Media Niugini Ltd t/as EMTV v International Management Group of America Pty Ltd

Court of Appeal (NSW)|2022-07-22|Before: Gleeson JA, Leeming JA, White JA, Ball J

Solicitors: Watson Mangioni Lawyers (Appellant) Marque Lawyers (Respondent) File Number(s): 2021/358329 Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Division Citation: [2021] NSWSC 1590 Date of Decision: 09 December 2021 Before: Ball J File Number(s): 2020/15141

HEADNOTE [This headnote is not to be read as part of the judgment] On 11 October 2017, the respondent, International Management Group of America Pty Ltd ("IMG"), began to solicit offers from commercial television station operators for media rights in the Pacific Islands to certain rugby league games controlled by the Australian Rugby League Commission. The appellant, Media Niugini Ltd (trading as "EMTV"), was one such operator in Papua New Guinea. In response to IMG's invitation to bid for media rights to the games, EMTV submitted two offers, one for each of the "Packages" advertised by IMG. After encouragement from IMG to increase its offer for the games comprising "Package B" (namely, all matches played in the Queensland Cup competition), EMTV bid US$2,800,000 for the right to broadcast and monetise Queensland Cup games in Papua New Guinea. On IMG's case, it accepted EMTV's offer for Package B on 30 October 2017. Subsequently, a number of matters came to the attention of EMTV's board, which caused its directors to doubt whether the price offered for Package B fairly reflected the value of the media rights contained therein. EMTV relayed these matters to IMG on 23 December 2017, and asked that IMG consider reducing the "total rights fee costs" under the agreement accordingly. These concerns having gone unanswered, on 6 February 2018, EMTV indicated its refusal to proceed with the transaction any further. IMG accepted what both it and the primary judge (Ball J) characterised as a repudiation of the parties' agreement on 28 February 2018, and resold Package B at a US$2,486,000 deficit to a third party. IMG thereafter instituted proceedings in the Commercial List to recover loss of bargain damages from EMTV. The primary judge upheld IMG's claim, finding that EMTV had repudiated its contractual obligation to pay the purchase price for Package B, and that, having accepted that repudiation, IMG was entitled to damages reflecting its loss of bargain. His Honour rejected EMTV's attempts to resist liability on, among many others, the ground that no binding contract ever came into existence between the parties (for want of agreement on "important terms"), or that, even if a contract had come into existence, it had been entered into as a result of misrepresentations made by IMG. There was no issue at trial as to the proper construction of any such contract, as opposed to its existence. On appeal, the issues before the Court were: (i) Whether the primary judge (as alleged by EMTV) had not only decided that the contract asserted by IMG was not void for incompleteness, but had also decided on the proper construction of certain "important terms" relating to the parties' obligations to produce and broadcast Queensland Cup games; (ii) Whether, if the primary judge had so decided, his Honour's failure to alert the parties to that construction constituted a failure to accord procedural fairness to the parties; (iii) Whether EMTV should be granted leave to amend its Notice of Appeal to challenge the primary judge's construction of the contract, as that construction had been interpreted by EMTV; and (iv) If (i) and (ii) are rejected, whether the primary judge had erred in rejecting a number of EMTV's defences to liability. The Court (Gleeson JA, Leeming JA and White JA), dismissing the appeal with costs, held: As to issue (i) per Gleeson JA: (1) Given that the focus at trial had been on whether an extant contract had existed prior to IMG's termination, it was unnecessary for the primary judge to decide upon the proper construction of the relevant terms of the parties' contract. Indeed, the primary judge had not done so at all, and it was impermissible for EMTV to attempt to raise the question of construction on appeal when it could have been, but was not, raised at trial: [1]-[5]. Metwally v University of Wollongong [1985] HCA 28; (1985) 60 ALR 68, applied. As to issue (i) per Leeming JA, Gleeson JA agreeing: (2) The better reading of the impugned passages of the primary judge's decision is that his Honour commented on the content of IMG's obligation to produce certain Queensland Cup games only insofar as was necessary to conclude that the parties' contract was not so incomplete as to be a nullity. The premise underpinning this ground of appeal was, accordingly, misplaced: [5] (Gleeson JA), [9]-[13], [15] (Leeming JA). Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622, discussed. As to issue (i) per White JA: (3) The better reading of the impugned passages of the primary judge's decision is that his Honour did determine the proper construction of IMG's obligation to produce certain Queensland Cup games, such construction not having been contended for by either party at trial: [83]-[84]. As to issue (ii) per White JA, Gleeson and Leeming JJA agreeing: (4) Even if the primary judge did adopt a construction of the contract that had not been contended for by either party, there was no failure to accord either party procedural fairness. In circumstances where the parties' dispute centred around the existence, rather than construction, of the contract in question, the primary judge was not obliged to alert the parties to his Honour's views on an ancillary matter: [6] (Gleeson JA), [15] (Leeming JA), [70]-[85] (White JA). Re Association of Architects of Australia; Ex parte Municipal Officers Association of Australia [1989] HCA 13; (1989) 63 ALJR 298; Broken Hill Cobalt Project Pty Ltd v Lord [2022] NSWCA 271, applied. Pantorno v The Queen (1989) 166 CLR 466; [1989] HCA 18; Ghazal v Government Insurance Office of New South Wales (1992) 29 NSWLR 336; Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208; (2005) 3 DDCR 1, distinguished. (5) It is possible for the Court to be satisfied that a contract exists, for the purpose of affixing liability for damages upon repudiation, even though the precise terms and proper construction of the contract remain undetermined: [5] (Gleeson JA), [14] (Leeming JA), [69] (White JA). Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429; [1968] HCA 8; Meehan v Jones (1982) 149 CLR 571; [1982] HCA 52, cited. As to issue (iii) per White JA, Gleeson and Leeming JJA agreeing: (6) While EMTV should be granted leave to amend, given that the question of construction is one which arises from the documents adduced at trial, the focus of the parties' pleaded case at trial on the existence, rather than construction, of the contract renders the amended ground of appeal otiose: [6] (Gleeson JA), [16] (Leeming JA), [86] (White JA). As to issue (iv) per White JA, Gleeson and Leeming JJA agreeing: (7) The primary judge did not err in rejecting EMTV's claim either that there was no binding contract for want of agreement on important terms or that any such contract had been entered into due to misrepresentations made by IMG. Each of those findings was supported on, and concordant with, the (admissible) evidence before the Court: [6] (Gleeson JA), [16] (Leeming JA), [87]-[96] (White JA).

