Discretion to refuse relief
154 Even once satisfied of the matters in r 7.23(1), the Court retains a residual discretion in r 7.23(2) to refuse to make an order for preliminary discovery. Though that discretion is unfettered in terms, there will normally be limited scope for refusing relief where the requirements of r 7.23(1) have been made out: Optiver at [45].
155 The discretion has been described as the "proper brake on any excesses" and is to be exercised in the particular circumstances of each case: see St George Bank at 26 (Hely J), citing Paxus Services Ltd v People Bank Pty Ltd [1990] FCA 723; 99 ALR 728 at [14] (Burchett J); and Minister for Health and Aged Care v Harrington Associates Ltd [1999] FCA 549 at [27] (Sackville J).
156 Broadly, Cricket Australia submitted that relief should be refused on discretionary grounds because the application was brought for reasons extraneous to the bringing of a claim or, alternatively, is an abuse of process: Essential Energy v Rose [2020] FCA 722; 145 ACSR 106 at [15] (Lee J); Davidson v Suncorp-Metway Limited (No 3) [2020] FCA 1593 at [84], [106] (Jackson J).
157 Cricket Australia submitted that Seven's application is not made bona fide, but is motivated by a desire to exert pressure on Cricket Australia in commercial negotiations for a rights fee reduction under the MRA, which it was also seeking through the parallel Expert Determination process.
158 Cricket Australia fortified this submission by asserting that Seven leaked a copy of the First Martin Affidavit, as well as correspondence between Cricket Australia's solicitors and Seven's solicitors, to the Sydney Morning Herald. Indeed, Cricket Australia urged that I should find that Seven leaked these materials, knowingly and deliberately in breach of the confidentiality and good faith obligations in the MRA.
159 Cricket Australia contended that in the absence of any plausible explanation for the leak, it is clear that this conduct was motivated by the ulterior and improper purpose of applying commercial pressure on Cricket Australia through the media. Alternatively, or in addition, it was an attempt to publicly embarrass Cricket Australia and thereby weaken its commercial position to obtain a collateral advantage for Seven in future negotiations. Cricket Australia submitted that any such leak would constitute an abuse of process, in the sense described by the High Court in Williams v Spautz [1992] HCA 34; 174 CLR 509 at 526-527 (Mason CJ, Dawson, Toohey and McHugh JJ):
[An abuse of process arises] when the purpose of bringing the proceedings is not to prosecute them to a conclusion but to use them as a means of obtaining some advantage for which they are not designed or some collateral advantage beyond what the law offers.
[Footnotes omitted]
160 Cricket Australia contended that if I was satisfied that the application was brought for such ulterior purpose, that constitutes an abuse of process and the application should be refused on that basis alone. Alternatively, Cricket Australia submitted that if I was not satisfied that Seven was so motivated, but nevertheless leaked the relevant materials, that was a consideration I should take into account in exercising my residual discretion to refuse the application for preliminary discovery.
161 Cricket Australia relied on the following evidence and circumstances in support of its allegation that Seven had leaked the First Martin Affidavit and relevant correspondence between solicitors.
162 Seven filed an Originating Application, accompanied by the First Martin Affidavit, on 30 November 2020 but failed to serve those documents on Cricket Australia until 7 December 2020. From that date until the date of the hearing, Cricket Australia gave Seven every opportunity to deny that they had leaked the First Martin Affidavit and the other adversarial correspondence between solicitors. At no point did Seven ever positively deny leaking the materials.
163 More specifically, on 2 December 2020, following media articles regarding the dispute in the Sydney Morning Herald newspaper, Cricket Australia's solicitors wrote to Seven's solicitors in the following terms (the 2 December 2020 Letter):
The Publications [in the media] refer to an application for preliminary discovery filed by your client in the Federal Court of Australia and supported by an affidavit of Mr Lewis Martin, your client's Melbourne managing director and head of sport (the Affidavit).
