FEDERAL COURT OF AUSTRALIA

Seven Network Limited v News Limited (No 4) [2005] FCA 244

PRACTICE and PROCEDURE – application for summary dismissal – whether the nexus between contraventions of the Trade Practices Act 1974 (Cth) and the ‘structural relief’ sought must be spelt out – basis for the structural relief sought tolerably clear – Trade Practices Act 1974 (Cth) ss 50, 80(1), (5), 81(1) – Federal Court Rules (Cth)O 20 r 2

PRACTICE and PROCEDURE – pleadings – striking out – exclusive dealing by entering into an agreement containing an exclusionary provision – particulars contain allegations of object and purpose – whether embarrassing and vexatious – Trade Practices Act 1974 (Cth) ss 4(1), 45(2)(b)(ii), 47(1) – Federal Court Rules (Cth) O 11 r 16

Trade Practices Act 1974 (Cth) ss 4, 4L, 45, 46, 47, 50, 80, 81, Pt XIC

Federal Court Rules (Cth) O 11 r 16, O 20 r 2

Dey v Victorian Railways Commissioners (1949) 78 CLR 62 followed

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 followed

Fancourt v Mercantile Credits Ltd (1983) 154 CLR 887 followed

Australian Building Industries Pty Ltd v Stramit Corporation Ltd [1997] FCA 1318 cited

Lonrho Plc v Fayed (No 2) [1992] 1 WLR 1 cited

Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] FCA 918; 34 ACSR 672 cited

Trade Practices Commission v Australia Meat Holdings Pty Ltd [1988] FCA 338; ATPR 40-876 cited

Australia Meat Holdings Pty Ltd v Trade Practices Commission [1989] FCA 25; ATPR 40-932 cited

Rieson v SST Consulting Services Pty Ltd [2005] FCAFC 6 cited

Tradestock Pty Ltd v TNT (Management) Pty Ltd (No 2) (1978) 32 FLR 420 cited

Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 cited

SEVEN NETWORK LIMITED & ANOR v NEWS LIMITED & ORS

NSD 1223 of 2002

SACKVILLE J

SYDNEY

16 MARCH 2005

THE COURT ORDERS THAT:

The applicants bring in short minutes of order giving effect to this judgment.

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

REASONS FOR JUDGMENT

the motion

1                     These proceedings arise out of bids for the pay television rights to Australian Football League (‘AFL’) and National Rugby League (‘NRL’) fixtures.  The applicants, Seven Network Ltd (‘Seven Network’) and its subsidiary C7 Pty Ltd (‘C7’), seek relief by reason of what are said to have been contraventions of Part IV of the Trade Practices Act 1974 (‘TP Act’) by the respondents in connection with bidding for the pay television rights.  The respondents include several very substantial corporations with interests in the media or in telecommunications.

2                     The third, fifth and sixth respondents (‘Telstra’) have filed an amended notice of motion seeking orders pursuant to Federal Court Rules (‘FCR’), O 20 r 2 summarily dismissing certain paragraphs of the Third Further Amended Application (the ‘Amended Application’) filed by the applicants.  The amended motion also seeks an order pursuant to FCR, O 11 r 16, that so much of par 71 of the Fourth Further Amended Statement of Claim (‘FFASC’) as seeks to put in issue any question of purpose, objective or state of mind of Telstra Multimedia Pty Ltd and/or Foxtel be struck out, in particular sub-pars (e)(1) and (e)(2) of the particulars to par 71.

the issues

the structural relief issue

3                     The first issue primarily concerns what is described in the Amended Application as the ‘structural relief’ claimed by the applicants.  That relief includes divestiture orders and injunctions.

4                     Section 81(1) of the TP Act provides that the Court may, if it finds that a person has contravened s 50 (prohibiting acquisitions which substantially lessen competition), direct the disposal of the assets acquired in contravention of that section.  Section 80(1) of the TP Act empowers the Court, if satisfied (inter alia) that a person has engaged in conduct that contravenes a provision of Part IV of the TP Act, to grant an injunction on such terms as it thinks appropriate.  The power extends to granting an injunction requiring a person to do an act or thing: s 80(5).