JUDGMENT

GLEESON JA: The principle of finality of litigation is well known. In Metwally v University of Wollongong [1985] HCA 28; (1985) 60 ALR 68 at 71, the High Court said: It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.
In this case the appellant EMTV chose to defend IMG's claim for damages for breach of contract on two grounds. One concerned the existence of the contract. EMTV contended that the alleged agreement upon which IMG sued was not binding because it was incomplete as to important terms. That included the number of matches in each regular season round of the Queensland Cup to be produced by IMG for broadcast by EMTV in the relevant Territories, which included Papua New Guinea. Alternatively, EMTV contended that if the agreement was binding, it was liable to be avoided on the ground of misrepresentation by IMG. The primary judge rejected these defences.
EMTV did not plead or raise a further alternative defence that, if the agreement was binding, then on its proper construction IMG was obliged to produce for broadcast by EMTV "all" matches in each regular season round of the Queensland Cup (except for those involving the PNG Hunters team), and that IMG was not in fact ready, willing, and able to perform the all matches obligation, or IMG itself had repudiated the agreement and EMTV had accepted such repudiation.
Having failed on its incompleteness defence, EMTV sought to circumvent the principle of finality by advancing a new case on appeal based on the "all" matches construction of the agreement under cover of ground 8 which asserted a denial of procedural fairness. EMTV contended that given IMG's position at trial based on the evidence of Mr Stitcher of IMG that he understood IMG's obligation was to produce one match for broadcast by EMTV in each regular season round (except those involving PNG Hunters), the primary judge denied EMTV procedural fairness by not disclosing that he was of the view that the "all" matches construction of the agreement was the correct construction. EMTV said this was apparent from [58] of his Honour's reasons, which are set out at [10] below in the judgement of Leeming JA.
In my view, the premise of ground 8 is incorrect and this ground should be rejected for that reason. As senior counsel for EMTV accepted in this Court, the language of the agreement was open to alternative constructions of the extent of IMG's obligation to produce matches for broadcast by EMTV. But that was not an issue in dispute at trial. The issues at trial were the existence of the contract and whether it may have been avoided on the ground of a misrepresentation, not its proper construction. The primary judge did not need to express a view as to the proper construction of the contract. Accepting that the reasons at [58] can be read in two ways, I incline to the view that his Honour did not determine the proper construction of IMG's obligation. I agree with Leeming JA that his Honour's reasons should be read as confining himself to rejecting EMTV's incompleteness defence and on this view ground 9 does not arise.
Nevertheless, the disposition of ground 8 does not depend on which reading of his Honour's reasons at [58] is correct. Even if his Honour is to be taken as having expressed the view that the "all" matches obligation was the correct construction of IMG's obligation, there was no denial of procedural fairness as White JA explains in rejecting ground 8. I agree with the orders proposed by White JA and his Honour's reasons for disposing of the other grounds of appeal.
LEEMING JA: I have had the advantage of reading the reasons for judgment of White JA in draft. I agree with his Honour that while there should be a grant of leave, the appeal should be dismissed. I shall not repeat the factual or procedural background to this appeal.
As White JA explains, the principal ground of appeal was that the primary judge denied procedural fairness to the appellant in finding at [58] that the contract required the production of all batches in packages A and B, something which, so it was said, was contended by neither party.
The first question is whether the primary judge is to be regarded as having made the finding as to the construction of the contract upon which this ground is premised. Obviously his Honour's reasons are to be read contextually, in light of the issues falling for resolution in the litigation and the submissions advanced by the parties. Paragraph [58] is in a section of the reasons for judgment at [47]-[61] under the heading "Was there a binding contract?", and follows [53] where his Honour records "EMTV advances two principal reasons why no contract was made on 27 October 2017 when Mr Stitcher accepted the offer contained in the Briefing Document and Bidding Form as amended". Paragraphs [54] and [55] deal with the first reason. Paragraph [56] introduced his Honour's response to the second reason, stating that his Honour did not accept that important terms were left out of the Briefing Document. His Honour elaborated this: It is true that the precise nature of the rights is not described in that document. But that does not mean that they were inadequately described to form the basis of a contract. Plainly, they were sufficiently described for EMTV to put a price on them. The precise nature of the rights would ultimately depend on the draws for particular matches and when and where those matches were to be played. There is no evidence that that was known at the time.
Paragraph [57] then accurately reproduced three matters identified in EMTV's final submissions that needed to be agreed, the first of which was "The number of matches to be produced and available for pick-up by any bidder needed to be agreed". That first matter was addressed in [58], which may conveniently be reproduced below: It is not easy to understand EMTV's first point. The description of Package B states that it includes "1 match per week currently produced as part of Australian domestic deal". The Briefing Document contains a section dealing with the production of matches which, among other things, makes it clear "[a]ll matches outlined in packages A and B will be produced …" but that the licensee must produce, or procure that a sub-licensee produce, audio-visual coverage of QLD Cup matches involving the PNG Hunters in PNG, and must produce matches involving the PNG Hunters played in Australia. It also states that IMG could provide a quote to produce matches played in Australia. EMTV does not explain why what was described was inadequate to form the basis of a contract.
The broader context is that questions of construction, as opposed to existence, of a contract were not raised by the Commercial List Statement or the response or the cross-summons. Not lightly should a judge in the Commercial List be taken to have construed a contract without that having been in issue and in the absence of argument.
What is more, at the commencement of this section of the judgment, the primary judge stated that in his opinion the evidence pointed strongly to the conclusion that the case fell within the first or fourth of the categories identified in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628, namely (as expressed by the primary judge at [47]-[48]): 1. "the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect", or 2. "where the parties agreed (objectively) to be bound immediately and exclusively by the terms they had agreed whilst expecting to make a further contract in substitution for the first contract containing additional terms".
In order to resolve the issue on the pleadings as to the existence of a contract, it was not necessary for his Honour to reach a conclusion whether the case fell within the first or fourth class. His Honour expressly left that open in [49] when introducing this section of his reasons, and the critical paragraph, [58], is to be read accordingly.
The distinction is no doubt a fine one, but in principle it is possible to reject a contention that no contract was formed without identifying the terms of the contract which is held to have come into existence. Indeed, a finding that a contract falls into the so-called fourth class is a finding that presupposes that while there is a contract in place, there remain further terms which the parties have not as yet agreed, and the primary judge expressly left open the possibility that the contract in the present case fell within that class. Further, the analysis in [58] builds upon the proposition that the draw for the competitions had not been determined and so the precise nature of the rights could not be known.
