Showtime Touring Group Pty Ltd v Mosley Touring Inc

The Amended Statement of Claim 10The following paragraphs of the Amended Statement of Claim are relevant to the application for leave: "40 At all material times the second defendant was a director/shareholder of the first defendant and its alter ego or otherwise the guiding mind behind the first defendant. 41 Between May of 2008 and July of 2008 the first defendant engaged in certain conduct within the meaning of the Trade Practices Act, namely:- (i) On or about April of 2008 the first defendant represented to the plaintiff that it would provide the services of the second defendant as a performance artist to perform at the following venues in Australia on the following dates:- Vodafone Arena, Melbourne, July 9 2008; Challenge Stadium, Perth, July 11 2008; Entertainment Centre, Adelaide, July 12 2008; Vector Arena, Auckland, July 18 2008; Entertainment Centre, Sydney, July 19 2008. Particulars: Conference calls between Isiosaia Kailahi and Rick Frazier. (ii) The first defendant forwarded to the plaintiff via email on 23 May 2008 a draft contract nominating the five venues referred to in the preceding paragraph and a consideration of $1million. Particulars: Agreement from the first defendant addressed to the plaintiff dated 12.05.2008. (iii)That the tour dates originally nominated would have to be changed as set out in the Contract dated 12 May 2008. Particulars: Conference call 11:30am 27 June 2008 between Isiosaia Kailahi, Rick Frazier and Monique Mosely (the second defendant's wife). (iv) On or about 7 July 2008 the first defendant sent audio drops being messages from the second defendant that he was coming to Australia to tour being an audio transmission to be used for publicity and promotional purposes by the plaintiff. Particulars: Audio drops received 7 July 2008 with the second defendant stating that he was coming to Australia to tour. (iv)On or about 3 July 2008 the first defendant represented that it would accept 'Option 2' being a series of August dates for the second defendant to perform in Australia and New Zealand including an extra show in Brisbane being the 16th, 17th, 20th, 21st, 22nd & 23rd August 2008. Particulars: Email from the plaintiff to Rick Frazier dated 3 July 2008 at 9:04am and response from Rick Frazier on 3 July 2008 at 2:08am headed 'Itinerary for Review'. (vi) On or about 8 July 2008 at 2:17am (United States time) the first defendant represented in writing that the second defendant would be touring Australia via a press release issued by the first defendant and forwarded to the plaintiff for release to the public. Particulars: Press Release sent from Monique Mosely headed 'Multi Platinum Artist Timbaland takes his beat Down Under'. The said press release represented, inter alia, that:- (a) Timbaland accompanied by fellow Mosely Group artist, Keri Hllson, who will perform in Sydney on 15 August 2011 and continue through Australia with an additional date in New Zealand; (b) All pre-purchase tickets are valid for new dates. If you have purchased tickets and are unable to attend the new dates and require refund please contact your place of purchase. ... 45 The representations made by the first defendant were misleading or deceptive or likely to have misled or deceived the plaintiff because:- (i) the first defendant had in fact been negotiating with promoters in Poland and Finland to perform at the Poland Coca Cola Music Festival on 22 August 2008 and in Finland on 23 August 2008 and promoted same on the Internet, namely at sites one of which was identified as http://www.last.fm\event\610917 with a Finish promotions company known as 'RHS Promotions' to perform in Krakow, Poland on August 22 2008 and in Finland on August 23 2008. ... 49 In addition or in the alternative, in respect of each and every one of the representations pleaded herein, the plaintiff pleads that the second defendant being the alter ego, guiding mind and an officer of the first defendant gave instructions, directions and information to Rick Frazier and Monique Mosely together with the lawyers representing the first defendant to make the representations to the plaintiff upon which it placed reliance. Further the second defendant gave such directions, instructions and information to persons and the first defendant to enter into negotiations and conclude an agreement with RHS Promotions to procure the services of the second defendant and contract with the first defendant to perform at the Coke Live Festival in Poland and Finland contrary to the express representations that had been made by the first defendant to the plaintiff as pleaded herein. 50 The plaintiff pleads that the second defendant has, contrary to s 75B of the Trade Practices Act 1974 (C'th), engaged in conduct to intentionally aid, abet, counsel or procure the contraventions of the Trade Practices Act 1974 (C'th), namely section 52, as pleaded against the first defendant and further pleads that by providing the audio drops and additional instructions to change the dates from July to August of 2008 knowingly, aided, abetted, counselled or procured the contravention as pleaded against the first defendant. 51 In the alternative, the plaintiff pleads that by his conduct the second defendant, by providing information, directions and instructions to the first defendant, its lawyers and agents, namely Rick Frazier and Monique Mosely, has knowingly been involved, either directly or indirectly, and concerned or otherwise a party to the contravention of the Trade Practices Act as pleaded against the first defendant and is liable to the plaintiff accordingly. 52 The plaintiff further pleads that all of the representations pleaded in this Amended Statement of Claim constituting 'conduct' for the purposes of the Trade Practices Act 1974 (C'th) were representations being communications that were received by the plaintiff in New South Wales in the Commonwealth of Australia."

