[2000] HCA 41
Akai Pty Ltd v The People's Insurance Co Limited (1996) 188 CLR 418
[1996] HCA 39
Australian Competition and Consumer Commission v April International Marketing Services Australia Pty Ltd (No 6) (2010) 270 ALR 504
[1964] HCA 69
Ho v Akai Pty Ltd (in Liq) (2006) 247 FCR 205
Source
Original judgment source is linked above.
Catchwords
[2016] FCA 196
Agar v Hyde (2000) 201 CLR 552[2000] HCA 41
Akai Pty Ltd v The People's Insurance Co Limited (1996) 188 CLR 418[1996] HCA 39
Australian Competition and Consumer Commission v April International Marketing Services Australia Pty Ltd (No 6) (2010) 270 ALR 504[1964] HCA 69
Ho v Akai Pty Ltd (in Liq) (2006) 247 FCR 205[2015] VSCA 90
Masters v Cameron 1954) 91 CLR 353
The defendant, Media Niugini Limited (trading as "EMTV"), is a company incorporated in Papua New Guinea ("PNG"). It is the owner of a free-to-air television channel known as EMTV that broadcasts in PNG. It is also a provider of multimedia production services in PNG. I shall refer to it as "EMTV".
On 7 February 2020 the plaintiff, International Management Group of America Pty Ltd ("IMG"), caused the Summons and Commercial List Statement in these proceedings to be delivered to EMTV at its registered office in Port Moresby, purportedly by way of service.
IMG did so relying on Uniform Civil Procedure Rules 2005 (NSW) r 11.4 which provides that:
11.4 Cases for service of originating process
(1) Originating process may be served outside of Australia without leave in the circumstances referred to in Schedule 6.
To justify such service, IMG now relies upon paragraphs (b) and (n) of Schedule 6 for the UCPR which provide, relevantly, that an originating process may be served outside Australia without leave:
Schedule 6 Service outside of Australia without leave
(b) when the claim is for the enforcement, rescission, dissolution, annulment, cancellation, rectification, interpretation or other treatment of, or for damages or other relief in respect of a breach of, a contract which -
(i) was made or entered into in Australia, or
…
(iii) was to be wholly or in part performed in Australia, or
(iv) was by its terms or by implication to be governed by Australian law or to be enforceable or cognizable in an Australian court.
…
(n) when the claim is founded on a cause of action arising in Australia
EMTV has not entered an appearance but, by notice of motion filed on 20 March 2020, seeks orders under UCPR r 11.6 dismissing the Summons or setting aside service of the Summons.
UCPR r 11.6 provides, relevantly:
11.6 Court's discretion whether to assume jurisdiction
(1) On application by a person on whom an originating process has been served outside of Australia, the court may dismiss or stay the proceeding or set aside service of the originating process.
(2) Without limiting subrule (1), the court may make an order under this rule if satisfied -
(a) that service of the originating process is not authorised by these rules, or
…
(c) that the claim has insufficient prospects of success to warrant putting the person served outside Australia to the time, expense and trouble of defending the claim.
[3]
The issues
The first issue is whether the claims made by IMG in its Commercial List Statement fall within one of the categories specified in Schedule 6 (see UCPR r 11.6(2)(a)). It is common ground that IMG has the onus of showing that each of the claims made in its Commercial List Statement falls within one of those categories.
The second issue is that, assuming all of IMG's claims do fall within a category in Schedule 6, its claims have "insufficient prospects of success" for the purposes of UCPR r 11.6(2)(c). It is common ground that EMTV has the onus of showing that this is so.
The third issue is whether, in any event, and as a matter of discretion, the Court should dismiss the proceedings or set aside service.
[4]
Decision
I am satisfied for the purposes of UCPR r 11.6(2)(a), to the requisite standard, that each of the claims made by IMG falls within paragraph (b) of Schedule 6.
I am not satisfied that those claims have "insufficient prospects of success" for the purposes of UCPR r 11.6(2)(c).
I see no other reason to set aside, as a matter of discretion, service of the originating process.
Accordingly, EMTV's application must be dismissed.
[5]
The claims made
IMG makes claims for relief against EMTV:
1. for breach of contract;
2. alleging an estoppel; and
3. in respect of a contravention of s 18 of the Australian Consumer Law.
The claims arise out of negotiations between IMG and EMTV concerning the broadcast rights in PNG of the Queensland Cup, a rugby league competition organised and run by the Australian Rugby League Commission ("ARLC"). The parties referred to these broadcast rights as "the PNG Rights".
[6]
The Queensland Cup
The Queensland Cup is a regional rugby league football competition that takes place largely in Queensland.
The Queensland Cup games are recorded by Fox Sports Australia Pty Ltd ("Fox") and/or Nine Digital Pty Ltd ("Nine"). Both of these entities are incorporated in Australia and have registered offices in the state of New South Wales. The feed of the game is then transmitted to the networks that have purchased the broadcast rights.
