Federal Court of Australia

Hafertepen v Network Ten Pty Limited [2020] FCA 1456

ORDERS

THE COURT ORDERS THAT:

1.    The order made on 22 May 2020 dismissing the proceeding be set aside.

2.    The proceeding be reinstated to the extent necessary to determine the applicant’s interlocutory application filed on 12 August 2020.

THE COURT DECLARES THAT:

3.    Clause 7 of the Settlement and Release Agreement (Agreement) made by the parties on 24 April 2020 is valid and enforceable and should be specifically performed and carried into execution.

THE COURT FURTHER ORDERS THAT:

4.    The respondent specifically perform clause 7 of the Agreement.

5.    It will be sufficient compliance with order 4 if the respondent publishes the Clarification referred to in clause 7 of the Agreement, in the manner there described and for the period there referred to, on a page of the 10play website relating to the program, The Project¸ starting with the URL https://10play.com.au/theproject/.

6.    The respondent pay the applicant’s costs on an indemnity basis.

7.    Liberty be granted to either party to apply on two (2) days’ notice in relation to any issue that might arise in relation to the carrying into effect of order 4.

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

REASONS FOR JUDGMENT

KATZMANN J:

Introduction

1    This is a matter arising out of the settlement of a defamation action brought against Network Ten Pty Limited which culminated in the dismissal of the proceeding by consent in accordance with the terms of settlement.

2    By an interlocutory application filed on 12 August, the applicant, Dylan Hafertepen, who brought the action, applied to reinstate the original proceeding and seek specific performance of the settlement agreement. He sought orders in the following terms:

1.    An order pursuant to s 22 of the Federal Court of Australia Act 1976 that the proceedings be reinstated.

2.    A declaration that Clause 7 of the Settlement and Release Agreement (the Settlement Agreement) between the parties dated 24 April 2020 is valid and enforceable and ought to be specifically performed.

3.    An order that the Respondent specifically perform Clause 7 of the Settlement Agreement by publishing the “Clarification Regarding Dylan Hafertepen” in Annexure D of the Settlement Agreement:

(a)    on a page of the website {www.10play.com.au} relating specifically to the programme The Project, starting with the URL {https://10play.com.au/theproject/};

(b)    in the same font and the same size as the other content on that page; and

(c)    for a period of not less than 14 days from the date of publication on that page.

4.    An order that, within 7 days, the Respondent provide the Applicant’s solicitor with copies of each letter sent to media organisations and Google in accordance within Clause 5 of the Settlement Agreement.

5.    An order that the Respondent pay the Applicant’s costs of this application assessed on an indemnity basis.

3    Mr Hafertepen’s application was supported by two affidavits affirmed by Sally Webber, a solicitor in the firm Atkinson Vinden Lawyers, which acts for Mr Hafertepen.

4    Ten opposed the application. It relied on an affidavit affirmed by Samantha de Bussey McGeoch, a solicitor then in the employ of Macpherson Kelley, which formerly acted for Ten, and evidence given by Myles Edwin Finlayson Farley, Senior Legal Counsel for Ten, who affirmed two affidavits.

The background to the current dispute

5    On 6 November 2018, on its television program The Project, Ten broadcast a segment entitled “Justice for Jack” and uploaded the segment to its website, www.10play.com.au (the 10play website). The sense and substance of “Justice for Jack” were republished by a number of media organisations around the world and copies of “Justice for Jack” were also posted on YouTube. The following year Mr Hafertepen launched a proceeding in this Court alleging that he was defamed in the segment, amongst other reasons because it conveyed the imputation that he had caused the death of “Jack” in order to inherit his estate which had been bequeathed to him in Jack’s will signed only three weeks before his death.

6    In its defence, Ten admitted that the segment was available to users for streaming from the 10play website in Australia and that The Project Twitter account carried promotional tweets directing users to view the segment on the 10play website. But it denied that the segment defamed Mr Hafertepen in the manner alleged. In the alternative, it raised defences of justification, contextual truth, qualified privilege, and honest opinion.

7    According to the defence, the segment remained on the 10play website for more than 10 months and was removed, without admission of liability, on the day Ten received Mr Hafertepen’s concerns notice.

8    The defamation proceeding settled following a private mediation conducted in late February 2020.

9    On 24 April 2020 the parties entered into a “Settlement and Release Agreement” (the Agreement) and on 22 May 2020 the Court made orders giving effect to cl 9(a), amongst other things, by dismissing the proceeding with no order as to costs and noting that the proceeding had settled on confidential terms.

10    As part of the settlement, Ten agreed to send a letter apologising to Mr Hafertepen “for the hurt and harm caused to [him] by the broadcast of the story”. It also agreed to publish a “Clarification” in the following terms:

On 6 November 2018, Network 10 aired a story about Australian man, Tank Hafertepen, formally known as Jack Chapman, who died in the United States after injecting himself with silicone.

His former partner Dylan Hafertepen has brought defamation proceedings against Network 10 about the story.

Network 10 did not intend to suggest and does not suggest that Mr Hafertepen had anything to do with that death. If anyone took it to mean that, then Network 10 unreservedly retracts any such suggestion.

The origins and nature of the current dispute

11    The current dispute concerns clauses 5 and 7 of the Agreement.

12    Clause 5, which is entitled “Letters to Media Organisations”, reads:

Within 28 days of the date of final execution of this Agreement, Ten shall:

(a)    cause the Letters to Media Organisations to be sent to the various media organisations identified in Annexure B; and

(b)    cause a letter to be sent to Google, as publisher of YouTube, demanding removal of the Broadcast on the ground of infringement of copyright.

13    Clause 7 relates to the publication of the Clarification. It provides:

Within 21 days of the date of final execution of this Agreement, Ten shall publish the Clarification on the 10play website for a period of not less than 14 days, such Clarification to be published in the same size and font that usually appears on that website.

14    The text of the letters and the terms of the Clarification were the subject of negotiation. So, too, was the form of the apology.

15    With one qualification, the text of the letters to media organisations was identical to the Clarification. The only difference was that the letters included an additional paragraph in the following terms:

Network 10 has removed the story from its platforms and asks that you remove the article at URL [insert relevant URL] which refers to our story or otherwise include a copy of this letter as part of your coverage.

16    Other features of the Agreement should also be mentioned.

17    Ten agreed not to republish the story, the broadcast on which it appeared, its publication on the 10play website, its promotion on The Project’s Twitter page, or any part of it (cl 12). Ten also agreed to pay the fees of the mediator (cl 3) as well as Mr Hafertepen’s reasonable legal costs (including pre-litigation steps and advice) up to and including the day of the mediation for an amount not exceeding $75,000 inclusive of GST (cl 4). The fees of the mediator were not disclosed in the Agreement but, since it was a private mediation and the mediator was a leading senior counsel, it is reasonable to infer that they would not have been insignificant. But the Agreement did not provide for the payment of damages.

