Federal Court of Australia

Seven Network v Cricket Australia [2021] FCA 1031

ORDERS

THE COURT ORDERS THAT:

1.    On or before 4:00pm on 10 September 2021, the Prospective Applicant is to provide the Prospective Respondent with proposed minutes of order reflecting the reasons for judgment and proposing:

(a)    the categories of documents in respect of which the Prospective Respondent is to provide discovery;

(b)    the time by which the Prospective Respondents is to provide discovery of the documents; and

(c)    the time by which the Prospective Respondent is to produce the documents for inspection.

2.    In the event that the Prospective Applicant’s proposed orders are agreed, the Prospective Applicant is to provide proposed minutes of order by way of email to associate.anastassiouj@fedcourt.gov.au and ea.anastassiouj@fedcourt.gov.au by no later than 4:00pm on 24 September 2021.

3.    Subject to further order, in the event that the Prospective Applicant’s proposed orders are opposed, the Prospective Applicant is to provide proposed minutes of order referring the dispute to a Registrar of the Court. Those proposed minutes of order are to be provided by way of email to associate.anastassiouj@fedcourt.gov.au and ea.anastassiouj@fedcourt.gov.au by no later than 4:00pm on 24 September 2021.

4.    If the Prospective Respondent intends to make an application for its reasonable costs and expenses of making discovery pursuant to r 7.29(b) of the Federal Court Rules 2011 (Cth), it must make such application within seven (7) days of the categories of documents being agreed between the parties or determined by the Court.

5.    If the Prospective Respondent makes the application referred to in order 4, the Prospective Respondent is to file and serve any written submissions, limited to two pages, by no later than seven (7) days after the making of the application.

6.    If the Prospective Respondent makes the application referred to in order 4, the Prospective Applicant is to file and serve any written submissions, limited to two pages, by no later than 14 days after the making of the application.

7.    Subject to order 8, the costs of the Prospective Applicant and Prospective Respondent of and incidental to the preliminary discovery application be that party’s costs in the cause in any proceeding commenced by the Prospective Applicant against the Prospective Respondent concerning claims the subject of the preliminary discovery application.

8.    If a proceeding against the Prospective Respondent concerning claims the subject of the preliminary discovery application is not commenced by the Prospective Applicant within six (6) months of the date of this order, or such further period as the Court allows, the Prospective Respondent shall be entitled to its costs of and incidental to the preliminary discovery application, to be agreed or in default of agreement assessed.

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

REASONS FOR JUDGMENT

ANASTASSIOU J:

INTRODUCTION

1    This is an application by Seven Network (Operations) Ltd, the Prospective Applicant, for preliminary discovery from Cricket Australia, the Prospective Respondent, pursuant to r 7.23 of the Federal Court Rules 2011 (Cth).

2    Seven and Cricket Australia are parties to an agreement described as a “Media Rights Agreement” (MRA) dated 20 November 2019. Under the agreement, Cricket Australia grants Seven the right to broadcast certain cricket matches organised and conducted by Cricket Australia in exchange for a rights fee.

3    The contractual provision of central relevance to the present application is cl 6.9(b) of the MRA, which provides:

[Cricket Australia] must use all reasonable endeavours to organise and conduct all Seven Matches on average across the Season to a quality and standard which is at least equal to the highest quality and standard in the world for such type of Matches and, in any event, to a quality and standard for the Season which is overall no less than the prior year’s Season.

4    Clause 1.1 of the MRA defines “Seven Matches” to include different formats of cricket which are televised by Seven during the cricket season, namely:

(a)    all Men’s Test Matches;

(b)    all Women’s International Matches;

(c)    all Seven BBL Matches; and

(d)    all Seven WBBL Matches.

Of particular relevance to the present application is that “all Seven BBL Matches” refers to 43 of the 59 “Big Bash League” (BBL) Matches scheduled in each season, including all finals.

5    Seven contends that it may have a right to obtain relief against Cricket Australia arising from Cricket Australia’s failure to organise and conduct “Seven Matches” to a quality and standard required by cl 6.9(b) of the MRA. Seven also contends, albeit indirectly, that it may have a right to obtain relief against Cricket Australia arising from a potential contravention of s 18 of the Australian Consumer Law (ACL), which is Schedule 2 of the Competition and Consumer Act 2010 (Cth), if the apprehended claim for breach of contract is established.

6    In particular, Seven believes that Cricket Australia may have breached the MRA by failing to use all reasonable endeavours to achieve the objectives in cl 6.9(b), instead preferring other commercial interests, to the detriment of the quality and standard of Seven Matches in the 2020-21 cricket season. Seven contends that the scheduling changes are capable of, and did in the present circumstances, have an adverse effect on the quality and standard of the Seven Matches.

7    Accordingly, Seven’s principal contention is that it may have a right to obtain relief arising from contraventions of cl 6.9(b). However, having regard to the content of the obligation under that clause, being to “use all reasonable endeavours”, Seven contends that it does not have sufficient information to decide whether to commence a proceeding in this Court, despite having made all reasonable inquiries. Embedded in this contention is a question of construction, namely, whether the meaning of “quality and standard” in cl 6.9 includes adverse consequences which may arise from scheduling changes, including adverse impacts upon the quality and standard of the Seven Matches.

8    As I explain further below, the underlying grievance advanced by Seven concerns changes made to the scheduling of the Seven Matches. There are specific and detailed provisions in the MRA relating to scheduling changes, including a mechanism for compensating Seven for the adverse effects of such changes following an Expert Determination under cl 6.11 of the MRA (see also cll 6.3 and 6.4 of MRA). In this instance, the Expert Determination process was enlivened by Seven on 11 September 2020 and a Final Determination was issued in respect of that process on 12 March 2021. The contents of that determination, including the amount of compensation to which Seven is entitled due to the scheduling changes, are confidential and it is proper that such sensitive commercial information not be disclosed: see, eg, Mobil Oil Australia Ltd & McDonalds Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34 at 38 (Hayne JA), (Winneke P and Phillips JA agreeing at 35). Importantly, Seven contends that the Expert Determination process under cl 6.11 does not provide an exhaustive remedy for any loss or adverse effects arising from scheduling changes.

9    In support of its application for preliminary discovery, Seven relies on the following affidavits:

(1)    an affidavit of Lewis Martin, Managing Director of Seven, affirmed on 30 November 2020 (the First Martin Affidavit); and

(2)    an affidavit of Lewis Martin affirmed on 9 December 2020 (the Second Martin Affidavit), which makes inconsequential amendments to the First Martin Affidavit.

Seven also filed detailed written submissions in support of the present application on 26 February 2021 and 10 March 2021.

10    Cricket Australia opposes the preliminary discovery application on three bases. The first basis is that the Federal Court of Australia does not have jurisdiction to hear and determine the potential claim foreshadowed by Seven. The second basis is that Seven has not satisfied the requirements of r 7.23(1) of the Rules and, accordingly, the present application ought to be dismissed. The third basis is that, by reason of Seven’s conduct leading up to, and in bringing, the preliminary discovery application, the Court should exercise its discretion to refuse the orders sought.

11    Cricket Australia relies on the following affidavits:

(1)    an affidavit of Christien William Corns, Partner at K&L Gates, sworn on 15 December 2020, including the Confidential Schedule to that affidavit (the First Corns Affidavit);

(2)    an affidavit of Stephanie Helen Beltrame Sturrock, Executive General Manager - Broadcasting & Commercial, Cricket Australia, affirmed on 16 February 2021 (the First Beltrame Affidavit);

(3)    an affidavit of Stephanie Helen Beltrame Sturrock affirmed on 12 March 2021 (the Second Beltrame Affidavit); and

(4)    an affidavit of Christien William Corns sworn on 15 March 2021 (the Second Corns Affidavit).

Cricket Australia also filed detailed written submission in opposition to the application on 5 March 2021.

12    For the reasons that follow, I am satisfied that the Court has jurisdiction to hear and determine the prospective proceeding. I am further satisfied that the various limbs of r 7.23(1) have been established and preliminary discovery should be ordered, subject to appropriate categories of discovery being agreed or, in default of agreement, determined by this Court.

BACKGROUND

13    The following summary of the relevant background facts is taken from Seven’s succinct summary of those matters in its written submissions. Cricket Australia does not dispute these matters. Accordingly, I gratefully adopt the summary, which I have paraphrased below, omitting footnotes, references and any partisan characterisations of the facts.

The MRA

14    Seven and Cricket Australia entered into the MRA in November 2019 following agreement as to the principal terms in April 2018. The MRA addresses six “Seasons” from 2018-19 to 2023-24, having a “Commencement Date” of 13 April 2018 and an Expiry Date of 31 March 2024, unless terminated earlier: cll 1.1 and 2.

15    By clause 3.1, Cricket Australia has granted to Seven “Media Rights”. Those rights are defined in cl 1.1 to mean the rights licensed to Seven under the MRA, including as detailed in Schedules 2 and 2A of the MRA. Those rights include the exclusive right to transmit “Matches”, including “Seven BBL Matches”, via free-to-air television within Australia. In turn, Seven is required to pay a rights fee to Cricket Australia in instalments throughout the term of the MRA: cl 20, Sch 4.

16    The MRA contains detailed provisions governing the parties’ obligations in relation to the conduct of “Matches”, and the manner in which broadcasts may (or must) be produced and transmitted.

17    Clause 6 provides a process for the scheduling of Matches. Cricket Australia is obliged to provide a draft schedule for men’s and women’s international matches by 31 March of each year and for men’s and women’s BBL (together referred to as “W/BBL”) matches by 1 May of each year: cl 6.1(c). Seven is then able to provide feedback within a prescribed period, and the parties are obliged to consult in good faith with a view to maximising television ratings, with Cricket Australia retaining ultimate control and discretion in scheduling: cl 6.1(d)-(e). Cricket Australia is then obliged to publish a final international schedule by 1 June of each year and a W/BBL schedule by 15 July of each year, known as/referred to as the “Published Schedule”: cl 6.1(f). The Published Schedule may only be changed by Cricket Australia in accordance with cl 6.3.

18    Clause 28(a) of the MRA provides for the suspension of a party’s obligations in circumstances where that party is wholly or partially precluded from performing by reason of a “Force Majeure Event”. The party affected by a Force Majeure Event must give notice of the extent to which it is unable to perform its obligations as soon as practicable after the event arises: cl 28(b).

The dispute concerning the 2020-21 Season

19    Mr Martin deposes to the fact that, during and after the 2019-20 cricket Season, he was concerned about the deteriorating broadcast ratings (i.e. audience numbers) for the BBL Tournament.

20    In the first half of 2020, representatives of Cricket Australia and Seven held meetings to discuss means of improving the BBL’s performance in the upcoming 2020-21 Season, including the importance of a “Fast Start” to be achieved by scheduling the commencement of the Men’s BBL Tournament on the same days as an international Men’s Test Match. Cricket Australia also indicated that it was committed to implementing rules innovations and extensive marketing and promotion to support broadcasting ratings for the Men’s BBL Tournament.

21    Commencing on 13 May 2020, Seven and Cricket Australia held weekly meetings (described as scheduling workshops) to discuss operational broadcast matters, scheduling strategies and other concepts to grow broadcast audiences.

22    On 28 May 2020, Cricket Australia published the international cricket match schedule for the 2020-21 Season in accordance with cl 6.1(f)(i) (the Published International Schedule). Mr Martin deposes to the fact that he was broadly satisfied that the Published International Schedule was consistent with the “Fast Start” concept envisaged in discussions between Seven and Cricket Australia.

