”: Oliver v Nine Network Australia Pty Ltd [2019] FCA 583 at [16] (Lee J). In Clarence City Council v Commonwealth of Australia [2020] FCAFC 134; 382 ALR 273 at [171]-[172] (Jagot, Kerr and Anderson JJ), the Full Court of this Court declined to express a view on this issue. In particular, the Full Court observed that it was unnecessary to do so in circumstances where the subject matter of the controversy between the parties squarely related to leases granted pursuant to a federal law and, accordingly, constituted a federal matter. As a result, there is no Full Court authority in relation to whether federal jurisdiction is enlivened simply by the presence of a corporate respondent. Seven submitted that I should apply the same reasoning in the present case unless satisfied that Hafertepen is plainly wrong: BHP Billiton Iron Ore v The National Competition Council [2007] FCAFC 157; 162 FCR 234 at [86]-[89] (Greenwood J), Sundberg J agreeing at [1]. This follows from the well-established principle that as a matter of judicial comity, single judges of this Court are expected, if not obliged, to follow decisions of other single judges of the Court concerning the same legal issue, unless they consider the decisions to be “plainly” or “clearly” wrong: see, eg, Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Constitution Place Case) [2020] FCA 1070 at [107] (Katzmann J).