Taylor v McLachlan
[2018] VSC 298
•6 June 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
S CI 2017 00323
| JACKSON TAYLOR | Plaintiff |
| v | |
| GILLON MCLACHLAN & ORS | Defendants |
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JUDGE: | JOHN DIXON J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 19 March 2018 |
DATE OF RULING: | 6 June 2018 |
CASE MAY BE CITED AS: | Taylor v McLachlan |
MEDIUM NEUTRAL CITATION: | [2018] VSC 298 |
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PRACTICE AND PROCEDURE – Application for preliminary determination of identified questions – Whether plaintiff’s claims barred by a deed of release – Whether defendants’ conduct in trade and commerce – Whether representations could constitute misleading conduct – Whether a proper basis for fairly determining preliminary questions demonstrated – Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 47.04.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | J Burnside AO QC with A Purton | Fairweather Legal |
| For the Defendant | G P Harris QC | K&L Gates |
HIS HONOUR:
Background and summary
In this proceeding, the plaintiff alleges that the defendants; the Australian Football League (the AFL), Mr Gillon McLachlan, its CEO, and Mr Michael Fitzpatrick, its Chairman engaged in misleading and deceptive conduct in contravention of s 18 of the Australian Consumer Law (ACL).[1] The allegations concern conduct of the AFL during its joint investigation with the Australian Sporting Anti-Doping Authority (ASADA) into the Essendon Football Club (EFC) supplements program. The plaintiff seeks mandatory injunctions for corrective advertising pursuant to s 232(2) of the ACL.
[1]Schedule 2 to the Competition and Consumer Act 2010 (Cth).
The defendants on this application seek orders and directions pursuant to r 47.04 of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules) for a separate trial of certain preliminary questions. The defendants have provided a proposed defence directed towards such a hearing.
The separate questions proposed
The questions are:
(1)was the conduct of the defendants in making seven statements conduct ‘in trade or commerce’ within the meaning of s 18 of the ACL?
(2)if so, are such statements not actionable under that section as they are opinions or would not have induced error?
The statements, made over a period of 13 months commencing on 12 January 2016 as pleaded in the Further Amended Statement of Claim filed 2 February 2018 (FASOC), were:
(a) Mr McLachlan on 12 January 2016, in a televised interview on the program, AFL 360 (AFL 360 Interview) represented that he had not asked ASADA to remove material unfavourable to the AFL from the ASADA Interim Report (the First Statement);
(b) Mr McLachlan, in the same AFL 360 Interview, represented that he had not attempted to achieve certain outcomes from the joint investigation and disciplinary proceedings before ASADA had obtained evidence from persons involved in the Essendon supplements program (the Second Statement);
(c) Mr McLachlan, in a Radio 3AW interview on 27 August 2016, represented that the AFL had not attempted to achieve certain outcomes from the joint investigation and disciplinary proceeding before those proceedings had been completed (the Third Statement);
(d) Mr McLachlan, in a Radio 2GP interview on 20 March 2015, represented that in respect of the players who participated in the Essendon supplements program, the AFL:
(i) bore only limited responsibility for risks to those players’ health and safety; and
(ii) could not reasonably have taken steps to avoid any risk to players’ health and safety-
(the Fourth Statement);
(e) Mr McLachlan, in the AFL 360 Interview, represented that the AFL had exercised reasonable care in protecting the health and safety of players who participated in the Essendon supplements program (the Fifth Statement);
(f) the Herald Sun reported on 13 January 2017 that an AFL spokesperson responded to a question whether Mr Fitzpatrick had said to Mr Danny Corcoran ‘Your mate Hird will never get back into football’ that that part of the conversation did not happen (the Sixth Statement); and
(g) the Age reported on 8 February 2017 that Mr McLachlan had stated that it was entirely unfair to suggest that the AFL had contributed to Mr Hird’s health issues and related hospitalisation in January 2017 (the Seventh Statement).
The defendants sought and were granted leave to add a third question:
(3)were the claims made by the plaintiff in the FASOC barred by the terms of the deed of release between the parties dated 23 December 2015 (Deed)?