23    On 6 July 2020, Cricket Australia purported to give notice that a Force Majeure Event (owing to the pandemic and associated restrictions) prevented Cricket Australia from complying with its obligation to publish a schedule for W/BBL matches pursuant to cl 6.1(f)(ii) of the MRA. Seven contends that there was no proper basis for the Force Majeure notice but it is unnecessary for the purposes of this application to decide that issue. In any event, the notice was subsequently withdrawn on 14 July 2020.

24    On 15 July 2020, Cricket Australia published a schedule for the men’s BBL tournament (the Published BBL Schedule). Mr Martin deposes to the fact that he was also broadly satisfied with the Published BBL Schedule and considered it consistent with the “Fast Start” concept. The BBL Tournament was scheduled to commence on 3 December 2020, being the first day of the first men’s Test against India in Brisbane according to the then Published International Schedule.

25    On 7 August 2020, Mr Martin and other Seven representatives met with representatives of Cricket Australia. During that meeting, Cricket Australia presented six alternative proposals to the Published International Schedule and the Published BBL Schedule. Mr Martin deposes to the fact that he considered each of these alternatives would harm the quality and broadcast spectacle of the BBL Tournament, and were materially detrimental to Seven’s commercial interests. The “key change” identified by Mr Martin was the change in the timing of the Australia v India Test matches, brought about by the proposed rescheduling of Australia v India T20 (T20) and One Day International (ODI) matches (which were not “Seven Matches” under the MRA).

26    Mr Martin deposes to the fact that he was and is unaware of any legitimate operational reasons Cricket Australia had for prioritising the T20 and ODI matches against India over the Seven Matches. According to Mr Martin, Cricket Australia’s representatives explained that the changes were the consequence of the Indian Board of Control for Cricket (BCCI) wanting all of the Indian cricket players to quarantine at once. Mr Martin deposes to the fact that he suspected the changes were made to benefit Fox Sports Australia Pty Ltd (Foxtel), who were to be the exclusive broadcaster of the T20 and ODI matches.

27    On 19 August 2020, Cricket Australia gave further notice of “one or more” Force Majeure Events that “wholly or partially precluded” Cricket Australia from performing “any” obligation “to ensure that scheduled matches are played as specified in the Published Schedule”. The notice did not identify, by clause, the source of the asserted obligation. Cricket Australia also asserted that it was “wholly or partially” precluded from complying with eight other obligations identified by reference to specific provisions of the MRA. On 27 August 2020, Seven’s solicitors responded disputing the validity of the purported notice.

28    Following circulation of further proposed revised schedules, Cricket Australia published, on 28 October 2020, a “Changed International Schedule” and, on 5 November 2020, a “Changed BBL Schedule”. On each of those days, Cricket Australia sent letters to Seven referring to and repeating the Force Majeure Event notice of 19 August 2020. The Changed BBL Schedule provided for “the opening stretch of matches to be played in Tasmania and Canberra” and its announcement was accompanied by a statement from the Premier of Tasmania describing it as a “massive coup” for the state of Tasmania.

Correspondence regarding potential breach of cl 6.9(b)

29    On 6 November 2020, Seven’s solicitors wrote to Cricket Australia’s solicitors expressing Seven’s doubts as to Cricket Australia’s compliance with cl 6.9(b) of the MRA and seeking explanations for various changes made in the Changed International Schedule and the Changed BBL Schedule. The letter invited Cricket Australia to explain the specific reasons why each of the changes were made and how those changes were said to be consistent with Cricket Australia’s obligations under cl 6.9(b) of the MRA. Seven further requested that Cricket Australia substantiate any explanation with documentation, including contractual documentation and correspondence between: (i) Cricket Australia and the BCCI; and (ii) Cricket Australia and the Government of Tasmania.

30    On 17 November 2020, Cricket Australia’s solicitors responded by letter asserting compliance with Cricket Australia’s obligations in cl 6.9(b) of the MRA. The letter reiterated the content of the Force Majeure notices and declined to provide any of the documentation sought by Seven on the basis that it considered the documents had been “arbitrarily sought”.

31    On 18 November 2020, Seven’s solicitors in turn responded, expressing disappointment and reiterating requests for substantiated explanations for the changes. That letter also foreshadowed an application for “pre-action discovery” if specified documents were not voluntarily provided.

32    I pause to add that the correspondence between the parties was assertive, tendentious, and at least to some degree, posturing. Such tendentious communications are, regrettably, not uncommon in the pre-litigation context. For reasons I shall explain below, a prospective applicant is not precluded from seeking relief under r 7.23 merely because their solicitors have asserted a contractual breach in correspondence with, or in prior statements to, a prospective respondent’s solicitors: see, eg, BCI Media Group Pty Ltd v Corelogic Australia Pty Ltd [2020] FCA 1556 at [35]-[58] (Charlesworth J); Manolo Blahnik Worldwide Limited v Estro Concept Pty Limited [2020] FCA 1561 at [44]-[58], [69]-[75] (Markovic J); cf. Cromwell Corporation Limited v ARA Real Estate Investors XXI Pte Ltd [2020] FCA 1492 at [116]-[131] (Anderson J).

Seven’s belief relevant to the preliminary discovery application

33    In summary, Seven contends that it has formed the view that: (a) it may have a claim for damages against Cricket Australia for breach of cl 6.9(b) of the MRA, but does not have sufficient information to decide whether to commence an action for damages; and (b) Cricket Australia is likely to have documents relevant to whether Seven has a right to damages, inspection of which would assist in deciding whether to commence proceedings.

34    Seven expresses its belief as having doubt that, in organising the 2020-21 season, Cricket Australia used all reasonable endeavours to ensure that the Seven Matches were conducted to the stipulated quality and standard in cl 6.9(b). Seven contends that the changes to the Published International Schedule and Published BBL Scheduled (together, the Published Schedules) damaged the quality of the Seven Matches and Seven doubts that those changes were necessitated or explained by the COVID-19 pandemic (or the related matters identified in Cricket Australia’s Force Majeure notices).

35    Seven believes that Cricket Australia, in its departures from the Published Schedules, may have prioritised its own interests and those of the BCCI, Foxtel and the Government of Tasmania, to the detriment of the quality and standard of the Seven Matches and in breach of Cricket Australia’s obligations under cl 6.9(b). Mr Martin deposes that this belief is in the nature of “informed inference”, on the basis that the changes made by Cricket Australia are “otherwise apparently inexplicable” to him. Notwithstanding, Mr Martin states that he did not consider this was a sufficient basis to determine whether to sue Cricket Australia, particularly given that proceedings of the kind contemplated are likely to be “very expensive” and necessarily involve difficulty in establishing what would have occurred on a counterfactual analysis.

Jurisdiction

36    A preliminary issue raised by Cricket Australia in this application is whether this Court would have jurisdiction to hear and determine the prospective proceeding: Rush v Commissioner of Police [2006] FCA 12; 150 FCR 165 at [5].

37    That issue was raised by Cricket Australia in written submissions sent to my chambers on 15 December 2020 in advance of a case management hearing in the matter. Cricket Australia explained the issue in the following terms:

There is a further threshold issue which [Cricket Australia] considers it ought raise, which may be fatal to the application.

It is unclear to [Cricket Australia] whether this Court even has jurisdiction to hear application. The Federal Court has an extensive, yet limited, jurisdiction to determine matters in federal jurisdiction. The Full Court (Allsop CJ, Besanko and White JJ), in Rana v Google Inc, explained:

A matter will “arise under” a law of the Parliament in a number of ways. These include cases where a cause of action is created by a Commonwealth statute; where a Commonwealth statute is relied upon as establishing a right to be vindicated; where a Commonwealth statute is the source of a defence that is asserted; where the subject matter of the controversy owes its existence to Commonwealth legislation —that is where the claim is in respect of or over a right which owes its existence to federal law; where it is necessary to decide whether a right or duty based on a Commonwealth statute exists even where that has not been pleaded by the parties, or where a federal issue is raised on the pleadings but it is unnecessary to decide.

Here, there is no prospective cause of action raised under a Commonwealth Act, nor any necessary nexus with federal law. Indeed, the foreshadowed proceeding is an allegation of a breach of contract, which does not (generally) invoke the Federal Court’s jurisdiction. There would need to be some federal matter. And, insofar as it may be said that the Court has jurisdiction by reason of a contract concerning a federal matter, that would require there to be a right or duty under the MRA which owes its existence to federal law or depends on federal law for its enforcement.

[Footnotes omitted]

38    In response, Seven submitted that there is “no doubt” that the prospective proceeding would be within the Court’s jurisdiction and articulated the following five bases upon which the Court’s jurisdiction is said to be enlivened.

(1)    First, the MRA is a contract in respect of rights which are the creation of federal law and depend upon federal law for their enforcement: see, eg, LNC Industries v BMW (Australia) Ltd [1983] HCA 31; 151 CLR 575 at 581 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ), Murphy J agreeing 582-583.

(2)    Second, Cricket Australia is a corporation incorporated under the Corporations Act 2001 (Cth). As a result, the ability to sue Cricket Australia “arises under and depends upon a law of the Commonwealth”: see, eg, Hafertepen v Network Ten Pty Limited [2020] FCA 1456 at [44] (Katzmann J), citing obiter in Oliver v Nine Network Australia Pty Ltd [2019] FCA 583 at [16] (Lee J).

(3)    Third, Cricket Australia’s reliance on border controls imposed by the Commonwealth Government, in justifying the need for scheduling changes under the MRA, gives rise to a federal matter, even if Seven’s prospective claim does not: see, eg, Australian Solar Mesh Sales Ltd v Anderson [2000] FCA 864; 101 FCR 1 at [12] (Burchett J), Wilcox J agreeing at [1].

(4)    Fourth, the apprehended breaches of the MRA occurred in, or are related to, a number of physical locations around Australia, including in relation to matches played in the Australian Capital Territory (ACT). That itself, Seven submitted, is sufficient to enliven federal jurisdiction: see, eg, Crosby v Kelly [2012] FCAFC 96; 203 FCR 451 at [35] (Robertson J), Bennett J agreeing at [1], Perram J agreeing at [2].

(5)    Fifth, Seven may have a claim for relief for a contravention of the prohibition in s 18 of the ACL for misleading and deceptive conduct, if the apprehended breach of contract is made out. That is a matter which arises directly under federal law and would therefore bring the whole proceeding within federal jurisdiction: see, eg, Oliver at [17].

39    Cricket Australia submitted that Seven’s prospective claim against Cricket Australia is plainly (and solely) one for damages arising from a purported breach of contract. Accordingly, Cricket Australia contended that the preliminary discovery application must fail on the basis that this Court lacks jurisdiction to hear and determine a prospective proceeding brought by Seven.

40    If any of the bases contended for by Seven is established, that is sufficient for the purposes of overcoming the threshold issue in this application. For the reasons that follow, I consider that the first basis contended for by Seven provides the necessary foundation to bring the matter within the jurisdiction of this Court. Though it is not strictly necessary to do so, I also make some brief observations in relation to the second basis.

First basis – Is the MRA a contract in respect of rights which are the creation of federal law and depend upon federal law for their enforcement?

41    Seven’s first and principal submission was that the matter arises under a federal law because a right or duty in question in the matter owes its existence to federal law and depends upon federal law for its enforcement: see LNC Industries at 581. The contention underpinning this submission is that the MRA is a contract in relation to Seven’s ability to broadcast cricket matches organised by Cricket Australia, and that contract involves a set of rights and obligations governed by federal legislation and facilitated by Commonwealth infrastructure. Seven submitted that the justiciable controversy is thus one in respect of media broadcasting rights, which rights are in turn the creation of federal law. It follows, according to Seven, that these circumstances are sufficient to bring the matter within the jurisdiction of this Court, notwithstanding that the determination of the controversy between the parties does not necessarily involve the interpretation or validity of a federal law: R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett [1945] HCA 50; 70 CLR 141 at 154 (Latham CJ).