For those reasons, I favour the view advanced in this Court by IMG that the primary judge should not be regarded as having determined the construction of the contract he found existed between the parties. White JA acknowledges that while this is a possible construction of the primary judge's reasons, the more natural construction, and that which his Honour favours, is that in [58] the primary judge construed the contract. If that is so, then I respectfully agree with White JA, for the reasons his Honour gives, that there was no denial of procedural fairness in determining a point which was open to be advanced by EMTV. In Re Association of Architects of Australia; Ex parte Municipal Officers Association of Australia (1989) 63 ALJR 298 at 305; [1989] HCA 13, in a passage recently cited in Broken Hill Cobalt Project Pty Ltd v Lord [2022] NSWCA 271 at [153], Gaudron J said that: As was pointed out by Deane J in Sullivan v Department of Transport (1978) 20 ALR 323 at 343, procedural fairness requires only that a party be given "a reasonable opportunity to present his case" and not that the tribunal ensure "that a party takes the best advantage of the opportunity to which he is entitled". And it is always relevant to enquire whether the party or his legal representative should reasonably have apprehended that the issue was or might become a live issue. (Emphasis omitted.)
For those reasons, I agree with White JA that ground 8, the principal ground of this appeal, should be dismissed. On the view I take, ground 9 does not arise, and grounds 6 and 7 must be dismissed. I agree with White JA for the reasons he gives that grounds 1-5 must also be dismissed.
WHITE JA: The appellant, Media Niugini Ltd, trades as EMTV and will be so described in these reasons. It operates a commercial television station in Papua New Guinea. The respondent, International Management Group of America Pty Ltd ("IMG"), brought proceedings in the Commercial List against EMTV claiming damages for breach of contract, as well as certain other claims. IMG pleaded that its business was the distribution of broadcasting rights, the management of sporting events and acting as a media and entertainment agent. It alleged that, on 30 October 2017, it accepted an offer from EMTV for the latter to acquire media rights pertaining to certain rugby league football games (known as the Queensland Cup) and for the televising of matches in Papua New Guinea for five years from 2018 to 2022, for the sum of US$2,800,000. It alleged that on 6 February 2018 EMTV repudiated the agreement and that that repudiation was accepted by IMG, which terminated the agreement on 28 February 2018. IMG alleged that it had suffered loss and damage as a result of EMTV's wrongful repudiation of the agreement being "…the profit it would have received had EMTV complied with the terms of the Agreement".
The offer made by EMTV was in response to an invitation to bid for media rights to "packages" described as Package A or Package B. Package A was for media rights for NRL matches. Package B was for media rights for Queensland Cup Matches.
IMG's claim succeeded. On 9 December 2021, the primary judge (Ball J) entered judgment for IMG against EMTV in the sum of US$2,486,000. EMTV's cross-claim was dismissed (International Management Group of America Pty Ltd v Media Niugini Ltd t/as EMTV (No 3) [2021] NSWSC 1590).
EMTV denied that the parties had made an enforceable agreement, but said that, if they had done so, EMTV was induced to enter into the alleged agreement as a result of misrepresentations made by IMG that it had received an alternative offer for the media rights in Papua New Guinea in respect of the Queensland Cup competition for an amount substantially in excess of EMTV's initial offer, which alternative offer was capable of acceptance by IMG.
In the written opening submissions of counsel appearing for EMTV at trial, EMTV contended that the alleged offer and acceptance relied upon by IMG did not give rise to a contract with IMG for a number of reasons.
First, it said that if some contract were made IMG was not a party to it. The primary judge rejected this contention and there is no appeal from that conclusion.
Secondly, it submitted that no binding agreement was reached because the negotiations were "subject to contract". There is no appeal from the primary judge's rejection of that contention.
Thirdly, EMTV submitted that a broad range of essential terms remained unresolved and required further detailed negotiation and agreement.
In relation to EMTV's submissions that the parties had not reached a concluded agreement by which they intended to be bound because important terms needed to be agreed upon, the primary judge said: "[57] In its final submissions, EMTV identifies three matters that needed to be agreed: (a) The number of matches to be produced and available for pick-up by any bidder needed to be agreed; (b) The extent of mobile rights needed to be agreed particularly given the decision to remove audio rights from Package B; and (c) The precise scope of the rights needed to be agreed and in particular any specific limitations on the rights to be granted."
The primary judge rejected each of these matters. His Honour's finding in relation to the first of the matters was the principal issue on the appeal. There was no challenge to the primary judge's conclusions on the second and third matters. In relation to the first matter, the primary judge said: "[58] It is not easy to understand EMTV's first point. The description of Package B states that it includes "1 match per week currently produced as part of Australian domestic deal". The Briefing Document contains a section dealing with the production of matches which, among other things, makes it clear "[a]ll matches outlined in packages A and B will be produced …" but that the licensee must produce, or procure that a sub-licensee produce, audio-visual coverage of QLD Cup matches involving the PNG Hunters in PNG, and must produce matches involving the PNG Hunters played in Australia. It also states that IMG could provide a quote to produce matches played in Australia. EMTV does not explain why what was described was inadequate to form the basis of a contract."
EMTV submits that in this paragraph the primary judge construed the documents said to comprise the contract as requiring that all matches in Package B be produced, whereas neither party had contended for that construction. On EMTV's case there was no term specifying the number of matches to be produced. It submits that on IMG's case below, the agreement required that only one match in Package B be produced, other than where a PNG Hunters match was played in Papua New Guinea, in which case the licensee would be required to produce the audio-visual coverage of the match at its own cost.
EMTV submits that, whilst the construction said to have been adopted by the primary judge was clearly available, his Honour was required to advise the parties that he was considering adopting such a construction so that they might be heard on the matter. It submits that, had such an indication been given, it could have sought leave to amend its Commercial List Response to allege that IMG had itself repudiated the agreement as so construed, or that IMG was not entitled to damages for loss of profits because it was not ready, willing and able to perform the contract as so construed. It submits that because the primary judge did not indicate to the parties that he was contemplating adopting such a construction, EMTV was denied procedural fairness. Although this was the ground numbered 8 of the Notice of Appeal, it was the principal ground argued.
In its written submissions, the respondent contended that the primary judge's finding at [58] should be understood as a finding that the Briefing Document provided for one Queensland Cup match per week, not all Queensland Cup matches, to be produced. Against the possibility that the Court accept that interpretation of the judge's reasons, EMTV sought leave to amend its Notice of Appeal to include a ninth ground challenging that construction. Leave to amend should be given, as the issue raised involves only the interpretation of the documents said to give rise to the contract and the judge's reasons. For the reasons below, however, this additional ground does not arise.
By grounds 6 and 7 of the Notice of Appeal, EMTV repeated its argument below that there was no binding agreement because an essential matter had not been agreed upon, namely, the number of matches to be produced. These grounds were pressed if ground 8 were rejected.
The primary judge rejected EMTV's defence that it was induced to make a revised offer for Package B rights that IMG accepted by IMG's misrepresentation. By grounds 1 to 5 of the Notice of Appeal, EMTV also challenges that finding.
There was no issue at trial, nor on appeal, as to the quantum of damages awarded. The primary judge concluded as follows: "[68] It follows from what has been said that there was a binding agreement by which EMTV agreed to acquire the Package B rights for USD2,800,000. EMTV repudiated that agreement. IMG Australia accepted that repudiation, terminated the agreement and re-sold the rights for USD314,000. It was common ground that IMG Australia's damages should be calculated as the difference it was entitled to receive under the contract for the rights and the amount that it will receive for those rights. That amount is USD2,486,000. Since all amounts were to be paid or are payable in US dollars, it is appropriate that the judgment be expressed in US dollars."
For the reasons which follow, I would dismiss the appeal.