5                     The paragraphs in the Amended Application challenged by Telstra are the following:

(a)        Paragraphs 19, 21 and 22

6                     These paragraphs seek various divestiture orders in relation to the ownership of:

(i)                  Foxtel, a business carried on in partnership by the second respondent (‘Sky Cable’) and the third respondent (‘Telstra Media’); and

(ii)                the ninth respondent (‘Fox Sports’), the shares in which are owned equally by the first respondent (‘News’) and the twenty-first respondent (‘PBL Pay TV’), a wholly owned subsidiary of the seventh respondent (‘PBL’).

The issued shares in Sky Cable are owned by Pay TV Management Pty Ltd, the shares in which are owned equally by PBL Pay TV and the twentieth respondent (‘News Pay TV’), a subsidiary of News’ parent company.

(b)        Paragraphs 7(m) and 20

7                     Paragraph 7(m) of the Amended Application seeks a declaration that the Broadband Co-operation Agreement dated 14 April 1997 (‘BCA’), to which Foxtel, by its agent the fourth respondent (‘Foxtel Management’), and the sixth respondent (‘Telstra Multimedia’) are parties, is void ab inito.  Paragraph 20(a) seeks an order that Foxtel Management and Telstra Multimedia terminate the BCA.  (Paragraph 20(b) is not pressed.) 

(c)        Paragraphs 17, 23 and 24

8                     Paragraph 17 seeks an order that Foxtel and Telstra Multimedia provide services to enable Seven Network to supply television channels to subscribers on terms incorporating conditions set out in Annexure C to the Amended Application.  Paragraphs 23 and 24 seek orders that Foxtel and Telstra treat equally all persons who wish to conduct a subscription television business using the Foxtel Cable network (owned by Telstra Multimedia) and who wish to supply to Foxtel content for broadcast on the Foxtel (pay television) Service.

(d)        Paragraphs 15 and 25

9                     Paragraph 15 of the Amended Application seeks an order restraining any person from bidding for or acquiring, together with any other person, any of the free-to-air television rights the subject of the News/AFL Licence entered into between News and the eleventh respondent (‘AFL’) on 19 December 2000.  Paragraph 25 seeks an order, inter alia, restraining Foxtel and Telstra from bidding for or acquiring any programming or broadcast rights as part of a subscription television service, other than by licensing a pay television channel from an independent third party.

10                  Telstra’s essential complaint about these paragraphs is that the applicants have failed to articulate the basis on which they contend that the Court ought to grant the relief sought.  Mr Archibald QC, who appeared with Mr Castle for Telstra, submitted that the FFASC had not made clear the nexus, if any, between the ‘structural relief’ sought in the Amended Application and the contraventions of Part IV of the TP Act alleged against the various respondents.  He said that the evidence filed by the applicants had not clarified the position.  Accordingly, Telstra was not able to discern the case made against it.

11                  Mr Archibald contended that the paragraphs of the Amended Application identified in the motion should be struck out.  In the alternative, he sought an order requiring the applicants to file a comprehensive statement of facts and contentions articulating the elements of the case they seek to make in relation to structural relief.

the access claims issue

12                  The second issue concerns the applicants’ pleading in par 71 of the FFASC that Foxtel and Telstra Multimedia had resisted supplying any services to C7 under the provisions of Part XIC of the TP Act.  Particular (e)(i) to par 71 alleges that Foxtel and Telstra Multimedia resisted supplying services by their conduct in relation to arbitrations under Div 8 of Part XIC:

‘carried out with the objective, in whole or in part, of delaying C7 from obtaining access or delaying the resolution of questions as to C7’s entitlement to access.’  (Emphasis added.)