Our client has not been served with the application, nor the Affidavit. The effect of rule 2.32(4) of the Federal Court Rules 2011 (Cth) is that non-parties are not entitled as of right to inspect the Affidavit. That is, leave of the Court is required to inspect the Affidavit.
Surprisingly, however, the media has had access to the Affidavit. It appears to us, therefore, that your client may have provided a copy of the Affidavit, or parts of it, to the news media, along with correspondence from us to you, to which reference is also made.
Our client is most disturbed that the Affidavit appears to contain correspondence and records of discussions which were highly confidential. This material should not be distributed to the media. Our client is at a loss to understand why your client would disclose such information to third parties.
If it be the case that it is your client that has provided the Affidavit to the news media (and we are not aware of how it may otherwise have been in the news media's possession), your client's conduct would not only be scandalous and in breach of its duty of good faith to our client, but it would be appear to be plainly calculated to exert commercial pressure on our client in the most inappropriate of ways.
Our client demands that by 4:00 pm today, 2 December 2020, you explain to us:
1. whether your client, or any person acting on its behalf, provided the Affidavit, or parts of it, to the news media;
2. if yes to (1 ), who provided the Affidavit, or parts of it, to the news media; and
3. if yes to (1 ), to whom has the Affidavit, or parts of it, been provided, and when.
…
164 In a further comprehensive letter dated 8 December 2020, Cricket Australia's made detailed legal arguments and concluded by noting (the 8 December 2020 Letter):
…
Finally, it is concerning that we have not had a response to, or acknowledgment of, our letter to you dated 2 December 2020.
Our client genuinely hopes that the content of this letter is such as to encourage Seven to rethink its current approach, and move to repairing its relationship with CA, so that each can benefit from the exciting summer ahead…
165 There followed some 'back and forth' correspondence, in which Cricket Australia's solicitors sought answers to its earlier demands.
166 On 21 December 2020, Seven's solicitors addressed the issue as follows (within the context of an otherwise detailed letter concerning a number of other matters) (the 21 December 2020 Letter):
…
Service of the originating process
We do not understand the basis on which you complain that we served the originating process and supporting affidavit one week after filing. Our service letter of 7 December 2020 explained that we waited until a return date had been allocated before serving. Your client was served 8 days before the first Case Management Hearing, in compliance with the relevant court rules. You have not identified any advantage our client may have sought or obtained by not serving the material sooner.
Alleged abuse of process
You assert that the Preliminary Discovery Proceeding "may be" an abuse of process. Our client denies this serious allegation (if actually made). Your assertion appears to be premised in part on the correctness of your client's assertions about the matters dealt with above (to which we have just responded), and in part on the proposition that our client's objectives are commercial rather than legal (which we do not understand, and which is certainly not a basis for concluding that the proceeding is an abuse of process).
…
167 On 9 February 2021, Cricket Australia's solicitors responded by explaining that a number of matters regarding the leaking of the First Martin Affidavit were not explained by the 21 December 2020 Letter. The letter included the following:
…
As general observation, we note in particular the following matters raised in our 14 December 2020 letter which were not addressed in you 21 December 2020 letter:
1. Who leaked Mr Martin's 30 November 2020 affidavit to the media? The affidavit was obtained by the media before it was served on our client and, despite repeated requests, you have not disclosed who was responsible. Indeed, it was obtained by the media by the evening of 30 November 2020, the day it was affirmed. Absent third party data theft, the only plausible source of the leak seems to be your client.
2. If your client leaked or authorised the leak of Mr Martin's 30 November 2020 affidavit to the media, what objective did the leak serve your client if not a commercial objective? Given the nature of the headlines that followed the leak (eg, "Explosive documents claim cricket fixture changes 'driven by' India" via the Sydney Morning Herald on 1 December 2020; " 'Ridiculous': Tense transcripts show Seven, Cricket Australia's schedule battle" via the Sydney Morning Herald on 1 December 2020), and the contemporaneous leak of our letter dated 30 November 2020 concerning preliminary discovery (which was not leaked by our firm, and we are instructed was not leaked by our client), it is a reasonably open proposition that your client leaked the materials to the media in an attempt to publicly embarrass our client and thereby attempt to weaken our client's commercial position.
