Consent to the conduct complained of?
57 A factual issue at first instance was whether, when Mr Tsao (formerly the Deputy Chief Executive Officer of ATV) visited Australia in February 1992, he authorised Yau's to engage in the conduct of which ATV/ATVE complained in its letter of 7 April 1999. Mr and Mrs Yau gave evidence of consent, which was denied by Mr Tsao. The primary judge accepted Mr Tsao's evidence in this respect.
58 Although this is a finding on an issue of credibility, Yau's contends that the primary judge misdirected himself in making his factual finding on this issue, hence there should be a new trial.
59 The misdirection is said to arise in this way: the primary judge found, on the basis of admissions contained in Yau's pleadings, that Yau's had engaged in the conduct complained of from 1992. Declarations 1-6 of the orders made on 30 June 2000 reflect that finding, which was made in the second phase of the proceedings. Yet in the first phase of the proceedings the primary judge said:
"44. Indeed, I am not at all convinced that the practices in question had been carried on for the number of years which the Yaus now claim or concede. From the point of view of relief, it no doubt suits the applicants to accept those concessions. However, when I look at the objective sequence of events, the hypothesis is open that they were instituted by Mr Yau in June 1998 as a result of his great concern as to the relationship between the applicants and Chinatown Entertainment during 1998, followed by the change of control of ATV and the announcement of much reduced supply of ATV-produced material in June of that year."
In par 45 his Honour found that the first objective evidence of the practice was in June 1998.
60 Yau's contention is encapsulated in ground 8 of its Notice of Appeal, which is as follows:
"8. The learned trial judge misdirected himself in his findings of fact, by propounding the hypothesis which he describes in paragraphs 44 and 45 of his Reasons for Judgment given on 10 March 2000 when:
(a) that hypothesis was not propounded on the respondents' behalf either in cross-examination, in argument or otherwise;
(b) that hypotheses [sic] was not put in cross-examination to the principals of the appellant, contrary to the rule in Browne v Dunn;
(c) that hypothesis, had it been put forward in the course of the trial, was capable of disproof, including disproof through the evidence of the appellants' sub-licensees who gave affidavit evidence in the proceedings; and
(d) that hypothesis was inconsistent with the factual basis upon which his Honour held on 22 June 2000 that the respondents were entitled to claim damages from the appellant."
61 Mr Epstein SC accepted that if he were to succeed on this ground, there would have to be a new trial. The appellant's supplementary written submissions included the following:
"4. Ground of appeal No 8, in the event it is upheld (and other grounds of appeal fail), would properly give rise to an order for a new trial."
62 The primary judge was not bound by any assertions in Yau's pleadings that the practices in question had been carried on by it since 1992. The mere fact that the "hypothesis" referred to in par 44 of the reasons for judgment is inconsistent with the declarations which were made on the basis of admissions contained in Yau's pleadings is insufficient of itself to establish that the primary judge misdirected himself in any relevant respect.
63 The real question is whether the primary judge used the "hypothesis" as a basis for preferring the evidence of Mr Tsao to that of Mr and Mrs Yau, and if so, whether use of the "hypothesis" in that way involved a denial of natural justice to Yau's.
64 It is important that findings of the type under consideration should be made in the context of the trial as it was argued. Otherwise there may be a denial of natural justice. However, as the Full Court of the Supreme Court of Western Australia observed in Klahn v Audeh [2001] WASCA 336 at [18], judges are both entitled and bound to think for themselves and to determine cases according to the evidence in front of them. That observation is, of course, subject to natural justice considerations.
65 The onus lay on Yau's to establish that conduct which would otherwise be wrongful was undertaken with the consent of ATV/ATVE. The case which Yau's sought to make in that respect was that the conduct complained of began in 1992 and continued thereafter. Whether that was so or not was a matter peculiarly within the knowledge of Yau's. The conduct was said not to be wrongful because it had been authorised by Mr Tsao on his visit to Australia in 1992. ATV, on the other hand, adduced evidence that the conduct of which it complained did not come to its attention until late 1998 or early 1999 and there was some inconclusive evidence that when Mr Ng visited ATV stores in August 1998, he did not observe any ATV logos on videos that were not made or supplied by ATVE to Yau's.