There are 14 teams in the Queensland Cup league. Twelve are are based in Queensland, one in New South Wales and one in PNG; the "PNG Hunters".
Each round of the competition consists of seven matches. The games are played at various venues around Australia, primarily in Queensland, with the exception of the PNG Hunters home games which are played in PNG. In each season, there are approximately 160 matches. Of these, approximately 13 games are played in PNG.
There are usually 23 rounds played each year, plus eight finals and a grand final. Of the seven games per round, one game is filmed, produced and televised.
The filming and production costs are borne by Fox and/or Nine, and from this a broadcast feed is created ("the Broadcast Feed").
In the circumstances I describe below, EMTV was the successful bidder for the PNG Rights.
As successful bidder for the PNG Rights, EMTV would be granted access the Broadcast Feed at:
1. Artarmon, NSW (if generated by Nine);
2. at the Fox Master Control Room in Sydney, NSW (if generated by Fox); or
3. at another mutually agreed access point located in Sydney, NSW (together, "the Access Point").
From the Access Point, EMTV would then have been obliged to transport the Broadcast Feed from Sydney back to PNG for broadcast there.
[7]
The negotiations leading to the alleged agreement
The negotiations leading to the alleged 30 October 2017 agreement took place between Mr Sam Stitcher, the Sales and Business Development Manager Asia Pacific of IMG, and Mr Matthew Park, the Chief Executive Officer of EMTV.
On 11 October 2017, Mr Stitcher sent Mr Park an email which attached a "Briefing Document" and a "Bidding Form". The email was headed "Confidential - Subject to Contract".
Mr Stitcher's email read:
"Please find attached the following two documents relating to the package of Australian Rugby League Commission media rights available for the Pacific Islands for the coming rights cycle from 2018-2022.
1. A Briefing Document outlining the properties and rights available and other terms and conditions.
2. A Bidding Form.
We have discussed these rights at length over the past few weeks and the attached documents are designed to formalise the conversations.
With that in mind could you please get back to me by no later than 5pm Sydney time on Monday 16th October with your final position - it is unlikely that there will be multiple rounds of bidding."
The Briefing Document attached to Mr Stitcher's 11 October 2017 email set out the terms on which IMG was willing to license the PNG Rights.
Under the heading "Introduction" the Briefing Document stated:
"Australian Rugby League Commission ('ARLC') is the owner of all commercial rights, including media rights for all ARLC controlled properties. International Management Group of America Limited ('IMG') has been granted media rights on exclusive basis in the Pacific Islands for a five-year term commencing in January 2018.
IMG is currently inviting bids for the media rights for ALRC properties as defined within this document with a view closing deals in the territory on or by Friday 20 October 2017."
The reference in that passage to "International Management Group of America Limited" is obviously a reference to IMG with the omission of "Pty".
The document said that IMG had been granted an exclusive media right by ARLC in the Pacific Islands for Package B which comprised:
"Package B:
- All matches played as part of the Queensland Cup ('QLD Cup') or its successor Tournament. 1 match per week currently produced as part of Australian domestic deal.
- State Championship Final (QLD Cup Premier Vs NSW Cup Premier)."
Under the heading "Delivery" the Briefing Document stated:
"IMG shall ensure that the following properties are made available at no additional cost at a gateway in Australia:
- International feed of all ARLC Matches
…
- Fox League Channel
…
The licensee shall be responsible for making its own arrangements for delivery from the specific pick up point and for any cost associated with delivery from the pick-up point to Pacific Islands."
Under the heading "Production of Matches" the document stated:
"All matches outlined in packages A and B will be produced however [sic], in respect of any PNG Hunters QLD Cup match played in Papua New Guinea it is agreed that licensee must, or must procure that a sub-licensee must, produce audio-visual coverage of that match at its cost.
For PNG Hunters Matches played in Australia, licensee must produce audio-visual coverage of that match at its cost.
…
IMG acknowledges and agrees that licensee (or its sub-licensees) may produce and transmit its own commentary for each ARLC match and IMG will procure that ARLC uses reasonable endeavours to procure access for licensee (or its sub-licensees) to the venue for the purpose of producing such commentary subject to:
- the availability of appropriate facilities at the venue to accommodate licensee and
- any terms and conditions relating to such facilities as are notified to IMG by Fox Sports or ARLC including a prohibition on licensees bringing cameras into the venue or filming inside the venue on game day".
Under the heading "Tickets" the document stated:
"In each year of the term, IMG shall procure that ARLC provides to licensee at no additional cost 10 VIP tickets to the following ARLC Matches:
- Each State of Origin Series Match
- NRL Grand Final".
[8]
The alleged offer
The following day, 12 October 2017, Mr Park sent Mr Stitcher an email attaching EMTV's bid for the "QRL Packages" that is, "Package B" that stated:
"Please find attached our Bid …
…
As previously discussed, it would be great if we could have an indication on whether we have or have not been successful in our bid as soon as possible and preferably before 2pm on Friday (13 October), as I have a major sales event at 3pm outlining our 2018 TV line-up."
