FEDERAL COURT OF AUSTRALIA

Nine Network Australia Pty Limited v IceTV Pty Limited (No 2)
[2008] FCAFC 154

PRACTICE AND PROCEDURE – appeal allowed and proceedings remitted to primary judge – whether slip or error in Full Court’s orders – whether Full Court should “clarify” scope of remitter.

Federal Court Rules (Cth)O 35 r 7(3), (4)

Federal Court of Australia Act 1976 (Cth) s 23

Caboolture Park Shopping Centre Pty Ltd (in liquidation) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 cited

Owston Nominees No 2 Pty Ltd v Branir Pty Ltd (2003) 129 FCR 558 referred to

NINE NETWORK AUSTRALIA PTY LIMITED v ICETV PTY LIMITED AND ICETV HOLDINGS LIMITED

NSD 1757 OF 2007

BLACK CJ, LINDGREN & SACKVILLE JJ

20 AUGUST 2008

MELBOURNE

THE COURT ORDERS THAT:

1.                   Orders 4 and 5(b) made on 8 May 2008 be stayed as against the second respondent pending a determination by the primary judge, consistently with the reasons of the Full Court, of the question of the second respondent’s liability for infringement of the appellant’s copyright in the appellant’s Weekly Schedules.

2.                   The parties have liberty to apply to the Full Court after the primary judge has determined the question referred to in Order 1 above.

3.                   The respondents pay the appellant’s costs to date of:

(a)        the respondents’ motion brought by notice of motion filed on 19 June 2008; and

(b)        the appellant’s motion brought by notice of motion filed on 25 June 2008.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT (No 2)

BLACK CJ:

1                     The two motions now before the Full Court should be dealt with as proposed by Lindgren and Sackville JJ and for the reasons that they give.  I agree with the orders that their Honours propose.

2                     To my mind, the central point here is that there has never been any resolution of an issue that was live at the trial and (as now appears) is still live between the parties.  The issue is whether the second respondent, IceTV Holdings, which is the holding company of the first respondent IceTV, was liable for the infringement of the appellant’s copyright.

3                     The learned primary judge did not resolve that issue, no doubt because having concluded that Nine’s action should be dismissed, she considered it unnecessary to do so. 

4                     The issue thus unresolved did not emerge on the appeal.  It was not raised by any of Nine’s grounds of appeal nor was it the subject of a notice of contention filed on behalf of both respondents.  Brief reference was made to the issue in para 65 of the appellant’s written submissions and there was a brief response in the respondents’ written submissions; but neither of these paragraphs was referable to any ground of appeal or to any ground in the notice of contention and they were not the subject of any oral argument.

5                     It now having appeared that the respondents want the unresolved issue determined by the primary judge and that Nine is content for this to occur, that, plainly, ought to be the outcome and there is no reason why it should not be. 

6                     In these circumstances, the remitter of the issue of liability of IceTV Holdings, including its liability for the costs of the proceedings at first instance, should be seen as within Order 3, namely that the proceedings be remitted to the primary judge for hearing and determination consistently with the Full Court’s reasons for judgment, on the appeal. 

Associate:

Dated      20 August 2008

REASONS FOR JUDGMENT (No 2)

Lindgren & Sackville JJ:

Introduction

7                     On 8 May 2008, the Court made orders and published reasons in this appeal: Nine Network Australia Pty Limited v IceTV Pty Limited (2008) 76 IPR 31 (Full Court’s earlier reasons).  There are now before the Court two motions.  One is brought by the respondents.  (We will refer to the respondents compendiously, as we did in our earlier reasons for judgment, as Ice, and, when it is necessary to distinguish between them, will refer to the first respondent as IceTV and to the second respondent as IceTV Holdings).  The other motion is brought by the appellant (Nine).  The motions relate to an issue as to the liability of IceTV Holdings, which is the holding company of IceTV, for infringement of copyright and for Nine’s costs at first instance and on appeal.

8                     On 8 May 2008 the Court made the following orders:

1.         The appeal be allowed.

2.         Order 1 made by the primary Judge on 9 August 2007 be set aside.

3.         The proceedings be remitted to the primary Judge for hearing and            determination consistently with these reasons for judgment.

4.         The respondents pay the appellant’s costs of the appeal.

5.         In relation to the costs of the proceeding at first instance to date:

(a)        Order 2 made on 10 August 2007 be set aside; and

(b)        the respondents pay the appellant’s costs excluding:

(i)         its costs (if any) relating exclusively to the question of damages, which costs are reserved to the primary Judge; and

(ii)        its costs associated with the discontinuance of the cross-claim the subject of consent Order 1 made on 17 October 2006.