Factual background

On 11 October 2017, Mr Stitcher of IMG sent an email to Mr Park of EMTV, stating: "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. I am available should you wish to discuss anything relating to the Briefing Document of [sic] the Bidding Form."
The Briefing Document attached included the following: "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 Ltd ("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 [sic] properties as defined within this document with a view [to] closing deals in the territory on or by Friday 20ᵗʰ October 2017."
The Briefing Document stated that the ARLC properties, for which IMG had been granted exclusive media rights in the Pacific Islands, were set out in two categories. Package A included all National Rugby League (NRL) regular season matches and final series matches, State of Origin series matches, and Kangaroos test matches controlled by ARLC, amongst other matches. Package B was described as follows: "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)."
Relevant to Package B, the Briefing Document stated that: "Any licensee must ensure that the following broadcast obligations are carried out in the Territories: … - all QLD Cup Matches which feature a team from Pacific Islands will be transmitted live on free-to-air or subscription Television in the territory that the team originates from"
The "Territories" included Papua New Guinea.
The document further stated that: "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 …"
The licensee was to be responsible for making its own arrangements for delivery from the specific pick-up point and for any costs associated with delivery from the pick-up point to Pacific Islands.
The document also stated: "Production of Matches: All matches outlined in packages A and B will be produced however, 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. Should licensee prefer IMG can provide a quote for production and delivery of PNG Hunters matches played in Australia."
The Briefing Document stated that bidders should submit their Bidding Form by 5.00pm, 16 October 2017. It stated that "All submitted offers shall be irrevocable and binding upon the relevant bidder for a period of 14 days from the bidding deadline unless released by IMG in writing in advance of the 14 day period".
EMTV submitted a bid of US$7,800,000 for Package A and US$2,000,000 for Package B for the years of 2018 to 2022. The Bidding Form asked the bidder to specify the Territory or Territories for which the bid was applicable, as set out in the Briefing Document. EMTV stipulated Papua New Guinea as the Territory for which it sought rights.
One of the competing bids was from the National Broadcasting Corporation of Papua New Guinea ("NBC"). It also bid for both Package A and Package B. Its bid for Package B totalled US$3,500,000.
A third company, Digicel, bid US$8,850,000 for Package A and US$365,000 for Package B. It was ultimately awarded the rights to Package A.
On 17 October 2017, IMG invited the bidders to improve their bids for Package A rights. Mr Stitcher provided the parties with a "Second Round Bidding Form - Package A, Pacific Islands".
In response to that invitation, NBC advised IMG by email on 19 October 2017 that it would be submitting a second bid for both Packages A and B. It stated that "NBC is only interested in Package B as part of a whole bid, i.e. Package A and B, due to the costs associated with production of Package B".
The email was sent by Ms Susan McRae of NBC. On the same day (19 October) Mr Stitcher replied as follows: "Hi Susan, Thank you for your email and for the confirmation that you intend to submit a second round bid for ARLC rights for the territory of the Pacific Islands. However, I have not invited revised bids to be submitted for Package B and as such any offer you submit on this basis will not be taken into consideration. I have attached for your reference the bid signed by Mr Kora Nou in his capacity as Managing Director of NBC accepting all stated terms and conditions set out in the Bidding Form and the Briefing Document. The bid document clearly sets out that in the event that a bidder submits a bid for one or both of Packages A and B, that IMG may accept one or both of the bids at its discretion. Further, the document clarifies that the bid made by NBC shall remain irrevocable and binding for a period of 14 days from the deadline (11ᵗʰ October 2017) unless released by IMG in writing. IMG has not released either of bids submitted by NBC on 11ᵗʰ October and as such NBC's bid for Package B remains valid until 5pm Sydney time on Wednesday 25ᵗʰ October. As a result I am not prepared to accept the position that NBC would now like to make a revised bid for Package B or that any bid for Package B would be contingent upon the acceptance of its bid for Package A. If NBC wishes to submit a revised offer for Package A in accordance with the terms and conditions set out in Second Round Bidding Form then that would be welcomed. However, if a bid is submitted on the basis of the email set out below then NBC runs a real risk that its bid will be deemed non- compliant, that the bid will not be considered for approval and that as a result NBC could miss out on the opportunity to acquire rights for Package A."
On 20 October 2017, at 1.00pm, Ms McRae accepted Mr Stitcher's assertions. She said: "You referred us to the bidding process and obviously we are seeking to ensure that there is no risk of non- compliance by the NBC. ... You have advised us Package B cannot be altered, which is understood. We are responding to your invitation for the Package A bid revision. We are resubmitting the bid document, leaving Package B unchanged as directed. …"
On the same day, at 3.54pm, NBC submitted a revised bid. It used the same Bidding Form as it had used for its first bid, and not the form Mr Stitcher had provided for the revised bids for Package A. The form referred to bids for both Packages A and B. The figures for Package B were unchanged.
On 24 October 2017, Mr Park sent a text message to Mr Stitcher saying that "Without knowing the outcome of the NRL, the most I can offer for the QRL is US$2.5 million".