Mr Park attached a Bidding Form in the format that Mr Stitcher had sent in the previous day. That form specified a "Bidding Deadline" of 16 October 2017. The form stated that:
"…Bidders should send their completed Bid Form, together with any supporting materials, via email in PDF format to sam.stitcher@img.com by no later than 5pm Sydney time on Monday 16th October 2017 (the 'Bidding Deadline').
All submitted offers shall be irrevocable and binding upon the relevant Bidder for a period of fourteen days from the Bidding Deadline unless released by IMG in writing in advance of the fourteen day period.
…
IMG reserves the right to accept or reject any of the Bids; request revised or amended Bids; [pursue] negotiations (on an exclusive or non-exclusive basis as determined by IMG [at] its sole discretion)".
Mr Park completed the Bidding Form to show that the territory "for which the Bid is applicable" was PNG, that EMTV sought exclusive rights for the relevant broadcast and that EMTV proposed a total licence fee, payable over seasons 2018 to 2022, of US$2 million.
Under "Additional Comments", Mr Park stated:
"As budgets are closing for clients and sponsors in PNG for 2018, this bid is only valid until Close of Business on Monday 16 October 2017, PNG time.
As EMTV have a major annual sales event scheduled for the afternoon of Friday 13 October 2017, we request a response as soon as possible and preferably before 2pm on 13 October 2017."
The Bid concluded with the statement:
"Submitted by the Bidder, acting by its authorised representative(s) and with the acceptance of all stated terms and conditions of the Briefing Document and Bidding Form."
Mr Park signed the document as "CEO" of EMTV.
On 20 October 2017 IMG received, from another bidder, an offer for the Queensland Cup rights of US$3.5 million ("the Alternative Offer").
On 27 October 2017 Mr Stitcher and Mr Park had telephone conversations in which Mr Stitcher informed Mr Park of the Alternative Offer, and during which Mr Park increased EMTV's offer to US$2.8 million.
[9]
The alleged acceptance of the offer
On 30 October 2017 Mr Stitcher sent an email to Mr Park, which stated:
"Following on from our discussion on Friday I can confirm that I would like to formally accept EMTV's offer of US$2,800,000 for Package B as outlined in the Briefing Document distributed on Wednesday 11th October.
Could you please get back to me to confirm how you would prefer the licence fee to be split across the five seasons?"
A short time later Mr Park sent an email specifying a licence fee of US$300,000 in Year 1, US$400,000 in Year 2, US$600,000 in Year 3, US$700,000 in Year 4 and US$800,000 in Year 5.
The following day, 31 October 2017, Mr Stitcher wrote:
"Thanks for confirming, Matthew. I am working on the contract now."
On 8 December 2018 Mr Stitcher sent Mr Park an email:
"Please find attached the draft agreement for ARLC Package B (QRL) for your reference."
[10]
The proposed Licence Agreement
The attached "Licence Agreement" was expressed to be between EMTV and IMG UK Ltd ("IMG UK").
Both IMG and IMG UK are subsidiaries of the United Kingdom company, Endeavor Operating Company, LLC.
The Licence Agreement:
1. provided that the "Licensor", IMG UK, "holds and controls the Designated Rights" (defined to include the right to broadcast the Queensland Cup Matches on a live or delayed basis) in, relevantly, the Queensland Cup Matches.
2. provided that IMG UK "hereby grants" to EMTV those Designated Rights;
3. provided that IMG UK would, or would procure that, an audio-video signal of the "International Feed" be available in a particular format "at Sydney Teleport Services in Rozelle Sydney or another gateway in Australia";
4. provided that EMTV would be responsible for making "its own arrangements for delivery of the International Feed from the specific pick-up point and for any costs associated with delivery from the pick-up point to the Territory, defined to mean Papua New Guinea;
5. provided that the licence fee was US$2.8 million;
6. contained an undertaking by EMTV to broadcast live or by free-to-air or by subscription television in PNG any Queensland Cup Match in which the PNG Hunters were playing; and
7. provided that EMTV would ensure that it would produce audio-visual coverage of any Queensland Cup Match in which PNG Hunters were playing within PNG or in Australia.
On 13 December 2017 Mr Park sent an email to Mr Stitcher:
"My legal team is still going through the document and will advise if they have any issues. In the meantime, my two questions are as follows:
1. There is no mention of the non-SP Hunters matches. How many will be produced each week and do we have rights to access these feeds?
2. The first payment date will need to be deferred to a later date (to 1 March 2018) as its already December and the FX issues will make it impossible to transfer US$75,000 by 31 December."
Mr Stitcher replied the same day:
"1. The rights granted to EMTV are for the Queensland Cup Competition, which includes all Matches, not just Hunters Matches…
2. No problem re the first payment provided that the remaining payments are unaffected."
The following day, 14 December 2017, Mr Park sent an email to Mr Stitcher:
"We've just seen a copy of the 2018 QRL schedule and see that only 6 matches will be televised/produced by nine?