The submissions of the parties 11Showtime submitted that the Amended Statement of Claim pleads facts which demonstrate that Mr Mosley knew of the representations and that they were misleading or deceptive. It referred to par 41 of the Amended Statement of Claim which pleads that the representations complained of were made by way of an audio message by Mr Mosley stating that he was coming to Australia to perform. It also referred to the fact that par [49] of the Amended Statement of Claim pleads that Mr Mosley was the alter ego, guiding mind and an officer of Touring, and that he instructed the negotiations for the Polish and Finnish performances to take place. 12In relation to the second issue raised by the primary judge, counsel for Showtime submitted that as representations containing audio messages by Mr Mosley were pleaded to have been disseminated in Australia, there was conduct by Mr Mosley in Australia to found the necessary territorial nexus for the accessorial liability claim. However, he properly conceded that the instructions given by Mr Mosley to disseminate the audio drops were not pleaded to have been made in Australia. He acknowledged his case was that Mr Mosley made the representations in the audio drops in Australia and in that way he participated in the alleged misleading or deceptive conduct of Touring. He accepted the question was whether that claim was in fact pleaded. 13Alternatively, it was submitted that Bray v F Hoffman-La Roche Ltd [2002] FCA 243; (2002) 118 FCR 1, the decision relied upon by the primary judge in concluding that, for an accessory to be liable under s 75B of the Act it was necessary to demonstrate that the accessory's participation occurred in Australia, was wrongly decided. It was submitted that provided the misleading or deceptive conduct occurred in Australia, an accessory could be liable regardless of where his or her conduct took place. 14So far as the costs question was concerned, Showtime pointed to the fact that no such application was made to Hislop J for such an order. It seemed to be submitted that UCPR r 42.7(2) did not empower the primary judge to order that costs be paid forthwith and, to the extent there was power, his Honour erred in failing to consider s 56 to s 58 of the Civil Procedure Act 2005. Showtime submitted that the making of the order in circumstances where it was not sought before Hislop J was contrary to the mandatory requirements contained in those provisions. 15Touring and Mr Mosley contended that leave should not be granted. They submitted no knowledge of the falsity of the representations was pleaded, nor were material facts pleaded which could support such an inference. So far as the question of conduct was concerned, they submitted that the primary judge was correct in stating there was no allegation of any conduct by Mr Mosley in Australia. They submitted that it was irrelevant that such conduct may be able to be pleaded and said that the Court should not speculate on this issue. 16Touring and Mr Mosley also submitted that the primary judge was correct in following Bray v F Hoffman-La Roche Ltd supra. It was pointed out that it had been followed by Hely J in the Federal Court of Australia in Australian Wool Innovation Ltd v Newkirk [2005] FCA 290; (2005) ATPR 42-053, by Bell J in Cauvin v Philip Morris Ltd [2005] NSWSC 640 and was approved by the Full Court of the Federal Court in Worldplay Services Pty Ltd v Australian Competition and Consumer Commission [2005] FCAFC 70; (2005) 143 FCR 345. 17In relation to the question of costs, Touring and Mr Mosley submitted that leave should not be granted as no error of discretion was shown and no question of general principle arose.