In light of our client's evidence being due to be filed by 12 February 2021, we request a response to this letter by no later than 4:30pm Thursday 11 February 2021 as our client may seek to rely on it.
[Footnotes omitted]
168 On 11 February 2021, Seven's solicitors responded by noting:
…
As to the balance of your letter, it seeks to draw irrelevant inferences from assumed or asserted facts that have not been established. We note your client's evidence is due on 12 February and our client will respond to that material, as appropriate, in its own evidence. Any suggestion that our client has engaged in any inappropriate conduct is, of course, completely rejected.
169 It is significant that at no point after 11 February 2021 did Seven or its solicitors deny leaking the First Martin Affidavit or the other contentious correspondence. To the contrary, Seven elided the issue and, instead of expressly denying the leak, sought to shift the onus onto Cricket Australia. Seven simply submitted that Cricket Australia should have made its allegation of leaking in plain terms and identified the evidence that supported the finding, if it believed that had occurred. However, as Senior Counsel for Cricket Australia submitted at the hearing, it was unnecessary, and arguably inappropriate, to advance that proposition until Seven had the opportunity to put on evidence that it had not leaked the relevant materials. Consistent with that position, Cricket Australia made the unequivocal allegation during the hearing that Seven had deliberately leaked confidential information to the media and urged that I make that finding.
170 Seven made three submissions in reply in relation to this issue:
(1) Whether or not the materials were leaked is not relevant to whether any of the three limbs in r 7.23 are satisfied. Accordingly, that tangential question is also not relevant to the Court's discretion, because that discretion is meant to be applied consistently with the purpose of the rule.
(2) There is no reason to infer that Seven was motivated by an ulterior purpose in bringing this application. To the contrary, Seven submitted that the application was pursued for a legitimate forensic purpose, as evidenced by the extensive pre-litigation correspondence between Seven's solicitors and Cricket Australia's solicitors. That correspondence included repeated requests for further information and documents, and relevantly foreshadowed the present application.
(3) It is unnecessary to embark on an inquiry as to whether Seven engaged in an abuse of process. If the application is an abuse of process, the appropriate remedy for that conduct is a permanent stay of the application and Cricket Australia has neither made nor particularised such a position.
171 In my view, although these matters are not irrelevant to the present application, Cricket Australia, in effect, sought to instigate a satellite inquiry in relation to questions that necessarily involve some degree of speculation and are ultimately not germane to the present application. I accept that there is evidence to suggest that the documents were leaked by Seven to the media, particularly given the absence of any blanket and categorical denial by Seven. However, in my view, even if that occurred, it does not provide a sufficient basis to refuse the relief sought under r 7.23.
172 It is not uncommon for parties to litigation, before and after a proceeding is commenced, to pursue a 'communications strategy' as one of several tactical tools designed to advance its commercial interests, whatever they may be. It is too simplistic to view such conduct, without more, as necessarily revealing an improper collateral purpose in bringing the proceeding, or in the present case, an application for preliminary discovery.
173 The curial process is rightly a public process, with limited exceptions when necessary to protect legitimate commercial (and other) interests that may be irrevocably harmed if certain confidential information were to be disclosed: Mobil Oil at 38 (Hayne JA), (Winneke P and Phillips JA agreeing at 35). There are also many instances where a party to a court proceeding may legitimately take steps to publicly protect its reputation or the goodwill of its business or other intellectual property rights. Such legitimate 'self-help' often arises in the context of passing-off cases, commonly brought under the rubric of a claim for misleading and deceptive conduct in contravention of s 18 of the ACL, or in misleading advertising claims, especially comparative advertising cases.
174 I mention these examples to illustrate the point that, as I have said, it is too simplistic to view steps taken by parties to advance their interests via public statements to the media as being, necessarily, an abuse of process. There are, of course, limits to the legitimate public self-protection, or self-advancement, of a party's cause via the mass media and ever burgeoning social media platforms. If the motivation of such media campaigns, conducted in parallel with an actual or threatened proceeding is found to be the actuating offensive strategy of a claimant, and the curial process is but a pawn in that strategy, such conduct may constitute an abuse of process.