18    In consideration of the benefits received under cll 3, 4, 5, 6, 7 and 12 and the disposal of the proceeding by consent in accordance with cl 9, Mr Hafertepen released and discharged from liability Ten, its directors, officers, employees, agents, contractors, related bodies corporate and regional broadcasting affiliates from liability (cl 8).

19    Within seven days of the payment of the mediator’s fees, Mr Hafertepen was required to file signed consent orders with the Court seeking the orders disposing of the proceeding (cl 9).

20    Clause 10 imposed obligations on each party to “take all steps and do all things reasonably required to give effect to [the] Agreement …”.

21    Clause 14 provided that nothing in the Agreement constituted an admission by Ten of any liability.

22    The Agreement could only be varied or replaced by a document duly executed by the parties (cl 15.2). There was also an “entire understanding” clause (cl 15.6).

23    The interlocutory application was filed because Mr Hafertepen contended that cl 7 had not been complied with and he was concerned that there had also been no compliance with cl 5. The reasons are apparent from Ms Webber’s evidence.

24    On 25 May 2020 Ms Webber emailed Macpherson Kelley seeking confirmation that Ten had complied with cll 5 and 7 of the Agreement. She said that she had reviewed the 10play website but was unable to find any publication of the Clarification. Ms McGeoch replied the same day, confirming that it had, including in her email a link to the Clarification.

25    The Clarification was to be found at the bottom of the “Terms of Use” page of the website.

26    On 27 May 2020 Ms Webber sent another email to Macpherson Kelley, complaining about the manner in which the Clarification had been published, and requesting that it be moved to a page of the 10play website relating to The Project. She wrote:

We note that the Clarification published by you on the 10play website has been published at the bottom of the link to the 10 play “terms of use” page.

At all times, our client (and ourselves) proceeded, in negotiations with you, on the understanding that the Clarification would be published on the 10play website pages concerning the TV programme the Project, so that viewers of the Project who saw the relevant episode were able to read the Clarification.

Your client’s decision to place the Clarification in a completely unrelated location at the bottom of a “terms of use” page is, in our view, not only insulting to our client, but in breach of both the spirit and terms of the settlement agreement.

Could you please arrange for the Clarification to be moved to one of the 10play website pages for the Project such as https://10play.com.au/theproject/about) within 48 hours, and confirm that it will remain in that location for 14 days once moved. Please send us a new link to the location of the Clarification once it has been moved.

If you client refuses to publish the Clarification in the above requested location, we will be seeking instructions to take steps to compel you[r] client to do so.

27    In the same email Ms Webber also requested copies of the letters which Ten sent to media organisations and Google in accordance with cl 5 of the Agreement “so that our client can be satisfied that your client has fully complied with that clause”.

28    By 5 June 2020 Ms Webber had not received a reply to her email, so she sent another requesting the same information. Justin Quill, then of Macpherson Kelley, replied to this letter on 9 June 2020. Mr Quill assured Ms Webber that Ten had complied with its obligations under the Agreement but he refused to provide copies of the letters. Instead, he said he had “sighted an image which contains the 8 letters to the media organisations with their respective envelopes ready for posting as well as an image which shows the envelopes being placed in a post box”.

29    On 16 June 2020 Ms Webber emailed Mr Quill, renewing her request for copies of the letters. She received a reply three days later advising her that Macpherson Kelly no longer acted for Ten in relation to the matter.

30    On 29 June 2020 Ms Webber wrote to Ten directly to complain about the manner in which the Clarification had been published and requesting copies of the letters, renewing her undertaking not to show them to her client, and foreshadowed the institution of the present proceeding in the event that Ten did not agree to her demands within 48 hours.

31    Ten replied on 3 July 2020, adhering to its position. In this letter, amongst other things, Tasha Smithies, Senior Litigation Counsel for Ten, said that on 22 May 2020, “being 28 days after the Settlement Date”, Mr Farley “personally finalised and sent out” the letters to the media organisations. Attachment A to that letter was an image which purported to depict the letters immediately before they were sent.

32    Ms Webber’s evidence was that “the resolution of the photograph” in Attachment A was “insufficient” to enable her to discern what the letters said or to whom they were addressed. The photograph is annexed to her first affidavit. It confirms Ms Webber’s evidence. The images are scarcely visible. If the photographs do depict letters, the letters are illegible and so are the names of the addressees. No legible images were ever provided either to Ms Webber or to the Court.

33    In his first affidavit, Mr Farley deposed that on 15 May 2020 he instructed Ten’s digital team to upload and place the Clarification on the 10play website in compliance with cl 7 of the Agreement and personally confirmed that this had been undertaken by checking the 10play website and ensuring the wording matched that required by Annexure D to the Agreement. He also deposed that on 22 May 2020 he finalised and sent out letters to the various media organisations and Google in compliance with cl 5 of the Agreement and that before 6pm that day he placed the letters into stamped addressed envelopes and put them into the nearest letterbox.

34    Ten has steadfastly refused to comply with any of Ms Webber’s requests, insisting that it has discharged its obligations under the Agreement and was not obliged to do more. Ms Webber undertook that if copies of the letter were provided to her, she would not show them to Mr Hafertepen. She renewed the undertaking in a letter to Ten’s senior in-house legal counsel on 29 June 2020. Even after a notice to produce copies of the letters was served on Ten and an oral call for them was made during cross-examination of Mr Farley who had referred to them in his affidavit, Ten resisted the application.

35    Mr Hafertepen submitted that, although the Agreement did not specify the location within the website where it was to be published, the manner in which Ten published the Clarification was clearly calculated to frustrate the purpose for which it was sought and was inconsistent with cl 7 of the Agreement. He asked the Court to order that cl 7 be specifically performed by the publication of the Clarification on a page of the 10play website relating to The Project, in the same font and size as the other content on that page, and for a period of at least 14 days. He also sought an order that copies of the letters to the media organisations and Google be provided to his solicitor.

The issues

36    The principal questions for resolution are these:

(1)    Does the Court have jurisdiction to entertain an application for specific performance of the Agreement?

(2)    If so, can the original matter be reinstated for the purpose of enforcing the Agreement in the original proceeding?

(3)    Is specific performance available?

(4)    How should the Agreement be construed?

(5)    What orders should be made?

Does the Court have jurisdiction?