42    In considering this basis of jurisdiction, careful attention must be given to the MRA, as well as to the rights and obligations the subject of the contract. As the recitals to the MRA explain, Seven owns and operates a free-to-air (FTA) television network and is an experienced FTA television broadcaster of, amongst other things, high-profile sporting events. Pursuant to cl 3.1 of the MRA, Cricket Australia grants to Seven various media rights, which must be exercised in accordance with the other terms of the agreement.

43    The first of those media rights is the exclusive right to transmit Seven Matches live, delayed and/or as a replay via FTA television during the term of the agreement. Transmit is defined to include any transmission, broadcast, communication, distribution, display, dissemination, performance or other exhibition of audio-visual material. The transmission and broadcast of Seven Matches can only occur through access to the broadcast telecommunications infrastructure, which is governed and controlled by the Commonwealth Government and its instrumentalities. In addition, Seven holds a commercial broadcasting licence under the Broadcasting Services Act 1992 (Cth) (BSA), being a licence issued by the Australian Communications and Media Authority (ACMA), which enables it to utilise specified broadcasting services: see ss 12, 36 and 41C of the BSA. It is therefore a necessary predicate of the MRA that Seven holds a commercial broadcasting licence if it is to enjoy its rights under the MRA.

44    The MRA also regulates the exercise of various intellectual property rights. Seven submitted that these are rights which owe their existence to federal law. It is significant in this context that pursuant to the terms of the MRA, the rights fee payable by Seven is in consideration for all rights and undertakings granted to Seven (including various intellectual property rights). Those intellectual property rights are contained in various clauses and are broadly governed by the Copyright Act 1968 (Cth) and Trade Marks Act 1995 (Cth).

45    Indeed, under the terms of the MRA, Seven covenants and agrees that all intellectual property rights arising from the coverage of cricket matches vest in, exclusively belong to and are irrevocably assigned to Cricket Australia. Cricket Australia in turn grants Seven a non-exclusive licence to use, modify, adapt, reproduce and distribute those intellectual property rights. It is noteworthy that the definition of intellectual property rights in the MRA is expansive, encompassing all rights in relation to patents, copyright, registered and unregistered trademarks, trade secrets, know-how and confidential information (amongst other things).

46    In addition, Cricket Australia grants to Seven a non-transferable and non-exclusive licence to make use of Cricket Australia’s licensed property in the course of producing, transmitting and promoting cricket matches and events. Similarly, Seven grants to Cricket Australia a non-transferable and non-exclusive licence to make use of Seven’s trademarks in connection with the promotion and production of cricket matches. Seven submitted that the existence of these rights, and their enjoyment, cannot be divorced from the obligation in cl 6.9(b), which Seven contends may have been breached by Cricket Australia.

47    These matters are relevant to the question of jurisdiction because, properly characterised, the MRA is not an agreement about cricket in the abstract. Rather, it is an agreement about the broadcast or transmission of cricket matches by Seven; that is, the right to broadcast a spectacle. Having regard to the subject matter of the MRA, the possibility that Seven may seek to bring a proceeding in this Court to enforce the agreement is sufficient to raise a matter involving federal jurisdiction, notwithstanding that it may seek a common law remedy for breach of contract and not one specifically provided by federal law: LNC Industries at 581 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ); see also Macteldir Pty Ltd v Dimovski [2005] FCA 1528; 226 ALR 773 at [95] (Allsop J, as the Chief Justice then was) and Bramco Electronics Pty Ltd v ATF Mining Electrics [2013] NSWCA 392; 86 NSWLR 115 at [6] (Meagher JA) and [36] (Barrett JA).

48    Cricket Australia submitted that this Court does not have jurisdiction in relation to the matter merely because the MRA regulates, in some way, the exercise of rights which are the creation of, or regulated by, Commonwealth legislation. Indeed, Cricket Australia submitted that Seven’s prospective claim was purely contractual in nature and did not concern an entitlement under a federal law. Cricket Australia submitted that the prospective proceeding was therefore relevantly distinguishable from LNC Industries and, in actual fact, analogous to RNB Equities Pty Ltd v Credit Suisse Investment Services (Australia) Limited [2019] FCA 760, 370 ALR 88 (Anderson J).

49    In RNB Equities, the claims arose out of the applicants’ acquisition of a financial product referred to as “MINI warrants”. The warrants were offered by Credit Suisse pursuant to a Product Disclosure Statement and were tradeable on a market operated in Australia by the Australian Stock Exchange. The warrants were neither created by federal law nor did they owe their existence to federal law. To the contrary, these financial products were purely contractual in nature. Accordingly, Anderson J held that the mere fact that these financial products were regulated by the Corporations Act was not sufficient to characterise the prospective claim as one arising under federal law.

50    In my view, RNB Equities is distinguishable from the present prospective claim. It is therefore unnecessary to express any view about the conclusion reached by Anderson J on this point. It is sufficient to consider Seven’s prospective claim, informed by what the High Court said in LNC Industries. Specifically, a claim for damages for breach of contract arises under federal law where the contract is “in respect of a right or property which is the creation of federal law” or where the “subject matter of the contract…exists as a result of federal law”: LNC Industries at 581. That phrasing, though not without boundaries, is patently broad. At a minimum, it encompasses a claim for breach of contract where the rights in controversy, and the entitlement to enforce them in court, are inextricably linked to Commonwealth legislation.

51    Accordingly, in my view, federal jurisdiction is apt to include a claim for breach of a contract of the present character. The underlying subject matter of the MRA is the right to broadcast the spectacle of cricket. For this to occur, the parties must engage the use of Commonwealth infrastructure and the broadcast is regulated by the relevant federal legislation referred to above. Further, the MRA is in essence a contract concerning intellectual property rights that are plainly a creature of federal statute. I am therefore satisfied that the present circumstances involve a “bundle of rights” which owe their existence to, and arise under, federal law: see, eg, Macteldir Pty Ltd v Dimovski at [63] (Allsop J, as the Chief Justice then was).

52    If there be any doubt about this view, it is apt to recall the remarks of Lee J in Oliver at [11]-[13]:

… For those interested (and everyone practising in courts exercising federal jurisdiction should be), the principles are explained in detail by Allsop J (as the Chief Justice then was) writing extracurially in the article Federal Jurisdiction and the Jurisdiction of the Federal Court of Australia in 2002 (2002) 23 Aust Bar Rev 29). The starting point is s 39B(1A)(c) of the Judiciary Act 1903 (Cth) (JA) which provides:

The original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter: ... (c) arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter.

(emphasis added)

The “matter” is the justiciable controversy between the actors involved, comprised of the substratum of facts representing or amounting to the dispute or controversy between them. It is not the cause of action and is identifiable independently of a proceeding or proceedings brought for its determination: Fencott v Muller (1983) 152 CLR 570 at 603-608; Australian Securities and Investments Commission v Edensor Nominees Pty Limited [2001] HCA 1; (2001) 204 CLR 559 at 584-585 [50].

When s 39B(1A)(c) of the JA was introduced in 1997, Parliament changed this Court from being a court of specific federal jurisdiction into a court of more general federal jurisdiction, extending its reach to all controversies or “matters” across all areas with respect to which the Parliament of the Commonwealth has made laws. So long as a “matter” can be said to “arise under” a law of the Parliament, then the Federal Court is vested with jurisdiction to hear the whole of the dispute. It follows that once the jurisdiction of the Court has been invoked by reference to a justiciable issue within federal jurisdiction (say, a related claim under a federal statute), the Court has “accrued” jurisdiction to determine the whole “matter” or controversy between the parties: Re Wakim; Ex parte McNally [1999] HCA 27; (1999) 198 CLR 511 at 584-588 [136]-[147]. Accordingly, as a matter of impression and practical judgment, if a claim for defamation not otherwise within federal jurisdiction arises out of the same “matter” which is within federal jurisdiction, then it will form part of the one justiciable controversy and, if the jurisdiction of this Court is invoked, it will be the duty of this Court, exercising Chapter III judicial power, to quell the whole controversy. It is, of course, heterodox to speak of any notion of concurrent state and federal jurisdiction.

53    The above quoted passage from Oliver elucidates the critical point, namely, that the ‘matter’ is the entirety of the justiciable controversy between the parties and encompasses the substratum of facts underlying the dispute. That must be apt to include the practical reality of the dispute, which in this instance is properly described as a dispute in relation to the scheduling and broadcast of the spectacle of cricket, an activity facilitated and governed by federal law. In addition, the fundamental character of the MRA is one concerning rights and obligations that are the creation of federal law. As a result of these matters, I am persuaded that, on this basis alone, the Court would have jurisdiction in a prospective proceeding brought by Seven to enforce its contractual rights under and pursuant to the MRA.

Second basis – Is it sufficient that Seven and Cricket Australia are corporations?

54    The second basis upon which Seven submitted that the prospective proceeding would be within the Court’s jurisdiction is Cricket Australia is an entity incorporated under the Corporations Act. Accordingly, Seven submitted that the ability to sue Cricket Australia arises under and depends upon a law of the Commonwealth, to paraphrase the language of the High Court in LNC Industries.

55    In Oliver, Lee J noted as follows at [16]:

… as Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ explained in LNC Industries Limited v BMW (Australia) Limited (1983) 151 CLR 575 at 581, a federal matter arises if a right, duty or obligation in issue in the matter “owes its existence to federal law or depends upon federal law for its enforcement” including where the right claimed is in respect of a right or property that is the creation of federal law. Whether or not a matter arises does not depend upon the form of the relief sought: LNC Industries at 581. This would involve when a right or duty based on a Commonwealth statute in issue arises (even where it has not been pleaded by the parties, or a federal issue is unnecessary to decide). A common example illustrates the potential breadth of this concept. It seems to me arguable that if a respondent is a corporation, the relevant matter arises under a law made by the Parliament within the meaning of s 39B(1A)(c) of the JA. Chapter 2B of the Corporations Act 2001 (Cth) provides for the basic features of a company. As is explained in Ford, Austin & Ramsay’s Principles of Corporations Law (Lexis) at [4,050], the capacity of a company created under the Corporations Act, including its ability to be sued, is to be found in s 119 when it provides that a company on registration comes into existence as a body corporate. It is s 124(1) which gives the entity powers of a body corporate (as to a company registered before the commencement of the relevant Commonwealth law, being the Corporations Act, s 1378 provides that registration under earlier state law has effect as if it were registration under Pt 2A.2 of the Corporations Act). The ability to sue the respondent as an entity now arises under and depends upon a law of the Commonwealth.

56    That dicta was seemingly applied and endorsed by Katzmann J in Hafertepen v Network Ten Pty Limited [2020] FCA 1456 at [38]-[44], in which her Honour observed:

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

…

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).

57    In Clarence City Council v Commonwealth of Australia [2020] FCAFC 134; 382 ALR 273 at [171]-[172] (Jagot, Kerr and Anderson JJ), the Full Court of this Court declined to express a view on this issue. In particular, the Full Court observed that it was unnecessary to do so in circumstances where the subject matter of the controversy between the parties squarely related to leases granted pursuant to a federal law and, accordingly, constituted a federal matter. As a result, there is no Full Court authority in relation to whether federal jurisdiction is enlivened simply by the presence of a corporate respondent.

58    Seven submitted that I should apply the same reasoning in the present case unless satisfied that Hafertepen is plainly wrong: BHP Billiton Iron Ore v The National Competition Council [2007] FCAFC 157; 162 FCR 234 at [86]-[89] (Greenwood J), Sundberg J agreeing at [1]. This follows from the well-established principle that as a matter of judicial comity, single judges of this Court are expected, if not obliged, to follow decisions of other single judges of the Court concerning the same legal issue, unless they consider the decisions to be “plainly” or “clearly” wrong: see, eg, Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Constitution Place Case) [2020] FCA 1070 at [107] (Katzmann J).