The third question
The defendants allege that the plaintiff signed the Deed in an analogous proceeding for the same relief.[2] The plaintiff at the hearing did not object to leave being granted accepting that this third question was proper for preliminary determination as the answer to it would have a decisive impact on the litigation and was a question of contractual construction.
[2]S CI 2015 04642.
In issue is the scope of the releases provided by the Deed. The negotiations antecedent to the entry into the Deed were by email communication. Although I cannot rule out the prospect that brief evidence may be required of the plaintiff and an AFL in-house lawyer, Mr Stephen Meade, at this stage it is not clear that evidence of the negotiations antecedent to the execution of the Deed will be relevant. It is improbable that there will be any evidentiary overlap between any evidence relevant to construction of the Deed and the issues otherwise exposed by the pleadings.
I am satisfied that this additional question is a proper matter for preliminary determination. The real issue in dispute is whether that hearing should also include the other questions sought by the defendants. I have not been persuaded that those other questions should be decided ahead of the trial.
Relevant background
To appreciate the context in which the application is made, I set out a brief chronology of relevant events.
(a) On 5 February 2013, representatives of EFC announced at a media conference that it had asked the AFL to investigate concerns at the club about the use of supplements;
(b) In early February 2013, it was announced that ASADA and the AFL had agreed to conduct a joint investigation into the use of supplements at EFC;
(c) On 27 February 2013, EFC commissioned an independent external review. On 6 May 2013, this review identified ‘a disturbing picture of a pharmacologically experimental environment never adequately controlled or challenged or documents within the club [sic]’;
(d) On 13 August 2013, the AFL issued charges for breaches of the AFL’s Rules in relation to the EFC supplements program against EFC, Mr James Hird (EFC’s Senior Coach), Mr Bruce Reid (EFC’s Club Doctor), Mr Danny Corcoran (EFC’s General Manager, Football) and Mr Mark Thompson (EFC’s Senior Assistant Coach);
(e) On 27 August 2013, penalties were imposed by the AFL on EFC of a $2m fine, suspension from the 2013 finals and draft penalties. Mr Hird was suspended for 12 months from coaching. Mr Corcoran was suspended for 6 months and Mr Thompson was fined $30,000;
(f) On 12 June 2014, ASADA issued show-cause notices on 34 current and former players of EFC alleging use of prohibited substances (First Show Cause Notices);
(g) On 13 June 2014, proceedings were issued in the Federal Court of Australia by EFC and Mr Hird against the CEO of ASADA that challenged the legality of the joint investigation on which the First Show Cause Notices were premised;
(h) On 19 September 2014, Middleton J dismissed that challenge;
(i) On 2 October 2014, Mr Hird appealed that judgment;
(j) On 17 October 2014, new show-cause notices were issued to the 34 current and former players of EFC alleging use of prohibited substances;
(k) On 14 November 2014, infraction notices were issued by the AFL to the 34 current and former players of EFC alleging use of prohibited substances in breach of the AFL Anti-Doping Code. The AFL Anti-Doping Tribunal convened hearings that commenced on 15 December 2014;
(l) On or about 30 January 2015, the Full Federal Court dismissed Mr Hird’s appeal;
(m)On or about 31 March 2015, the AFL Anti-Doping Tribunal found it was not comfortably satisfied that the 34 current and former players of EFC had breached the AFL Anti-Doping Code;
(n) On or about 11 May 2015, the World Anti-Doping Agency (WADA) appealed the decision of the AFL Anti-Doping Tribunal to the Court of Arbitration in Sport (CAS), which heard the appeal on 16 to 21 November 2015;
(o) On or about 12 January 2016, the CAS upheld WADA’s appeal of the decision of the AFL Anti-Doping Tribunal and imposed a 2 year period of ineligibility on the 34 current and former EFL players. The practical result was the players were banned from playing in the 2016 AFL season; and
(p) The seven statements relied on by the plaintiff were made between 12 January 2016 and 8 February 2017.
Applicable principles
The parties agreed about the applicable principles, briefly stated by the Court of Appeal in Murphy v Victoria,[3] but thoroughly essayed in the analysis of the authorities undertaken more recently by Derham AsJ in Vale v Daumeke:[4]
[3][2014] 45 VR 119, 126 [28].