37    There was no dispute that the Court had jurisdiction to hear an application for specific performance of the Agreement. But jurisdiction cannot be conferred by consent. The Court must be satisfied that it has jurisdiction: Federated Engine-Drivers and Firemen’s Association of Australasia v The Broken Hill Proprietary Company Limited (1911) 12 CLR 398 at 415 (Griffith CJ).

38    For the following reasons I am satisfied that the Court has jurisdiction to grant specific performance of the Agreement.

39    The original jurisdiction of the Court includes jurisdiction in any matter “arising under any laws made by the Parliament …”: Judiciary Act 1903 (Cth), s 39B(1A)(c).

40    A claim for specific performance of a contract is a claim for relief of a kind which is available under State law. Yet if the contract is in respect of a right which is the creation of federal law (law made by the Parliament), the claim arises under federal law; the subject matter of the contract exists as a result of federal law: LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 at 582. See also Macteldir Pty Ltd v Dimovski [2005] FCA 1528; 226 ALR 773 at [63], [76], [95] (Allsop J).

41    A matter also arises under federal law if the right or duty in question owes its existence to federal law or depends on federal law for enforcement: R v Commonwealth Court of Conciliation & Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 154 (Latham CJ); LNC Industries at 581–2.

42    Thus, where the matter the subject of a settlement agreement arises under a law made by the Parliament, enforcement of the settlement agreement is a matter or part of a matter arising under that law: Needlework Warehouse Pty Ltd v Chansonette Pty Ltd [2005] FCA 1525 at [41]–[47] (Lindgren J) with which Allsop J agreed in Dimovski at [59]. The enforcement of a contract to settle proceedings is to be regarded as part of the same matter as the dispute which was the subject of the settlement agreement: Dimovski at [59]–[62].

43    The matter the subject of the Agreement arises under a law made by the Parliament: see Crosby v Kelly (2012) 203 FCR 451 (Bennett, Perram and Robertson JJ); Rana v Google Inc. (2017) 254 FCR 1 at [24] (Allsop CJ, Besanko and White JJ). In his statement of claim Mr Hafertepen alleged that Ten had published “Justice for Jack” in NSW, Queensland and the ACT. Section 9(3) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) picks up, as federal law, the jurisdiction of the ACT and Northern Territory Supreme Courts to hear and determine a defamation action. As Perram J put it in Crosby at [2], s 9(3) creates a surrogate Commonwealth law by reference to the jurisdiction of the Supreme Courts of the Territories which then acts as a law of the Commonwealth under which matters may then arise.

44    Further, in a case such as the present, where the respondent is a corporation, the ability to sue “arises under and depends upon a law of the Commonwealth”: Oliver v Nine Network Australia Pty Ltd [2019] FCA 583 at [16] (Lee J).

45    The Court also has accrued jurisdiction to enforce the Agreement: Needlework at [39]–[45].

Can the original matter be reinstated for the purpose of enforcing the Agreement?

46    For the following reasons it was open to Mr Hafertepen to invoke that jurisdiction by an interlocutory application in the original proceeding. He was not obliged to go to the trouble and expense of instituting a new proceeding for this purpose.

47    Mr Hafertepen relied on s 22 of the Federal Court of Australia Act 1976 (Cth) (FCA Act).

48    Section 22 provides that, in every matter before the Court, the Court shall grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly raised in the matter “so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided”. In order to achieve the statutory purpose a liberal construction should be adopted: Macteldir Pty Ltd v Dimovski (2003) 132 FCR 492 at [50] (Wilcox, Jacobson and Bennett JJ).

49    In Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510 the Full Court by a majority (Fisher J dissenting) held that s 22 gave the Court jurisdiction, not merely power, to enforce compromises of suits before the Court. Pincus and Einfeld JJ, who constituted the majority, observed that the Supreme Courts had the power to enforce a compromise by giving judgment in the settled proceeding for the agreed sum (citing, amongst other authorities, Roberts v Gippsland Agricultural and Earth Moving Contracting Co Pty Ltd [1956] VLR 555) and that, on its proper construction, the FCA Act intended that this Court should have a similar power. Section 61(7) of the Supreme Court Act 1928 (Vic), which was the basis for the decision in Roberts, is almost identical to, and relevantly indistinguishable from, s 22 of the FCA Act.

50    The difficulty in the present case is that the suit which was compromised is no longer before the Court. It was dismissed by consent in accordance with the Agreement.

51    Ellwood was a case in which the settled proceeding had not been dismissed. But the principle for which the case stands does not appear to rest on that fact. In Gravern Holdings Pty Ltd v Yepp Rowing Pty Ltd [2014] FCA 41 Murphy J held that the Court could reinstate a proceeding which had been settled and, as in the present case, concluded by the entry of orders by consent dismissing the proceeding so that judgment could be given in accordance with the terms of settlement. The view Murphy J reached is consistent with the position in Roberts at 565 that “if the action has been stayed or struck out, then it is necessary that the stay should be lifted or the action reinstated as an action for trial, before the agreement is enforced on motion in the action”.

52    Mr Hafertepen submitted that reinstatement for the limited basis of enabling him to seek specific performance of the Agreement conforms to the statutory purpose underlying s 22 as it avoids a multiplicity of proceedings, is more cost-effective than filing a fresh proceeding, and involves less delay. Mr Hafertepen also submitted that reinstatement in these circumstances would not undermine the finality of the 22 May order because he does not seek to vary the order, only to have the agreement underlying it enforced. These submissions are persuasive. No argument to the contrary was advanced. They should be accepted.

53    In any event, if the party in whose favour it is made consents, the Court has power under r 39.05(f) of the Federal Court Rules 2011 (Cth) to set aside an order after it has been entered.

54    In Gravern Murphy J held that r 39.05(f) gave the Court the power to reinstate the proceeding because the orders provided for dismissal of both the applicants’ claims and the respondents’ cross-claim and both the applicants and the respondents consented to the order being set aside or varied.

55    During argument in the present case, through its counsel, Ten consented to an order under r 39.05 setting aside the order dismissing the proceeding in order to enable the interlocutory application to be heard and determined.

56    For all these reasons, I am satisfied that the order should be set aside and the proceeding reinstated for this purpose.

Is specific performance available?

57    Ten did not dispute that an order for specific performance could be made if it had not complied with its contractual obligations, whether under cl 7 or cl 5. A court can order specific performance of a provision of an executed agreement or the provision may be enforced by an analogous order such as a mandatory injunction: Meagher R, Heydon JD and Leeming M, Meagher, Gummow and Lehane’s Equity: Doctrine and Remedies (4th ed, LexisNexis Butterworths, 2002) at [20-135].