59    Having regard to these principles, Seven submitted that I should follow the approach of Katzmann J in Hafertepen (applying the dicta of Lee J in Oliver), as Cricket Australia could not (and did not) articulate any basis upon which that decision might be plainly wrong.

60    In response, Cricket Australia submitted that federal jurisdiction is not enlivened merely because the respondent to a proceeding is a corporation. Cricket Australia contended that proposition is plainly wrong because it does not address the relevant question, namely, whether the subject matter of the dispute involves a right, duty or obligation that owes its existence to federal law or depends upon federal law for enforcement.

61    Cricket Australia further contended that to so construe federal jurisdiction would be to take it far beyond that which has been previously recognised. Indeed, by application of principles enunciated by the High Court in Burns v Corbett [2018] HCA 15; 265 CLR 304, Cricket Australia submitted it would also have the effect that any time a corporation is involved in a dispute, that dispute is necessarily within federal jurisdiction. The consequence of such a finding on what jurisdiction can be conferred on VCAT, and like administrative bodies, cannot be overstated.

62    In my view, there is persuasive force in Cricket Australia’s submission on this point. There are several ways this point may be put to convey that there is a substantive distinction between, on the one hand, a controversy between the parties involving a right, duty or obligation that owes its existence to federal law, or depends on federal law for its enforcement, and, on the other hand, the character of a party as a corporation, that is incorporated under and capable of being sued by reason of federal law. There is arguably a conflation between federal law as a wellspring from which a corporate entity comes and a matter which owes its existence to federal law. As the Chief Justice observed extracurially in the passage referred to at [52] above, federal jurisdiction is founded upon a matter and a matter is the justiciable controversy between “the actors involved”. The fact that a corporate entity is a party to the controversy does not mean that the there is any controversy about the legal identity of any corporate entity that is a party to the proceeding. To adopt the linguistic metaphor, corporate entities may be seen as no more than “actors involved” in the broader justiciable controversy: see also Fencott v Muller [1983] HCA 12; 152 CLR 570 at 603-608 (Mason, Murphy, Brennan and Deane JJ).

63    However, it is unnecessary given my conclusion as to jurisdiction on the first basis for me to decide, one way or the other, whether the dicta in Oliver, followed in Hafertepen, is plainly wrong. Self-evidently, the answer to this question has potentially far-reaching consequences, and for this reason also, I consider it undesirable to express an opinion in obiter. In that respect, I am guided by the approach taken to the question by the Full Court in Clarence. Accordingly, I shall not decide whether the second basis advanced by Seven is, or is not, sufficient in itself to confer federal jurisdiction on this Court.

Third, fourth and fifth bases for jurisdiction

64    Seven relied on additional bases for federal jurisdiction in respect of the putative claim. Those included:

(1)    Cricket Australia invoking Commonwealth government border controls and restrictions (matters regulated by the Biosecurity Act 2015 (Cth)) in its correspondence with Seven as a defence; that is, to justify the need for scheduling changes under the MRA;

(2)    apprehended breaches of the MRA in the ACT, which provide a sufficient territorial connection to commence a breach of contract claim in the ACT Supreme Court and, therefore, a proper basis to establish federal jurisdiction; and

(3)    the availability of a non-colourable misleading and deceptive conduct claim in relation to the potential breach of cl 6.9(b), sufficient to give the Court jurisdiction over the whole controversy.

65    In light of my finding in relation to Seven’s principal contention on the question of jurisdiction, it is unnecessary for me to decide whether there are other bases for federal jurisdiction. As things presently stand, Seven may decide not to plead causes of action which raise such further bases for federal jurisdiction. Accordingly, I turn now to the substantive preliminary discovery application.

Rule 7.23 and relevant principles on a preliminary discovery application

66    Rule 7.23 states as follows:

7.23 Discovery from prospective respondent

(1)    A prospective applicant may apply to the Court for an order under subrule (2) if the prospective applicant:

(a)    reasonably believes that the prospective applicant may have the right to obtain relief in the Court from a prospective respondent whose description has been ascertained; and

(b)    after making reasonable inquiries, does not have sufficient information to decide whether to start a proceeding in the Court to obtain that relief; and

(c)    reasonably believes that:

(i)    the prospective respondent has or is likely to have or has had or is likely to have had in the prospective respondent’s control documents directly relevant to the question whether the prospective applicant has a right to obtain the relief; and

(ii)    inspection of the documents by the prospective applicant would assist in making the decision.

(2)    If the Court is satisfied about matters mentioned in subrule (1), the Court may order the prospective respondent to give discovery to the prospective applicant of the documents of the kind mentioned in subparagraph (1)(c)(i).

67    In Poole v Australian Pacific Touring Pty Ltd [2017] FCA 424 at [39], Bromwich J conveniently summarised various principles relevant to a preliminary discovery application under r 7.23:

(1)    Rule 7.23 is to be beneficially construed and given the fullest scope that its language will reasonably allow, with the proper brake on any excesses lying in the discretion of the Court, exercised in the particular circumstances of each case: Optiver at 444-5 [43] quoting with approval St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360; 211 ALR 147 at 153 [26(a)] and Paxus Services Ltd v People Bank Pty Ltd (1990) 99 ALR 728 at 733.

(2)    Each of the pre-requisites set out in r 7.23(1) must be met before the discretion in r 7.23(2) is enlivened: St George Bank Ltd at 153 [26(b)], citing Hooper v Kirella Pty Ltd (1999) 96 FCR 1 at 11 [38].

(3)    Not every element of any relevant cause of action must be established, provided there exists a reasonable cause to believe the prospective applicant “may have” a right to obtain the relief: Optiver at 445-6 [48].

(4)    A “belief” requires more than mere assertion and more than suspicion or conjecture. The evidence must “incline the mind towards the matter of fact in question”: Optiver at 446 [48], citing, inter alia, John Holland Services Pty Ltd v Terranora Group Management Pty Ltd [2004] FCA 679 at [13], [14], [17] and [73].

(5)    The rule does not speak in terms of a belief in the existence of a cause of action. It speaks of a right to relief. By reason of the expression “may have”, the rule is concerned with a belief in the possibility (not the existence) of such a right: Sandhurst Trustees Limited v Clarke [2015] FCAFC 21; (2015) 321 ALR 1 at 16 [24], citing EBOS at 540 [31].

(6)    The notion that an order for preliminary discovery is no longer appropriate once a prospective applicant has sufficient information to meet the threshold of “a bare pleadable case” is fundamentally inconsistent with the purpose of the rule, which is concerned not just with reasonable belief as to the possible right to relief, but also with whether the cost and risk of litigation is worthwhile: Optiver at 443 [35]-[36]. It follows that the question posed by r 7.23(1)(b) is not whether the applicant has sufficient information to decide if a cause of action is available against the prospective respondent, but rather whether the applicant has sufficient information to make a decision whether to commence proceedings in the Court.

(7)    It is not an answer to an application to say that preliminary discovery is in the nature of a fishing expedition, because that is precisely what such a rule contemplates: St George Bank at 154 [26(h)].

These principles have been recently adopted by judges of this Court, including in Nalini Asher Enterprises Pty Ltd v H&M Tracey Construction Pty Ltd [2019] FCA 2161 at [11] (Moshinsky J) and Cromwell at [75] (Anderson J).

68    In Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCAFC 193; 257 FCR 62, Allsop CJ (at [2]) and Perram J (at [119], [126]) emphasised that preliminary discovery applications are not to be conducted as “mini-trials”: see also Outback Stores Pty Ltd v Smith [2020] FCA 1785 at [34] (White J); Davidson v Suncorp-Metway Limited (No 3) [2020] FCA 1593 at [36] (Jackson J); Manolo Blahnik at [46], [92] (Markovic J). That observation underscores that an application for preliminary discovery is interlocutory in nature, in which the prospective applicant only needs to demonstrate that it has a reasonable belief as to a particular state of affairs and as a result may have a right to obtain relief from the prospective respondent: Pfizer at [101] (Perram J).

69    Also relevant are the observations of Allsop CJ in Pfizer at [4] and [8]:

… Rule 7.23 is a beneficial provision, the purpose of which is to enable a person who believes he, she or it may have a right to seek relief to obtain information to make a responsible decision as to whether to commence proceedings.

…

It is important to approach the task with the fundamentals of the rule in mind. There have been a large number of cases now (both at first instance and Full Court) dealing with and explaining the relevant rule. Those authorities should not be utilised to form a complex matrix of sub-rules for the operation and application of a tolerably straightforward provision. Whilst there was no submission that any of these cases was wrongly decided, there does appear to have been a tendency to create an overly abstracted conceptualisation of refined states of mind which, if the words of the rule are not kept in mind, can lead in application to a misstatement of the essence of the rule, focused as it is upon what may be the position. The foundation of the application in r 7.23(1)(a) is that an applicant (a person or a corporation) reasonably believes that he, she or it may have a right to relief. The belief therefore must be reasonable (expressed in the active voice that someone reasonably believes) and it is about something that may be the case, not is the case. It is unhelpful and likely to mislead to use different words such as “suspicion” or “speculation” to re-express the rule. For instance, it is unhelpful to discuss the theoretical difference between “reasonably believing that one may have a right to relief” and “suspecting that one does have a right to relief” or “suspecting that one may have a right to relief” or “speculating” in these respects. The use of such (different) words and phrases, with subtleties of differences of imprecise meaning, and not found within the rule itself is likely to lead to the proliferation of evidence and of argument, to confusion and to error. One must keep the words of the rule firmly in mind in examining the material that exists in order to come to an evaluation as to whether the relevant person reasonably believes that he or she may have a right to relief. That evaluation may well be one about which reasonable minds may differ.

[Emphasis added]

70    If the criteria in r 7.23(1) of the Rules are satisfied, the Court retains a residual discretion under r 7.23(2) to refuse to order preliminary discovery. However, consistent with the reasoning of the Full Court in Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2008] FCAFC 133; 169 FCR 435 at [45] (Heerey, Gyles and Middleton JJ), there is normally little scope to refuse the application if the conditions of r 7.23(1) are satisfied: see, eg, Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as The Australian Manufacturing Union (AMWU) v BR & I Pty Ltd [2020] FCA 1498 at [14], [58] (Abraham J); HQ Insurance Pty Limited v Stonehatch Risk Solutions Limited (No 2) [2020] FCA 1010, 146 ACSR 159 at [112] (Thawley J).

71    I pause briefly to observe that, notwithstanding the cautionary remarks of Allsop CJ in Pfizer, this application amounted, in effect, to a mini-trial. By way of illustration, the parties filed written submissions which, cumulatively, exceeded 65 pages. The First Martin Affidavit, including exhibits, was nearly 500 pages. The First and Second Beltrame Affidavits included a further 300 pages of evidentiary material. In total, the Court Book numbered some 885 pages and two hearing days were occupied by the preliminary discovery application.

72    These observations are not intended to be a criticism of the parties or the manner in which the application was conducted. To the contrary, the materials filed with the Court were diligently prepared and easy to navigate. I was also greatly assisted by the cogent and well-considered submissions of counsel. However, I make these remarks to emphasise that, wherever possible, if upon reasonable and objective analysis it appears to a prospective respondent that there is a clear risk it will be ordered to provide discovery, it is objectively more likely to be in that party’s interest to cooperate by agreement in relation to categories of document which are directly relevant to the putative claim. Such approach would almost certainly save the prospective respondent significant cost and would undoubtedly spare scarce court resources.

Seven’s Preliminary Discovery Application

Does Seven have a reasonable belief that it may have a right to relief?