[4][2015] VSC 342 [31] (citations omitted).
Ordinarily, all issues of fact and law in a proceeding will be determined at the one time by the Court following a trial. There are a great many decisions relating to the matters to be considered in the exercise of the discretion to order the separate trial of questions in a proceeding. Many have gathered together considerations relevant to the particular facts and issues in the particular proceeding. All recognise that much depends on the facts at hand. Nevertheless, there are principles, relevant matters and cautions identified that provide guidance in the exercise of the discretion. They are as follows:
(a) The discretion must be exercised with great caution, and only in a clear case;
(b) An order for the determination of a separate question before trial is generally only appropriate where the determination of the question will be likely to end the litigation or substantially narrow the issues in dispute, or where there is a clear demarcation between that issue and the other issues in the case;
(c) Where the preliminary question is one of mixed fact and law, it is necessary that the question can be precisely formulated (ensuring that the terms used have clear meaning) and that all of the facts that are on any fairly arguable view relevant to the determination of the question are ascertainable either as facts assumed to be correct for the purposes of the preliminary determination, as agreed facts or as facts to be judicially determined;
(d) The separate determination of the question should not be attempted where there is uncertainty inherent in the definition of the facts upon which the substantive question must be determined;
(e) In cases where the relevant facts are assumed by one party to be correct for the purposes of the preliminary determination, it is only possible to determine a question of law, not one of mixed law and fact;
(f) Care must be taken in utilising the procedure provided for in r 47.04 of the Rules to avoid the determination of issues not ‘ripe’ for separate and preliminary determination—for example, where it is simply one of two or more alternative ways in which an applicant frames its case, and determination of the issue would leave significant other issues unresolved;
(g) The advantages of trying separate questions for one party may unfairly disadvantage another party, including because the questions will be determined without the benefit of all the evidence relevant to the proceeding;
(h) Whether a question should be determined separately involves a two-stage process - the first stage requires that the questions for determination be identified clearly and with precision, while the second stage is the actual determination of the question—and the two stages should not be run together;
(i) If the questions involve issues of fact that need to be determined or proved, and the Court cannot see, on the basis of the material presently before it, that the facts can be properly determined, it is inappropriate to make the order;
(j) In some cases, perhaps most cases, it will be inappropriate to order the trial of preliminary questions before discovery of documents relevant to the questions, and before resolving grounds restricting production and inspection of them, such as client legal privilege or public interest immunity;
(k) Factors that tend to support the making of an order include that the separate determination of the question may:
(i) Contribute to the saving of time and cost by substantially narrowing the issues for trial, or even lead to disposal of the action; or
(ii) Contribute to the settlement of the litigation; and
(l) Factors that tell against the making of an order include that the separate determination of the question may:
(i) Give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial;
(ii) Result in significant overlap between the evidence adduced on the hearing of the separate question and at trial—possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding—which will be of particular significance if the Court may be required to form a view as to the credibility of witnesses who may give evidence at both stages of the hearing of the proceeding; or
(iii) Prolong rather than shorten the litigation.
I also bear in mind the potential pitfalls associated with preliminary trials of separate issues identified by Kirby and Callinan JJ in Tepko Pty Ltd v Water Board.[5]
[5](2001) 206 CLR 1, 55.
Submissions
The defendants broadly contended that two broad factors pointed in favour of the court exercising its discretion to order a separate trial of the preliminary questions:
(a) the court only has to determine issues of law. The facts are not substantially disputed; and
(b) relevant obligations under the Civil Procedure Act2010 support a preliminary determination.
The first proposed question is whether the defendants’ representations were conduct in trade or commerce. The defendants submitted that:
(a) the preliminary questions could be determined largely, if not completely, by reference to tendered contemporaneous documents without the need to call any witnesses;
(b) only seven statements were made by the defendants that are contained in 5 documents;
(c) there is no dispute about the accuracy of the records of those statements; and
(d) save for paragraph 19(j) of the FASOC, the facts relied on to determine whether the conduct was in trade or commerce are admitted.