Particular (e)(2) to par 71 alleges that Foxtel and Telstra Multimedia also resisted supplying services by broadcasting additional channels:

‘in order to occupy the entire bandwidth available for the broadcast of analogue channels on the Foxtel Cable with a purpose of precluding C7 from obtaining access or raising arguments delaying C7 from obtaining access.’

13                  Telstra contended that the allegations of purpose in the particulars are embarrassing and vexatious.  Mr Archibald argued that any purpose or objective of Foxtel and Telstra Multimedia in relation to the access arbitration is simply not relevant to any issue pleaded by the applicants and, if allowed to remain, would open up a very large factual inquiry at the trial.

principles

14                  There was no serious dispute as to the principles to be applied on a summary dismissal application. It is only a very clear case indeed that will justify the summary intervention of the Court, since litigants are not to be deprived the right to submit genuine controversies for determination: Dey v Victorian Railways Commissioners (1949) 78 CLR 62, at 91-92, per Dixon J.  Accordingly, the power to order summary judgment should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, at 129-130, per Barwick CJ; Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, at 99, per curiam.  A Full Court of this Court in Australian Building Industries Pty Ltd v Stramit Corporation Ltd [1997] FCA 1318, approved the formulation of Millett J in Lonrho Plc v Fayed (No 2) [1992] 1 WLR 1 (Ch D), at 5 as follows:

‘A plaintiff is entitled to pursue a claim in these courts however implausible and however improbable his chances of success.  Unless the defendant can demonstrate shortly and conclusively that the plaintiff’s claim is bound to fail or is otherwise objectionable as an abuse of process of the court, it must be allowed to proceed to trial.’  (Emphasis added.)

15                  It is also appropriate to bear in mind what was said by Hely J in Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] FCA 918; 34 ACSR 672.  In that case, on a summary dismissal application, it was assumed that the applicant could establish the pleaded contraventions of the TP Act.  The respondent contended, however, that the Court would not make declarations or orders sought by the applicant.  Hely J said (at [13]-[14]): 

‘If contravention of Pt V is assumed, whether relief should be granted in the form of an order for corrective advertising, or in the form of a declaration as to past contravention of the Act, involves discretionary considerations, although it may be, in the case of a declaration, that it cannot be made if it will produce no foreseeable consequence for the parties…

The time for the exercise of that discretion is at the trial, in the light of findings made upon the evidence that is adduced.  The issue under O 20 r 2 is not how I would exercise the discretion to grant or withhold relief on such materials as are before me, which cannot be assumed to be the same as the evidence at the trial.  Rather, the issue is whether the claims for relief are clearly untenable and cannot possibly succeed, no matter was evidence is adduced at the trial, within the confines of the case as pleaded.’

16                  Telstra contended that the principles articulated by Hely J were more apposite than those stated by the High Court in cases such as General Steel, since the motion did not seek to prevent the applicants maintaining the entirety of the proceedings.  But the distinction seems to me of little significance once it is accepted (as Telstra did) that the issue is whether the claims for relief are clearly untenable and cannot possibly succeed.

17                  For their part, the applicants did not dispute that they would ultimately have to show a nexus between any contraventions of the TP Act and the relief identified in the Amended Application in order to obtain the orders they seek.  As Wilcox J said in Trade Practices Commission v Australia Meat Holdings Pty Ltd [1988] FCA 338; ATPR 40-876, a divestiture case (at 49,519):

‘The question … is whether the retention of that asset, gained in contravention of sec. 50(1), will serve to assist the contravening corporation to dominate the relevant market.  If there is no nexus between the retention of the asset and domination, there is no need to insist upon divestiture.  If there is such a nexus, of more than minimal proportions, the court should insist that the contravening corporation divest itself of that asset.  Only in that way may the policy underlying sec. 50(1) be vindicated.’