9                     When Lindgren J, on behalf of the Full Court, read out the Full Court’s orders and delivered its reasons, the orders consisted only of orders numbered 1 to 4 above.  In the circumstances referred to below, Order 5 was added later in the day by consent of the parties.

10                  Ice’s notice of motion (filed on 19 June 2008) seeks an order pursuant to O 35 r 7(3) of the Federal Court Rules (Cth) (the FCRs), alternatively pursuant to s 23 of the Federal Court of Australia Act (1976) (Cth) (the FCA Act), that the orders of 8 May 2008 be corrected, alternatively varied, by substituting the words “first respondent” for the word “respondents” in Orders 4 and 5(b).  It will be appreciated that Order 4 related to the costs of the appeal and formed part of the original orders of 8 May 2008, whereas Order 5(b), which was made by consent later on 8 May 2008, related to the costs at first instance.

11                  In the alternative, Ice seeks an order pursuant to O 35 r 7(4) of the FCRs that Orders 4 and 5(b) be stayed as against IceTV Holdings pending a finding that IceTV Holdings is jointly liable for infringement of copyright in the Weekly Schedules (we will use terms used in the Full Court’s earlier reasons without explanation and on the assumption that those reasons have been read).

12                  Nine’s notice of motion (filed on 25 June 2008) seeks an order pursuant to s 23 of the FCA Act that the Full Court clarify the scope of the remitter the subject of Order 3 made on 8 May 2008, or, in the alternative, that the question of the liability of IceTVHoldings for infringement of Nine’s copyright in the Weekly Schedules be remitted to the primary judge for hearing and determination consistently with the Full Court’s earlier reasons.

13                  In the alternative, Nine seeks an order pursuant to s 23 of the FCA Act that Orders 4 and 5(b) of 8 May 2008 be stayed pending the determination of whether IceTV Holdings is jointly liable for infringement of Nine’s copyright in the Weekly Schedules.  Although the stay sought by Nine does not distinguish between IceTV and IceTV Holdings, there appears to be no reason why there should be a stay of the costs orders as against IceTV, as Ice’s own notice of motion recognises (see [11] above).

14                  As appears below, we are of the view that the Court should order that Orders 4 and 5(b) made on 8 May 2008 be stayed as against IceTV Holdings pending the determination by the primary judge of whether IceTV Holdings is jointly liable for infringement of Nine’s copyright in the Weekly Schedules.

Facts

15                  In the primary proceeding, Nine’s application sought relief against the respondents (in the plural) without discriminating between them.  The amended statement of claim pleaded that IceTV Holdings was the holding company of IceTV and gave particulars.  The statement of claim pleaded certain activities of IceTV undertaken “with the sanction or approval of, or under the direction of, IceTV Holdings”.  It alleged that IceTV and IceTV Holdings threatened, and unless restrained would continue, to do the acts said to infringe; that the pleaded acts of IceTV were done in circumstances in which it was just for IceTV Holdings to be jointly liable for the commission of those acts; and further or alternatively that any order had the capacity to affect IceTV Holdings’s interests and accordingly it was a proper party to the proceeding.

16                  Ice (that is, the respondents) filed a single defence.  The defence admitted that IceTV Holdings was the holding company of IceTV, denied that IceTV’s activities were undertaken with the sanction or approval of, or under the direction of, IceTV Holdings, and denied that IceTV Holdings was a proper party.

17                  Before her Honour, Nine submitted that a prospectus in evidence made it clear that IceTV Holdings managed and directed IceTV’s business and had “the requisite degree of control of IceTV” and that it followed that “on the application of orthodox principles, IceTV Holdings [was] jointly liable for the infringing acts of IceTV”.  Ice, on the other hand, submitted that whichever of certain lines of authority was taken, “Ice Holdings Limited [sic] could not be regarded as a joint tortfeasor in the circumstances of the present case”.  In reply, Nine asserted that the evidence revealed that IceTV Holdings was formed for the purpose of acting as the parent company of IceTV;  that IceTV Holdings had a role in the management and direction of the business of IceTV;  and that the company was being floated to raise funds to enable IceTV to continue to carry out its core business of producing and distributing its IceGuide.