Can you confirm if this is accurate? I also note that many of the matches are moved from Sundays to Saturdays. Can you confirm?"
Mr Stitcher replied on 19 December 2017:
"I have followed up with NRL on this and we still have a few details to finalise however in summary the following QLD matches will be available from Australia:
State cup
- CHANNEL NINE:
- 1 match a round of Queensland Cup (24)
- 1 Qld Cup Finals match per week of Finals (including State Cup GF)
- FOX SPORTS:
- Qld Cup Finals Series (5)."
On 21 December 2017, Mr Park sent an email to Mr Stitcher:
"I've been pushing my legal team and my Board to review/sign the agreement. It was supposed to be done last week but the board meeting was postponed today. I should have something by the end of the day or tomorrow morning."
The EMTV Board met on 22 December 2017.
The following day, 23 December 2017, Mr Park sent an email to Mr Stitcher:
"My board met on Friday and discussed the QRL rights agreement and they have advised as follows:
A number of issues have been raised as being of major concern to the Board.
Issues:
The majority of matches for 2018 have been moved from late Sunday afternoon (before the Sunday NRL Matches as per the 2017 season), to early Saturday afternoon in 2018, where potential TV viewership numbers are reduced.
The number of total matches to be produced for TV (by either Channel Nine or the PNG rights holders) have dropped in 2018 from 2017.
Due to the late confirmation of QRL rights by IMG, EMTV have not been able to secure the necessary sponsorship numbers for 2018 (as many potential sponsors already locked in their marketing budgets for 2018 in September/October 2017).
As a result, the Board feel the value of the QRL rights have significantly dropped and would like IMG's consideration for a reduction in the total rights fee costs as stated in the draft agreement.
We await your response."
On 11 January 2018, Mr Park sent an email to Mr Stitcher:
"Any more word on the full QRL schedule for 2018 (and which matches or programming will be produced and available from Nine and Fox)? As discussed yesterday morning, we need to finalise something one way or another this week."
Some time later, the email is not dated, Mr Stitcher sent an email to Mr Park:
"The NRL offices (I have just found out after 2 days of calling) are still closed until next week. Can I get back to you Monday please?"
[11]
The alleged repudiation
On 6 February 2018, Mr Park emailed Mr Stitcher:
"You never got back to me with the full schedule of matches and productions as requested and said that it was not possible to move on the price. We are now approaching the second week of February and I heard two weeks ago from digicel that [IMG] have been in discussions with them on the QRL rights.
We will NOT be taking the QRL rights."
[12]
The alleged acceptance of the repudiation
On 28 February 2018, Endeavor's Vice President and Counsel, Litigation wrote to EMTV:
"I am litigation counsel for Endeavor and advise its group companies, including IMG, in relation to disputes and litigation internationally. I understand from my colleague Sam Stitcher that EMVP [sic] has expressed an intention not to be bound by the license agreement it entered into with IMG for media rights to the Queensland Cup competition (the 'Matches'). Pursuant to the Agreement, EMVP is required to (a) pay a sum of 2.8M USD to IMG in a series of instalments and (b) broadcast the Matches in the PNG territory to the standard set out in the Agreement.
Your email to Mr Stitcher of 23 December stating that EMVP did not intend to comply with its obligations under the Agreement amounts to a repudiatory breach and entitles IMG to treat the Agreement as terminated and sue EMVP for the full Fee and any additional loss."
[13]
Contract
The claims made by IMG in contract are set out in its Commercial List Statement as follows:
1. On 12 October 2017, by the email referred to in [35] above, and the executed Bidding Form, EMTV offered to pay US$2 million for "Package B" (described as the "Initial Offer") (List Statement 10);
2. On 27 October 2017, IMG informed EMTV of the Alternative Offer referred to at [41] above (List Statement 14);
3. On 27 October 2017, by the conversation referred to at [42], EMTV varied the Initial Offer by increasing the amount offered for Package B to US$2.8 million (called the "Revised Offer") (List Statement 15);
4. On 30 October 2017, by the email referred to at [43] above, IMG accepted the Revised Offer (List Statement 16);
5. IMG and EMTV thereby "entered into an agreement providing that EMTV would purchase Package B" for US$2.8 million (called the "Agreement") (List Statement 17);
6. By its email of 6 February 2016 referred to at [59] above, EMTV repudiated the Agreement (List Statement 19 and 20);
7. By the letter dated 28 February 2018 referred to at [60] above, and by reason of the alleged repudiation, IMG terminated the Agreement (List Statement 21); and
8. IMG thereby suffered loss (List Statement 22).
The List Statement makes no reference to IMG UK, or the Licence Agreement in which IMG UK, not IMG, was expressed to be the licensor.