58    Ten did not take issue with the following summary of the relevant principles included in the submissions filed for Mr Hafertepen.

59    First, there must be a valid contract, because specific performance is an equitable remedy and equity does not assist volunteers.

60    Second, there must be an actual or threatened breach of the contract.

61    Third, specific performance will not be ordered if damages are an adequate remedy: Dougan v Ley (1946) 71 CLR 142 at 150 (Dixon J); 153 (Williams J).

62    Fourth, at the time the action is commenced, the applicant must have performed the substance of the contract or be willing and able to do so: Green v Sommerville (1979) 141 CLR 594 at 610 (Mason J).

63    Only the second matter was controversial.

64    The Agreement is unquestionably a valid contract.

65    On the construction of the Agreement advanced on Mr Hafertepen’s behalf, damages would not be an adequate remedy because it would not put Mr Hafertepen in the position he would have been had the Agreement been performed as intended. An award of damages would not correct the misconception generated by the broadcast or provide a public clarification of the facts.

66    Mr Hafertepen performed his part of the bargain well before he filed his interlocutory application.

67    Specific performance is a discretionary remedy. Factors which would militate against the exercise of the discretion include delay, hardship to the respondent, conduct of the applicant which would render it unfair that the remedy be granted, where the respondent entered into the contract by mistake, and where continuing supervision from the Court would be required.

68    None of these factors arises here. Indeed, Ten did not suggest that there were any discretionary matters which should be taken into account or which militated against the making of a decree. The only dispute concerns whether there has been an actual or threatened breach of contract. Whether that is so depends on the proper construction of Ten’s obligations under the Agreement.

How should the Agreement be construed?

69    No clause in an agreement is to be considered in isolation. In order to arrive at its true meaning a clause must be considered in the context of the whole of the agreement: Lewison K, The Interpretation of Contracts (6th ed, Sweet & Maxwell, 2015) at [7.02].

70    Notwithstanding the position Ten took in its correspondence with Ms Webber, neither in its written submissions nor in oral argument did Ten disagree with the proposition advanced by Mr Hafertepen that the Agreement should be interpreted in accordance with the principles drawn from a succession of High Court cases, starting with Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 at [11], summarised by Allsop P in Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603. At [14] his Honour observed:

The construction and interpretation of written contracts is to be undertaken by an examination of the text of the document in the context of the surrounding circumstances known to the parties, including the purpose and object of the transaction and by assessing how a reasonable person would have understood the language in that context.

71    In Franklins v Metcash at [19] Allsop P also said that a contract should be read “fairly and broadly”, not “pedantically or in a manner prone to defeat the evident commercial purpose”.

72    In Maggbury at [11] Gleeson CJ, Gummow and Hayne JJ approved the statement of Lord Hoffman (with whom Lords Goff, Hope and Clyde agreed) in Investments Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912; [1998] 1 All ER 98 at 114 that interpreting a written contract involves “the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract”.

73    The importance of context and purpose cannot be overstated. In Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [46] French CJ, Nettle and Gordon JJ observed that “[t]he rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose”.

74    Further, as Mr Hafertepen submitted, an obligation is implied by law on the parties to a contract to do all things necessary to enable each other to secure the benefit of the contract, as well as a negative covenant not to hinder or prevent the fulfilment of the purpose of the express promises made in the contract: Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126 at [36] (Gleeson CJ, Gummow, Kirby and Hayne JJ); Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 378 (Dixon J); Adaz Nominees Pty Ltd v Castleway Pty Ltd [2020] VSCA 201 at [117]–[118] (Whelan JA and Riordan AJA), [278] (McLeish JA). See also Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at [61] (Kiefel J). As this principle is directly related to contractual performance, it is arguably a rule of construction: Barker at [37] (French CJ, Bell and Keane JJ). Of course, an implied obligation to cooperate cannot conflict with any express term of the contract: Adaz at [279] (McLeish JA). But there could be no such suggestion here, having regard to cl 10 of the Agreement, which expressly requires the parties to take all steps and do all things reasonably required to give effect to the Agreement.

75    Ten accepted that commercial contracts are ordinarily subject to an implied obligation of good faith, referring to the judgment of the NSW Court of Appeal in Burger King Corporation v Hungry Jack’s Pty Ltd [2001] 69 NSWLR 558 and to the view expressed by Edelman J as a member of this Court in Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6) [2015] FCA 825; 329 ALR 1 at [1009] that in this context “the notion of ‘good faith’ is better understood as a norm underlying, and shaping, a particular duty or duties”. The obligation is implied as a matter of law: Burger King at [164].

76    Allsop CJ, who has written extensively on the subject both in this Court and elsewhere, summarised the effect of the authorities in his judgment in Paciocco v Australia and New Zealand Banking Group Ltd (2015) 236 FCR 199 (FC). His Honour observed at [288] that the obligation of good faith usually involves “an obligation to act honestly and with a fidelity to the bargain; an obligation not to act dishonestly and not to act to undermine the bargain entered or the substance of the contractual benefit bargained for; and an obligation to act reasonably and with fair dealing having regard to the interests of the parties (which will, inevitably, at times conflict) and to the provisions, aims and purposes of the contract, objectively ascertained”. His Honour also at [289] made the following observations (without alteration):

As Posner J said in Market Street Associates Ltd Partnership v Frey 941 F (2d) 588 (1991) the contractual notion of good faith varies in what is required for its satisfaction by reference to the nature of the contract. But the notion is rooted in the bargain and requires behaviour to support it, not undermine it, and not to take advantage of oversight, slips and the like in it. To do so is akin to theft, and if permitted by the law led to over-elaborate contracts, and defensive and mistrustful attitudes among contracting parties.

77    His Honour explained at [290] that the good faith obligation will not call for the same acts from all contracting parties in all cases. Rather, “[t]he contractual and factual context (including the nature of the contract or contextual relationship) is vital to understand what, in any case, is required to be done or not done to satisfy the normative standard”. His Honour remarked at [291] that the good faith obligation is consistent with the content given to the expression in influential jurisdictions in the United States, such as refraining from acting with subterfuge and evasion or refraining from opportunistic conduct, such as by taking advantage of a disadvantageous position of the other party who has performed first, or cooperating to achieve the contractual goals. The case references appear there and need not be reproduced here. At [292] his Honour noted that the good faith obligation is rooted in honest and reasonable fair dealing.