Propositions (b) and (c) were not controversial.
In respect of propositions (a) and (d) the defendants contended that as the trial of preliminary questions would not require substantial witness evidence, there was no need for extensive discovery on those issues. All allegations of fact relevant to the determination of the preliminary questions were essentially admitted, taking relevant material facts out of controversy, or might conveniently be resolved, so the court need only determine questions of law.[6]
[6]Mulley v Manifold (1959) 103 CLR 341, 345.
In support of this proposition the defendants cited Pioneer Plastic Containers Ltd v Commissioners of Customs & Excise.[7] In that case, Buckley J identified the question before the court as partly one of law and partly one of fact. His Honour observed that so far as facts are relevant to the determination of the case, it is for the plaintiff to plead to those facts, and if the defendant admits all those facts then there is no issue between the parties on that part of the case which is concerned with matters of fact. Buckley J then observed, in a passage on which the defendants rely:
In those circumstances the plaintiff ought not to be allowed to elaborate his case in any way by way of admitting evidence which may embroider the facts alleged in the statement of claim.[8]
[7][1967] Ch 597 (‘Pioneer Plastics’).
[8]Ibid 601.
Pioneer Plastics was followed in Divcon (Australia) Pty Ltd v Divine Shipping Pty Ltd[9] where Beach J observed that an omission in the pleadings is a serious step for a party to take. It means that proof is no longer required or permitted of the fact admitted as the fact is no longer in controversy between the parties.
[9][1996] 2 VR 79.
The application of this principle in the current case requires examination of the pleadings. The plaintiff pleaded the material facts supporting his allegation that the conduct of the AFL was in trade or commerce in paragraph 19 of the FASOC in the following terms:
(a) the AFL had adopted a stance that set an example for all participants in the sport of Australian Football – not just AFL licensed players – by condemning the use of performance-enhancing drugs;
(b) the AFL had responsibility to encourage and promote a competition free from prohibited substances and methods and to prevent doping practices in sport;
(c) issues surrounding the EFC supplements program had engulfed the AFL for around four years;
(d) the EFC Supplements Program had a profoundly negative impact on AFL players, clubs and the AFL’s reputation;
(e) the pre-emption representations were made in direct response to the CAS decision, which had been made one day earlier;
(f) the CAS Decision overturned the AFL Anti-Doping Tribunal Decision and the AFL had actively participated in the CAS Appeal;
(g) issues surrounding the EFC Supplements Program had a significant financial impact on the AFL in the four-year period leading up to the CAS Decision;
(h) matters surrounding the EFC Supplements Program, the AFL Anti-Doping Tribunal Decision, the CAS Appeal and CAS Decision were matters of public interest;
(i) the AFL was required to publicly disclose matters related to the CAS Decision under the Code; and
(j) in making the statements, the AFL was seeking to protect its commercial interest by:
(iii) explaining its earlier conduct in the context of the outcome of the CAS Decision; and
(iv)justifying its earlier conduct in connection with the protection of the integrity of the AFL competition and the health of the players.
The proposed defence admits sub-paragraphs (a) - (i). It states:
In answer to paragraph 19 they:
(a)save to refer to and rely on paragraph 3(b) above, admit sub-paragraph (a);
(b)admit sub-paragraph (b) to (i);
(c)admit in making the statements alleged paragraphs 16, 17, 27 (confined to sub-paragraph 19(j)(ii) below), 28 and 45 (confined to sub-paragraph 19(j)(ii) below of the FASOC, the AFL was also seeking to:
(i)explain its earlier conduct in the context of the outcome of the CAS Decision; and
(ii)justify its earlier conduct in connection with the protection of the integrity of the AFL competition and the health of players;
(d) otherwise deny paragraph 19.
The defendants said further that a statement cannot be misleading and deceptive if not made in trade or commerce. The fact that conduct may have advanced the AFL’s commercial interest is irrelevant because the conduct is not in trade or commerce. That context is not accepted by the plaintiff who contended that the AFL’s motivation is relevant to the proper characterisation of the conduct as being in trade or commerce.
