NETWORK TEN LTD v FULWOOD

The application concerns a programme which Seven (as I shall describe it) proposes to put to air, with or without the assistance of Miss Fulwood, this evening. Ten (as I shall describe it) claims that for it to do so will constitute a breach by her, with the assistance of Seven, of a contract which Miss Fulwood has with Ten.

I shall narrate the facts according to the evidence as it is before me. It is proper to record that the evidence comes before me in a quite unusual way, which I haveattempted to detail in the transcript and which I need not now repeat. It is possible - it may be probable - that if the matter is finally determined by a hearing, the evidence will be different and what I say will, to that extent, be inaccurate. However, I must deal with the present application upon the basis of the evidence as it is before me.

In May 1994 Ten made an agreement with Miss Fulwood under which she would be employed by it as a news presenter performing that or such other duties as she might be directed to perform from time to time by the chief executive officer of Ten or his nominee. Reference is made to her duties in a letter of 12 May 1994, which she accepted as setting forth the terms or the basis of her contract. It is proper to record that her remuneration for the work which she was to do in that regard was, on any view, substantial. The contract was to continue until 31 December 1995 and the contract provided for Ten to have 'an option for a further extension of this agreement for a period of one year on terms to be mutually agreed upon'.

On 9 October 1995 Miss Fulwood gave a notice to Ten, indicating that she proposed to terminate the contract. She said: 'I wish to terminate my employment with Network Ten Ltd'. The reply to that by Ten was contained in a letter dated 16 October 1995. That letter referred her to the terms of the agreement and to the fact that the agreement continued in force until 31 December 1995S. It drew her attention to the restrictions which continued to be imposed upon her. It drew to her attention the possibility of her committing a breach of the agreement and dealt generally with the consequences of her letter.

On 20 October 1995 Miss Fulwood wrote a reply to that letter. She said that she did so 'to ensure that my departure from Network Ten causes as little friction as possible for both of us'. She then set out a number of matters which she 'confirmed for the record' and she concluded the letter by saying: 'I have received a letter from Michael Lloyd Jones pointing out my obligation not to work for another network until 31 December 1995. You may be sure that I shall abide by that contract'.

It appears, from the material before me, that on 9 October 1995 Seven had written to Miss Fulwood a detailed letter of employment, or proposed employment, under which she would - I put the matter broadly and therefore perhaps to an extent inaccurately - perform services for Seven similar to those she had performed for Ten. The letter provided for an agreement for three years to commence on | January 1996, her annual remuneration being significantly larger than had been provided in the previous document. It was said that she did not sign that document formally, or at all, until 1 December 1995 but it may be inferred that at least discussions in relation to it had taken place on or before 9 October 1995, or after that date.

That is the situation which emerged from the evidence which was placed before Young J in the present matter. Word of the possibility of her changing channels apparently escaped into the public domain. There was reference in the media - some oblique, others direct - to the possibility of her undertaking employment with Seven. It is not necessary, for reasons to which I shall refer, for me to detail all of the references that were made.

It now appears that Seven proposes to commence the programme in which Miss Fulwood is to take part, not after 1 January 1996 but on 4 December 1995, today. Her participation would, as is accepted, be in breach of her obligations to Ten under her agreement of 12 May 1994. This was discovered at some stage by Ten, and an application was made to the Equity Division on or about 1 December 1995 for leave to serve short notice of an application for an injunction. That leave was given and on 4 December 1995, a Monday, an application came before Young J for such an injunction. Counsel have informed me that the matter was dealt with on an interlocutory basis, although the defendants were prepared to have the matter dealt with upon a final basis. Young J refused to grant the injunction.

It is said - and again I state the matter broadly and, therefore, perhaps inaccurately - that Young J based his refusal upon, inter alia, two broad grounds: first, because, in his opinion, the plaintiff had not moved to seek the injunction withsufficient speed; and, secondly, because he took the view that damages would, in the circumstances, be an adequate remedy, relying, in that regard, upon a factor, to that effect, to be taken into account in determining whether an injunction, final or interlocutory, should be granted.

The matter came before me this afternoon, a short time after Young J gave his judgment. I do not have a copy of his judgment. Counsel have read to me what they accept to be the substantial matters in the judgment. Counsel have placed before me the evidentiary material which was before Young J.

Mr Rares SC, for the defendants, would ordinarily have sought to cross-examine the witnesses whose affidavits have been placed before me but, in the exigency of the circumstances, counsel have come to an arrangement which has involved his not exercising his right or claim to cross-examination. He is not to be prejudiced because of his failure to cross-examine, should the matter subsequently come before the Court.

The application made to me by Mr Robinson for the plaintiff is an application which I am dealing with as a single judge of the Court of Appeal. Mr Rares SC, for the defendants, has submitted that I have no jurisdiction to deal with the matter. His argument is generally to the effect that this application is an application for, or involves an application for, leave to appeal against an interlocutory decision of Young J. It is agreed that leave to appeal would be necessary were an injunction to be granted by the Court of Appeal. Mr Rares SC has pointed to the provisions of s 46 of the Supreme Court Act. He has submitted that I am exercising the power to grant leave to appeal and that that section precludes such a power being exercised by a single judge of the Court of Appeal.