78    A party is not required to subordinate its own interests to that of another (Paciocco at [289]). But there are limits. As Barrett J pointed out in Overlook v Foxtel [2002] NSWSC 17; (2002) Aust Contract R ¶90-143 at [65], that only holds true “so long as pursuit of those interests does not entail unreasonable interference with the enjoyment of a benefit conferred by the express contractual terms so that the enjoyment becomes (or could become), in words used by McHugh and Gummow JJ in Byrne v Australian Airlines Ltd (1995) 185 CLR 410, ‘nugatory, worthless or, perhaps, seriously undermined’”. Later, at [67], his Honour put it this way:

[T]he implied obligation of good faith underwrites the spirit of the contract and supports the integrity of its character. A party is precluded from cynical resort to the black letter. But no party is fixed with the duty to subordinate self-interest entirely which is the lot of the fiduciary: Burger King at para 187. The duty is not a duty to prefer the interests of the other contracting party. It is, rather, a duty to recognise and to have due regard to the legitimate interests of both the parties in the enjoyment of the fruits of the contract as delineated by its terms.

79    Mr Hafertepen pointed to the express obligation imposed on each party by cl 10 of the Agreement to take all steps and do all things reasonably required to give effect to the agreement. He submitted that there was arguably little substantive difference between a contractual obligation to act reasonably and an obligation to act in good faith. In Burger King at [169] Sheller, Beazley and Stein JJA noted that the Australian cases made “no distinction of substance between the implied term of reasonableness and that of good faith”.

80    Ten did not argue that it was not required to act in good faith. Its position was that Mr Farley’s evidence demonstrated that it did. I will come to Mr Farley’s evidence in due course. First it is necessary to consider the context and purpose of the Agreement and decide how a reasonable person would have understood the language in cl 7.

81    Ten doggedly maintained that it had absolute discretion as to where on the 10play website to publish the Clarification because cl 7 was silent on the matter. On an objective reading of the Agreement, its position is untenable. Having regard to the context, and in view of the purpose of the Agreement, a reasonable person would not have understood it in this way.

82    The context is apparent from the terms of the recitals, which read as follows:

A.    On 6 November 2018, Ten produced a story titled “Justice for Jack” (Content) and, through its subsidiaries and regional broadcasting affiliates throughout Australia, broadcast the Content as part of the television program known as The Project (Broadcast).

B.    On or about 6 November 2018, the Content was uploaded by Ten to the 10play website (Internet Publication).

C.    On or about 6 November 2018, the Content was promoted on The Project Twitter page (Internet Promotion).

D.    The Content, Broadcast, Internet Publication and Internet Promotion contained references to Hafertepen.

E.    On 25 October 2019, Hafertepen commenced defamation proceedings against Ten in the Federal Court of Australia.

F.    The Parties have agreed to settle the Proceeding without any admission of liability on the terms set out in this Agreement.

83    The purpose of the Agreement was to settle the dispute over the alleged defamation in the broadcast and the various publications on the internet by restoring at least to a certain extent the damage to Mr Hafertepen’s reputation potentially caused by the story. In consideration of his promise in cl 8 to release and discharge Ten from any claim connected with or arising out of the broadcast or the publication or promotion of the story on the internet, Mr Hafertepen received no monetary compensation. He argued that the Court could readily infer from the terms of the Agreement that the vindication derived from the publication of the Clarification, the letters to the media organisations, and the apology was the major component of the relief he agreed to accept in consideration for compromising his claim against Ten.

84    Ten quibbled with this characterisation. It contended that the statements made in the various publications were not intended as a complete vindication. It stressed that the Agreement was entered into “on a no-admissions basis” and the only concessions were made in respect of two out of seven imputations. It argued that there was a significant monetary component to the settlement, pointing to the agreement to pay the mediator’s fees and Mr Hafertepen’s reasonable costs. It also argued that there was little or no discretion in any of the clauses except for cl 7. Furthermore, it maintained that the fact that cl 7 was the last of the five substantive benefits listed in the Agreement, and much less detailed, demonstrates that it was of less importance than the others.

85    Neither the order in which the clause appears in the Agreement nor the amount of detail it contains defines its importance or assists in determining its purpose or the purpose of the Agreement as a whole.

86    Defamation is concerned with the protection of reputation. The purpose of a suit in defamation is to restore or repair the harm to the reputation of the applicant caused by the defamatory statement(s) or publication(s). That was certainly the objective purpose of the letters and the Clarification for which cll 5 and 7 provided. It was also the objective purpose of Ten’s agreement to Mr Hafertepen showing the letter of apology to friends, family members and prospective employers.

87    The Clarification was in the nature of a retraction or public apology. The purpose of an apology is “to appease the injured feelings of the person defamed and to undo the harm done to his reputation in consequence of the publication”: Gatley on Libel and Slander (12th ed, Sweet & Maxwell, 2013) at [29.2]. More than 150 years ago, in Lafone v Smith (1858) 3 H. & N. 735, in a passage cited in Gatley, Bramwell B said that:

Inserting an apology means effectually inserting it; not so that people would not be likely to see it, but in such a manner as to counteract as far as possible the mischief done by the libel.

88    More recently, in Wagner v Nine Network Australia Pty Ltd [2019] QSC 284 at [127] Applegarth J referred to the remarks of Bramwell B and observed that, for an apology to be effective “it should be published, so far as possible, to the readers or viewers of the indefensible defamation and to those to whom the defamation has spread on the grapevine”. The same must also be said of a retraction, whatever name is given to it.

89    Ten denied that its apology was insincere. That much must be accepted. It follows, as Mr Hafertepen’s counsel put it in submissions, that the Clarification was not merely platitudinous. Rather, it served to correct an impression some viewers may have formed that Mr Hafertepen was in some way associated with his partner’s death. Correcting the record about such a serious matter was an important part of the Agreement.

90    Since the Clarification related to a story aired on The Project, and was intended to go at least some way towards restoring or repairing any damage to Mr Hafertepen’s reputation the story may have caused, a reasonable person would have understood the reference in cl 7 to the 10play website to be a reference to a place on the website where the Clarification was likely, if not most likely, to come to the attention of anyone who had watched the program. Yet, by posting the Clarification on the Terms of Use page, Ten put it in a place where it was highly unlikely to come to anyone’s attention. As Ms Webber put it in correspondence with Ten before the filing of the interlocutory application:

The purpose of the Clarification is to provide information to users of the 10play website who may have watched the story titled “Justice for Jack” (Content), broadcast as part of the television program known as The Project, and uploaded by Ten to the 10play website on or about 6 November 2018. Users of the 10play website since November 2018 would have no reason in May 2020 to read or access the website Terms of Use, and in particular to scroll to the bottom of those Terms.