73    To satisfy the Court of the matters in r 7.23(1)(a), Seven must demonstrate that: (a) it has a reasonable belief as to a particular state of affairs; and (b) that state of affairs consists of the possibility that Seven has a right to obtain relief from Cricket Australia (as indicated by the word “may” in r 7.23(1)(a)): Pfizer at [101] (Perram J). That test is both subjective and objective. A prospective applicant must demonstrate that it holds the requisite subjective belief and that such belief is objectively reasonable.

74    Accordingly, the first issue which arises under r 7.23 is whether Seven’s belief that it may have a right to obtain relief from Cricket Australia is a reasonable belief. As I have explained earlier in my reasons, but for convenience, that belief is that Seven may be entitled to damages from Cricket Australia as a result of the putative failure by Cricket Australia to comply with the obligation in cl 6.9(b) of the MRA.

Seven’s submissions in relation to the first limb of r 7.23(1)

75    Seven referred to several matters of construction relevant to whether its belief that cl 6.9(b) may have been breached is reasonable.

(1)    First, there are two cumulative requirements in cl 6.9(b) in relation to the standard and quality of Seven Matches. Those requirements are: (a) that the matches must be at least equal to the highest quality and standard in the world for the particular type of matches; and (b) that, in any event, the standard and quality must be overall no less than the prior year’s season.

(2)    Second, Cricket Australia must use “all reasonable endeavours”, that being a more stringent obligation than to simply use “reasonable endeavours” or “best endeavours”, at least where both phrases are used in the same contract: see, eg, Eureka Funds Management Ltd v Freehills Services Pty Ltd [2008] VSCA 156; 19 VR 676 at [52]-[53] (Neave and Redlich JJA).

(3)    Third, even if the standard and quality thresholds in cl 6.9(b) are ultimately met, that does not necessarily exclude the possibility that Cricket Australia may have breached its obligation to use “all reasonable endeavours”. For instance, the quality and standard of Seven Matches may be the consequence of extraneous variables or mere good fortune.

(4)    Finally, cl 6.9(b) does not define what is reasonable, nor does it expressly state whether (if at all), Cricket Australia may have regard to other commercial interests. However, it is at least clear that Cricket Australia must not act in a manner that is likely to hinder or prevent the fulfilment of the stated objective in cl 6.9(b) of the MRA: Shepherd v Felt and Textiles of Australia Ltd [1931] HCA 21; 45 CLR 359 at 378 (Dixon J).

76    Having regard to these matters, Seven submitted that the following changes made by Cricket Australia to the Published Schedules were materially detrimental to the quality and standard of the Seven Matches:

(1)    the rescheduling of the T20 and ODI matches against India (being matches broadcast exclusively by Foxtel), which undermined the plan for a “fast-start” to the BBL tournament;

(2)    the rescheduling of tour matches between India and the Australia A team such that they were in direct competition with Seven BBL Matches;

(3)    the delayed start of the New Year’s test in Sydney, which was rescheduled to 7 January 2021, rather than 3 January 2021, and therefore fell outside the most common holiday window; and

(4)    the rescheduling of the opening matches of the BBL so that eight of the first twelve matches were to be played in Tasmania and the remaining four in the ACT.

77    Seven submitted that Cricket Australia failed to use “all reasonable endeavours” by not pursuing alternative possibilities which would have avoided, or at least ameliorated, any decline in the quality and standard of Seven Matches, notwithstanding the difficulties caused by the COVID-19 pandemic.

78    Seven referred, by comparison, to the efforts made by administrators of the AFL and NRL sporting competitions, and expressed doubt that Cricket Australia appreciated the degree of planning and liaison required with Federal, State and Territory governments to ensure the successful conduct of major sporting competitions.

Cricket Australia’s submissions in relation to the first limb of r 7.23(1)

79    In response, Cricket Australia contended that Seven’s preliminary discovery application does not satisfy the first limb of the test in r 7.23 by reason of having failed to satisfy both the subjective and objective elements of r 7.23(1)(a).

Matters regarding Seven’s subjective belief

80    As to Seven’s subjective belief, Cricket Australia’s principal contention was that Seven has already formed the view that it has a cause of action available to it for a breach of the MRA and further that it is entitled to relief. Accordingly, preliminary discovery is not available to Seven simply to enable it to verify that belief or otherwise ascertain the strength of its case.

81    Cricket Australia relied in particular on the observations of Perram J in Pfizer at [108], which were referred to and expanded upon by Anderson J in Cromwell at [118]-[120]:

If the prospective applicant already believes that there is a cause of action, discovery is not available to enable the applicant to verify that belief or otherwise to ascertain the strength of the case for the right to relief: Dyer v Hunter [1999] VSC 531 at [7] (Beach J); Pfizer at [108] (Perram J).

I have set out above Allsop CJ’s statements in Pfizer, where his Honour emphasised the word “may” in r 7.23(1)(a). Allsop CJ stated that “[t]he belief …is about something that may be the case, not is the case”: Pfizer at [8] (emphasis in original).

Perram J also stated at [108] in Pfizer:

FCR 7.23(1) is not about giving preliminary discovery to those who believe they do have a case. Its wording unequivocally shows that it is about those who do not know that they have a case but believe that they may. In terms, it authorises what traditionally have been referred to as fishing expeditions; that is to say, evidentiary adventures in which the goal is not to find proof of a case already known to exist, but instead to ascertain whether a case exists at all.

(Emphasised [sic] added.)

82    From an evidentiary perspective, Cricket Australia referred to a letter from Seven’s Managing Director and Seven West Media CEO, James Warburton, to the interim CEO of Cricket Australia, Nick Hockley, dated 9 September 2020 (the 9 September 2020 Letter). As Senior Counsel for Cricket Australia put it, this nine-page letter is not the idle utterance of a mid-level employee but rather a detailed and considered letter, which one might reasonably infer was carefully crafted by the heavy hand of lawyers and raises a myriad of contractual arguments, along with detailed analysis of facts and law.

83    In that letter, one of the views expressed by Seven was as follows:

…

The proposed changes in the Draft Revised Schedule will materially detrimentally affect the overall quality and standard of the 2020-21 Australian cricket season and the value of the rights acquired by Seven under the MRA (including by reason of the material effects these will have on production and on Seven’s advertising sales)…

84    Further, in that same letter, under a heading “Seven’s immediate right to terminate the MRA”, Seven asserted:

…

For the reasons just given, CA is presently in fundamental breach of, and further has evinced its intention not to perform, key obligations under the MRA:

…

(e)    The obligation in clause 6.9(b) of the MRA to use all reasonable endeavours to organise and conduct all Seven Matches on average across a Season to a quality and standard which is at least equal to the highest quality and standard in the world for such type of Matches and, in any event, to a quality and standard for the Season which is overall no less than the prior year’s Season.

…

CA’s breaches are not capable of being relieved by reliance on COVID-19 as a Force Majeure Event under the MRA, both because most of CA’s decisions are not bona fide responses to COVID-19 but are rather motivated by CA’s other priorities, and because COVID-19 does not (and cannot) preclude CA acting in good faith and using its reasonable/best endeavours to perform its obligations under the MRA.

…

85    Cricket Australia contended that the letter was fatal to Seven’s preliminary discovery application because, by at least that date, Seven had formed “an unequivocal view” that Cricket Australia was in breach cl 6.9(b) of the MRA.

86    Cricket Australia also referred to a conversation on 12 November 2020, between Mr Martin of Seven and Ms Beltrame of Cricket Australia, in which Mr Martin deposes that:

On or about 12 November 2020, I spoke to Ms Beltrame as part of the weekly calls scheduled between Seven and CA. During our conversation, Ms. Beltrame said that she and the rest of the CA team were unhappy with the way I expressed my exasperation about CA not answering questions about the scheduling of the white ball matches at the start of the 2020-21 cricket Season and the commencement of the Men's BBL Tournament not being scheduled on the same day as Men's Test Match cricket. I continued to ask Ms Beltrame the same questions about the scheduling of the white-ball games and the departure from the Fast Start and indicated to her that Seven stands to incur substantial losses due to the impact on the quality of the BBL of the Changed International Schedule and the Changed BBL Schedule…

[Emphasis added]

87    Referring to this correspondence, Cricket Australia submitted that Seven had not only formed a view that Cricket Australia was in breach of the MRA but had additionally satisfied itself that “substantial losses” would follow from the alleged breach, sounding in a claim for damages.

88    It was therefore submitted that, at best, Seven’s preliminary application was made in the hope of being comforted in making a decision which it already had sufficient information to enable it to make. At worst, Cricket Australia submitted, the application is an abuse of process and, in conjunction with Seven's suspected ‘leaking’ is designed to publicly embarrass Cricket Australia in order to weaken its commercial position in dealings with Seven.

Whether Seven’s subjective belief is objectively reasonable

89    In addition, Cricket Australia submitted that even if Seven is found to have a subjective belief that it may have a right to obtain relief from Cricket Australia, such belief is not objectively reasonable. That contention was advanced on the following bases.

90    First, Cricket Australia submitted that Seven’s right to relief in respect of scheduling changes is captured by the Expert Determination process provided for by the MRA, in respect of which a Final Determination was issued on 12 March 2021. The essence of this submission was that the Expert Determination ‘covers the field’ and Seven has been unable to adduce any evidence, or articulate any basis, upon which it believes it would be entitled to relief beyond that which the expert has already determined is appropriate.

91    Second, Cricket Australia submitted that Seven’s belief "is based on views that are unreasonable, if not irrational or baseless.” In written submissions, Cricket Australia referred to Seven’s position as a “grand conspiracy theory” in which Seven postulates that Cricket Australia has favoured the interests of the BCCI, Foxtel and the Tasmanian Government, all at the expense of Seven. Cricket Australia submitted that it had already disclosed to Seven that it was merely accommodating the BCCI requests that it did not want Indian players to quarantine twice and that Cricket Australia had no agreement with either the BCCI or the Tasmanian Government.

Seven’s reply submissions in relation to the first limb of r 7.23(1)

92    In reply, Seven addressed Cricket Australia’s submissions as follows.

Seven’s reply submissions in relation to its subjective belief that it may have a right to obtain relief

93    In relation to Seven’s subjective belief in a right to obtain relief, it made the following submissions.

94    First, that assertions in pre-litigation adversarial correspondence, to the effect that another party has breached a contractual provision, do not imply or convey that the author of the correspondence has formed a definitive position that it is entitled to obtain relief from the Court. To accept that submission would be to impliedly discount the possibility that Seven might be persuaded by Cricket Australia during the course of correspondence. Further, it is apt to recognise that the 9 September 2020 Letter was sent before the cricket season had commenced and was therefore, necessarily, expressing a view as to the likely consequences of Cricket Australia’s conduct on the quality and standard of Seven Matches. As such, the context in which the 9 September 2020 Letter was sent means the views expressed therein, however strongly worded, must be understood as expressing Seven’s provisional views as to a purported breach of cl 6.9(b) of the MRA.

95    Seven further submitted that Cricket Australia’s position ignores the doubts expressed by Mr Martin in the First Martin Affidavit as to whether Seven has a right to obtain relief. In this regard, Seven referred in particular to Mr Martin’s evidence that Seven’s belief is based on “informed inference” and that “it is possible that I am wrong and that [Cricket Australia] has not breached its obligations to use all reasonable endeavours under clause 6.9(b) of the MRA”.

96    Relatedly, Seven submitted that Cricket Australia conflates Seven’s belief that Cricket Australia may have breached cl 6.9(b) of the MRA with a belief that Seven has a right to obtain relief. That slightly more nuanced position takes into account that preliminary discovery may be necessary to ascertain whether the breach is merely technical, or inconsequential, or whether, alternatively, it is a significant or repeated breach of the MRA.