I do not think that that is the correct categorisation of the present application. The parties have quite properly dealt with the matter without reference to technicalities. The argument has proceeded upon the basis that the procedural steps which it would be appropriate to take have been taken. The matter is too urgent to bedelayed while formal documents are prepared, filed and served. I am dealing with the matter upon the basis of what I understand to be the implications to be drawn from what they have done. The present application is, as I infer, an application for an injunction to preserve the subject matter of the proceeding, the benefit of the contract which Ten has, until Ten can pursue its right of appeal against the order made by Young J. In due course, if the proceeding is to come by way of appeal before the Court of Appeal, it will be necessary for leave to appeal to be granted. The present application is not for leave to appeal but for an injunction to preserve the subject matter of the application for leave to appeal and, if that is granted, of the appeal.

I am of the opinion that there is power in the Court of Appeal to grant an injunction to preserve the subject matter of a proceeding in respect of which leave to appeal will subsequently be sought. I am of the opinion that under the section and otherwise, as a single judge, in the exigencies of the present case, I have power to deal with the matter.

As I have indicated to Mr Rares SC, I propose to deal with the matter on that basis. It is not necessary for me to pursue the question whether this is an application in which my power derives from the appeal from Young J - that is, whether I am exercising a power as part of an appeal from Young J or whether this is an exercise of the inherent power of the Court of Appeal, granted to it under the general law, the Act and the rules. Distinctions of this kind have been drawn in cases involving applications for stay of proceedings: see generally Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310. It is not necessary for me to pursue those matters.

Having dealt with these peripheral matters of jurisdiction, I come now to the substance of the case. The question is whether I should grant an injunction restraining the first defendant, Miss Fulwood, from taking part in the programme this evening, and Seven from presenting it with her. This is a matter on which my mind has wavered during the course of the proceeding. On the evidence, as it is before me - andagain I emphasise that I speak upon that basis - the matter involves a blatant breach of contract by one of the parties, Miss Fulwood, and assistance in that breach of contract knowingly by Seven. It is not suggested that the contract that Miss Fulwood has with Ten is at an end. The matter has been dealt with upon the basis that the contract remains on foot and that what is involved in her participating in the programme this evening is a breach of contract by her.

No real justification has been brought forward, nor do I find anything in the evidence before me, which would warrant what she is doing. There is, as I have said, a blatant breach of the contract. Seven is participating in this. It knows, and no doubt knew previously, that she was acting in breach of contract in entering into the programme as at 4 December as her contract remained on foot until 31 December.

This is a situation which, from the point of view of commercial morality, is unacceptable. I emphasise again that I speak upon the basis of the evidence before me. But, as the matter goes to the discretion of the Court, and in view of what was said by this Court in its judgment in Curro & Anor v Beyond Productions Pty Ltd (1993) 30 NSWLR 337, it is proper that I indicate my view in this regard.

It is proper that I add that Mr Rares SC has submitted that the merits of the matter do not lie all on one side. He has submitted that Channel Ten, when it learned of Miss Fulwood's proposal to terminate her contract as at 31 December 1995, took her off air in order, it has been suggested - again I put the matter in general terms - to ensure that her image with Channel Ten or with the public was no more than it would otherwise be. However that be, that has not been argued to be a justification for what has been done by her and the present application comes before the Court upon the basis that there is blatant breach of contract by her, participated in and assisted by Seven.

The question then is why should that not be restrained? Mr Robinson has referred to the emphatic terms of the decision of this Court in Curro. In that case, the lady in question had also acted in breach of her contract. On one view of the facts,she had acted as if she could ignore her given word and do so with impunity. The Court there said that it saw no reason at all why the lady in question should not be ordered to keep her word. That is a matter which I think is directly relevant in the present case. In what I say and do, I do not in any way intend to depart from what was there said.

Miss Fulwood knew that she was bound to work for Ten until the end of the present year and that she could not work for Seven before then. She was entitled to refuse to work for Ten after then and, in view of the option clause in her contract, she was no doubt wise to tell Ten of this when she did. She was warned in clear terms that, if she worked for Seven before the end of the year, she would be in breach of her contract. She accepted this and gave Ten her assurance that she would abide by her contract. Notwithstanding this, within a few days of giving her assurance that she would abide by her contract, she entered on a breach of it. I record these things because, in my opinion, they go to the weight which must be given to them, against her and against Seven, in the exercise of the Court's discretion on this application.

There is, however, an important matter which has been emphasised by Mr Rares SC. It is, as I shall describe it, the delay which has taken place in the bringing of the matter before the Court. I use the word 'delay' in the absence of some other appropriate word: to mean the time between the end of the period of time appropriate for doing what was to be done and the time when Ten applied to this Court for the present relief. What has been said has been that Ten has known for some time of the proposal for Miss Fulwood to go to air on Seven prior to the expiration of her contract and that, in the circumstances, if it was to move to restrain it, it should have moved more quickly than it did.

This was a matter of substantial contest before the judge below. I do not have the transcript or the copy of the judge's judgment but counsel have indicated to me what took place and have read to me what they agree are the relevant portions of the judge's judgment.