His Honour’s observations were cited with approval on appeal (subject to a presently irrelevant caveat by Sheppard J): Australia Meat Holdings Pty Ltd v Trade Practices Commission [1989] FCA 25; ATPR 40-932, at 50,095-50,096, per Davies J; at 50,102, per Sheppard J.

reasoning on structural relief

18                  It is of some importance to identify the way Telstra put its case on the structural relief issue.  Mr Archibald accepted that the applicants were not obliged to plead the elements of their claims for particular forms of relief, in the sense that the material facts supporting a cause of action need to be pleaded.  This is because he accepted (as I followed the argument) that the function of a pleading is not to identify the discretionary consideration relevant to the grant of particular relief.  Accordingly, Mr Archibald did not submit that the applicants had to plead the material facts establishing the nexus between the alleged contraventions of the TP Act and the structural relief sought. 

19                  Furthermore, although Mr Archibald asserted that the affidavits filed in the proceedings by the applicants did not make out a case for the grant of structural relief, he acknowledged that there could well be additional evidence at trial that addressed the issues.  It seems to me that, on any view, it is inappropriate at this stage of large and complex proceedings, to attempt to assess whether the affidavit evidence supports the relief the applicants seek.  It must be borne in mind that the applicants have not yet been required to identify the documents they intend to tender.  There are likely to be many of them.

20                  Telstra’s contention is that in the particular circumstances of this case the applicants, as a matter of fairness, should spell out the nexus they say exists between the contraventions of the TP Act and the relief sought.  Mr Archibald stressed the complexity of the litigation and the difficulties facing Telstra in determining what evidence it should adduce at the trial.

the nexus explained

21                  In their written and oral submissions, the applicants explained the nexus between the contraventions alleged and the relief sought as follows:

(a)               Paragraphs 19, 21 and 22

22                  The FFASC alleges that Foxtel entered into the Master Agreement in 2000 (to which Telstra, News and PBL were also parties) with a substantial purpose to ‘kill C7’ (par 198(2)(c), (d), (q)).  Moreover, it is said that Foxtel’s purpose was to enable it to secure the ‘AFL pay rights’ and to prevent C7 from competing against Fox Sports in the wholesale sports channel market (par 202).  The applicants’ case is that Foxtel has acted in the interests of News and PBL (its shareholders) and in the interest of Fox Sports, the sole competitor to C7 in the wholesale sports channel supply market.

23                  The FFASC pleads that so long as PBL and News control Foxtel, the latter is unlikely to take a channel into its Service or to allow a channel to be shown on Foxtel Cable which is competitive with Fox Sports.  In these circumstances, it is said to be difficult for the applicants, or any other competitor, to compete in the ‘Sports Rights’ markets or to re-enter the ‘wholesale sports channel market’ to compete with Fox Sports (pars 146(d), 148(d), 149(g)(ii), 190, 191).

24                  As Mr Myers QC (who appeared with Mr Moore and Mr Nixon) explained, the applicants will ultimately submit that retention of the current ownership structure will make it very difficult to re-establish competition in the relevant wholesale supply markets or to maintain competition in other markets.  They will contend that it is sufficient to set aside the current licensing arrangements for the AFL pay rights or to restrain a repetition of the conduct in contravening ss 45 and 47 of the TP Act.  They will also argue that the current structure, under which Foxtel is vertically integrated with content suppliers and is thereby protected from potential entrants into the retail pay television market (par 142(j)), must be dismantled in order to remedy the anti-competitive effects of the conduct alleged in the proceedings.

25                  Thus (the applicants say) the relief sought in par 19 of the FFASC is necessary to avoid the anti-competitive effect of the alleged contravening conduct.  Paragraph 21 of the FFASC is merely an alternative to par 19, while par 22 addresses the wider problems of vertical integration of the Foxtel pay television service with content providers and content supply.

