Business Travel Media Pty Ltd v GroupM Communications Pty Ltd

Federal Court of Australia|2023-07-21|Before: Lee J

The applicant's solicitor take the necessary steps to provide for the amount of $20,000 (held for security for costs) be released immediately to the respondents from the Commonwealth Bank-controlled money account held in the name of the applicant's solicitor and paid to the trust account of the solicitors for the respondent (security sum).
The applicant pay the respondents' costs of the proceedings to date (costs order).
That pursuant to s 56A of the Federal Court of Australia Act 1976 (Cth), a Registrar of the Court be appointed as a referee to inquire into and report as to the proper quantum of the costs order on a lump sum (with such a reference to be conducted with minimum formality and on the terms of the usual order for reference made by the Court in respect of references) with a report of no more than five pages to be provided to the Associate to Justice Lee and the parties as soon as practicable (for the avoidance of doubt, the security sum will be credited to any liability for costs and even if the proper amount of party/party costs is assessed by the referee as being less than $20,000, this amount will constitute the lump sum amount payable in respect of the costs order, and if the amount of any finding of the referee adopted by the Court is an amount greater than $20,000, then subject to adoption of the report of the referee, the balance will be payable as if it was an ordinary costs order of the Court).
Subject to Order 5, the proceeding be stayed.
The stay of the proceeding be lifted subject to the following conditions: (a) compliance with Order 1 by 4pm on 27 July 2023; and (b) a statement of claim pleading the applicant's case with specificity is provided to the Associate to Justice Lee. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

A INTRODUCTION 1 This is the fourth time this matter has been before the Court. The background to the proceeding does not require repetition and is set out in two previous judgments of the Court, namely: (1) Business Travel Media Pty Ltd v GroupM Communications Pty Ltd [2023] FCA 512; and (2) Business Travel Media Pty Ltd v M Media Group Pty Ltd [2023] FCA 411. 2 What matters presently is that the respondents move on an amended interlocutory application by which they seek, among other things: Summary judgment 7. Pursuant to s 31A(2) of the [Federal Court of Australia Act 1976 (Cth) (FCA Act)] or r 26.01 of the [Federal Court Rules 2011 (Cth) (FCR)], the proceeding be summarily dismissed with judgment for the Respondents. 8. The [a]pplicant pay the [r]espondents' costs of the proceeding on an indemnity basis (or alternatively, as between party and party). Strike-out (in the alternative to summary judgment) and dismissal 9. In the alternative to Orders 7 and 8, and pursuant to: (a) [FCR 16.21], the whole of the [a]pplicant's Further Amended Statement of Claim be struck out. (b) [s 37P(5), 6(a) or FCR 1.32, 5.23(1)(b)(i)] the proceeding be dismissed; and (c) the [a]pplicant pay the [r]espondents' costs of the proceeding on an indemnity basis (or, alternatively, as between party and party). Costs of this interlocutory application 10. The [a]pplicant pay the [r]espondents' costs of and incidental to this interlocutory application, on an indemnity basis (or, alternatively, as between party and party).

B.1 Relevant law 3 The relevant principles to be applied in applications under s 31A of the FCA Act are not in dispute and were set out by the High Court in Spencer v Commonwealth of Australia [2010] HCA 28; (2020) 241 CLR 118. They do not require detailed repetition (while noting the principles informing the discretion under s 31A also inform the discretion under FCR 26.01: see Construction Forestry Mining & Energy Union v Rio Tinto Coal Australia Pty Ltd [2014] FCA 462; (2014) 232 FCR 560 (at 568-569 [29]-[31] per Flick J)). 4 As the High Court observed in Spencer (at 139 [51] per Hayne, Crennan, Kiefel and Bell JJ), the provision pivots around the notion that there is "no reasonable prospect" (emphasis in original) for the successful prosecution of the claim or claims the subject of the proceeding. In other words, the Court must begin the task by asking whether there is a "reasonable" prospect of the applicant prosecuting the proceeding. 5 Further, it is trite to observe that the discretion is not to be exercised lightly: see Spencer (at 141 [60] per Hayne, Crennan, Kiefel and Bell JJ); Construction Forestry Mining (at 568-569 [31] per Flick J); Trkulja v Google LLC [2018] HCA 25; (2018) 263 CLR 149 (at 157-158 [22] per Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