The judge took the view, having heard witnesses cross-examined before him, that it was probable - I may be putting the matter too high in so describing it

• that Ten was aware of at least the real prospect of the defendant, Miss Fulwood, breaching her contract prior to 31 December 1995 and yet it did not move as quickly as it should.

The judge was obviously affected by the fact that in such a breach of contract there would be involved the preparation by her and by Seven of detailed programmes to go to air and all of the expenditures that are there involved. It is not necessary for me to refer to what is involved in the preparation of a programme of this kind; the matters were dealt with in argument by reference to sponsors and the like. The matter has been conducted upon the basis that, if a programme was to be put to air with her, substantial expenditures and arrangements would be required. The case has been put that Ten did not move as quickly as it should and that (as I infer) the result has been that arrangements have been made which, had it moved more quickly, would not have been made. These were, in substance, the judge's findings.

Mr Robinson has submitted that his Honour erred in fact in this regard and has submitted that for this reason his decision may be put aside. This is a matter upon which I must confess my mind has wavered. I have the judge's judgment, so far as it has been able to be put before me by counsel. His Honour obviously took the view that the possibility of, or probability of, a breach of the contract came to the notice of Ten at a date earlier than was suggested by them and he came to the view that, properly applying their minds to their own affairs, they should, in the circumstances, have moved earlier. He treated this as an important discretionary matter in determining not to grant the injunction. I have to consider whether, in the exercise of my discretion, assuming that it is my discretion to be exercised and that this is not merely a review on appeal of what the judge has done, I should come to a different conclusion.

Iam faced with the difficulty that I do not have before me in full the terms of the evidence as it was before the trial judge. In particular, the terms of the cross-examinationare not before me. It is plain, from what the judge said, that he was affected by what he saw of the witnesses for Ten, what they said and what emerged from them in cross-examination. I have proceeded, as counsel have in the course of their argument, upon the basis that the evidence was to that effect.

Reference was made in argument to whether, if an injunction be not granted, the plaintiff will suffer irreparable injury. Ten urged that damages will not be an adequate remedy because, inter alia, it will be difficult or impractical to quantify them. This is a factor which, for over a hundred years, has been taken into account in such application as this: see London and Blackwell Railway Co v Cross (1886) 31 Ch D 354; see generally Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204.

This is a factor to be taken into account. I do not think that the quantification of the damages will be impossible or impracticable. If, as prima facie appears, the breach is blatant, that may affect the basis or the quantum of the damages. But I do not doubt that a judge or jury will be able to assess the loss which Ten will have suffered. I take this factor into account, but it is upon the factor of delay that, in the practical sense, the balance turns.

In the special circumstances of this case, and having regard to the manner in which it has been conducted, I do not think that I can depart from what the judge has said in relation to delay - that is, I do not think that I should come to a different conclusion. I feel that, in the special circumstances of this case, I should adopt or act upon the assessment of the position as to delay which the judge arrived at, having seen and heard witnesses who have not been before me. The judge came to the conclusion that - I use the word in the sense I have indicated

• the delay of Ten, in moving for relief, was such that, in the circumstances, it is a matter which, with the other circumstances of the case, should justify not granting an injunction in this case.

I do not think that, in the circumstances, I should come to a different conclusion. If I am, as I think I am, exercising my own discretion, I think I should act upon the basis of the factual findings which the judge has made. These have been putbefore me in the manner which will appear from the transcript of the proceeding and what has been said in argument before me.

With some regret, therefore, I have come to the conclusion that an injunction should not be granted at the moment. I shall, therefore, dismiss the present application. I will reserve the costs of the present application to the judge who deals with any renewal of the application before this Court.

My dismissal of the present application is not to prejudice any application by the plaintiff to this Court in the ordinary course for other or further relief as may be appropriate on an appeal from any decision by the judge. It may be that, if the programme goes to air tonight and the parties involved, the defendants, take the risk of the damages which may flow should they lose the ultimate proceedings, the matter will not go further. It may be that in that event the matter will not proceed further. But, however this be, the right of the plaintiff to apply to this Court for further relief by way of injunction is not prejudiced by what I have said. It follows from what I have said that the costs of today should be dealt with by the Court when it then knows all the circumstances of the case. It will know more about the circumstances of the case than I presently can know. However, in the event that the matter does not proceed further, then my order is that in respect of the costs of the present application each party should bear her or its own costs. I would not order that one party bear the costs of the other.

I have attempted, in making such an order, to cover the eventualities which may arise in the circumstances of this case. I will, in case I have omitted to deal with every eventuality, reserve liberty to the parties to apply in relation to costs, should they be advised to do so, that application to be made on two days notice.

The result of the present application is that I do not issue an injunction against the programme in question going to air this evening, or against Miss Fulwood taking such part in this as she may be advised. The effect of that, in relation to damages, is, of course, a matter which will have to be considered in due course.

I will direct that my Associate retain the papers which have been handed to the Court in relation to this matter. If the parties should want to have them for some reason, application can be made to her, at an appropriate time tomorrow, and copies can be made of them by the Court.