[14]
Estoppel
As set out in the List Statement the claims made by IMG concerning an estoppel are as follows:
1. IMG and EMTV acted on a "common assumption" that:
1. the 'agreement' was binding; or
2. that IMG would license Package B to EMTV for the Revised Offer, that EMTV would pay the amount in the Revised Offer and that IMG had licensed Package B to EMTV for the Revised Offer (List Statements paragraphs 32 and 33);
1. In accordance with the Common Assumption, IMG rejected the Alternative Offer (List Statement 35); and
2. EMTV is estopped from denying or resiling from the Common Assumption.
[15]
Misleading or deceptive conduct
As set out in the List Statement IMG's claims in respect of misleading or deceptive conduct are as follows:
1. By reason of the Initial Offer, the Revised Offer and the acceptance of the Revised Offer, EMTV represented it would purchase Package B for the Revised Offer (List Statement 23);
2. That representation was "false and misleading" for the purposes of s 18(1) of the Australian Consumer Law because EMTV had no intention of being bound by the Agreement or did not have reasonable grounds for making the Agreement (List Statement 25 and 26);
3. In reliance on the Representation, IMG did not accept the Alternative Offer (List Statement 26); and
4. IMG thereby suffered loss and damage (List Statement 29).
There is no dispute that this claim falls within paragraphs (b) and (n) of Schedule 6 of the UCPR.
[16]
UCPR r 11.6(2)(a) - was service of the originating process authorised by the rules - do each of these claims fall within Schedule 6?
[17]
To what standard must IMG demonstrate its claims fall within Schedule 6?
As I have mentioned, it is common ground that, to justify service of the Summons and Commercial List Statement on EMTV outside Australia, IMG has the onus of showing that each of the claims it makes falls within one or more of the categories in Schedule 6 of the UCPR.
It is also common ground that the standard of proof required is a prima facie or arguable case. [1]
Mr Webb did not dispute the following summary of the authorities set out in Mr O'Brien's submissions:
"The requirement to establish a 'prima facie case' has been described as being 'not particularly onerous': Australian Competition and Consumer Commission v Yellow Page Marketing BV, [2] requiring that the material merely demonstrate that a 'controversy exists between the parties that warrants the use of the Court's processes' and that it is satisfied if 'on the material before the court, inferences are open which, if translated into findings of fact, would support the relief claimed': Ho v Akai Pty Ltd (in Liq). [3] It does not call for a substantial enquiry, and should be done upon 'a broad examination rather than an intense scrutiny of the material before the court': Australian Competition and Consumer Commission v April International Marketing Services Australia Pty Ltd (No 6). [4] "
Further, in deciding whether service is permitted by the UCPR, "attention must be directed to the way in which the claims made by [IMG] are framed". The enquiry "neither requires nor permits an assessment of the strength in the sense of likelihood of success" of [IMG's] claim. [5]
The question is to be answered "by reference to the allegations made in the originating process, plus any evidence beyond the pleaded allegations to the extent that the pleading does not contain allegations necessary to establish the claim is of a requisite kind". [6]
[18]
Schedule 6 clause (b)(i) - enforcement of a contract made or entered into in Australia
IMG's contract claims do not fall within this category as the contract for which it contends was not made or entered into in Australia.
I did not understand Mr O'Brien to submit the contrary.
In any event, as Mr Webb pointed out, a contract is made at the place in which the acceptance is received by the offeror. [7]
IMG alleges that it accepted the Revised Offer by the email that Mr Stitcher sent to Mr Park on 30 October 2017 (see [43] above).
That email was received by EMTV in PNG. Thus, the contract for which IMG contends was made in PNG.
[19]
Schedule 6 clause (b)(iii) - enforcement of a contract to be wholly or partly performed in Australia
However, IMG's contract claims do fall within this category.
That is because the contract contended for by IMG was to be partly performed by it in Australia.
For example, the Broadcast Feed for the Queensland Cup games, other than those filmed and produced in PNG, was to be made available to EMTV at an "Access Point" in Sydney (see [23] above).
From that Access Point, EMTV would then be obliged to transport the Broadcast to PNG (see [24] above).
IMG was obliged to procure that the ARLC used reasonable endeavours to procure access to venues in Australia for the purpose of producing commentary (see [33] above).
The fact that IMG UK was to be the proposed licensor under the Licence Agreement provides no reason to suppose that IMG itself would not be obliged to perform these local functions.
Further, IMG was obliged to procure that the ARLC provide EMTV with VIP tickets for each State of Origin Series matches and the NRL Grand Final (see [34] above). That would involve performance by IMG of a contractual obligation within Australia.
This conclusion is sufficient to establish that IMG's contract claim does fall within Schedule 6.
[20]
Schedule 6 clause (b)(iv) - enforcement of a contract which was by its terms or implication to be governed by Australian law
In any event, there was at least a prima facie case that the contract for which IMG contends was by implication to be governed by Australian law.
The contract for which IMG contends contains no express provision as to what law was to govern it.