97    Seven’s final submission relates to a matter of legal principle. As explained above, Cricket Australia relied on passages in Pfizer and Cromwell in support of the proposition that if a prospective applicant already believes that it has a right to obtain relief, preliminary discovery is not available to enable the applicant to verify that belief. Seven submitted that the Court in Pfizer did not hold that a party who believes that it has a right to obtain relief cannot also be a party who believes that it may have a right to obtain relief. Seven further submitted that to the extent Cromwell stands for the contrary, it was wrongly decided.

98    Rule 7.23(1)(a) replaced the former O 15A r 6, which expressly used the phrase “has or may have the right to obtain relief”. In Pfizer, Perram J construed the change in language as follows at [103]:

It is apparent that the drafter of FCR 7.23, in an attempt to put the rule in plainer English, has reasoned that where there is a reasonable cause to believe, there must also be a person who holds that belief. Further, whilst the former rule required the belief to relate to a case which did or might exist (“has or may have the right to obtain relief”) the new rule only requires the belief to relate to a claim which may exist. This was perhaps done on the basis that if the rule was simplified so that it required only a belief which related to a claim which “may” exist, this would necessarily include within its scope that narrower class of case where the belief related to claims which did exist.

[Emphasis added]

99    At [104], Perram J referred to s 15AC of the Acts Interpretation Act 1901 (Cth), which provides that stylistic changes in redrafted legislation ought not to be regarded as affecting the meaning of an Act. His Honour also referred to the Explanatory Statement which accompanied the amendment to the Rules at [105]-[106], noting in particular that the new Rules were not intended to alter existing practice and procedure but rather to explain it in a way that can be more easily followed and applied. Notwithstanding, Perram J found that the new rule 7.23(1)(a) had effected a substantive change insofar as it now requires a prospective applicant to hold a subjective belief as to the right to obtain relief, which was not previously a requirement (at [107]).

100    In my view, his Honour was not expressing a view at [108], referred to above at [81], that parties who believe they have a right to obtain relief cannot avail themselves of the preliminary discovery process in r 7.23(1)(a). His Honour was there referring to the lower threshold under r 7.23(1)(a) compared with its predecessor. Caution should be taken not to interpret his Honour’s reasoning out of context: see also BCI Media at [56] (Charlesworth J).

101    Also in Pfizer, at [171], Nicholas J held that leaving aside the introduction of a requirement that a prospective applicant must hold the requisite subjective belief:

… there does not appear to me to be any basis for holding that the current rule was intended to change the requirements that must be satisfied before the discretion to make an order for preliminary discovery is enlivened. Nor do I see any basis for concluding that the existing rule was intended to disturb what was, by the time the Federal Court Rules 2011 (Cth) came into operation, the settled principles governing the application of the former rule.

102    Seven’s position was therefore as follows. In the first instance, Seven submitted that its belief was only that it may have a right to obtain relief and assertions in adversarial correspondence do not imply that Seven entertains no doubt about its position. In any event, Seven alternatively contended that a prospective applicant will almost never be certain that they have a right to obtain relief. Litigation is inherently and notoriously uncertain. Therefore, a party will rarely be in a position where they believe they have, rather than may have, a right to obtain relief.

Seven’s reply submissions in relation to the objective reasonableness of its subjective belief

103    In relation to Cricket Australia’s submission that Seven’s subjective belief is not objectively reasonable, Seven submitted that contention was a bare assertion that does not grapple with the proper construction of cl 6.9(b) of the MRA.

104    Cricket Australia’s first contention was that Seven’s belief that it may have a right to relief is unreasonable because it has already invoked the Expert Determination process in cl 6.3 of the MRA, which provides for a rights fee reduction if the expert deems that appropriate. Seven submitted that such a mechanism is expressly confined to changes made under cll 6.3(b)(ii) or 6.3(d)(ii) of the MRA. Those clauses concern changes made by the International Cricket Council (ICC) or Cricket Australia to international tournaments, Men’s Test Matches or Women’s international Matches and changes to the W/BBL Tournaments, Seven BBL Matches or Seven WBBL Matches, respectively.

105    Accordingly, Seven submitted that the expert appointed under cl 6.3 has no jurisdiction in respect of cl 6.9(b). It follows that, in Seven’s submission, the Expert Determination process is intended to apply in circumstances where Cricket Australia has complied with the contractual regime. Therefore, that mechanism does not purport to displace, or exhaust, any remedies for a breach of contract arising under cl 6.9(b) of the MRA.

106    As to Cricket Australia’s submission that Seven’s belief reflects a “grand conspiracy” or “paranoid suspicion”, Seven contended that these were merely generalised and conclusory statements. Seven submitted that such assertions do not grapple with the fact that Cricket Australia need not consciously conspire to harm Seven in order for there to be a breach of cl 6.9(b). Seven directed attention, in particular, to the First Beltrame Affidavit to support its contention that Cricket Australia had fundamentally misunderstood that cl 6.9(b) requires Cricket Australia to prefer Seven’s interests over those of other stakeholders. In that Affidavit, Ms Beltrame provides detailed evidence of the process involved in scheduling cricket matches (including consultation with various stakeholders) and, relevantly, observes:

… It is not part of [Cricket Australia’s] practice to prioritise or prefer the commercial preferences of one stakeholder over another and I have never observed this to have occurred.

107    Contrary to Cricket Australia’s submission, Seven submitted that this does no more than to demonstrate that the belief is contestable, citing Perram J in Pfizer at [121]:

In practice, to defeat a claim for preliminary discovery it will be necessary either to show that the subjectively held belief does not exist or, if it does, that there is no reasonable basis for thinking that there may be (not is) such a case. Showing that some aspect of the material on which the belief is based is contestable, or even arguably wrong, will rarely come close to making good such a contention. Many views may be held with which one disagrees, perhaps even strongly, but this does not make such a view one which is necessarily unreasonably held. Nor will it be an answer to an application for preliminary discovery to say that the belief relied upon may involve a degree of speculation. Where the language of FCR 7.23 relates to a belief that a claim may exist, a degree of speculation is unavoidable. The question is not whether the belief involves some degree of speculation (how could it not?); it is whether the belief resulting from that speculation is a reasonable one. Debate on an application will rarely be advanced, therefore, by observing that speculation is involved.

[Emphasis added]

Analysis of the subjective belief criterion in r 7.23(1)(a)

108    The distinction between ‘may have’ and ‘has’ concerns the subjective state of mind of the prospective applicant for preliminary discovery. The distinction, if there is any distinction of substance, is both ethereal and in all likelihood ephemeral. It is a distinction that necessarily involves the fine calibration of the state of mind of the prospective applicant. It raises the question whether the prospective applicant’s state of mind has transcended from a belief that it ‘may have’, to a belief that it ‘has’, a right to obtain relief from the Court.

109    If a prospective applicant holds a belief that it ‘has’ a right to obtain relief, that does not exclude the characterisation of that belief as also entailing a belief that the prospective applicant ‘may have’ a right to obtain relief. The distinction lies in the degree of certitude of the prospective applicant’s belief. That is, as I have said, ethereal. Further, the prospective applicant’s belief may change in relation to its confidence, or certitude, in the holding of a belief about the right to obtain relief as it makes further enquiries or as a result of responses it receives from the prospective respondent. That renders the prospective applicant’s belief ephemeral.

110    The authorities referred to above have sought to grapple with this distinction, which, in my view, is more illusory than real in many cases. Both Seven and Cricket Australia relied upon essentially the same authorities, demonstrating that in preliminary discovery applications the relevant question, so far as the distinction between a party believes that it ‘may have’ and ‘has’ a right to obtain relief, depends upon the characterisation of the subjective belief, founded upon what the prospective applicant says about its state of mind. That belief is informed by objective facts, including the conduct of the prospective applicant and prospective respondent, as well as the relevant information known to the prospective applicant or voluntarily provided by the prospective respondent.

111    Though I have described the distinction as ethereal and ephemeral, that is not to suggest that there are not cases where the degree of certitude on the part of the prospective applicant may be seen to cross over the line into a belief that the prospective applicant ‘has’ such a right. In order to cross that line, it is not necessary that the prospective applicant harbours no material doubt about the existence of its right.

112    In Pfizer, Perram J at [121], referred to above at [107], discussed the significance of speculation on the part of the prospective applicant in the context of whether the subjective belief is a reasonable one. In that context, his Honour said: “The question is not whether the belief involves some degree of speculation (how could it not?); it is whether the belief resulting from that speculation is a reasonable one.” I respectfully agree, but add that his Honour’s observation as to the inherent likelihood of a degree of speculation is also apposite for the purposes of the distinction between whether a prospective applicant subjectively believes it “has” or “may have” a right to obtain relief from the Court. In instances where the prospective applicant has reached sufficient satisfaction about the availability of a right to obtain relief, the distinction becomes discernible. Indeed, when the prospective applicant’s state of mind crosses the notional line to become a belief that it ‘has’ a right, the first limb of r 7.23(1) will not be satisfied. In Cromwell, Anderson J concluded that the prospective applicant’s belief had crossed the line, so to speak, and became a belief in the existence of the right.

113    In all cases where the state of mind of a party is in issue, there is a need for forensic and evidentiary analysis in the context of the factual matrix in which the controversy arises. The nature and content of the prospective applicant’s belief concerning whether it ‘has’ or ‘may have’ a right to obtain relief from the Court is a factual question, and it is one in respect of which the prospective respondent is necessarily at a disadvantage. When, as often arises, the state of mind of an applicant is an essential element in proving a cause of action or proving causation for the purpose of obtaining a remedy, the respondent is able to test the applicant’s evidence at trial with the benefit of discovery provided by the respondent in the usual course.

114    For the reasons referred to in Pfizer and the other authorities, referred to above at [68], preliminary discovery applications are not to be conducted as “mini-trials”. In my view, given the practical necessity to avoid that occurring, so far as possible, cross-examination of the prospective applicant’s deponents should generally be discouraged. However, with the same objective in mind, namely, to avoid the application becoming a ‘mini-trial’, it behoves a prospective applicant to provide cogent and appropriately detailed evidence in support of its stated belief. As the Chief Justice said in Pfizer at [8], referred to above at [69]: “The belief therefore must be reasonable (expressed in the active that someone reasonably believes) and it is about something that may be the case, not is the case.”

Nature of residual discretion under r 7.23(2)

115    Rule 7.23(2) preserves a residual discretion to refuse to make an order for preliminary discovery. In Optiver, the Full Court observed (at [45]) that there is normally little scope to refuse the application if the criteria in r 7.23(1) is satisfied. In relation to matters that are entirely within the knowledge of the prospective applicant, relevantly its state of mind, provided the evidence relied upon by the prospective applicant is sufficiently specific and particularised, the evidence will often be sufficient to satisfy the criteria in r 7.23(1), particularly if it has not been tested under cross-examination.

116    In my view, the Court should be astute to ensure that the evidentiary bases upon which the prospective applicant claims to hold the necessary subjective belief are cogent. For example, as a general proposition, it may be expected that senior officers of the prospective applicant (with responsibility for making a decision about whether or not to bring a proceeding in this Court) give candid evidence by way of affidavit material. Such evidence should include all relevant facts, or assumptions, upon which the stated belief is founded. If such evidence is not provided by the prospective applicant, while it may satisfy r 7.23(1) in the absence of contending evidence, and in the absence of having been tested, there may be work for the discretion in r 7.23(2). If, for example, it appears that the prospective applicant is understating its knowledge of relevant facts, or conversely overstating its inability to make a reasonably well-informed decision about whether to bring a proceeding, or is eliding perceived obstacles to the success of its application, there would in my view be scope to exercise the discretion in r 7.23(2) to refuse the application. That may be so even though the criteria in r 7.23(1) may have been established on the material before the Court. I wish, however, to make it clear that what I have said above about the potential work for the discretion under r 7.23(2) does not arise in the present application. I shall refer further below to the matters advanced by Cricket Australia in relation to the discretion under r 7.23(2).