The pleading issue 18Showtime accepted correctly that to establish a cause of action for damages in reliance on s 75B of the Act, it was necessary to plead material facts alleged to give rise to the primary cause of action (in this case misleading or deceptive conduct in contravention of s 52 of the Act), and further, material facts demonstrating that the accessory had knowledge of the conduct and that it was misleading or deceptive: Yorke v Lucas supra. 19In the present case the Amended Statement of Claim, although hardly elegant, pleaded such material facts. I have set out the relevant portions of the Amended Statement of Claim above. Primary conduct is pleaded in par [41] of the Amended Statement of Claim and the facts said to make that conduct misleading or deceptive are pleaded in par [45]. Paragraph [49] of the Amended Statement of Claim pleads that Mr Mosley gave instructions to make the representations pleaded in par [41]. It can thus be inferred that he knew of the representations. Further, par [49] also pleads that at the same time he gave instructions to carry out the negotiations for his appearances in Poland and Finland. That is material from which it can be inferred that Mr Mosley knew the representations as to the proposed appearances in Australia were misleading or deceptive. 20In these circumstances, subject to the need for conduct in Australia, it seems to me that the material facts necessary to give rise to a claim against Mr Mosley in reliance on s 75B of the Act, have been pleaded. 21I do not accept the submission of Showtime that it is unnecessary to plead that some conduct of the accessory occurred in Australia. Bray v F Hoffman-La Roche Ltd supra, concerned a claim under s 75B of the Act for knowing participation in a contravention of s 45 of the Act. Merkel J held that it was necessary that at least some of the conduct said to give rise to accessorial liability occur in Australia. He stated the position in the following terms: "[50] Whether a statutory provision has extra-territorial operation is a question of construction of the Act as a whole. With the TPA, as in Meyer Heine, it is not necessary to rely on any canon of construction in respect of s 5 as s 5(1) has provided for extra-territorial operation of the provisions of Pts IV, IVA, V (other than Div 1AA), VB subject to certain conditions. As with s 9(b) of the Australian Industries Preservation Act, s 5 of the TPA is to be accounted for only on the basis that the Act as a whole, including s 5 itself, has been framed on the assumption that when conduct is made a contravention of the Act it is only conduct in Australia that is meant unless the conditions set out in s 5 apply. ... [54] Part VI is not a Part of the TPA to which the extended application of the TPA provided for in s 5(1) applies. Although the Court may make orders under ss 80 and 82 against persons contravening s 45, and against persons involved in the contravention as set out in s 75B, ss 45 and 75B are not to be regarded as equivalent types' of provision. As was explained by Fisher J in Yorke v Ross Lucas Pty Ltd (1983) 68 FLR 268 at 270; 46 ALR 319 at 321: '...neither s 75B nor s 82 deem the accessor to have committed a contravention, but rather proceed on the basis that in one or other of the specified ways he was involved' in the commission of the primary offence. Section 75B it can be said is procedural in the sense that it merely purports to indicate the various ways in which one person can be involved in the commission of a contravention by another to such an extent as to render it just that he contribute to recoupment of the loss suffered by others in consequence of the contravention.' [55] Thus, a person involved in a contravention, although liable under Pt VI to pay damages (s 82) or to an injunction (s 80) does not contravene the Act. In those circumstances, the extended operation of the Act under s 5(1) only relates to persons who have contravened or are bound by a provision of the Parts referred to in s 5(1). Accordingly, as the extended application of the Act under s 5 does not apply to Pt VI, for the reasons set out above, s 75B is to be construed as only being applicable to conduct in Australia. In Australia Meat Holdings at 355 Wilcox J arrived at a similar conclusion." 22That decision has been followed by the Federal Court and implicitly approved by the Full Court of that Court: Australian Wool Innovation Ltd v Newkirk supra at [54]; Worldplay Services Pty Ltd v Australian Competition and Consumer Commission supra at [17]-[18]. It has also been followed in this Court: Cauvin v Philip Morris Ltd supra at [33]-[34]. In my respectful opinion these cases were correctly decided and their reasoning is compelling. 