Accepting the principle in Pioneer Plastics is directly applicable to the facts alleged in sub-paragraphs (a) – (i), the issue that remains is whether the denial that the AFL was seeking to protect its commercial interest as alleged in sub-paragraph (j) is a relevant and significant factual contest. For reasons I will explain, I am persuaded that this factual dispute cannot be readily determined judicially on a preliminary determination.
Putting that conclusion to one side, should the defendant’s application be accepted, the issues that would remain for determination at trial would include whether the representations were in fact misleading and deceptive, that is, breach, which would raise significant areas of factual dispute that will require extensive investigation and discovery by the defendants, in order not only to fully plead to those allegations but also to prepare necessary witness proofs for trial.
The defendant observed doing so would involve consideration of events occurring more than 5 years ago, thousands of documents collated into an AFL database for the duration of the supplements controversy, and may involve third parties and persons no longer employed by first defendant. Additionally, numerous personnel from various AFL departments were involved in the supplements controversy including:
(a) the AFL’s legal department and external solicitors, Minter Ellison, as well as senior and junior counsel who were briefed at various stages of the supplement controversy;
(b) the AFL’s integrity department which worked with ASADA on the joint investigation;
(c) The AFL’s external forensic accountants, Deloitte;
(d) the AFL’s corporate affairs department; and
(e) the AFL executive including the former CEO, Mr Demetriou.
It was submitted significant time and very considerable expense would be required to ready the matter for trial, which could be avoided by preliminary determination of the identified questions, at least insofar as individual claims were dismissed. It was estimated that the likely cost of such preparation, should the proceeding goes to trial on all issues, would be $700,000.
The plaintiff submitted that the court must take care in exercising the discretion under r 47.04. The court should refuse the defendants’ application to order a separate trial of the preliminary questions because the defendants have not clearly elucidated a case that warrants the exercise of the court’s jurisdiction. The plaintiff submitted that it would be inappropriate to determine the preliminary questions before discovery was completed and without the oral evidence that would be led at trial. The plaintiff contended that the preliminary questions cannot be dealt with on the facts admitted but must be determined by findings made after hearing evidence. The defendants were seeking to assert that the preliminary questions could never lead to the conclusion that the impugned statements were made in trade or commerce.
It is not appropriate for the court to shut the plaintiff out from leading evidence, simply because certain admissions are made by the defendants. I was invited to reject the defendants’ submission that the preliminary determination would not involve significant disputed evidence.[10] Witnesses who give evidence during the trial of the preliminary questions are likely to be required as witnesses at the trial. The court will have to consider the same or related questions in the context of the full trial. Such duplication of effort may prolong proceedings rather than shorten litigation and may unfairly disadvantage the plaintiff.
[10]I note the plaintiff asserted the defendants’ reliance on admissions and the Pioneer Plastics point was misplaced, as the parties are not committed to any of the admissions contained in the proposed draft defence. In reply, the defendants undertook to commit to the admissions made by the proposed defence if the court granted the application.
The first proposed question
I do not accept the defendants’ contention that, applying Pioneer Plastics, the admissions largely resolve the scope of the evidence relevant to the questions. An admission of fact in a pleading does not remove that fact from controversy, although no evidence is required to prove that fact. Accepting that evidence is not allowed, where all facts are admitted on the pleadings, evidence of admitted facts may be necessary to resolve controversy around other pleaded facts that are neither admitted nor denied.
In the absence of admission, the plaintiff is entitled to prove that the defendants’ conduct was in pursuit of an intention to protect the AFL’s commercial interests. In doing so, the plaintiff may rely on evidence led on the contested breach questions. Whether the conduct was misleading - a question that concerns the proper characterisation of the conduct against the statutory norm - is a question capable of affecting the assessment of the context in which the notion of trade and commerce is to be determined.
Further, I was not persuaded to accept the defendants’ submission that a finding could be made on this particular issue following contained discovery, limited by issues of relevance, materiality and proportionality. That the AFL was, or was not, acting to protect its commercial interest is relevant to defining the scope of discovery.