Consideration in relation to the first limb of r 7.23(1)

117    I return now to the question of whether Seven subjectively believes that it may have a right to obtain relief and whether that belief is objectively reasonable.

118    Cricket Australia placed significant reliance upon correspondence from Seven, including the 9 September 2020 Letter. In my view, statements made by Seven in this correspondence are not fatal to the success of the present application. Insofar as that correspondence contains assertions by Seven that Cricket Australia has breached cl 6.9(b) of the MRA, that is not inconsistent with Seven’s belief rising no higher than that it ‘may have’ a right to obtain relief from the Court.

119    I do not read the correspondence from Seven as conveying a belief that it ‘has’, as opposed to ‘may have’, a right to seek relief from the Court. The correspondence must be understood in its context. The essential character of the message from Seven is that it is making a claim upon Cricket Australia for breaching its obligations under the MRA. Leaving aside the seemingly unavoidable hyperbole, and, often, bombast that accompanies such correspondence, it should not be expected that Seven would express its claim diffidently.

120    Indeed, there are legitimate forensic and evidentiary reasons, in relation to a putative proceeding, why the grievances of the prospective applicant, and the asserted factual basis for them, should be put as confidently and comprehensively as possible. That may include assertions of fact based upon inferences that are reasonably open on the facts which are known to the prospective applicant. In effect, when making a preliminary discovery application, the prospective applicant puts its future case thesis to the prospective respondent. Needless to say, the exercise I have described could be communicated just as effectively without hyperbole.

121    When the correspondence from Seven is understood in its proper context, namely, the ‘Phoney War’ which lamentably precedes adversarial litigation, the express statements take on a different complexion. Insofar as those statements convey a state of knowledge and belief on the part of Seven sufficient to allow a decision to bring a proceeding, I discount any such inference in the present context. In my view, there is nothing said in the correspondence from Seven that supports such a conclusion. But, in any event, even if there were, the context gives rise to a strong inference that any statement that might otherwise have ‘crossed the line’ so far as Seven’s subjective belief is concerned, is more likely due to overstatements made for the purpose of advancing its claims against Cricket Australia, with an eye to laying the groundwork, so to speak, for the prospective proceeding.

122    In my view, the correspondence from Seven does not have the evidentiary quality, for the purpose of the presently relevant questions, as was ascribed to that correspondence by Cricket Australia. Cricket Australia sought to characterise aspects of the correspondence from Seven as, in effect, admissions as to Seven’s knowledge and belief, thereby taking it outside the criteria in r 7.23(1)(a). Of course, there are cases where even allowing for the prospective applicant’s right to express its claim robustly, statements can be made by the prospective applicant in pre-litigation correspondence which constitute admissions against interest in relation to the questions of knowledge and belief which are presently in issue. However, the present the application is not such a case.

123    For the above reasons, I am satisfied that the subjective belief of Seven is that it ‘may have’ a right to obtain relief in relation to the asserted breach of cl 6.9(b) of the MRA. I find that Seven’s subjective belief is squarely within the scope of r 7.23(1)(a).

124    Further, I regard Seven’s subjective views as objectively reasonable. Though Seven’s contentions may not ultimately be substantiated, there is a sufficient basis for a logical and rational person to believe that cl 6.9(b) may have been breached. Such a belief does not depend upon a “paranoid suspicion” on the part of Seven. The generalised assertions by Cricket Australia to the contrary are ultimately unpersuasive and I reject those submissions.

Has Seven made reasonable inquiries and, yet, lacks sufficient information to decide whether to commence proceedings?

125    Rule 7.23(1)(b) contains two matters in relation to which the Court must be satisfied. First, that Seven has made reasonable inquiries and, second, having made those inquiries, it does not have sufficient information to decide whether to commence a proceeding to claim the relief which it reasonably believes it may have a right to obtain.

Has Seven made the reasonable inquiries of Cricket Australia?

126    The first of those requirements may be dealt with shortly in this instance. Seven has repeatedly sought information, including documentation, from Cricket Australia which is directly relevant to the question of whether Seven should commence proceedings.

127    By at least the beginning of September 2020, Seven had written to Cricket Australia with detailed requests for information directed to whether Cricket Australia had been complying with its obligations under the MRA. This included requests about what steps Cricket Australia had taken in relation to the scheduling and broadcast of relevant cricket matches, including the Boxing Day test at the Melbourne Cricket Ground and the Sydney Test at the Sydney Cricket Ground in early January. Seven also made inquiries relevant to the quality and standard of Seven Matches, including as to: whether Seven would have access to players for on-field interviews; what steps Cricket Australia had taken to recruit, or facilitate the recruitment of, overseas players in the BBL, including by advocating for quarantine exemptions; whether and what new innovations were contemplated in the BBL tournament; and what consideration Cricket Australia had given regarding the use of ‘hubs’ in the BBL. Cricket Australia responded on 4 September 2020, though by this point it appears that the scope for constructive dialogue had all but dissipated.

128    Seven made subsequent, more formal, inquiries in November 2020 to obtain relevant information and documents. For example, on 6 November 2020, Seven’s solicitors wrote to Cricket Australia’s solicitors expressing doubt as to Cricket Australia’s compliance with clause 6.9(b) of the MRA and requested copies of any:

(1)    contractual documentation as exists between Cricket Australia and the Indian Cricket Board in relation to the Indian Tour;

(2)    correspondence between Cricket Australia and the Indian Cricket Board in relation to the Indian Tour;

(3)    contractual documentation as exists between Cricket Australia and the Government of Tasmania in relation to the BBL; and

(4)    correspondence between Cricket Australia and the Government of Tasmania in relation to the BBL,

directly or indirectly relating to specified scheduling changes.

129    Cricket Australia’s solicitors declined to provide any such documentation, stating as follows in a responsive letter dated 17 November 2020.

…

Finally, your client is not entitled to the myriad [of] documents arbitrarily sought by it in your letter, and [Cricket Australia] does not intend to provide them.

130    Seven’s solicitors responded to Cricket Australia’s representatives on 18 November 2020. In that letter, Seven’s solicitors reiterated the preceding document request and made further requests, limited to correspondence on and from 1 August 2020, for documentation between Cricket Australia and the various Federal, State and Territory Governments relating to:

(1)    international quarantine and border arrangements; and

(2)    domestic quarantine and border arrangements

directly or indirectly relating to the Changed International Schedule or Changed BBL Schedule.

131    There is no basis to suggest that Seven’s inquiries were unreasonable or that other inquiries ought reasonably to have been made, particularly in light of Cricket Australia’s unequivocal position that it would not voluntarily provide those documents to Seven.

Does Seven have sufficient information to decide whether to start a proceeding?

132    The controversy in relation to the second limb of the test for preliminary discovery therefore related to whether Seven has sufficient information to decide whether to start a proceeding against Cricket Australia. Seven submitted that it lacks adequate information to make that decision for two reasons.

133    First, Seven submitted that it only has a limited insight into the alternative courses of action which were available to, considered or pursued by Cricket Australia in relation to the scheduling of cricket matches. Seven has not been privy to Cricket Australia’s communication with the Federal, State and Territory governments or with the Indian Cricket Board. Consequently, Seven’s position is that Cricket Australia may have breached cl 6.9(b) of the MRA as a matter of informed inference. That does not constitute sufficient information to commence an action in this Court.

134    Seven also submitted that, even assuming there has been a breach of cl 6.9(b) of the MRA, it is unable to ascertain whether a breach will sound in more than nominal damages. It may be that even if Cricket Australia failed to use all reasonable endeavours to organise and conduct cricket matches to the requisite quality and standard, Seven is unable to demonstrate that this breach materially affected the spectacle being broadcast. Alternatively, it may be that other scheduling options reasonably available to Cricket Australia only favoured Seven’s interests in a negligible way.

135    Cricket Australia’s position was that Seven’s application must fail because Seven has already formed the view that it has a right to obtain relief and is impermissibly seeking to use the procedure of preliminary discovery to obtain evidence in order to better asses its prospects of success, or bolster its pleading, prior to commencing a proceeding: see, eg, Cromwell at [135] (Anderson J).

136    Cricket Australia submitted that Seven is merely seeking “proof of a case already known to exist” and, in those circumstances, preliminary discovery is not available because Seven already has sufficient information to decide whether to commence a proceeding: citing Pfizer at [108] (Perram J). In Cricket Australia’s submission, this is evidenced by Seven’s repeated assertions that Cricket Australia has breached cl 6.9(b) of the MRA and the quantification of its entitlement to damages on multiple occasions.

137    There was a difference between the parties as to the relevant principles to be applied in relation to the second limb of r 7.23(1). In this respect, I regard the observations of the Full Court in Telstra Corporation Ltd v Minister for Broadband, Communications and the Digital Economy [2008] FCAFC 7; 166 FCR 64 at [59] (French, Weinberg and Greenwood JJ) as apposite:

The second condition upon the exercise of the power is that the applicant has made all reasonable inquiries and yet has not sufficient information to enable a decision to be made whether to commence a proceeding to obtain that relief. The question of what constitutes all reasonable inquiries is evaluative, albeit objective. The question whether the applicant has sufficient information to enable a decision to be made whether to commence the proceeding also necessarily involves evaluative, albeit objective, considerations. There is some tension in the cases about the generosity of the criteria by which sufficiency is to be assessed. Absent a contradictor this case is not a vehicle for resolving that tension. We would simply observe that if the criteria are too generously interpreted, preliminary discovery could be available in advance of the commencement of virtually any proceeding. What is ‘sufficient’ must be read by reference to O 15A r 6(c) which directs the application of the rule to documents relating to the question whether the applicant ‘has the right to obtain the relief’. In the ordinary course it would be expected that such documents would go to issues of liability. Even within that limitation [(b)] does not enliven the power to order preliminary discovery so that the applicant may acquire all documents in a prospective respondent’s possession which are relevant to its prospective cause of action.

[Emphasis added]

138    In circumstances where there may be significant practical, pecuniary and reputational consequences involved in litigation, a prospective applicant must at least have sufficient information to make a preliminary, albeit informed, qualitative assessment regarding their prospects of success in a prospective proceeding. It follows, in my view, that in determining whether the prospective applicant has sufficient information to commence a proceeding, the Court is permitted to evaluate:

(1)    the prospective applicant’s confidence in the potential right to obtain relief;

(2)    the possible extent of any contravention by the prospective respondent;

(3)    the availability of a reasonable defence; and

(4)    the potential quantum of damages that may be available.

See, eg, Telstra Corporation at [61], citing St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360, 211 ALR 147 at [26](f) (Hely J).

139    The view I have expressed above is consistent with the observations of the Full Court in Optiver at [36]:

The concept of a “bare pleadable case” is not only a gloss on the text of the rule but is fundamentally inconsistent with its purpose. The policy behind the rule is that even where there is a reasonable cause to believe that a person may have a right to relief, nevertheless that person may need information to know whether the cost and risk of litigation is worthwhile. As Hely J pointed out in St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147 at [26], the question does not concern the right to relief but rather “whether to commence proceedings”. Inspection of documents in the possession of the proposed defendant may enable a properly informed decision to be made whether to commence a proceeding to obtain the relief. The “bare pleadable case” approach diverts attention from the true purpose of the rule. A person may have a pleadable case, but still not sufficient information upon which to decide whether to embark upon litigation…

[Emphasis added]

140    The “preliminary observations” of Charlesworth J in BCI Media at [60]-[66] are also helpful in this context. I respectfully adopt those passages of her Honour’s reasoning, including her Honour’s analysis of the dichotomy between the two classes of information which are relevant to an assessment of whether a prospective applicant should commence a proceeding:

Turning then to the text of the provision, there is some force in the submission that r 7.23 does not include a power to compel the disclosure of every species of document that might assist a prospective applicant to decide whether to start a proceeding. More specifically, it appears doubtful that the rule was enacted for the purpose of equipping the prospective applicant with information other than that which bears directly on the question of whether there is a right to relief. What follows should be understood as my preliminary observations on that question.