On 27 October 2017, IMG sold Package A to Digicel.
Mr Stitcher deposed that, on 27 October 2017, he had a telephone conversation with Mr Park in which he advised that Package A had been sold and that he had received a significantly higher offer for the Queensland Cup rights, but that he wanted to give EMTV an opportunity to increase its offer. He declined to say how much the other offer was for the Queensland Cup rights, but said that if EMTV were to raise its offer to US$2,800,000 for those rights, then he would be prepared to work with EMTV.
The "significantly higher offer" to which Mr Stitcher was referring was NBC's offer for Package B of US$3,500,000. Mr Stitcher considered that accepting an offer from EMTV for at least US$2,800,000 would pose less risk to IMG than accepting NBC's higher offer, but he would have accepted that higher offer if EMTV did not increase its bid.
Mr Park did not agree with Mr Stitcher's account of the telephone conversation on 27 October 2017. He said that he had received two telephone calls from Mr Stitcher, one on 24 October and the other on 27 October 2017. Mr Park deposed that, on 24 October 2017, Mr Stitcher told him that there were three bids for the Queensland Cup rights in PNG, which NBC was currently leading, with EMTV in second place and Digicel in third. He deposed that Mr Stitcher said "We are skeptical of NBC's ability to pay on time so if EMTV are [sic] able to raise its current bid for the QRL rights from US$2 million to US$2.8 million, then we would be willing to award EMTV the QRL rights".
Mr Park deposed that, on 27 October 2017, Mr Stitcher said to him that if EMTV were willing to raise its bid for the Queensland Cup rights IMG was willing to give EMTV those rights, but IMG would not settle on anything less than US$2,800,000.
Following the telephone call between Mr Stitcher and Mr Park on 27 October 2017, there was the following exchange of text messages between Mr Stitcher and Mr Park: Mr Stitcher: "Id like to close today if possible Matthew so please get back to me when you can" Mr Park: "okay, we can close at US$2.8" Mr Stitcher: "Okay great thanks Matthew. Deal done. Will send a follow up email tomorrow…I'll need you to get back to me to confirm the allocations between the years but I can work with you on that. Really good to get this deal done with you and thank you for your cooperation and patience"
On 30 October 2017, Mr Stitcher sent an email to Mr Park as follows: "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 for the license fee to be split across the five seasons? Thank you for your cooperation and patience with this process. I will send through a contract for signature shortly".
On 8 December 2017, Mr Stitcher sent Mr Park a draft agreement expressed to be made between IMG UK Ltd and EMTV called a "Licence Agreement". The draft Licence Agreement provided that IMG UK Ltd would grant to EMTV the "Designated Rights", being the right to broadcast the "Programmes on the Broadcast Basis". The "Programmes" was the "International Feed of the Matches". The "Matches" included the Queensland Cup Matches, defined as "all matches played as part of the Queensland Cup (or its successor competition)". "International Feed" was not defined but the agreement provided that IMG would provide or procure the provision of an audio-visual signature of the International Feed to be available at its Sydney Teleport Services in Rozelle, Sydney, or another agreed gateway in Australia and 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.
Notwithstanding these provisions, Mr Park sent an email to Mr Stitcher on 13 December 2017 as follows: "Hi Sam, 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? ... Matthew"
On the same day, Mr Stitcher replied: "Hi Matthew, Thanks for the email and in response to your points below: 1. The rights granted to EMTV are for the Queensland Cup Competition which includes all matches, not just Hunters matches. One match per round is available from Australia and delivery is covered in clause D of the Key Terms. EMTV is obliged to produce and broadcast Hunters matches, but it is worth remembering that there may be occasions where Hunters matches played in Australia will already be produced by Fox. I suspect this will be the case on more than one occasion given that the Hunters won the comp in 2017. In these instances you should keep in mind that there will only be one match available and not two (Hunters match in PNG plus a match from Australia). ... Please let me know if that makes sense? Cheers, Sam"
Mr Stitcher's response did not accord with the draft Licence Agreement that had been provided, nor with the terms of the Briefing Document. That would, or should, have been apparent to Mr Park's legal team.
Email correspondence ensued between Mr Park and Mr Stitcher in relation to what Queensland Cup matches would be shown. On 23 December 2017, Mr Park wrote to Mr Stitcher as follows: "Hi Sam, 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. Matthew"
On 6 February 2018, he sent an email to Mr Stitcher as follows: "Sam, 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. Matthew"
The primary judge found (at [46]) that, on 28 February 2018, IMG terminated the agreement. That termination was effected by a letter of that date from a Ms Alexandra McGurk, Vice President and Litigation Counsel of "Endeavour" of which IMG was a part. Ms McGurk stated that Mr Park's email of 23 December 2017 was a repudiation of the agreement, that she required "EMVP" [sic] to pay the agreed fee of US$2,800,000 and stated that, failing amicable resolution of the dispute, IMG would have no alternative but to commence proceedings against "EMVP". In the meantime she reserved all of "IMG's rights and remedies".
IMG pleaded that, by the email attaching this letter on 28 February 2018, IMG terminated the agreement which it contended EMTV had repudiated. EMTV denied that the email and attached letter from Ms McGurk was a termination of the agreement but this issue appears to have fallen away. There is no appeal from the primary judge's finding that IMG terminated the agreement on the basis of Mr Park's repudiatory email of 23 December 2017.