(b)        Paragraphs 7(m) and 20

26                  The FFASC pleads that by giving effect to cl 5.2 of the BCA, by which Telstra Multimedia is obliged to grant to Foxtel the exclusive right to provide pay television services delivered by means of the Foxtel Cable, Foxtel and Telstra Multimedia have engaged in conduct in contravention of the TP Act.  The contraventions involves 45(2)(b)(ii) (giving effect to a provision of a contract that has the purpose, or the effect or likely effect, of substantially lessening competition) and s 47(1) (engaging in exclusive dealing) (pars 375-392F).  The consequence is said to be that the BCA is void, subject only to the question of whether cl 5.2 can be severed from the remainder of the BCA: TP Act, s 4L; Rieson v SST Consulting Services Pty Ltd [2005] FCAFC 6 (and cases cited therein).

27                  Mr Myers accepted that the question of severability may be one of some difficulty.  However, he maintained that the issues were not appropriate for resolution on a summary dismissal application.

(c)        Paragraphs 17, 23 and 24

28                  The FFASC pleads that Foxtel and Telstra Multimedia have contravened ss 45(2)(b)(ii) and 47(1) of the TP Act by refusing C7’s requests for the provision of services pursuant to Part XIC of the TP Act and resisting the supply of services to C7 (pars 375-392F).  The relief sought in par 17 (so Mr Myers explained) is required to overcome the anti-competitive effects of the contravening conduct.  Paragraph 23 is analogous to par 17.

29                  The FFASC further pleads that Foxtel, by refusing to take C7 channels on its pay television service, engaged in conduct that contravened s 46 of the TP Act (taking advantage of a substantial degree of market power for an anti-competitive purpose) (pars 399-415).  The order sought in par 24 is said to be appropriate in order to remedy Foxtel’s discriminatory conduct against C7 and to redress Telstra’s conduct in aiding, abetting and procuring the contravention (par 562).

(d)        Paragraph 15 and 25

30                  The applicants do not press par 15 in its present form, but are content to limit its application to ‘any respondent or its related bodies corporate’ instead of seeking an order that extends to ‘any person’.  Paragraph 15, so Mr Myers explained, relates only to the free-to-air television rights the subject of the News/AFL Licence: that is, the free-to-air television rights to AFL matches for the period 2002 to 2006.  The remedy in par 15 will be sought only if the contracts by which the AFL rights were acquired are set aside.  The FFASC pleads matters that, if established, might justify such relief (pars 445-463, 569-571).  If the contracts are set aside, the relief sought in par 15 is intended to ensure that the process of re-bidding will be unaffected by anti-competitive conduct.  A similar justification was offered for par 25.

conclusion

31                  In the light of these explanations and on the assumption that the applicants can establish the pleaded contraventions of the TP Act, I think that the basis for the structural relief sought by the applicants is tolerably clear.  Indeed, in his submissions in reply Mr Archibald seemed to do an admirable job of identifying the issues that will need to be addressed at the trial in order to determine whether the requisite ‘nexus’ exists between the contraventions and the relief sought.  Mr Archibald protested that he had only been able to identify the issues because he had had the advantage of hearing the applicant’s contentions. Be that as it may, I do not accept that Telstra is unable to make an informed judgment about the additional evidence, if any, it needs to tender in order to meet the applicant’s claim for structural relief.

32                  Needless to say, I express no view as to whether the applicants will be able to establish the requisite ‘nexus’ between any contraventions of the TP Act and the relief sought by them.  The applicants may or may not be able to establish the factual allegations they have made and their legal arguments may or may not prove to be sound.  But a summary dismissal application is not the occasion to explore these issues.

