Seven Network Limited v News Limited

THE ISSUE 1 A dispute has arisen concerning the admissibility of portions of the statement of Mr Gammell of 24 March 2004 ('the Statement'). I heard argument yesterday (21 September 2005) and indicated to the parties that I would give a ruling this morning as there are other parts of the Statement that give rise to similar issues. 2 Paragraphs 16 and 17 of the Statement are as follows: '16. In the period since 1995, and in particular in the period from 1998 to 2002, I have advocated a strategy to position the Seven Network as an integrated media company. An important element in this strategy was my recommendation that the Seven Network become involved in the production of pay TV channels, initially through the production of the C7 Sport channels. My intention was that the Seven Network should create and aggregate entertainment and information to deliver it via a range of technology platforms according to consumer demand. I considered that this would bring synergies as well as revenue growth opportunities for the Seven Network. 17. The strategy which I advocated was based on my assessment that: 17.1 The Seven Network had a number of advantages on which it could capitalise in the changing technological landscape. These included: (a) broadcast television is one of the most, if not the most, powerful vehicles to build brands. This is due to its ability to aggregate large numbers of potential viewers; (b) the Seven Network either possessed, or was in a good position to obtain, key content rights, particularly sports rights and Australian drama, and had the expertise and facilities to create and own high quality content; (c) this provided Seven Network with a competitive advantage over other potential entrants, particularly in respect of the emerging distribution channels; and (d) the Seven Network had a strong existing brand, as well as established media personalities, with associated audience loyalty, which could be leveraged and exploited on new platforms. 17.2 The introduction of new platforms and technologies provided opportunities for growth and for developing greater and deeper links with the viewer. 17.3 If the Seven Network positioned itself as an integrated media company in a manner which utilised its rights to content, skills, production facilities and brand in a complementary manner across a number of different media and distribution channels, the Seven Network would benefit from increased revenue opportunities, including offering integrated advertising packages, without substantially increasing its costs. 17.4 It was imperative that the Seven Network have flexibility and adaptability and be able to move onto new platforms, or technologies, as consumer preferences evolved. In this regard, I considered that the Seven Network should build upon existing viewer habits, on an incremental basis, as they became accustomed to new technology. While it is difficult to try to shape viewer habits in a predetermined manner, it was important to be in a position to be able to respond to changing viewer preferences and, hence, have a presence in the evolving technologies and new platforms. 17.5 One of the keys to the Seven Network's development in the new media landscape was ownership of rights to compelling content, that is, content which is compelling to viewers and potential viewers. 17.6 The most compelling content in Australia, particularly on subscription television, is premium live sport, in particular the AFL and NRL'. 3 The present dispute relates to the bolded portion of paragraph 17 ('the disputed material'). The competing arguments have been put by Mr Sheahan SC on behalf of the applicants ('Seven Network'), on the one side, and by Mr Castle for the third, fifth and sixth respondents ('Telstra') and Mr Meagher SC for the seventh, eighth and twenty-first respondents ('PBL'), on the other. 4 Telstra and PBL accept that the disputed material should be admitted into evidence, but they contend that it should admitted on a limited basis only. They acknowledge that evidence that Mr Gammell adopted a particular strategy to position Seven Network as an 'integrated media company' and that he did so on the basis of his assessment of certain matters affecting Seven Network's position as a pay television provider, may be relevant in the proceedings. In particular, Telstra and PBL acknowledge that Seven Network, in order to obtain certain relief that it seeks, may have to show that but for the conduct of various respondents in contravention of the Trade Practices Act 1974 (Cth) ('TP Act'), it would have successfully pursued an 'integrated media' strategy. 5 However, Telstra and PBL submit that the disputed material should be admitted only insofar as it goes to Mr Gammell's belief or intention at the relevant times. They say that a direction should be made pursuant to s 136 of the Evidence Act 1995 (Cth) ('Evidence Act'), which provides as follows: 'The court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might: (a) be unfairly prejudicial to a party; or (b) be misleading or confusing'. The direction they seek is that the disputed material be admitted for the purpose of proving that Mr Gammell held the beliefs to which he refers, but that it should not be admitted to prove the truth of those beliefs or the truth of the facts on which he may have relied to form those beliefs. 6 Seven Network contends that Mr Gammell's evidence should be admitted without qualification. That is, Seven Network says that Mr Gammell's account of the opinions he formed while advocating the 'integrated media' strategy, particularly during the period 1998 to 2002, should be admitted as probative of the existence of the facts about which he formed the opinions.