The pleadings and issues at trial

IMG's Commercial List Statement identified the Issues Likely to Arise as: "1. Whether there was an Agreement between IMG and EMTV and, if so, whether the Agreement between IMG and EMTV was breached. 2. Whether EMTV made Representations to IMG and, if so, whether the Representations made by EMTV were false. 3. Whether there was a Common Assumption between the parties and, if so, whether EMTV is estopped from denying the existence of any such assumption."
EMTV's Amended Commercial List Response agreed with this statement of issues. The Amended Commercial List Response did not plead that IMG's acceptance of EMTV's offer did not give rise to a binding contract because no agreement had been reached as to what matches would be produced by EMTV. Nevertheless, in his written opening submissions, counsel for EMTV submitted that the parties did not intend that there would be a binding agreement until a formal contract was signed for a number of reasons, including that "…a broad range of essential terms remain unresolved". Reference was made to the exchange of emails between Mr Park and Mr Stitcher of 13 December 2017 referred to at [60]-[61] above.
Whilst there was an issue at trial as to whether no agreement as asserted by IMG was made because important terms had not been agreed, or that the asserted agreement was uncertain for the lack of definition of matches to be produced and made available for EMTV to broadcast in Papua New Guinea, the correct construction of the contractual document was not an issue. It would be enough to show that there was a binding contract if the court could conclude that the contract had some meaning, albeit that the contract was ambiguous (Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429 at 436-7; [1968] HCA 8; Meehan v Jones (1982) 149 CLR 571 at 578; [1982] HCA 52).

