FEDERAL COURT OF AUSTRALIA

SingTel Optus Pty Limited v Australian Football League [2012] FCA 138

THE COURT ORDERS THAT:

1.    The application be dismissed.

2.    The applicants pay the respondents’ costs, as agreed or taxed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Introduction

1    The first applicant and its subsidiary, the second applicant (together referred to as “Optus”) provide the TV Now recording service (“TV Now”) to Optus’ private and small to medium business customers in Sydney, Melbourne, Brisbane, Adelaide and Perth. They can record free to air television programs, including AFL games, and play them back on any one or more of certain supported devices.

2    The first respondent (“the AFL”) operates the Australian Football League and owns the copyright in broadcasts on free to air television of games played between teams in its competition. The second respondent, (“Mr Demetriou”), is the Chief Executive Officer of the AFL.

3    Recently, Optus successfully defended itself against an allegation by, amongst others, the AFL, that Optus’ operation of TV Now infringes the AFL’s copyright in AFL games broadcast free to air (see SingTel Optus Pty Ltd v National Rugby League Investments Pty Ltd (No 2) [2012] FCA 34 (“Optus v NRL”)). The primary Judge handed down his decision on 1 February 2012, and the appeal by the AFL and others has been specially fixed for hearing on 14 and 15 March 2012.

4    Optus complains that, despite the findings in Optus v NRL, Mr Demetriou and, through him, the AFL have engaged in misleading or deceptive conduct (s 18 of Schedule 2 “Australian Consumer Law” to the Competition and Consumer Act 2010 (Cth) (“the ACL”) by making public comments over the weekend of 18 and 19 February 2012 to the effect that Optus is engaging in illegal activities by operating TV Now. Those comments (collectively defined in the Originating Application as “Impugned Statements”) made, as they are against the backdrop of the judgment in Optus v NRL (which is presently undisturbed), are factually untrue.

5    The respondents have countered Optus’ demand that they undertake not to make further comments to such effect by advising that they will not comply with such demands.

6    Optus’ Originating Application, filed in Court on 21 February 2012, seeks a declaration that by publishing or causing to be published Impugned Statements, the respondents have, in trade or commerce, engaged in conduct that was misleading or deceptive or likely to mislead or deceive, in contravention of s 18 of the ACL; injunctions pursuant to s 232 of the ACL restraining the respondents from, in trade or commence, publishing or causing to be published any Impugned Statements or any statement to like effect; orders as to publishing corrective material; damages under s 236 of the ACL and other orders.

7    It also seeks interlocutory relief including, inter alia, interim injunctions pursuant to s 234 of the ACL that restrain the respondents from publishing or causing to be published any Impugned Statements or any statement to like effect, pending determination of the application.

8    At the conclusion of the hearing on Thursday, 23 February 2012 I inquired of the parties as to whether either party had any objection to my deciding the matter on a final basis. No objection was raised and I therefore proceed to deal with the matter on a final basis.

The Respondents’ Conduct

9    Mr Demetriou’s comments have included the following:

“Optus should take a good look at themselves. If you are an Optus subscriber, switch to Telstra.”

“Do everyone a favour (and) get out of that company. Stop subscribing to them. We are not the only sport saying that at the moment.”

and

“The thought of Optus deciding to lift our content and not pay for it, and pretend and purport to be doing it for the consumer, is a complete disgrace.”

“They should be ashamed of themselves because what they are really doing is charging for a start, so that they can benefit their shareholders, not the consumers.”

“They are not paying for it; they are lifting it. It is akin to stealing and all it will do is that if sports can't rely on that revenue, they will slug the consumers.”

and

“I think they [politicians] are looking for a way for the legislation to catch up with technology…It would be far more preferable if Optus just dropped this shenanigans and into the real commercial world and starting just paying for things.”

(Emphasis added.)

10    The “Impugned Statements” are defined to be “statements to the effect that” Optus, by providing its TV Now service, is engaging in conduct that:

(a)    is “akin to stealing”;

(b)    is “lifting” content owned by sporting bodies; and

(c)    is illegal.

11    The first two of the Impugned Statements were made by Mr Demetriou as a small part of a long interview with Mr Glenn McFarlane and Mr Shane Crawford from the Herald Sun published on 19 February 2012. The third of the Impugned Statements does not appear to have been made.