33                  In my opinion, Telstra has fallen well short of making out a case for summary dismissal of those paragraphs of the Amended Application that are the subject of its motion.  Nor am I persuaded that the applicants should be required to formulate a detailed statement of issues and contentions.  The pleadings and supporting particulars are detailed.  While I am by no means satisfied that elaboration of the applicants’ claim for structural relief was necessary in order to understand the basis of their claim, the submissions made on the current application have made the position clear.  I am satisfied that Telstra is well able to proceed to trial on the structural relief issue.

reasoning on the purpose issue

34                  Mr Archibald submitted that the applicants’ case, as pleaded, does not include any allegation that Telstra had an anti-competitive purpose in refusing to provide C7 with access to the Foxtel Cable.  The relevant allegations are that Telstra and Foxtel gave effect to cl 5.2 of the BCA in contravention of s 45(2)(b)(ii) of the TP Act, and engaged in the practice of exclusive dealing in contravention of s 47(1).  The exclusive dealing comprised entering into an agreement containing an exclusionary provision (that is, cl 5.2).  Thus, so Mr Archibald contended, Telstra’s purpose forms no part of the applicants’ case.

35                  Mr Archibald submitted that, despite the form of the pleadings, particulars (e)(1) and (e)(2) to par 71 of the FFASC are ‘redolent with the suggestion of purpose’.  He pointed out that the applicants had withdrawn an application to amend the pleadings to include an express allegation of an anti-competitive purpose in relation to the conduct of the access arbitration.  To allow the applicants to rely on the particulars to par 71 would reintroduce purpose as an issue through the back door, with serious consequences for the conduct of the trial.  In particular, it might become necessary to investigate at length the conduct of the parties to the access arbitration, with a view to ascertaining the purpose or purposes underlying their actions.

36                  Mr Myers did not suggest that it was an essential element of the applicants’ pleaded case that Foxtel and Telstra Multimedia had acted in relation to the access arbitration with a particular anti-competitive purpose.  Rather, he submitted that the purpose of Foxtel and Telstra Multimedia is relevant to the characterisation of conduct which could constitute ‘giving effect’ to cl 5.2 of the BCA.  He gave as an example that if Telstra Multimedia had taken certain procedural steps which had the effect of delaying the arbitration, the steps of themselves might be neutral on the question of whether Telstra Multimedia was giving effect to cl 5.2.  If it was found that Telstra Multimedia had taken the steps for the purpose of delaying C7 obtaining access to the Foxtel Cable, the finding might be material in assessing whether Telstra Multimedia had given effect to cl 5.2 in the requisite sense.

37                  Mr Myers also submitted that purpose is relevant to the barrier to entry to the retail pay television market pleaded in par 141(e) of the FFASC.  There it is alleged, in relation to the access regime pursuant to Part XIC of the TP Act, that obtaining access is a lengthy and complex process which permits the existing pay television service provider to delay and frustrate requests for access.  The conduct pleaded in par 71, so Mr Myers argued, is relevant to the characterisation of the actions of those who are in a position to raise or take advantage of the barriers to entry to the relevant market.

38                  The FFASC pleads the effect of cl 5.2 of the BCA in par 375.  The text of cl 5.2 is as follows:

‘(a)      Subject to Law and this clause 5, Telstra Multimedia:

(i)                 grants to FOXTEL the sole and exclusive right to provide and manage the provision by Other Service Providers of Services delivered by means of the Broadband System Service; and

(ii)               may not, except in accordance with this clause 5:

(A)              use or permit the use of Telstra Multimedia’s Broadband System to deliver the Services of any Other Service Providers; or

(B)               manage the provision of the Services of any Other Service Providers.

(b)       Subject to Law, FOXTEL may not use or permit use of the Broadband System Service except as the means of delivering to Residential Subscribers who are Subscribers:

(i)                 Services provided by FOXTEL; and

(ii)               Services provided by an Other Service Provider where provision of those Services is managed by FOXTEL for the Other Service Provider.

(c)        Subject to Law, Telstra Multimedia may not provide Broadband Transmission Services to a Non-Service Provider except subject to a condition that the Non-Service Provider may only use that Broadband Transmission Service to deliver services which are not Services.’