91    In what can only be described as an understatement, Mr Hafertepen submitted that “the ‘Terms of Use’ page is not an immediately apparent feature when one accesses the Website”. To find it, one has to scroll to the bottom of the homepage where, in small white letters on a black bar the following text appears:

Advertise with Us – Terms of Use – Privacy Policy – FAQs – Careers – Corporate – Contact Us / © 2020 Network Ten Pty Limited.

92    If one clicks on the words “Terms of Use”, one is taken to the “Terms of Use” page.

93    The “Terms of Use” page is that page of the website which records the terms and conditions pursuant to which anyone accessing or using the website agrees to do so. The Clarification was published after the Terms of Use where, bizarrely, it was followed by the word “Advertisement”. When printed out, the Terms of Use run to 15 A4 pages.

94    To say the least, this was an obscure location. It is notorious that most people do not read terms of use even when prompted to do so before obtaining access to digital services. Ms Webber was unable to find the Clarification even though she was looking for it. In the circumstances it is difficult not to believe that the Clarification was published there in order that it would not be seen.

95    The decision to upload the Clarification to this part of the website was made by Mr Farley in consultation with “key members of the Network Ten digital team” and Ms Smithies who was his supervisor. The evidence indicates that the idea to put it on the Terms of Use page, however, was his.

96    No evidence was adduced from Ms Smithies or any member of Ten’s digital team. Some of the consultation took place by email but much of it was oral and not disclosed. In the absence of any explanation for the absence of evidence from these potential witnesses, it is reasonable to infer that nothing they could say would assist Ten’s case.

97    Mr Farley deposed that, before the Clarification was published, he was told by (unnamed) members of the digital team and believed and continued to believe that:

(a)    Because Network Ten is a television broadcaster, the homepage of the 10play website is designed specifically to host video content and does not allow a large amount of text to be published on it;

(b)    The 10play website has been specifically designed so it easily carries across to the 10play mobile phone and smart television applications in a similar layout;

(c)    If a large amount of text were to be published on the 10play homepage, this would require a significant amount of re-design to the website or the underlying code to ensure that the homepage would continue to carry across to the 10play mobile phone and smart television applications in a similar layout; and

(d)    It was not realistically feasible to place the Clarification on the 10play homepage.

98    Mr Farley did not indicate what he meant by “a large amount of text”. I struggle to understand why it was not feasible to publish the Clarification on the 10play homepage, since on the face of things it does not consist of “a large amount of text”. Be that as it may, Mr Hafertepen does not suggest it should have been published there. The case Ten came to meet was that it should have been published on a page of the website relating to The Project. Mr Farley deposed that this was an option the digital team discussed with him and that “the most logical” part of that page was the “Articles” tab, which he described as “a location commonly reserved for statements or responses to requests for comment”. But he said that, given the discretion he considered Ten had in determining where on the website to place the Clarification, he directed the digital team to put it on the Terms of Use page in the same size and font that usually appears on that page.

99    In his first affidavit Mr Farley deposed that this was “the most logical location”. In his second affidavit he described it as “the most appropriate”. This evidence strains credibility and I cannot accept it. Indeed I consider it to be disingenuous. In cross-examination Mr Farley accepted that it was not commonplace for a person to click on the Terms of Use page to find out information about a particular program. He revealed that, before he selected the Terms of Use page as “the most logical” and “most appropriate” location to publish the Clarification, no-one had ever told him they had read the Terms of Use page. When asked how a clarification to a person who had sued Ten was a term of use, he struggled to answer, replying:

I don’t – you mean a term of – no, that’s – it wasn’t part of the terms of use, it was underneath them.

100    He later conceded that it would be a misdescription to call the Clarification a term of use. He sought to justify his position in this way. He understood that terms of use are legal notices for the website and the Clarification was a legal notice, although he had never previously been involved in putting anything else in that position since he had worked for Ten and was unaware of any other legal notice appearing on the Terms of Use page.

101    Even if there were some logic to Mr Farley’s thinking, the Terms of Use page was by no means the most logical or most appropriate location. If anything, it was one of the least logical and least appropriate. In effect, if not by design, publishing the Clarification in this part of the website undermined its purpose. The logical location was the place where it was most likely to be seen by people who had seen the story, for they were the people whose opinion of Mr Hafertepen might have been lowered by the relevant imputations and whose misconceptions were in need of correction. If that was not the homepage or the Clarification could not be accommodated on the homepage, then it was a page relating to The Project, being the place on the website to which the story had been uploaded and where it had been made available for streaming.

102    In cross-examination Mr Farley denied making the decision to put the Clarification on the Terms of Use page in the belief that “next to nobody” would see it. But when asked whether he thought people read the terms of use of the website, he said he did not know. When pressed, he replied:

Look, I don’t think that – I don’t think people go there, but – I – I don’t know. I honestly don’t know.

103    If he did not think people go to the Terms of Use page (or know whether they do), then the Terms of Use page was scarcely the most logical or appropriate location for the Clarification. The most rational explanation for his choice of location was that he thought it was in Ten’s best interests to bury it where it was unlikely to be found. It is true that later in cross-examination, when asked whether he was seriously telling the Court that he was satisfied that the Clarification was in a place where people could find it, he replied that it was. In the light of his earlier evidence, however, his answer was not credible.

104    In his second affidavit Mr Farley addressed the requests made by Ms Webber to republish the Clarification where it could be seen and to send her copies of the letters to the media organisation. He dealt with this matter by reference to the “reputational cost” of the Agreement, stating:

[31]    As a national broadcaster and large media organisation, the Respondent’s public standing carries considerable value. In my experience, it is not a small matter for an organisation such as the Respondent to make any form of public correction, clarification or apology. This is especially the case, as in this matter, where the Respondent settled the proceeding with no admission of liability, pursuant to clause 14 of the Settlement Agreement.

[32]    I considered that the Settlement Agreement was an all-inclusive package deal the Applicant was prepared to accept and the Respondent was prepared to pay, which had a considerable reputational and monetary cost for the Respondent.

[33]    I considered that the requests by the Applicant for the repositioning of the Clarification and copies of the Letters to Media Organisation had the potential to undermine the integrity of the Settlement Agreement as a package deal, which finely balanced the reputational cost the Respondent was prepared to accept in return for the cost effective resolution of the dispute.