Analysis

12    I am of the view that the application is misconceived on two fundamental bases:

(1)    First, the Impugned Statements were not made by Mr Demetriou “in trade or commerce”; in other words, they were not conduct “in trade or commerce”.

(2)    Second, even if the Impugned Statements amounted to conduct “in trade or commerce”, the conduct was not “misleading or deceptive or likely to mislead or deceive”.

In those circumstances, what is proscribed by s 18 of the ACL, could have no application.

13    As to the first, as the respondents submitted, there is a difference between conduct that is “in trade and commerce” and conduct that is “in respect of trade or commerce”. Section 18 of the ACL applies only to the former; not to the latter: Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594 (“Concrete Constructions”); Village Building Company Ltd v Canberra International Airport Pty Ltd (2004) 139 FCR 330 (affirming the judgment of Finn J reported at (2004) 208 ALR 98); Robin Pty Ltd v Canberra International Airport Pty Ltd (1999) 179 ALR 449.

14    The statements complained of were part of a wide-ranging interview with Mr Demetriou covering a variety of topics, not all of them having to do with the AFL at all. To the extent that they concerned the AFL’s commercial interests, they consisted of statements of opinion by Mr Demetriou about the health and governance of the game and the member clubs of the AFL. To the extent that they concerned Optus, they were value judgments about the integrity and conduct of Optus in relation to the recording of content in respect of which the AFL owned the copyright.

15    The comments made by Mr Demetriou were part of an on-going narrative about media rights to sporting events in the context of ongoing technological change. They were a part of a narrative in which Optus itself is a participant, along with other organisations, commentators, politicians, legal professionals and academics. Mr Demetriou is engaged in a campaign to try and persuade all sides of the political framework, as well as harness support from as wide a spectrum of Australian sporting bodies as is possible, that the Copyright Act 1968 (Cth) ought to be amended in the light of the decision in Optus v NRL.

16    Notwithstanding, they are not “in trade and commerce” as that phrase must be understood following Concrete Constructions. This is best summed up in the plurality judgment at 603, 604:

[I]n the context of Pt V of the Act with its heading ‘Consumer Protection’, it is plain that s. 52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purposes of, its overall trading or commercial business. Put differently, the section was not intended to impose, by a side-wind, an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities. What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character. Such conduct includes, of course, promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public. In some areas, the dividing line between what is and what is not conduct ‘in trade or commerce’ may be less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character.”

17    As to the second, the issue in this proceeding is not the truth of the statements that Optus’ behaviour is “akin to stealing”, or the statement that Optus is “lifting” content owned by sporting bodies. The issue is whether the conduct of Mr Demetriou in making those statements is likely to mislead or deceive; to lead one into error. This requires a characterisation of the conduct as a whole, taking into account all relevant circumstances and not the taking of particular words out of context.

18    The statement that Optus is “lifting” content owned by AFL was the opinion of Mr Demetriou and no doubt it was honestly held. In the circumstances of this case, such a statement is incapable of constituting misleading and deceptive conduct: Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 88; Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 318–321, 341–342.

19    Alternatively, it was nothing more than, and could be understood as nothing more than, a vernacular or shorthand description of what Optus is incontrovertibly doing. On any view, Optus has established an infrastructure that (at the request of a customer) records the broadcast of an AFL game and then (at the request of the same customer) replays it. The fact that Rares J held that, for the technical purposes of particular provisions of the Copyright Act, it is the customer and not Optus that “makes” a cinematographic film and it is the customer and not Optus who then “communicates” that film, does not alter the fact that Optus’ equipment records, and Optus’ equipment then streams to its customers, the broadcast of games in which AFL holds the copyright.

20    The statement that Optus’ behaviour is “akin to stealing” is not misleading or deceptive for the following reasons:

(a)    it was clearly a statement of Mr Demetriou’s opinion and, again, was honestly held. It was not and did not purport to be a statement of fact;

(b)    the basis for the opinion was clearly set out in the surrounding words that provide the context in which the statement must be considered. That context includes the fact that Optus’ equipment records, and Optus’ equipment then streams to its customers, the broadcast of games in which AFL holds the copyright. It also includes the fact that Optus does not pay anything to the AFL for the content that Optus makes available for its own commercial gain to its customers.

21    Read as a whole, in the context of the interview given, and in light of the manner in which Optus’ TV Now service operates, Mr Demetriou’s statements are not misleading or deceptive.

22    The application must be dismissed with costs.

Associate:

Dated:    28 February 2012