18                  In her reasons for judgment, the primary judge did not address the question whether IceTV Holdings was liable as a joint tortfeasor (except to note (at [6]) that it was claimed by Nine that IceTV Holdings was liable as a joint tortfeasor).

19                  By her final orders made on 9 August 2007, her Honour dismissed the application.

20                  Nine’s notice of appeal did not distinguish between the two respondents (in the particulars of its notice of appeal Nine refers to acts done by IceTV, but provides no definition of that term).

21                  Ice filed a single notice of appearance on the appeal, and a notice of contention, but not to the effect that her Honour’s decision against IceTV Holdings should be upheld on the ground that it was not liable as a joint tortfeasor.

22                  On the appeal, Nine’s submissions did not address the separate position of IceTV Holdings except for one paragraph.  Paragraph 65 stated:

Her Honour erred in failing to find that Ice Holdings [sic] was jointly liable for IceTV’s infringing acts.

No ground of appeal explicitly reflects this submission.  Ice responded in Ice’s appeal submissions at para 68:

At AS [appellant’s submissions] 65, Nine submits that the primary judge erred in failing to find that the second respondent, Ice Holdings [sic] was jointly liable for any acts of infringement by Ice.  Her Honour did not make any findings which would support any liability of Ice Holdings.

23                  The Full Court’s earlier reasons did not distinguish between the positions of IceTV and IceTV Holdings, or address para 65 of Nine’s appeal submissions or para 68 of Ice’s appeal submissions.  The subject matter of those submissions had not been pursued in the parties’ oral submissions.

24                  On 8 May 2008, when Lindgren J announced the Full Court’s orders and delivered its reasons, he noticed that while Order 4 was that Ice must pay Nine’s cost of the appeal, there was no order as to the costs at first instance.

25                  Shortly afterwards, his Honour drew this matter to the attention of the legal representatives of the parties who discussed it and agreed that Order 5 should be made in the form set out at [8] above. Accordingly, a new orders sheet incorporating Order 5 was substituted for the original.

26                  The Full Court’s orders were entered on 20 May 2008 on Ice’s application.

27                  Ice has applied for special leave to appeal to the High Court, not distinguishing in any respect between IceTV and IceTV Holdings.

28                  The proceeding has been before the primary judge pursuant to the remitter referred to in Order 3 of the Full Court’s orders set out at [8] above.  There was disagreement as to whether it was open to her Honour to determine the issue of the liability of IceTV Holdings.

Consideration

Ice’s motion

29                  We address here Ice’s motion in so far as it seeks orders having the effect of omitting IceTV Holdings from Orders 4 and 5(b).

30                  Nine’s primary submission is that it is not necessary for the Court to deal with Ice’s motion at this stage, and that there should simply be a stay pending determination by her Honour of the issue of IceTV Holdings’s liability.  For the reasons that appear below, we agree.

31                  It is now necessary to attend further to the course of events leading to the making of Orders 4 and 5(b) on 8 May 2008.

32                  When on 9 August 2007 the primary judge ordered that the application be dismissed, she stated (at [252]) that she would hear the parties on costs before making orders.  The Appeal Book did not include any orders made by her Honour as to costs.  It was therefore not apparent from the Appeal Book that any such order was made.  In fact, however, her Honour did make an order on 10 August 2007 that Nine pay the costs of Ice (that is, of both IceTV and IceTV Holdings).

33                  Nine’s notice of appeal did not seek an order setting aside her Honour’s order as to costs, and the parties’ submissions on the appeal did not address the question of the costs at trial.  This explains why the original form of the orders made on the appeal did not include an order as to the costs of the proceeding at first instance.

34                  The Court’s “slip rule” is found in O 35 r 7(3) of the FCRs and is as follows:

A clerical mistake in a judgment or order, or an error arising in a judgment or order from an accidental slip or omission, may at any time be corrected by the Court.

The slip rule does not avail Ice because there was no clerical mistake or error arising from an accidental slip or omission.  Conceivably, if the judgment had been handed down with the orders in their original form it might have been said that an error had been made, although even that is doubtful in view of the form of the notice of appeal.  But given that the problem was detected and that Order 5 was added by consent, there was no relevant “error”.  Putting the point at its highest, Ice may have been ill-advised to consent to the addition of Order 5.  But Ice did consent.