105    In cross-examination, however, he rejected the proposition that his decision that the Clarification should be published on the Terms of Use page in the first place was primarily actuated by his concern with the reputational harm he felt would be occasioned to Ten because it had agreed to publish a clarification. On the other hand, he conceded that the purpose of the Clarification was to vindicate Mr Hafertepen’s reputation to the extent that it may have been damaged by The Project’s story. He also conceded that in order to achieve that purpose it was necessary for people to see the Clarification and that it was therefore necessary for it to be published in a position where it could be seen. Yet, the effect of Mr Farley’s evidence is that it never entered his head when considering the various options that the Clarification should be published in a position where it could be seen. Rather, it was a matter of complete indifference to him. As long as it was published that was enough. This evidence is also implausible. I accept the submission made on Mr Hafertepen’s behalf that more likely than not Mr Farley chose the place of publication in order to avoid or minimise the so-called reputational cost of making a public apology.

106    Mr Farley was an unsatisfactory witness. He was often evasive and had to be pressed to answer the questions he was asked. In cross-examination he was unable to provide an intelligible explanation for sending Ms Webber a photograph to prove the letters had been sent when the subject-matter of the photograph was unable to be discerned. As indicated above, on critical issues his evidence was not credible.

107    I find that, by publishing the Clarification at the bottom of the Terms of Use page of the 10play website Ten’s conduct failed to discharge its obligation under cl 7. Rather, it published the Clarification in a manner that was calculated to frustrate or undermine its purpose and which deprived Mr Hafertepen of an essential benefit of the contract he had bargained for. In acting in this way, Ten breached the Agreement.

108    By insisting that it was adhering to the terms of the Agreement, Ten’s conduct involved what Barrett J referred to in Overlook as “cynical resort to the black letter”. Publishing the Clarification in a place where it was unlikely to be seen by anyone, let alone by anyone who had seen or heard the publication the subject of the suit being compromised by the Agreement, was an act of bad faith. It was also inconsistent with Ten’s obligation to do all things reasonably required to give effect to the Agreement.

What orders should be made?

109    For all these reasons, the order dismissing the proceeding should be set aside and an order made for specific performance of the Agreement, more particularly of cl 7. As is customary, a declaration should also be made that the contract should specifically be performed and carried into execution or effect: see Singh (Sudagar) v Nazeer [1973] 1 Ch 474 at 477 (Sir Robert Megarry V-C); Fuentes v Bondi Beachside Pty Ltd [2016] NSWSC 531; 18 BPR 35989 (White J); Jeppesons Road Pty Ltd v Di Domenico [2005] QCA 391.

110    During the hearing, after the call had been made on Ten during Mr Farley’s cross-examination to produce copies of the letters to the media organisations, Ten agreed to produce them to the Court. Over its objection I granted access to his lawyers. Consequently, proposed order 4 was not pressed.

111    That leaves the question of costs.

112    The Court has a broad discretion when it comes to costs. The power, conferred by s 43 of the FCA, is subject to no express fetters, save that it must be exercised in the way that best promotes the overarching purpose of the civil practice and procedure provisions of the Act and Rules: FCA Act, s 37M(3). That purpose, described in s 37M(1) of the Act, is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. Section 37N imposes a duty on the parties to a civil proceeding to conduct the proceeding in a way that is consistent with that purpose and on a party’s lawyer to take account of the duty imposed on the party and assist the party to comply with it. In exercising the discretion to award costs in this case, I am required to take account of any failure to comply with that duty: FCA Act, s 37N(3).

113    The usual position is that costs follow the event and are assessed on a party and party basis. Rarely does an assessment of party and party costs compensate the victor for all costs incurred. In the present case, Mr Hafertepen seeks an order that Ten pay his costs and that they be assessed on an indemnity basis.

114    Despite the breadth of the Court’s discretion, an order for indemnity costs will not be made in the absence of some “special or unusual feature” which would justify a departure from the ordinary course: see, for example, Cirillo v Consolidated Press Property Ltd (formerly known as Citicorp Australia Ltd) (No 2) [2007] FCA 179 at [3] (Finn J). Such an order is normally reserved for cases where the Court wishes to indicate its disapproval of a party’s conduct of the litigation: Dal Pont G E, Law of Costs (4th ed, LexisNexis Butterworths, 2018) at [16.46], citing Raja v Rubin [2000] Ch 274 at 289 (Peter Gibson LJ), with whom Clarke LJ and Hirst LJ agreed. It may be made “when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs”: Hamod v New South Wales [2002] FCAFC 97; 188 ALR 659 at [20] (Gray J, with Carr and Goldberg JJ agreeing at [26]–[27]); Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No 2) [2017] FCAFC 116 at [3]–[5] (Jagot, Yates and Murphy JJ). Nevertheless, the order is intended to be compensatory, not punitive: Hamod at [20].

115    I am persuaded that this is an appropriate case for indemnity costs.

116    Ten’s behaviour was unreasonable from the outset. Even if Mr Farley genuinely believed that publication of the Clarification on the Terms of Use page amounted to compliance with cl 7, it was unreasonable of Ten to refuse to accede to Ms Webber’s request of 27 May 2020 to arrange for the Clarification to be moved to one of the 10play website pages for The Project. Moreover, although there was no requirement under the Agreement for it to do so, it was also unreasonable of Ten to refuse to provide copies of the letters sent to the media organisations and Google, particularly after Ms Webber gave the undertaking on 16 June 2020 not to show them to her client.

117    Ms Webber renewed her requests several times before the interlocutory application was filed. On 29 June 2020, she wrote a letter to Ten in the following terms, foreshadowing an application for indemnity costs in the event that Ten maintained its position and it became necessary to approach the Court:

We refer to the Settlement Agreement entered into by Network Ten Pty Ltd (Ten) with our client with respect to the above proceedings, and the subsequent email correspondence between ourselves and Ten’s former solicitors, Macpherson Kelley, with respect to Ten’s compliance with the Settlement Agreement.

Compliance with Clause 7

We refer the email sent by Macpherson Kelley to our firm on 1 June 2020 in relation to Ten’s compliance with Clause 7 of the Settlement Agreement.

We strongly disagree with the contents of that email.

We do not agree that the publication by Ten of the Clarification at the bottom of the “Terms of Use” webpage of the 10play website is the “logical place” for publication.

The purpose of the “Terms of Use” page is to set out the terms and conditions of an agreement between users accessing the 10play website and you. The Terms of Use must be read and agreed to by new users signing up to 10play website. The Terms of Use is not a page of the 10play website that existing users, in the ordinary course, would have any need to access or view.

For the above reasons it is not, in our respectful submission, the logical place to communicate any clarifications, corrections or apologies with respect to material published by Ten on the 10play website. The logical place for the publication of any such clarification, correction or apology is in the same, or similar, location as the place the original content (which requires clarification, correction or apology) was published.

