Digital Cinema Network Pty Limited v Omnilab Media Pty Limited

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 813 of 2010

BETWEEN: DIGITAL CINEMA NETWORK PTY LIMITED (ACN 132 404 481)

AND: OMNILAB MEDIA PTY LIMITED (ACN 002 585 391)

JUDGE: GORDON J DATE: 24 MAY 2013 PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 The parties' dispute was and remains acrimonious. Liability has been determined: Digital Cinema Network Pty Ltd v Omnilab Media Pty Limited (No 2) [2011] FCA 509. That trial lasted just five days. Liability was affirmed on appeal: Omnilab Media Pty Limited v Digital Cinema Network Pty Ltd; Smith v Digital Cinema Network Pty Ltd (2011) 285 ALR 63. The damages hearing is listed for 28 October 2013, on an estimate of four weeks. Any proposal to narrow the damages dispute, including references out, has been rejected by one party or the other. This is the latest dispute in this long running saga. 2 The Applicant (DCN) sought orders pursuant to s 7(1) of the Foreign Evidence Act 1994 (Cth) (the Act) that letters of request be sent to the judicial authorities of the United States of America and the United Kingdom requesting those authorities to take or cause to be taken evidence compulsorily from three named Hollywood studio executives. The named executives were Mr Zylberstein, an employee of The Walt Disney Studios, Mr Levin, an employee of 20th Century Fox, and Mr Aseme an employee of Paramount Pictures International Limited (the Hollywood Studio Executives). 3 On 28 February 2013, the Court granted DCN's application and letters of request were issued. At that time, the damages hearing was listed for 15 April 2013. That hearing was adjourned. DCN now seeks new letters of request be sent to the judicial authorities of the United States of America and the United Kingdom requesting those authorities to take or cause to be taken evidence compulsorily from the Hollywood Studio Executives for the damages hearing on 28 October 2013. I would grant the current application. 4 The First and Second Respondents (the Omnilab Parties) opposed the application in February. They oppose the current application. They have sought reasons why the Court granted both applications. 5 First, s 7(1) of the Act. It relevantly provides: (1) In any proceeding before a superior court, the court may, if it appears in the interests of justice to do so, on the application of a party to the proceeding, make an order, relating to a person outside Australia: … (c) for issue of a letter of request to the judicial authorities of a foreign country to take the evidence of the person or cause it to be taken. (2) In deciding whether it is in the interests of justice to make such an order, the matters to which the court is to have regard include the following: (a) whether the person is willing or able to come to Australia to give evidence in the proceeding; (b) whether the person will be able to give evidence material to any issue to be tried in the proceeding; (c) whether, having regard to the interests of the parties to the proceeding, justice will be better served by granting or refusing the order. (Emphasis added.) 6 The Omnilab Parties opposed both applications on four grounds; the evidence of the Hollywood Studio Executives is irrelevant, at the liability hearing DCN unsuccessfully sought to adduce the evidence from the Hollywood Studio Executives, it is unlikely that the Hollywood Studio Executives will give the evidence set out in identified paragraphs of the outlines of evidence provided and, finally, that the evidence filed in support of the applications pursuant to s 7(1) of the Act was manifestly inadequate. In short, the position adopted by the Omnilab Parties was that the Hollywood Studio Executives are not able to give evidence material to an issue to be tried in the damages hearing. 7 Contrary to the position adopted by the Omnilab Parties, my present view is that the evidence of the Hollywood Studio Executives is material to an issue to be tried in the damages hearing. Indeed, the Omnilab Parties originally included Hollywood studio executives on their Indicative List of Proposed Witnesses which they filed with the Court in preparation for the damages hearing. That "indicative list" contained the following statement: The identity of the witnesses the [Omnilab Parties] will call and the nature of the evidence they will give depends critically upon the evidence led by [DCN] and cannot be finally determined until such time as the [Omnilab Parties] have seen [DCN's] evidence. Subject to that qualification, the witnesses that the [Omnilab Parties] presently consider they may need to call are as follows: • ... • Possibly Hollywood studio executives (between 2-6) • … 8 That the Omnilab Parties considered that they themselves may need to call Hollywood studio executives at the damages hearing was not surprising. It was not surprising because of the List of Issues for the damages hearing which was filed on behalf of the Omnilab Parties. That List of Issues included statements that the issues to be resolved at the damages hearing: … 3. … will require consideration of, inter alia: (a) the chance that but for the Conduct the major Hollywood studios would have entered into VPF agreements with DCN. This will require consideration of inter alia; (i) .. (ii) whether the Hollywood studios would have entered into VPF agreements with DCN without the support of [Independent Cinemas Association of Australia]; (iii) … (b) the terms and conditions of any VPF agreement that DCN may have entered into with the major Hollywood studios, including any conditions precedent; …. 4. … will involve a consideration of, inter alia: (a) the date on which DCN was likely to sign VPF agreements with the major Hollywood studios … (b) the terms and conditions of any VPF agreement that DCN may have entered into with the Hollywood studios, including the amount of the sums payable to DCN under those agreements … … 9 Indeed, as late as December 2012, having then decided not to call any Hollywood studio executives themselves, the solicitors for the Omnilab Parties wrote to DCN's solicitors as follows: … We also refer to the [Omnilab Parties'] updated List of Issues …, which raised the question of causation as a key issue in your client's case. In particular, whether: (a) the Hollywood studios would have executed VPF agreements with DCN; and (b) whether DCN could have achieved the condition precedent in the draft VPF agreements (that is, inter alia, executed VPF agreements with at least four Hollywood studios). At present, the only evidence in this regard served by your client is contained in paragraphs 125 to 128 of the Affidavit of Martin Gardiner affirmed 1 November 2012. There is no direct evidence from any of the Hollywood studios that they would have executed agreements with DCN, and, if so, in what form. Your client has now indicated that it proposes to call such evidence from the Hollywood studios. This is despite your client clearly being on notice of the critical importance of this issue to its case … (Emphasis in original.) 10 As DCN submitted, there can be little doubt that the Hollywood Studio Executives are "able to give evidence material" to these issues in the damages hearing - they are the people who would have executed the VPF agreements, or recommended the execution of the VPF agreements, by the relevant Hollywood studio with which they were connected: Hardie Rubber Company Pty Ltd v General Tire & Rubber Company (1973) 129 CLR 521 at 528. Indeed, the Omnilab Parties appeared to agree when, in December 2012, they described the issue of the Hollywood studios' entry into the VPF agreements as a "key issue" of "critical importance" to DCN's case. 11 The evidence on this application discloses that the Hollywood Studio Executives would not participate voluntarily. Two consequences followed - DCN applied for the letters of request and, secondly, DCN filed an outline of the evidence that it expects each of the Hollywood Studio Executives will give. Given the nature and content of the outlines, any question about the admissibility of the evidence that will be given viva voce at the damages hearing by the Hollywood Studio Executives should be determined at trial. Put another way, on the balance of probabilities, I am satisfied that the Hollywood Studio Executives will be able to give material evidence. That is sufficient for present purposes. It is inappropriate now to determine the admissibility of evidence which has not yet been adduced. It is also inappropriate now to determine whether or not anticipated evidence is inconsistent with the conduct of, or any relevant findings made, in the liability stage of the proceedings. 12 It was for those reasons that the initial order was made in February 2013 and orders will now be made for letters of request to issue for the damages hearing in October 2013. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.