23It follows that the pleading, to demonstrate a good cause of action, must plead material facts which demonstrate that Mr Mosley participated in the misleading or deceptive conduct in Australia. 24In my opinion, the Amended Statement of Claim does not plead such facts. The representations in par [41] were all said to have been made by Touring. The participation of Mr Mosley was limited to the giving of instructions and directions to the other officers of Touring. There are no facts pleaded to suggest that this conduct took place in Australia. 25It may well be that Showtime could plead the case that Mr Mosley participated in the alleged misleading or deceptive conduct by making representations in Australia through the medium of the audio drops. However, such a claim was not pleaded. Although par [50] of the Amended Statement of Claim pleads provision of the audio drops, it does not plead that the making of the representations in those audio drops constituted participation by Mr Mosley in the alleged conduct of Touring. 26It follows that the primary judge was correct in his conclusion that an arguable cause of action was not pleaded against Mr Mosley. However, in the circumstances, as the respondents' counsel effectively conceded was inevitable, leave should be given to Showtime to plead its claim against Mr Mosley in such manner as it may be advised. 27I would grant leave to appeal against the orders of the primary judge so as to make it clear that Showtime has leave to further amend the Amended Statement of Claim so as to bring a properly constituted cause of action against Mr Mosley, if it is able to do so.

The costs issue 28UCPR r 42.7 provides as follows: "42.7(1) Unless the court orders otherwise, the costs of any application or other step in any proceedings, including: (a) costs that are reserved, and (b) costs in respect of any such application or step in respect of which no order as to costs is made, are to be paid and otherwise dealt with in the same way as the general costs of the proceedings. (2) Unless the court orders otherwise, costs referred to in subrule(1) do not become payable until the conclusion of the proceedings." 29The power in r 42.7(2) to make an order contrary to r 42.7(1) is vested in the Court. There is nothing in r 42.7(2) to suggest that the power can only be exercised by the judge who made the original court order, much less that the order must be made at the same time as the original order for costs. 30There is good reason for a contrary interpretation as this case illustrates. The original order was made in September 2010 over two years ago. It may have been appropriate not to make an order under r 42.7(2) at the time of the original costs order. However, such an order is amply justified by the fact that at the time the primary judge made his orders, the litigation had not significantly progressed and the respondents were being kept out of their entitlement to costs. Further, the power of the Court should not be frustrated by the possibility that the judge who originally made the order might be unavailable to hear the application. 31Nor did the judge err in failing to consider the provisions of s 56 to s 58 of the Civil Procedure Act. To the contrary, a lengthy delay in an entitlement to enforce an unchallenged costs order does nothing to facilitate the just, quick and cheap resolution of proceedings.

Orders 32In the circumstances, I make the following orders: 1 Grant the applicant leave to appeal. 2 Direct the applicant/appellant to file a Notice of Appeal in terms of the Draft Notice of Appeal dated 12 December 2011 within 7 days of the date hereof. 3 Vary Order 1 of the orders made by the primary judge on 28 November 2011 by deleting subpars (b) and (c) thereof. 4 Make the following order as Order 1A: "Paragraphs [49]-[52] of the Amended Statement of Claim filed on 29 March 2011 be struck out but leave be granted to the applicant/appellant to file an amended claim against the second defendant." 5 Appeal otherwise dismissed. 6 Order the applicant/appellant pay the respondents' costs of the application for leave to appeal and the appeal. 33McCOLL JA: I agree with Bathurst CJ's reasons and the orders his Honour proposes. 34BERGIN CJ in Eq: I agree with Bathurst CJ.

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: 15 March 2013