There is a difference between conduct that is ‘in trade and commerce’ and conduct that is ‘in respect of trade or commerce’. Section 18 of the ACL applies in the former circumstance; not in the latter.[11] In Concrete Constructions (NSW) Pty Limited v Nelson, the plurality stated:[12]
[I]n the context of Pt V of the Act with its heading ‘Consumer Protection’, it is plain that s. 52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purposes of, its overall trading or commercial business. Put differently, the section was not intended to impose, by a side-wind, an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities. What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character. Such conduct includes, of course, promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public. In some areas, the dividing line between what is and what is not conduct ‘in trade or commerce’ may be less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character.
[11]Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594 (‘Concrete Constructions’); Village Building Company Ltd v Canberra International Airport Pty Ltd (2004) 139 FCR 330 (affirming the judgment of Finn J reported at (2004) 208 ALR 98); Robin Pty Ltd v Canberra International Airport Pty Ltd (1999) 179 ALR 449.
[12]Concrete Constructions (1990) 169 CLR 594, 603 - 604.
In Houghton v Arms,[13] the High Court stated that while in most cases the focus will be on the nature of the business of the party making the representation, s 52 was not so limited. In particular, that section did not refer to the trade or commerce of any particular corporation. Accordingly, statements made by a person not engaged in trade or commerce may answer the statutory expression, for example, conduct designed to encourage others to invest, or to continue investments, in a particular trading entity. Whether conduct was in trade or commerce will depend on examination of all of the circumstances.[14]
[13](2006) 225 CLR 553.
[14]See also Roo-Roofing Pty Ltd v Cth [2017] VSC 31.
Should the plaintiff demonstrate the AFL was seeking to protect its commercial interest, the fact that it acted in furtherance of that intention could rationally affect the probability of a finding that the defendants’ conduct in making the representations was conduct in trade or commerce. It is unnecessary to now explain why that might be so. Such matters are best left to the trial of the issues.
I accept, as the plaintiff submitted, that the court must determine whether the statements were made in an attempt by the AFL to protect its commercial operations in order to determine the preliminary question. The AFL’s business depends in large part upon the way it is viewed by the public, because its income is derived from television revenues, membership and ticket sales. Controlling the clubs and the competition so that the public have faith in the integrity of the competition may be a necessary part of that activity.
The importance of the context in which the conduct was engaged in is clear from SingTel Optus Pty Ltd v AFL.[15] Optus complained that the AFL engaged in misleading or deceptive conduct by its then CEO, Mr Demetriou, making public comments to the effect that Optus is engaging in illegal activities by operating a television recording service called ‘TV Now’. Edmunds J concluded that Mr Demetriou’s statements were not conduct ‘in trade or commerce’ and had they been, they were neither misleading nor deceptive.
[15][2012] FCA 138.
Edmunds J concluded that Mr Demetriou’s comments were part of an ongoing narrative about media rights to sporting events in the context of technological change. He was engaged in a campaign to persuade all sides of the political framework, as well as a wide spectrum of Australian sporting bodies, that amendment was needed to copyright laws.
Context will be relevant in the assessment of whether the defendants’ conduct in making the statements was an aspect or element of activities or transactions that bore a trading or commercial character. The defendants will contend that the conduct, put against them at its highest, was no more than concerning trade or commerce or in relation to trade and commerce and fell short of actually being in trade or commerce. Rather, it was conduct in the context of investigation/disciplinary processes that is not commonly found to be in trade or commerce.[16]
[16]CPA Australia v Storai [2015] VSC 442 [42] - [48].
However the circumstances of this case, once fully identified and explored, may be distinguishable from those ordinarily arising out of disciplinary enquiries. The AFL’s activities are different in nature from the areas of commerce considered in other cases, a distinction that simply stresses that the inquiry as to whether conduct is in trade or commerce is fact sensitive. In that context, I bear in mind the complexity of the events evident from the brief chronology set out above.
It may be open to the plaintiff to demonstrate from evidence led in that context that AFL football is a commercialised sport at the epicentre of a discrete part of the entertainment industry. What the AFL provides is the basis for many commercial transactions. On the other hand, circumstances indicating the statements were not in furtherance of a commercial motivation may show that the statements were not misleading. The question is best resolved by reference to the whole of the evidence to be adduced in the proceeding. A preliminary determination would necessarily deprive the plaintiff of the benefit of all of the evidence that is relevant to those questions and which would be available and considered at the trial of the proceeding.