35                  If it is relevant, contrary to Ice’s written submissions on its motion, the Full Court did not intend to make the orders for costs at first instance against IceTV alone.  There was no suggestion in any of the written submissions or in oral argument that if the appeal succeeded, costs at first instance should not also be ordered against IceTV Holdings.  The appeal was conducted on the basis that the position was identical as between IceTV and IceTV Holdings.  Ice had the opportunity when the costs issue was raised by Lindgren J on 8 May 2008 to make the distinction they now seek to make, but did not do so.

36                  There is no basis for invoking the power conferred on the Court by s 23 of the FCA Act or, for that matter, the implied power of the Court: cf Owston Nominees No 2 Pty Ltd v Branir Pty Ltd (2003) 129 FCR 558 at [29] per Allsop J.  The orders sought by Ice are not necessary to preserve the integrity of the Court’s processes.  Ice consented to orders to resolve the costs issue and now wish to repent.  That is not what the power referred to is concerned with.

37                  Similarly, O 7 r 4 of the FCRs does not apply.  That rule refers to “the power of the Court to vary or terminate the operation of an order by a supplementary order”.  A supplementary order cannot vary or alter the original order: Caboolture Park Shopping Centre Pty Ltd (in liquidation) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 at 235 per curiam.  An order excluding IceTV Holdings from the scope of Orders 4 and 5(b) of 8 May 2008 would alter those orders fundamentally.

38                  It follows that Ice’s motion does not succeed in so far as it seeks orders that would now excise IceTV Holdings from the operation of Orders 4 and 5(b) of 8 May 2008.

39                  We think that the appropriate course is not to make orders finally disposing of Ice’s motion pending a determination by the primary judge of the question of IceTV Holdings’s liability for infringement as discussed below.

Nine’s motion

40                  Nine’s motion has been prompted by a dispute between the parties on the remitter as to whether it included the issue as to whether IceTV Holdings is jointly liable for infringement with IceTV.  The terms of the remitter are found in Order 3 which was set out at [8] above.  The remitter was of “the proceedings”.  Literally, this is wide enough to include the issue of IceTV Holdings’s liability and the making of findings of fact relevant to that question.

41                  It is important to appreciate that the question of IceTV Holdings’s separate liability was not specifically raised on the appeal.  Ice filed a notice of contention, but did not seek to uphold the dismissal of the proceeding against IceTV Holdings on the ground that even if IceTV was liable, IceTV Holdings was not.  Subject to one qualification, the Full Court had no knowledge that any of this was in dispute.

42                  The qualification is to be found in para 65 of Nine’s submissions and para 68 of Ice’s submissions on the appeal, both set out at [22] above.  The point was not further developed.  In the absence of a notice of contention raising the point or oral argument on it, it is hardly surprising that the Full Court’s judgment did not separately consider the position of IceTV Holdings.

43                  There is a good deal to be said for not reopening the Full Court’s orders of 8 May 2008.  The Full Court’s earlier reasons proceed on the basis that IceTV and IceTV Holdings stood or fell together.

44                  On this approach, if the primary judge now proceeded to address the question of the separate liability of IceTV Holdings (everyone accepts that IceTV’s liability is established by the Full Court’s earlier reasons) she would be acting inconsistently with the terms of the Full Court’s judgment.  Ice had its chance to raise these questions on appeal but did not do so except in the oblique and unsatisfactory reference in para 68 of their written submissions, unsupported by any notice of contention.

45                  However, Nine does not dispute that Ice should have the chance to argue the question of IceTV Holdings’s separate liability before the primary judge.  Nor does it object to a stay of both Orders 4 and 5(b) pending the resolution of this issue by her Honour.  In our view this is very sensible and is what should happen, subject to the stay being as to IceTV Holdings alone.  We should indicate, however, that we can see no basis at all for altering Order 4 of 8 May 2008.

46                  By these reasons, and without the necessity of a clarifying order, we indicate that in our view Order 3 of 8 May 2008 includes a remitter of the issue of the liability of IceTV Holdings, including its liability for the costs of the proceeding at first instance.

Conclusion

47                  For the reasons given above, the appropriate order is that Orders 4 and 5(b) made on 8 May 2008 be stayed as against IceTV Holdings pending a determination by the primary judge, consistently with the Full Court’s earlier reasons, of the question whether IceTV Holdings is liable for infringement of Nine’s copyright in its Weekly Schedules.

48                  Once her Honour has determined that question and associated questions of the liability of IceTV Holdings for costs at first instance, the parties should be at liberty to apply to the Full Court for consequential orders.

49                  Ice should pay Nine’s costs of the two motions.

Associate:

Dated:  20 August 2008