If the matter is looked at in terms of the parties' "inferred choice" as a matter of construction, [8] this contract concerns broadcast rights to Australian sporting matches which will be made available to EMTV in Australia.
That suggests that it is at least arguable that the parties' "inferred choice" was that the laws of Australia govern the contract.
If, alternatively, the matter is to be looked at in terms of where the alleged contract had its "closest and most real connection", [9] matters that are relevant include place of performance of the contract and the nature and subject matter of the contract. [10]
As to the place of performance, the alleged contract was to be performed, predominantly, in Australia. As Mr O'Brien submitted, all of IMG's obligations to perform, as outlined in the Briefing Document, arose in Australia. Those obligations included making available the Broadcast Feed, arranging access to EMTV to venues in Australia and making available the tickets referred to at [34] above. Further, many of EMTV's obligations to perform would have arisen in Australia, such as the obligation to produce audio-visual broadcasts of PNG Hunter games played in Australia.
Further, the subject matter of the contract concerns Australian sporting broadcast rights.
These matters point to the conclusion that there is a prima facie case that the contract for which IMG contends was to be governed by Australian law.
[21]
Schedule 6 - clause (n) - claim founded on a cause of action arising in Australia
I am not persuaded that the claim made by IMG in contract is founded on a cause of action arising in Australia.
On the face of it, as Mr Webb submitted, IMG's cause of action arose in PNG. The breach alleged is the repudiation of the contract by EMTV. The act of repudiation relied on is Mr Park's email of 6 February 2018 to Mr Stitcher in which he stated "we will NOT be taking the QRL rights" (see [59] above). That act of repudiation occurred in PNG.
Mr O'Brien pointed to authorities that suggest that, for the purpose of consideration of Schedule 6 clause (n), "the cause of action arises when in substance the act giving rise to the plaintiff's complaint took place" [11] and that "the cause of action arose within the jurisdiction if the act on the part of the defendant, which gives the plaintiff his cause of complaint has occurred within the jurisdiction". [12]
However, here in substance, the act giving rise to IMG's complaint is EMTV's alleged repudiation of the agreement and, as I have said, that took place in PNG.
Assuming that IMG has suffered damage in Australia, it does not follow that its cause of action arose in Australia as damage is not an element of that cause of action. [13]
Mr O'Brien also pointed to authorities that state that repudiation is "a thing writ in water and of no use to anybody". [14] Mr O'Brien submitted that it was only when IMG accepted EMTV's repudiation that repudiation became something of value. However, the difficulty with that submission is that IMG accepted EMTV's alleged repudiation of the contract by IMG UK's letter of 28 February 2018 (see [60] above) which was evidently sent from the United Kingdom to PNG. The acceptance of the repudiation did not occur in Australia.
I am not satisfied that IMG's claim falls within Schedule 6(n).
[22]
Overall conclusion concerning IMG's claim in contract
As I am satisfied that IMG's contract claim falls within cll (b)(iii) and (b)(iv) of Schedule 6, I am satisfied that service of the originating process was authorised by the rules.
[23]
Estoppel
Mr O'Brien submitted that the estoppel claim was "akin" to that referred to in Waltons Stores (Interstate) Ltd v Maher "in that it is used to enforce the alleged contract in the event it was found that no such contract was formed, applying contractual principles". [15]
There was debate before me as to whether estoppel is a cause of action. I need not resolve that dispute as there is authority for the proposition that, for the purposes of consideration of an application to set aside originating process under UCPR r 11.6, and its analogues, "a claim in the nature of the estoppel claim is a cause of action". [16]
In my opinion this claim can be seen, for the purposes of Schedule 6(b), as a claim for the "enforcement" of the contract for which IMG contends. In that regard, Mr O'Brien referred to the observations of Deane J that an estoppel "provides the factual foundation of an ordinary action for enforcement of that 'contract' notwithstanding that those facts demonstrate that no binding contract was actually made". [17]
[24]
Misleading or deceptive conduct - ACL claim
As I mentioned at [65], there is no dispute that this claim falls within one or other of the subparagraphs in Schedule 6.
[25]
UCPR 11.6(2)(c) - do the claims have insufficient prospects of success to warrant putting EMTV to the time, expense and trouble of defending the claim in this Court?
[26]
To what standard must EMTV demonstrate insufficient prospects of success?
It was common ground that the test to be applied in determining whether the claims made by EMTV have insufficient prospects of success to warrant putting EMTV to the time, expense and trouble of defending the claim in New South Wales is that that would be applied had EMTV been served locally and moved to have the proceedings dismissed as disclosing no reasonable cause of action. [18]
That is, EMTV must show that IMG's claims are "so obviously untenable that it cannot possibly succeed", "manifestly groundless", "so manifestly faulty that it is not admit of argument", that it "discloses a case which the Court is satisfied cannot succeed" and that "no possibility can there be a good cause of action". [19]
[27]
Contract
The starting point is that the parties have used the language of contract.