No denial of procedural fairness

On the hearing of the appeal, EMTV read an affidavit from its solicitor, Mr John Biggs. That affidavit was read without objection. Mr Biggs deposed that, during the conduct of the proceedings below, he understood that IMG's case was that the agreement for which it contended only required that one Queensland Cup match per round (other than the Hunters' match) be filmed and produced for television. That was the position taken by Mr Stitcher of IMG in his email of 13 December 2017, referred to at [61] above, and on 19 December 2017. In his affidavit of 26 November 2020, Mr Stitcher responded to affidavits of Mr Parker of EMTV. In a paragraph which was objected to and rejected, Mr Stitcher said that: "as set out in the Briefing Document, EMTV would receive a minimum of 1 filmed and produced QRL match per round for the entire season (and each subsequent season under the term of the QLD Cup Rights Agreement)".
He repeated that contention in further paragraphs that were objected to and rejected. In a sentence that was not rejected, Mr Stitcher said that it was correct that, should EMTV wish to film and produce Queensland Cup matches other than those matches featuring the PNG Hunters, it could do so, but at its own cost.
Mr Stitcher's opinion as to the effect of the provisions of the Briefing Document was inadmissible. Mr Stitcher did contend that IMG's obligations were limited in the way Mr Biggs described. Mr Biggs deposed that, if he had understood that the primary judge was considering adopting a construction of the Agreement under which all Queensland Cup matches were required to be produced, then he would have sought to argue that IMG had repudiated the agreement and EMTV had accepted that repudiation, or to argue that IMG was not entitled to recover loss of bargain damages because IMG was not ready, willing and able to perform the Agreement because IMG was neither willing nor able to procure that all Queensland Cup matches be produced.
But this construction was plainly an available one and indeed, as EMTV accepted on appeal, the construction which EMTV says the judge adopted was a construction emerging from the plain words of the document. It was one that those acting for EMTV must have considered. Mr Stitcher was cross-examined by Senior Counsel appearing at trial for EMTV to the effect that the Briefing Document provided that all of the Queensland Cup matches would be filmed. He gave the following evidence: "Q. If you go over the page to page 263, the top of the page under the heading "All matches outlined in packages A and B will be produced." Do you see that? A. Yes I see that. Q. That's a statement isn't it that all of those matches will be filmed, if I can put it that way? A. That wasn't what I intended in, in drafting the document. What I intended was that the matches referred to in package B were the domestically produced matches in Australia. Q. When you go back then, the reader of the document then would take what you say in paragraph 260 in the description of package B, as being an indication wouldn't they that all matches in the cup would be produced in the forthcoming period? A. It's possible. Q. That's something that would have to be resolved in negotiation of subsequent agreement, isn't it? A. I would expect that to be resolved in advance of the bidding deadline. Q. It's something that would have to be resolved in advance of an agreement being made. A. Yes, that's correct."
It was always open to EMTV to put an alternative case that, if there were a binding agreement, then, on its proper construction, IMG was required to produce all matches at its expense and provide them to EMTV but IMG had repudiated that obligation and was not ready and willing to perform the contract as so construed. Nothing done or omitted by the primary judge deprived EMTV of that opportunity. EMTV was represented at trial by experienced solicitors and Senior Counsel.
In support of its submission that the primary judge ought to have given the parties an opportunity to make submissions about the proposed construction apparently adopted by his Honour at [58], quoted above at [26], EMTV relied upon Pantorno v The Queen (1989) 166 CLR 466 at 472-3, 482; [1989] HCA 18; Ghazal v Government Insurance Office of New South Wales (1992) 29 NSWLR 336 at 346-7; and Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208 at [78]; (2005) 3 DDCR 1.
Pantorno v The Queen concerned a sentence appeal in which it was common ground before the judge that the offender should be sentenced on the basis that his plea of guilty to a charge of possession of a drug of dependence referred to s 73(1)(b) of the Drugs, Poisons and Controlled Substances Act 1981 (Vic) and not the more serious offence under s 73(1)(c). Although this was common ground in the sentencing hearing, the judge proceeded to sentence the offender under s 73(1)(c), which carried a larger penalty. In the passages relied upon by EMTV, Mason CJ and Brennan J said: "In principle, the notion is erroneous that a court must tell the parties what the law is. A court is under no duty to a party to advise him how to present his case; the court's duty is to give him a reasonable opportunity to present his case: per Deane J. in Sullivan v. Department of Transport ((1978) 20 ALR 323 at 343). … The responsibilities of counsel cannot be assumed by the court, for its even-handedness would be compromised by assuming a responsibility for the conduct of the case of one of the parties. We would not hold that there is some general duty, resting on either the County Court or the Full Court, to warn a convicted person or his counsel of the onus imposed by s.73(1)(b) merely because no attempt is made to discharge it. However, a concession was made by counsel for the Crown in the course of argument in this Court which, if made in the Full Court, would have sufficed to establish the second of the grounds of appeal to that Court…When the parties to an adversarial proceeding agree on a proposition of law and conduct their cases on that basis, their agreement does not bind the trial judge. If the judge determines the law to be different, he may apply the law as he determines it to be, but he must inform the parties of the view he has formed when that is necessary to give them an opportunity to address new issues arising from the judge's departure from the proposition of law on which the case was conducted. Otherwise both parties are taken by surprise: see Fairmount Ltd. v. Environment Secretary ([1976] 1 WLR 1255 at 1265-1266; [1976] 2 All ER 865 at 874)."
In Ghazal v Government Insurance Office of New South Wales, the trial judge dismissed the plaintiff's claim for damages for personal injuries suffered in a car accident on the basis that he was not satisfied that the plaintiff was involved in an accident (at 337). Although the plaintiff's credibility was seriously in issue, it was not put to him that he was not involved in the accident at all. Kirby P said (at 346) that if the trial judge were to act on that basis, and that matter had not been put by the defendant (or its insurer that was conducting the case), it was the duty of the judge himself to put it to the plaintiff before deciding otherwise (see also Mahoney JA at 347 to the same effect).
In Seltsam Pty Ltd v Ghaleb, Mason P said at [78]: "[78] These cases illustrate the general principle that although the basis on which the parties conduct a trial does not bind the judge, if the judge contemplates determining the case on a different basis he or she must inform the parties of this prospect so that they have an opportunity to address any new or changed issues that may arise."
As Mason CJ and Brennan J said in Pantorno (quoted at [76] above), a court is not under a duty to a party to advise it how to present its case and the judge cannot assume the responsibilities of counsel. There was no concession made by counsel from which the judge departed. In final submissions at trial, Senior Counsel for EMTV submitted that: "…plainly, the document requires further negotiation and it requires terms which match a price to a right which has attached to it a defined number of matches for which a feed is going to be made available to the bidder who succeeds on price".
Counsel for IMG submitted that the number of matches to be produced and available to EMTV to be picked up was addressed in the Briefing Document. Counsel referred to the fact that the Briefing Document referred to one match per week being currently produced as part of the Australian Domestic Deal and said that that was not the language of promise, but the bidder was being told that there was currently one match produced per week, nothing more, nothing less. He submitted that the question raised by Mr Park as to how many matches would be produced each week was dealt with in the Briefing Document. Counsel submitted that: "…the rights are sold and acquired, not with a promise as to how many will or will not be produced by the third party, but with the opportunity to take up such matches as are produced… … If it's not clear, it's just a question of construction. It's not a question of completeness."
As IMG submitted, it was enough that the Briefing Document had some contractual meaning and it was not necessary for the primary judge to decide what that meaning was. IMG submitted that the primary judge did not determine the issue of construction. In addition to his Honour's reasons quoted above at [26], his Honour had earlier said: "[56] As to EMTV's second point, I do not accept that important terms were left out of the Briefing Document. It is true that the precise nature of the rights is not described in that document. But that does not mean that they were inadequately described to form the basis of a contract. Plainly, they were sufficiently described for EMTV to put a price on them. The precise nature of the rights would ultimately depend on the draws for particular matches and when and where those matches were to be played. There is no evidence that that was known at the time."
IMG submits that the primary judge did not decide that the Briefing Document required that all matches be produced, but rather decided that what was described in the Briefing Document was adequate to form the basis of a contract. IMG submits that, if the primary judge expressed any view as to the proper construction of the contract, it was that one match per week would be produced and made available (save that EMTV would be responsible for producing matches involving the PNG Hunters) because this, so IMG contends, was outlined in Package B.
This is a possible construction of the primary judge's reasons, but the more natural construction is that his Honour considered that, on the proper construction of the Briefing Document, it required that IMG would be required to produce all matches in Package B, save for those matches involving PNG Hunters, which EMTV was responsible for producing.
It is true, as EMTV submits, that this was not a construction advanced by either party, nor raised by the judge during the hearing. But the issue of whether it was possible to give a contractual meaning to the Briefing Document was in issue and was addressed by both parties, and that potential construction was raised in the cross-examination of Mr Stitcher. Unlike Pantorno, the primary judge did not decide the case on a ground which had been conceded by IMG. In Ghazal, the basis upon which the trial judge acted involved a breach of the rule in Browne v Dunn (Browne v Dunn (1893) 6 R 67 at 76). There is little similarity to this case. In relation to the statement of Mason P in Seltsam Pty Ltd v Ghaleb referred to at [78] above, the basis upon which the case was conducted was that the asserted contract had some sufficient meaning and the case was determined on that basis.
For these reasons, I reject ground 8 of the notice of appeal.