The purpose of the Clarification is to provide information to users of the 10play website who may have watched the story titled “Justice for Jack” (Content), broadcast as part of the television program known as The Project, and uploaded by Ten to the 10play website on or about 6 November 2018. Users of the 10play website since November 2018 would have no reason in May 2020 to read or access the website Terms of Use, and in particular to scroll to the bottom of those Terms.

At all material times whilst negotiating the terms of the Settlement Agreement, it was our client’s understanding that the Clarification would be published in a location which would enable it to be brought to the attention of viewers of the Content, which is why our client insisted on inserting in Clause 7 of the Settlement Agreement the words that the Clarification “be published in the same size and font that usually appears on that website.”

Whilst we agree that Clause 7 does not stipulate the specific page/location of the required placement of the Clarification on the 10play website, it is clear when one has regard to the terms of the Settlement Agreement as a whole, and in particular the words used in Clause 7 (which specify the size and font of the Clarification), that it was the intention of the parties that the Clarification would appear on the 10play website in a location that viewers of the Content were likely to see it.

Ten’s decision to publish the Clarification at the very bottom of the 10play website “terms and conditions” page is plainly a deliberate attempt to place the Clarification in a place where no one who saw the Content on 10play would look, such that the Clarification would not come to the attention of any viewers of the Content.

That such a location would be chosen by Ten is a disgrace, and something that was so far outside the contemplation of the parties at the time of negotiating the Settlement Agreement that our client did not consider it necessary to proscriptively specify the location of publication in Clause 7 of the Settlement Agreement.

Ten’s conduct in choosing this location for publication of the Clarification clearly demonstrates bad faith on Ten’s part in carrying out the terms of the Settlement Agreement. To argue, as set out in Macpherson Kelley’s email dated 1 June 2020, that leaving the Clarification on the website for longer than the 14 day period required by the Settlement Agreement demonstrated “further good faith by our client” is, with all due respect, highly offensive.

Compliance with Clause 5

We refer to our email exchanges with Macpherson Kelley between 25 May 2020 and 19 June 2020 in relation to Ten’s compliance with Clause 5 of the Settlement Agreement.

Despite repeated requests, Ten has refused to provide our firm with copies of the letters Ten says it has sent to various media organisations and Google pursuant to Clause 5 of the Settlement Agreement. This is notwithstanding our firm's undertaking not to provide copies of these letters to our client.

We do not understand Ten’s blanket refusal to provide our firm with copies of these letters. This refusal is, in our view, a further demonstration of a lack of good faith on the part of Ten with respect to its compliance with the terms of the Settlement Agreement.

It is standard practice for a party to a Settlement Agreement, upon request from the other party, to provide evidence of compliance with its obligations under a Settlement Agreement. It would be a very simple matter for Ten to provide our firm with copies of the letters it has sent pursuant to Clause 5.

Instead, Ten has refused to provide these letters as evidence of compliance. Instead, it has chosen to provide assurances, through Macpherson Kelley, that compliance has occurred. Evidence of compliance and assurances as to compliance are not the same thing. Our client is entitled to evidence of compliance.

Demand

Whilst we note Ten does not intend to take any further action with respect to the above matters and considers its compliance with the Settlement Agreement at an end, our client is not of the same view.

We are instructed to make the following demands of Ten:

1.     That by 5pm on Wednesday 1 July 2020, Ten publishes the Clarification on the 10play website on one of the pages with content dealing specifically with the Project, and starting with the URL https://10play.com.au/theproject/ (such as, for example, https://10play.com.au/theproject/about), in the same size and font as the other content on that page, to remain in that location for a period of 14 days from the date of publication on that page; and

2.     That by 5pm on Wednesday 1 July 2020, Ten provides Atkinson Vinden lawyers with copies of each of the letters sent to the various media organisations and Google pursuant to Clause 5 of the Settlement Agreement.

We renew our undertaking, as previously provided in our email to Macpherson Kelley date 16 June 2020, to not show or provide copies of the letters sent in compliance with Clause 5 to our client.

If the above demands are not met, we are instructed to file an application in the Federal Court, to be listed before Her Honour Justice Katzmann without further notice to you, seeking orders requiring Ten to specifically perform Clause 7 of the Settlement Agreement and to provide copies of the letters sent in compliance with Clause 5 of the Settlement Agreement.

If such an application is required, we will be seeking an indemnity costs order against Ten with respect to that application, and will be relying on this letter with respect to that costs application.

118    In its reply of 3 July 2020 Ten did not dispute Ms Webber’s characterisation of the Terms of Use page. Nor did it cavil with Ms Webber’s statement that it was standard practice for a party to a settlement agreement to provide evidence of compliance on request. Indeed, while it maintained its position that it had complied with the Agreement, Ten did not engage with any of Ms Webber’s arguments.

119    In all the circumstances, Ten’s refusal to agree to Ms Webber’s demands was unreasonable.

120    On 27 August 2020 Macpherson Kelley made an open offer to settle the interlocutory application on the following terms:

 1.    by Monday, 31 August 2020, a legal representative of your firm is to arrange to attend our office by prior appointment to inspect the Letters to the Media Organisations sent in accordance with Clause 5 of the Settlement Agreement;

 2.    our client agrees to forgo any application for its costs relating to your client’s interlocutory application; and

3.    the interlocutory application be dismissed with no adjudication of the merits and with no order as to costs.

The offer was open, it seems, for 24 hours.

121    Ten’s responses were inconsistent with its obligations under s 37N. It is bewildering that in 2020, during a global pandemic, Ten would insist that Mr Hafertepen’s lawyer attend the office of Ten’s lawyers to inspect the letters to the media organisations. Besides, the offer did not address Ten’s failure to publish the Clarification in a place on the website where it was likely to be seen by anyone who had watched the particular episode of The Project or, for that matter, anyone at all.

122    At the first return date for the interlocutory application on 3 September 2020, I sent the parties to a registrar of the Court for mediation in the hope that the matter could be resolved expeditiously at minimal cost. Open offers were thereafter exchanged. The offer made on behalf of Mr Hafertepen lapsed. Ten did give further ground on this occasion. While insisting that it was in the right, it made another open offer to settle the interlocutory application on terms which included publishing the Clarification on the homepage of The Project under the “Articles” heading, in the same size and font that usually appears on that page, and for a period of not less than 14 days. It also agreed to make the letters to the media organisations available either via an audio-visual platform such as Microsoft Teams or at Macpherson Kelley’s office. But it also proposed that the interlocutory application be dismissed with no order as to costs. By this time, however, there was no good reason why Ten should not have agreed to meet Mr Hafertepen’s reasonable costs.

123    It follows that I will make orders substantially in accordance with those sought by Mr Hafertepen.

Associate:

Dated:    12 October 2020