Accordingly, I am not persuaded that the issue of whether the conduct was in trade or commerce can fairly be determined as a preliminary question divorced from the determination of whether the conduct was misleading. The utility, economy and fairness to the parties of a preliminary determination are not beyond question. It is inappropriate to consider preliminary determination of questions based on contestable facts. That finding is sufficient to deny the defendants a preliminary determination of the first question.
The second proposed question
The second question raises the issue of whether the statements were honestly held opinions or could not have induced error. Because the statements formed part of a long ongoing public narrative about disciplinary procedures against certain members of the EFC, those statements were not promotional in the sense referred to by the High Court in Concrete Constructions. Whether the statements are capable of being likely to mislead requires characterisation of the conduct of the defendants in all of the circumstances to ensure that the particular identified statements are considered in their proper context.
On the basis of the material presently before the court, in particular the proposed admissions, I cannot see that the proper context for the evaluation of the statements can be appropriately and fairly determined in a preliminary hearing for the reasons already given. Substantially for the reasons given in respect of the first question, I am satisfied that it is not appropriate to order a separate determination of the second question.
Other matters
The defendants emphasised that the plaintiff has neither suffered damage nor been personally affected by the conduct alleged. The plaintiff has no direct/indirect financial interest in prosecuting his claim and he brings the proceeding in the ‘public interest’. Beyond engaging in proscribed conduct, assuming that be the finding at trial, the FASOC does not allege material facts establishing the need for corrective advertising to be ordered by mandatory injunctive relief or the content of such advertising.
Moreover, no connection was evident between the relief sought and the joinder of the first and second defendants into the proceeding. The defendants submitted that the plaintiff is pursuing an improper motive by that joinder. There was no issue that each of them was relevantly a directing mind of the AFL, which must, and did, accept responsibility for their conduct. The defendants contended that the only identifiable purpose in including Mr McLachlan and Mr Fitzpatrick personally as defendants was to stain their reputations. The defendants contended these matters brought into question the plaintiff’s motives in the litigation.
The first and second defendants have been vexed by the allegations contained in the FASOC since at least 1 July 2015, and by seven iterations of the statement of claim being served as the plaintiff attempted to formulate his claim.
The plaintiff responded, and I agree, that joinder of individuals who are the directing minds of corporate defendants is not uncommon in litigation and in particular in litigation under the ACL. That said, whether there was some merit in the defendants’ contentions will be a matter for the trial judge given the relief that is sought in the proceeding and doubts as to whether it would be seriously contended at trial that the first and second defendants should pay for corrective advertising. The material before the court does not warrant a finding that those defendants are vexed by the proceeding.
There is an appearance that the presence of Mr McLachlan and Mr Fitzpatrick is gratuitous despite being probable witnesses for the AFL. The plaintiff submitted Mr McLachlan and Mr Fitzpatrick’s presence in the litigation and the proper resolution of those questions depends on what the evidence ultimately reveals about the reasons they engaged in the conduct in circumstances where it was important to understand the AFL’s intention in making those statements through its two senior executives. The plaintiff says that these factual questions can only be explored properly after discovery and on the basis of evidence from witnesses at trial. The plaintiff added that it is unlikely that Mr McLachlan or Mr Fitzpatrick will be held individually responsible for any costs, given they are represented by the same lawyers and counsel as the AFL.
The court has ample power in its inherent jurisdiction and under the Civil Procedure Act to protect the first and second defendants. To the extent that such protection may involve security for costs, the defendants have orders for security to some extent and are at liberty to seek greater protection. These matters do not warrant forming a different view on the utility of a separate determination of the identified questions.
Conclusion
The application for preliminary determination of the proposed questions 1 and 2 is refused. I will order that the court determine pursuant to r 47.04 whether the claims made by the plaintiff in the FASOC are barred by the terms of the Deed. I invite the parties to submit a suitable minute of appropriate directions to prepare that question for determination on a date to be fixed and I will hear counsel on the question of the costs of the application.
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