Thus, in the Initial Offer of 12 October 2017 (see [35] above), by the Bidding Form, EMTV made a "bid" on the terms of the Briefing Document. Mr Park stated that EMTV was acting by "its authorised representatives" and "with the acceptance of all stated terms and conditions of the Briefing Document and Bidding Form".
It may be that the qualification Mr Park noted (set out at [38] above) that the bid was only "valid" until close of business on 16 October 2017 was inconsistent with the bid being "irrevocable" as the Bidding Form required.
Nonetheless, Mr Park's 11 October 2017 offer was an offer that, in his email of 30 October 2017 (see [43] above) Mr Stitcher said he would "like to formally accept".
Mr O'Brien submitted that the "Agreement" was intended by the parties to be binding "but the parties also intended to enter into a subsequent, formal, fulsome agreement".
Mr O'Brien submitted that:
"The alleged contract falls into either the:
(a) first Masters v Cameron category, [20] being that the parties had reached finality in arranging all the terms of their bargain and intended (objectively) to be immediately bound to the performance of those terms, but at the same time proposed to have terms restated in a form which would be fuller or more precise but not different in effect; or
(b) the fourth category identified by McLelland J in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd, [21] being that the parties were content (objectively) to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract containing additional terms.
The terms of the contract are those contained in the Briefing Document … the bid … and the Revised Bid … with the price being split across the years designated by EMTV."
On the other hand, Mr Webb submitted that:
"The situation was one within the third class of Masters v Cameron…; objectively ascertained, there was clearly no intention to form a contract until a formal licence was executed."
In support of that submission, Mr Webb pointed to a number of matters.
The first was that Mr Stitcher's 11 October 2017 email to Mr Park (set out at [26] and [27] above) was headed "Confidential - Subject to Contract". That suggested, Mr Webb submitted, that the parties intended that "there would be no concluded agreement short of an executed licence agreement in respect of the PNG rights". However, the statement by Mr Stitcher that his email of 11 October 2017 was "subject to contract" begs the question as to the "contract" to which Mr Stitcher intended the email be subject. It is at least arguable that Mr Stitcher was saying no more than that the mere submission by him to Mr Park of the Briefing Document and the Bidding Form would not, without more, constitute a proposal capable of acceptance.
Mr Webb also pointed to the fact that Mr Stitcher's email of 30 October 2017 (see [43] above) sought a proposal from Mr Park as to how Mr Park would prefer the "licence fee to be split across the five seasons". I see this as casting no light on whether the parties intended immediately to be bound by the email exchange of 12 and 30 October 2017.
Mr Webb also pointed to the fact that the communications exchanged between IMG and EMTV up to 30 October 2017 were "silent as to the basis of [IMG's] ability to grant a licence". However, as Mr O'Brien submitted, there is no principle of contract law that prevents a person from promising to deliver or provide something which they do not presently possess. Either they acquire it after contracting or end up being in breach of contract.
Mr Webb next referred to Mr Stitcher's statement in his 31 October 2017 email (see [45] above) that "I am working on the contract now". I see that statement as being neutral.
Next, Mr Webb pointed to the fact that the communications between IMG and EMTV to 30 October 2017 did not specify how many matches or live television broadcasts would occur over the five year period for the Queensland Cup. That may be so but, as Mr O'Brien pointed out, it is at least arguable that what EMTV was willing to pay for was the right to broadcast those matches from the Queensland Cup that did occur, with one match being produced each week. I accept Mr O'Brien's submission that it is at least arguable that the absence of more specificity about this matter does not militate against that intention immediately to create legal relations.
Mr Webb also submitted that by 30 October 2017 it had not been determined whether or not any licence would be exclusive or otherwise. That is not correct, as EMTV's offer of 12 October 2017 specified that the rights were to be exclusive (see [37] above).
In those circumstances, my conclusion is that it is at least arguable that the language the parties used showed that they intended to be immediately bound by the email exchange between Mr Park and Mr Stitcher on 12 and 30 October 2017 and that, as Mr O'Brien submitted, the contract for which IMG contends falls within either the first, or the fourth categories referred to at [111] above.
I am not satisfied that IMG's contract claim has insufficient prospects of success for the purposes of UCPR r 11.6(2)(c).
[28]
Estoppel
Mr Webb submitted that the facts asserted are incapable of giving rise to the estoppel contended and that they "simply confirm that the parties were proceeding to work on a proposed licence agreement to be entered into in the future". I do not think this is a fair way to look at the pleadings.
IMG's pleaded case is that EMTV represented it would buy the relevant rights for US$2.8 million and that IMG relied upon that representation by not accepting the Alternative Offer.
I am not persuaded that these contentions have insufficient prospects of success for the purpose of UCPR 11.6(2)(c).
[29]
Misleading or deceptive conduct - ACL claim
Mr Webb submitted that, in substance, the representations relied upon by IMG are indistinguishable from the claim in contract and that, as the contract claim had insufficient prospects of success, the same must be said for the claim for misleading or deceptive conduct.