66 If it were the fact that the conduct in question only began in 1998, a contention that it had been authorised by a conversation with Mr Tsao back in 1992 (he having been dismissed by ATV in September 1992) would be likely to have been dismissed as fanciful. For all practical purposes, the onus lay on Yau's to persuade the primary judge that the conduct complained of began in 1992, and ATV's alleged consent to that conduct occurred in 1992. The parties were at issue on those matters. Yau's did not succeed in persuading the primary judge of either of those matters. The primary judge found against Yau's on the issue of authorisation by Mr Tsao. The primary judge accepted Mr Tsao as a witness of truth for reasons which he gave, apart from the "hypothesis" referred to in par 44 of the reasons for judgment given in relation to the first phase.
67 I am not persuaded that this "hypothesis" was part of the process of reasoning by which the primary judge preferred the evidence of Mr Tsao to that of Mr and Mrs Yau. Other and cogent reasons are given for coming to that conclusion before any mention of the "hypothesis". The "hypothesis" is expressed as something which is "open", rather than as something which has been established.
68 It is less clear whether the primary judge found against Yau's on the authorisation point partly because of a finding that the conduct in question did not commence until June 1998. The first objective evidence of the practice was found to be in June 1998 (first judgment [45]; second judgment [16]). In the second judgment at [17] the primary judge appears to reject a contention that in his first judgment he made a positive finding that the conduct in question did not commence until 1998. That is consistent with the language of the first judgment which recorded that the first objective evidence of the practice was in June 1998, and the primary judge "was not at all convinced" that the practices in question had been carried on since 1992.
69 Given the onus which Yau's bore of establishing that the practices in question had been carried on with the consent of ATV/ATVE, a finding that the primary judge was "not at all convinced" that the practices had been carried on for the number of years for which Yau's contend did not involve any breach of the rules of natural justice. Rather, the evidence adduced by Yau's did not make out the case which it sought to establish. If, on the evidence before him, the primary judge was not persuaded as to this matter, there is no reason why he should not say so.
70 Yau's contends that the primary judge misdirected himself in a second respect. In par 43 of the reasons for judgment his Honour said:
"If Mr Yau had received the authorisation that he now claims, there is no reason why that could not have been referred to, albeit briefly in the letter from the solicitors for Yau's Entertainment replying to the letter of 7 April 1999 from Gilbert and Tobin."
The terms of Yau's solicitor's letter are set forth in par 39 of his Honour's reasons. The first paragraph of that letter is as follows:
"We are unable to be more specific at this stage, however, [we] can indicate that approval has been obtained from your client to use the ATV logo.
71 I do not accept Yau's submission that in making the observation in par 43 quoted above, the primary judge overlooked the terms of the letter which he had quoted only four paragraphs earlier. Rather, the primary judge was making the point that if it was Yau's case that consent had been given by Mr Tsao on his visit to Australia in 1992, a brief reference to that fact could have been made in the letter in lieu of the entirely non specific assertion which was made.
72 In any event, the issue of consent would only be relevant to the contractual claims if the implied terms for which ATV contends were established. The supplementary written submissions make it reasonably clear that if this issue is found in Yau's favour, then the consent issue does not arise.
73 Declarations 1-6 of the orders made on 30 June 2000 are premised on the assumption that ATV/ATVE did not authorise the conduct the subject of those declarations. As things transpired the conduct the subject of those declarations was not carried forward into the damages claim, which were ultimately claimed on a basis which did not include that conduct.
74 The issue of consent would have been relevant to whether the conduct the subject of the declarations was wrongful. Although the Notice of Appeal seeks the setting aside of the "orders" made by the primary judge on 30 June 2000 and 29 June 2001, no submissions were put on the hearing of the appeal in relation to those declarations. Yau's failed to prove that the conduct the subject of the declarations was undertaken with the consent of ATV/ATVE, and the finding of the primary judge on this issue is not infected by appellable error. No other cause has been shown for setting the declarations aside, even though, at least in the events which have happened, the declarations appear to lack utility: cf Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Limited (1999-2000) 169 ALR 616 at 629 [52] per Gaudron J.