175 It is not possible to delineate in an abstract way the boundaries between a party's legitimate interest in publicly defending or advancing its position, including its reputation, on the one hand, and the use of the Court's processes as a pretext to exert improper commercial or reputational pressure on the opposite party, on the other hand. It is sufficient for present purposes to say that I am not satisfied the conduct complained of by Cricket Australia crosses the line between the legitimate interest in public communication strategies and the abuse of the Court's processes in aide of a strategy designed to put improper pressure on the opposite party.
176 As ever, context matters. The notional line I have described above will more readily be crossed when the relationship between the parties is by its nature imbalanced in terms of the parties' respective economic or commercial positions. In the present case, there is no such apparent power imbalance between Seven and Cricket Australia. Further, and significantly, both parties are important participants, albeit in different capacities, in the sports and entertainment business and both operate in different but related ways in the broadcast of sporting spectacles. It is hardly surprising in this context that the mass media generally has an interest in the controversy that underlies any future claim that may be brought by Seven.
177 It goes without saying that merely because Seven and Cricket Australia are engaged in the sports and entertainment business that does not licence Seven to deploy a media strategy that is designed to exert improper commercial pressure, including by contriving to harm or vilify Cricket Australia's reputation. At one level, at least the public and media interest in the much loved game of cricket, from the traditional test format of the game to its various re-imagined forms, inevitably attracts interest from commentators and aficionados. Therefore, the grievances expressed by Seven concerning the quality and standard of the spectacle will inevitably attract the attention of the sports media, in which Seven is obviously a major participant, as is Cricket Australia (albeit, as I have said, in different capacities). Viewed in this context, I do not accept that even if Seven leaked the material about which Cricket Australia complains, that should of itself be found to constitute an abuse of process sufficient to refuse the present application.
178 Having regard to the above conclusion, it is unnecessary for me to find, one way or the other, whether Seven leaked the material. Indeed, in the absence of it being necessary to do so, I consider it undesirable to make such a finding for the purposes of the present application; as such finding could pre-empt a later claim or cross-claim by Cricket Australia in relation to its allegations that by leaking the material, Seven breached confidentiality obligations under the MRA. That complaint, if pressed by Cricket Australia, is better left for determination at the hearing of any later claim by Cricket Australia, or later cross-claim, should Seven bring its putative claim. In this regard, I am mindful of the caution expressed by the Full Court in Pfizer against allowing preliminary discovery applications to become 'mini-trials'.
179 The final matter Cricket Australia insisted was relevant to my discretion is the Expert Determination process in the MRA. Seven submitted that this was irrelevant to discretionary considerations on an application of this nature. Specifically, Seven reiterated its position that the Expert Determination mechanism is concerned with changes made by Cricket Australia in compliance with the contract pursuant to cll 6.3(b)(ii) and 6.3(d)(ii) of the MRA: see also cl 6.11(a) of the MRA.
180 For the reasons I have given above, it is at least reasonably arguable that the Expert Determination process does not preclude Seven from seeking relief from this Court, including potentially for an award of damages for breach of cl 6.9(b) of the MRA. It is unnecessary to decide the extent to which, if any, the Expert Determination process supplants other legal rights Seven may be able to enforce by relief available in this Court. Again, consistent with the desirability of avoiding the present application morphing into a 'mini-trial' on certain issues, this issue, along with others I have referred to above, should await determination in any proceeding that may be commenced, including any cross-claim by Cricket Australia.
181 In conclusion, in relation to the Court's residual discretion to refuse Seven's application, I find there is no warrant to exercise that discretion. For the above reasons, I do not accept Cricket Australia's contentions as to abuse of process. I am satisfied that Seven brought the present application for a legitimate forensic purpose, as mandated by the requirements in r 7.23(1).