It may be that IMG's misleading or deceptive conduct claim will stand or fall depending on its success in relation to its claim in contract. But I do not see that that is a reason to conclude that the misleading or deceptive conduct claim itself has insufficient prospects of success.
[30]
Conclusion
For these reasons, my conclusion is that IMG has demonstrated a prima facie case that its claim in contract is for the enforcement of a contract which was to be partly performed in Australia and which, by implication, was to be governed by Australian law.
Accordingly, in my opinion, that claim is one authorised by the rules for the purposes of UCPR 11.6(2)(a) as it is one which enlivens subparagraphs (b)(iii) and (iv) of Schedule 6 to the UCPR.
For the reasons I have set out, my conclusion is that the estoppel claim is in the same category. As I have mentioned, there is no dispute that the misleading or deceptive conduct claim is in the same position.
I am not satisfied that any of the claims by IMG have insufficient prospects of success for the purposes of UCPR r 11.6(2)(c).
I see no other reason why, as a matter of discretion, I should set aside service.
It follows that EMTV's notice of motion of 20 March 2020 should be dismissed with costs.
I will list the matter for further directions on 22 May 2020.
[31]
Endnotes
News Corporation Ltd v Lenfest Communications Inc (1996) 21 ACSR 553 at 558 (Giles J).
[2010] FCA 1218 at [25] (Gordon J).
(2006) 247 FCR 205; [2006] FCAFC 159 at [10].
(2010) 270 ALR 504; [2010] FCA 704 at [8].
Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [50] and [51] (Gaudron, McHugh, Gummow and Hayne JJ).
Madden International Limited v Lew Footwear Holdings Pty Ltd (2015) 50 VR 22; [2015] VSCA 90 at [24] (Mandie JA; Beach JA and John Dixon AJA agreeing).
For example, DJE Constructions v Maddocks [1982] 1 NSWLR 5 at [19].
For example see Akai Pty Ltd v The People's Insurance Co Limited (1996) 188 CLR 418; [1996] HCA 39 at 441-2 (Gaudron and Gummow JJ); ACCC v Valve Corporation (No 3) (2016) 337 ALR 647; [2016] FCA 196 at [63] (Edelman J).
Bonython v The Commonwealth [1951] AC 201 at 219; ACCC v Valve Corporation (No 3) (2016) 337 ALR 647; [2016] FCA 196 at [65] (Edelman J).
Akai Pty Ltd v People's Insurance Co Limited (1996) 188 CLR 418; [1996] HCA 39 at 437.
In the matter of Mustang Marine Australia Services Pty Ltd (in Liq) [2013] NSWSC 360 at [10] (Brereton J).
Distillers Co (Biochemicals) Ltd v Thompson [1971] AC 458, referring to Jackson v Spittall (1870) LR 5 CP 542; cited with approval in New Cap v Renaissance [2002] NSWSC 856 at [18] (Barrett J).
J D Heydon, Heydon on Contract (2019, Lawbook Co) at [26.30] and the cases cited therein.
Howard v Pickford Tool Co [1951] 1 KB 417 at 421 (Asquith LJ); Duncan v Big Country Developments Pty Ltd [2016] NSWCA 163 at [44] (Leeming JA).
(1988) 164 CLR 387; [1988] HCA 7
News Corporation Ltd v Lenfest Communications Inc (1996) 21 ACSR 553 at 569
Waltons Stores (Interstate) v Maher (1988) 164 CLR 387; [1988] HCA 7 at 445
See Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [60] (Gaudron, McHugh, Gummow and Hayne JJ); their Honours were dealing with the predecessor of UCPR r 11.6, Supreme Court Rule Part 10 r 6A which did not have an equivalent of UCPR 11.6(2)(c); however, at [55] their Honours said that one of the three bases upon which the Court would refuse to exercise jurisdiction would be where "the claims made have insufficient prospects of success to warrant putting an overseas defendant to the time, expense and trouble of defending the claims" which words are now embedded in the UCPR as r 11.6(2)(c). Recently, Davies J, in Azzi v Foxfire Security System LLC [2020] NSWSC 331, suggested that the question of whether there were "insufficient prospects" is less demanding than whether a reasonable cause of action is disclosed. However, it appears that his Honour's attention was not drawn to the High Court's observations in Agar v Hyde.
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69 at 129 (Barwick CJ), and Dey v Victorian Railways Commissioners (1949) 78 CLR 62;[1949] HCA 1 at [91] (Dixon J); per Agar v Hyde at [60].
(1954) 91 CLR 353; [1954] HCA 72.
(1986) 40 NSWLR 622 at 628.
[32]
Amendments
13 May 2020 - Para [126] has been amended, adding the word "claim" in both sentences. The word "and" has been replaced by "in" at the end of the first sentence.
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Decision last updated: 13 May 2020