Other Grounds of Appeal

Because the true construction of the contract was not an issue at trial, it is unnecessary to address ground 9 of the Notice of Appeal, although, for the reasons above, I find it difficult to construe the Briefing Document as meaning anything other than that "all matches outlined in package[s]…B will be produced", except that EMTV would be responsible for production of PNG Hunters matches (see at [41] above).
It follows that the primary judge was correct to reject EMTV's submission that there was no intention to contract because the important term as to what matches would be produced remained to be negotiated. Mr Stitcher's acceptance of that proposition in cross-examination (at [73] above) is irrelevant, as it depends upon his opinion as to what the Briefing Document was intended to provide, rather than what it does provide. The fact that in previous years only one Queensland Cup match was produced by the Nine Network or Foxtel could not displace the express words of the contract that was applicable to future years.
The primary judge rejected EMTV's contention that it was induced to enter into the contract by a misrepresentation made by Mr Stitcher. The misrepresentation was said to have been conveyed to Mr Park on 24 October 2017, when Mr Stitcher said in relation to the "QRL Rights in PNG" that "NBC are currently leading the bids, with EMTV in second place…" (see primary judgment at [34]).
Mr Stitcher's evidence was that, on 27 October 2017, he told Mr Park that he had received a "significantly higher offer for the Queensland Cup rights" and wanted to give EMTV an opportunity to increase its offer.
The representations, whether as deposed to by Mr Park as having been made on 24 October 2017, or as described by Mr Stitcher as having been made on 27 October 2017, were materially the same. EMTV submitted that the representation was misleading or deceptive because the substantially higher offer that had been received was the offer of NBC (at [44] above). EMTV submitted that Mr Stitcher's statement was misleading because NBC's higher offer of US$3,500,000 was conditional upon NBC also being awarded the rights to Package A.
However, as the primary judge correctly found, NBC resiled from that position on 20 October 2017 (at [49] above). The primary judge found that Mr Stitcher was correct when he told Mr Park that NBC had offered more for Package B than had EMTV.
EMTV submitted that the primary judge had failed to have regard to the Bidding Form submitted by NBC after Ms McRae's email of 1.00pm on 20 October 2017. The Bidding Form referred to the Bidder's wishing to secure rights for both Package A and Package B (see at [50] above). EMTV submitted that NBC's 20 October 2017 bid was a tied bid. Had it not been, it would have simply submitted a Second Round Bidding Form as provided by Mr Stitcher. The form offered the higher price for Package A. EMTV submitted that NBC had flip-flopped in its correspondence between Mr Stitcher and Ms McRae, but then flip-flopped again when it submitted its revised bid. [1] It submitted that, had the primary judge considered the terms of the revised bid of 20 October 2017, his Honour should have found that Mr Stitcher's statements of 24 and 27 October 2017 were misleading.
I do not agree.
Ms McRae's email of 1.00pm on 20 October 2017 unequivocally stated that the bid that was being resubmitted was for revision of Package A only. She also emphasised that she wished to ensure that there was no risk of non-compliance by NBC. The Bidding Form accompanying the Briefing Document inviting bids for both Package A and Package B had provided that IMG could accept one or both of the bids at its election. Although this stipulation could not bind the parties from whom bids were sought, Mr Stitcher made it clear that he was only inviting a revised bid for Package A and that he did not accept that NBC could make a bid for Package B that was contingent upon acceptance of its bid for Package A. Ms McRae accepted this unequivocally in saying that "…obviously we are seeking to ensure that there is no risk of non-compliance by the NBC".
In these circumstances, it would not be reasonable to construe NBC's second bid as tying its existing bid for Package B to an acceptance of its bid for Package A.
The primary judge found that Mr Stitcher was correct when he told Mr Park that NBC had offered more for Package B than had EMTV. He was right so to find.

Conclusion

For these reasons I propose the following orders: 1. Grant leave to the appellant to amend its Notice of Appeal to add ground nine, in accordance with its proposed Amended Notice of Appeal; 2. Appeal dismissed with costs.

Endnote

Perhaps it meant that NBC flipped once from its position that the bids were tied and flopped once to return to its original position. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 March 2023

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