B.2 Consideration 6 As is evident from my previous judgments in this proceeding, by reason of the deficiencies in the various iterations of the applicant's statement of claim, it has been far from apparent to me the precise case the applicant wishes to advance. I am acutely conscious that the assessment of whether the proceeding has no reasonable prospect of success requires the making of a value judgment in the absence of a full and complete factual matrix and argument. Although the exercise of the discretion does not require what would amount to a mini-trial based upon incomplete evidence, it does necessitate an examination of the available materials to determine whether there is some real question of law or fact that should be decided at trial. 7 Without conducting a mini-trial, I received evidence on the application from the solicitor for the applicant, Mr Gupta, and by Mr Raja, who is one of the two directors of the applicant. 8 On the material before me, it is apparent that there is considerable uncertainty as to the proper contractual position that relates to the contracts entered into in relation to a series of "insertion orders" made by the applicant, commencing in July 2015 and effected by a series of dealings which occurred late in the following year. 9 The transcript will record my interaction with counsel concerning my present understanding of the nature of the applicant's case. I noted, yet again, that it was necessary for the applicant to devote close thought to not only the proper contracting parties, but also the nature of the contract (or contracts) at the relevant times and, in particular, how through a series of dealings between what might be described as the "GroupM Connect group" and the applicant, those dealings changed. Questions may arise as to whether they changed by dint of conduct in contravention of the Australian Consumer Law (being Sch 2 to the Competition and Consumer Act 2010 (Cth)), or some misapprehension occasioned by communications between the GroupM Connect group and the applicant. 10 It is not the role of the Court to express any view about how this case should be pleaded. But it is sufficiently apparent that a coherent pleading could be put together which would raise a triable issue (or issues). On that basis, in the light of the caution that the Court must necessarily exercise in dealing with such applications, I do not consider that it is appropriate to make orders summarily dismissing the proceeding or an order striking out the whole of the applicant's further amended statement of claim (FASOC). 11 With that said, it is clear that the respondents have been put to a great deal of unnecessary expense by the failure of the applicant to grapple with the true legal nature of the case. I do not propose to descend again into the brume of pleading deficiencies the subject of my previous judgments. But today, I was able to identify nine areas of remaining ambiguity or incoherence in the FASOC. As it stands, it is clear that if the matter proceeded to trial, the FASOC would not provide adequate procedural fairness to the respondents, nor would it advance the true nature of any actionable claim by the applicant. 12 I am required to exercise a practice and procedure discretion. Section 37M of the FCA Act relevantly provides: The overarching purpose of the civil practice and procedure provisions (1) The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes: (a) according to law; and (b) as quickly, inexpensively and efficiently as possible. … (3) The civil practice and procedure provisions must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose. 13 I do not think it is consistent with the overarching purpose to allow the current state of affairs to continue in circumstances where the applicant has been afforded no less than four attempts to get its house in order. In this respect, I am acutely aware that many of the complaints made about the applicant's pleading have not only been comprehensively articulated by the respondents in correspondence to the solicitors for the applicant, but the subject of criticism by the Court during the course of three case management hearings and two previous judgments of the Court.

B.3 The way forward 14 Something must be done, but it must be both fair to the applicant and to the respondents, which have been put to significant and unnecessary expense. 15 I have previously ordered an amount of $20,000 in security to be paid into a controlled-money account for the steps thus far taken in the proceeding. I am told by Mr Goodyear, counsel for the respondents, that the costs that have been incurred by the respondents to date likely exceed that figure. Any solution today must be one which does not prevent the respondent from recouping its proper costs, which have been thrown away by reason of the manner in which the applicant has conducted the proceeding to date. Having said that, what, if any, difference between those asserted costs and the true amount ultimately recoverable by the respondents pursuant to an order for the costs of the proceeding to date is not something that I am in a position to judge presently. 16 When I expressed my preliminary views to the parties, it was suggested an appropriate course may be to dismiss the proceeding pursuant to FCR 39.03, which, in essence, would allow the applicant to institute a fresh proceeding but also allow the respondents to seek an order staying the fresh proceeding until the costs of the first proceeding have been paid. Although this course is open to me, it has some disadvantages in the present context, to which I will return shortly. 17 It is clear that the Court has power, pursuant to the extensive case management powers in Pt VB of the FCA Act and/or FCR 1.32, to fashion a bespoke solution in the somewhat unusual circumstances of this case. In all the circumstances, I propose to make an order that the proceeding be stayed, but that the stay be lifted upon the satisfaction of two conditions, namely: first, that the applicant's solicitors take the necessary steps to release the amount of $20,000 to the solicitors for the respondents in satisfaction of its costs incurred to date in the proceeding (subject to a referee appointed by the Court assessing the proper quantum of the costs order on lump sum basis); and secondly, that a statement of claim pleading the applicant's case with specificity is provided to my Associate. 18 Such an order does justice between the parties. It does not shut out the applicant reactivating the case in the event it gets its house in order, and compensates the respondents for the costs that have been visited upon them to date. It also obviates the necessity for further costs to be expended by the respondents until such time the applicant is in a position to run its case properly. Although I will not make it an express condition in the orders, my preliminary view is that if the proceeding is reactivated, it would be a proper exercise of the discretion for security to be payable for the balance of any reconstituted proceeding until the time of final hearing.

C A FURTHER MATTER 19 Before concluding, there was a further matter raised by Mr Gupta this morning. 20 Apparently, counsel previously briefed in relation to this matter has received an inappropriate communication at her chambers relating to her conduct of the case, which, I am told, has resulted in a complaint to the New South Wales Police Force (NSW Police). I am also told that she has taken the view, after consulting with senior counsel, that she should return her brief as a consequence of the communication received. 21 Of course, I know nothing about the underlying facts other than what Mr Gupta has told me from the bar table. But if these contentions were established by evidence, this would be a matter which would be of real concern to the Court. I stress that there is no suggestion that the alleged conduct bears any connexion to the respondents, but that does not mean the allegation that counsel has been intimidated in discharging her duties pursuant to a brief to appear should not be further investigated. 22 In the circumstances, I would request that the solicitor for the applicant contact my Associate when the preliminary investigations by NSW Police are complete and there is some indication as to whether or not NSW Police propose to take any action in relation to the complaint made by counsel. Subject to the steps taken by NSW Police, and upon receipt of information from the applicant's solicitor, I will be in a better position to determine whether it is appropriate to direct the Registrar of the Court to undertake an inquiry in relation to this matter.

D CONCLUSION AND ORDERS 23 I will make orders facilitating the course I have outlined above. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Lee.

Court of Australia Act 1976(Cth)

Court Rules 2011(Cth)

Federal Court Rules 2011(Cth)rr 1.32, 5.23(1)(b)(i), 16.21, 26.01, 39.03

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