39                  Paragraph 377 of the FFASC alleges the following:

‘In:

(a)       refusing C7’s requests for the provision of services pursuant to Part XIC of the [TP Act]; and

(b)       resisting the supply of any services to C7 pursuant to Part XIC of the [TP Act],

as pleaded in paragraphs 66 to 73, Foxtel and Telstra Multimedia have given and continue to give effect to clause 5.2 of the BCA.’

40                  Paragraph 376 repeats pars 66-73 of the FFASC.  This of course includes par 71, which pleads the rejection of the requests by C7 under Part XIC of the TP Act for the supply of ‘declared services’ to enable C7 to supply pay television channels on the Foxtel Cable.

41                  It is of some significance that in December 2003, the applicants informed the other parties to the proceedings that they intended to amend par 71 to plead that Foxtel and Telstra Multimedia had refused requests for services and resisted supplying services to C7 under Part XIC of the TP Act:

‘with the purpose of precluding or delaying C7 from obtaining access to the Foxtel Cable, preventing C7 from competing with Foxtel, and assisting Foxtel to secure the pay television rights to AFL matches from 2002 to 2006.’

42                  On 23 January 2004, the applicants informed the other parties that they no longer pressed the amendment and therefore no longer sought discovery of documents relating to the amendment.  In a letter dated 23 November 2004, the applicants in relation to a discovery dispute, stated that the purpose of requiring certain documents was

‘to show that the complexity of issues in an access dispute makes the process capable of being frustrated, not that your clients deliberately tried to frustrate the process during the access arbitration involving C7’.  (Emphasis added.)

43                  The definition of ‘give effect to’ in s 4(1) of the TP Act, in relation to a provision of a contract, arrangement or understanding, includes:

‘do an act or thing in pursuance of or in accordance with or enforce or purport to enforce’.

44                  It follows from the definition that a corporation ‘gives effect to’ a contract if it does something ‘in accordance with’ the contract, regardless of whether its officers had the contract in mind when they acted in a particular way.  The precise motive for the conduct is irrelevant.  As Smithers J said in Tradestock Pty Ltd v TNT (Management) Pty Ltd (No 2) (1978) 32 FLR 420, at 432:

‘What is prohibited by [s 45(2), read with the definition] does not turn on whether the motives of the persons concerned are good or bad or desirable from their own or the community’s interests.’

See also Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1, at 6, 23-24, per Franki J.

45                  In my view, particulars (e)(1) and (e)(2) to par 71 of the FFASC are embarrassing.  They plead a purpose or objective that is not a necessary part of the applicants’ case.  The applicants withdrew a previous application to amend par 71 so as to include an allegation of a particular purpose.  To allow the allegations to remain in the particulars to par 71 would open up an inquiry likely to take considerable time at the trial without advancing resolution of the issues upon which the case will turn.

46                  I should add that I do not think that the impugned particulars can be supported by par 141(e) of the FFASC.  That sub-paragraph deals with a different issue.  The particulars to par 71 must be assessed by reference to the series of allegations of which par 71 forms part.

47                  I propose to strike out particulars (e)(1) and (e)(2) to par 71 insofar as they refer to the objective or purpose of Telstra Multimedia or Foxtel.

CONCLUSION

48                  Telstra’s summary dismissal application fails.  However I propose to strike out the particulars to par 71 of the FFASC insofar as they refer to the objective or purpose of Telstra Multimedia or Foxtel.

49                  The applicants have filed a motion seeking leave to file a Fourth Further Amended Application.  Unless Telstra or one of the other respondents wishes to raise any further argument in opposition to leave being granted, I shall grant that leave.

50                  My present inclination is that I should make no order for costs on Telstra’s motion, both parties having enjoyed some success (and experienced some failure).  However, if the parties with to argue the question of costs, they shall have the opportunity to do so.

51                  I shall direct the applicants to bring in short minutes giving effect to this judgment.  The short minutes should incorporate any other matters on which the parties have reached agreement.

Associate:

Dated:              16 March 2005