It is helpful to consider two classes of information, both of which are capable of assisting a prospective applicant to decide whether to start a proceeding. The first class of information is that which is directly relevant to the question of whether the prospective applicant has the right to obtain the particular relief forming the subject matter of the reasonable belief mentioned in subpara (1)(a). The second class is that which is not directly relevant to the existence of that right, but which may otherwise assist the prospective applicant to make a prudent commercial assessment as to whether the cost and risk of the contemplated litigation would be worthwhile.

The first class of information may be disclosed in documents that tend to prove or disprove the acts or omissions that fulfil the elements of the cause of action from which the relevant right to relief would flow. It may also be disclosed in documents that tend to prove or disprove a substantive defence that would deprive the prospective applicant of the right to relief he or she might otherwise be in a position to establish. Information in this class assists in the enquiry as to whether the prospective applicant has the right to relief or not. Of its nature, that information will also bear on the strength of the applicant’s claim and the strength of any defence and so will be relevant to an assessment of the risks of the contemplated proceeding.

The criterion in subpara (1)(b) falls to be considered in circumstances where it has already been established that the prospective applicant may have a right to relief. It operates within the domain of uncertainty to which Perram J referred in Pfizer. As his Honour said, for the purposes of subpara (1)(b), a prospective applicant would not have sufficient information to decide to commence a proceeding if he or she does not know enough about what each prospective respondent has done in order to prepare initiating documents that comply with the Court’s rules as to the sufficiency of pleadings.

This first class of information clearly informs the decision as to whether or not to start a proceeding, but it is not concerned with the commercial worth of the claim or the likely costs of pursuing it to judgment.

Documents containing the second class of information may enable an assessment to be made of such thing as to the net commercial worth of the proceeding. In my view, those considerations do not bear on the question of whether the prospective applicant has a right to relief, but they are capable of informing an assessment as to whether to start a proceeding for the enforcement of the right.

As can be seen, both classes of information are capable of informing the question as to whether the costs and risk of the litigation are worthwhile and so fall within the text of subpara (1)(b) as construed by the Full Court in Optiver and the line of authority discussed earlier in these reasons.

141    In BCI Media, her Honour went on to observe at [76]:

What is or is not “sufficient information” is for the Court to determine. The Court may have regard to circumstances peculiar to the prospective applicant in making that assessment.

142    In the present circumstances, there is uncertainty regarding both: (i) whether Seven has a right to obtain relief at all from Cricket Australia; and (ii) the quantum of any relief that may be obtained. Accordingly, I am satisfied that Seven does not have sufficient information to decide whether to commence proceedings, with all the risks, expenses and commercial consequences that entails. The decision to commence proceedings requires a careful and considered evaluative judgment and what constitutes sufficient information must be understood having regard to that context.

143    It is right that there are limits to the exercise of the coercive powers of this Court to compel a person to provide discovery before its jurisdiction is otherwise invoked by the commencement of a proceeding. Indeed, there are limits even after a proceeding is brought, though it is unnecessary to say anything about principles that govern discovery between parties to a proceeding generally. The limits to preliminary discovery are set by the requirements of r 7.23, the evident purpose of which is to strike a balance between the rights of a person not a party to the proceeding to maintain, if it wishes, confidentiality in respect of information that would be revealed if its confidential documents were produced to the prospective applicant and, broadly speaking, the interest of the prospective applicant in being able to make an informed decision about whether to commence a proceeding. There is also a legitimate public interest in the efficient administration of justice, namely, that when there is a relevant asymmetry of knowledge between the prospective applicant and the prospective respondent, the former should be afforded the opportunity to evaluate the wisdom, or unwisdom, as the case may be, of commencing a proceeding (within the limits prescribed by the requirements of r 7.23). I respectfully adopt what Hely J said in St George Bank at [26](f), concerning the true question raised by an application for preliminary discovery:

…the question posed by sub-paragraph (b) of the rule is not whether the applicant has sufficient information to decide if a cause of action is available against the prospective respondent. The question is whether the applicant has sufficient information to make a decision whether to commence proceedings…

144    When the correct question is identified, it becomes apparent that r 7.23 serves the interests of a prospective applicant, while also imposing limits on the availability of preliminary discovery, which of course serves the interests of a prospective respondent. Those requirements ultimately serve the interests of justice by allowing the prospective applicant to be in a potentially better position to make a tutored decision about whether or not to commence a proceeding.

145    I do not accept Cricket Australia’s contention that Seven already has sufficient information as a result of engaging in the Expert Determination process. Though the factual matters relevant to the Expert Determination process may overlap substantially with the matters that may be the subject of a prospective proceeding, it does not follow that the issues considered in the Expert Determination address all aspects of the relief Seven may seek from this Court. The Expert Determination is undertaken pursuant to the MRA and is limited according to the terms, including the scope of any remedy, agreed between the parties. It is conceivable that Seven may seek relief for harm allegedly done to it beyond the scope of the jurisdiction contractually agreed between the parties.

146    For the reasons given above, I also reject Cricket Australia’s submission that the correspondence between the parties conveys that Seven has sufficient information to determine whether to commence a proceeding.

147    Accordingly, the second limb of r 7.23(1) is satisfied.

Does Seven have a reasonable belief that the documents it seeks are relevant to whether Cricket Australia breached cl 6.9(b)?

148    In its originating application dated 30 November 2020, Seven sought discovery of the following six categories of documents:

1.    any written correspondence on or after 1 August 2020 to which one or more of the CA Executives were party, which discusses, records or otherwise evidences the reason(s) for actual or proposed changes to the schedule for international cricket matches and the schedule for Big Bash League (BBL) matches in the 2020/2021 Australian Cricket season, other than correspondence sent by or to the Prospective Applicant;

2.    any written agreement between CA and the Board of Control for Cricket in India (BCCI) concerning the tour of Australia by the Indian Test, One Day International and T20 Cricket teams in the 2020/2021 Australian Cricket season (the Indian Tour);

3.    any written correspondence between CA, on the one hand, and BCCI or Fox Sports Australia Pty Ltd or any affiliate thereof, on the other hand, in relation to the Indian Tour;

4.    any written agreement between Cricket Australia and the Government of Tasmania concerning the BBL;

5.    any written correspondence between CA, on the one hand, and the Government of Tasmania, on the other hand, concerning the BBL; and

6.    any written correspondence on or after 1 August 2020 between CA, on the one hand, and an Australian Federal, State, or Territory Government, on the other hand, relating to international entry, domestic border crossing and quarantine arrangements for Indian or Australian international cricketers or any BBL cricketers.

149    The third limb of r 7.23(1) requires Seven to establish a belief, on reasonable grounds, that Cricket Australia has, or is likely to have had, documents which are directly relevant to the question of whether to start a proceeding. That includes information which is of “direct relevance” because it is relevant to whether the prospective applicant has the right to obtain relief, as well as material from which that inference may be drawn: ObjectiVision Pty Ltd v Visionsearch Pty Ltd [2014] FCA 1087; 108 IPR 244 at [102] (Perry J).

150    Importantly, the extent of preliminary discovery is limited to the information reasonably necessary to overcome the insufficiency of information already in Seven’s possession, to enable it to make a decision about whether to commence a proceeding: Manolo Blahnik at [84]; see also Pfizer Ireland Pharmaceuticals v Sandoz Pty Ltd [2020] FCA 1648; 158 IPR 1 at [25] (Burley J) citing with approval Reeve v Aqualast Pty Ltd [2012] FCA 679 at [65](d) (Yates J).

151    I am satisfied that Cricket Australia has or is likely to have documents in its control that are directly relevant to the putative claim and that inspection of those documents would assist Seven in determining whether to commence proceedings.

152    In the course of the hearing, I raised with Senior Counsel for the parties how best to determine the categories of documents to be discovered by Cricket Australia if I concluded that preliminary discovery should be made. I urged both parties to confer with a view to narrowing the ambit of those categories. Both parties are evidently well resourced and each is represented by experienced solicitors and counsel. I reiterate what I have said above at [72] concerning the desirability of avoiding, where possible, unwarranted legalism in this context.

153    Accordingly, I would expect both parties to make genuine efforts to negotiate a resolution to any differences between them concerning categories of documents to be discovered by Cricket Australia. For this approach to succeed, it behoves both parties, guided by experienced lawyers, to eschew overreach in their respective positions in this regard. If, despite such efforts, there remains residual categories upon which agreement cannot be reached, the Court will determine such dispute. Subject to being persuaded on cogent grounds that I should determine such residual controversy, I shall direct that any dispute concerning categories of documents be referred to a Registrar of the Court for determination.

Discretion to refuse relief

154    Even once satisfied of the matters in r 7.23(1), the Court retains a residual discretion in r 7.23(2) to refuse to make an order for preliminary discovery. Though that discretion is unfettered in terms, there will normally be limited scope for refusing relief where the requirements of r 7.23(1) have been made out: Optiver at [45].

155    The discretion has been described as the “proper brake on any excesses” and is to be exercised in the particular circumstances of each case: see St George Bank at [26](a) (Hely J), citing Paxus Services Ltd v People Bank Pty Ltd [1990] FCA 723; 99 ALR 728 at [14] (Burchett J); and Minister for Health and Aged Care v Harrington Associates Ltd [1999] FCA 549 at [27] (Sackville J).

156    Broadly, Cricket Australia submitted that relief should be refused on discretionary grounds because the application was brought for reasons extraneous to the bringing of a claim or, alternatively, is an abuse of process: Essential Energy v Rose [2020] FCA 722; 145 ACSR 106 at [15] (Lee J); Davidson v Suncorp-Metway Limited (No 3) [2020] FCA 1593 at [84], [106] (Jackson J).

157    Cricket Australia submitted that Seven’s application is not made bona fide, but is motivated by a desire to exert pressure on Cricket Australia in commercial negotiations for a rights fee reduction under the MRA, which it was also seeking through the parallel Expert Determination process.

158    Cricket Australia fortified this submission by asserting that Seven leaked a copy of the First Martin Affidavit, as well as correspondence between Cricket Australia’s solicitors and Seven’s solicitors, to the Sydney Morning Herald. Indeed, Cricket Australia urged that I should find that Seven leaked these materials, knowingly and deliberately in breach of the confidentiality and good faith obligations in the MRA.

159    Cricket Australia contended that in the absence of any plausible explanation for the leak, it is clear that this conduct was motivated by the ulterior and improper purpose of applying commercial pressure on Cricket Australia through the media. Alternatively, or in addition, it was an attempt to publicly embarrass Cricket Australia and thereby weaken its commercial position to obtain a collateral advantage for Seven in future negotiations. Cricket Australia submitted that any such leak would constitute an abuse of process, in the sense described by the High Court in Williams v Spautz [1992] HCA 34; 174 CLR 509 at 526-527 (Mason CJ, Dawson, Toohey and McHugh JJ):

[An abuse of process arises] when the purpose of bringing the proceedings is not to prosecute them to a conclusion but to use them as a means of obtaining some advantage for which they are not designed or some collateral advantage beyond what the law offers.

[Footnotes omitted]

160    Cricket Australia contended that if I was satisfied that the application was brought for such ulterior purpose, that constitutes an abuse of process and the application should be refused on that basis alone. Alternatively, Cricket Australia submitted that if I was not satisfied that Seven was so motivated, but nevertheless leaked the relevant materials, that was a consideration I should take into account in exercising my residual discretion to refuse the application for preliminary discovery.

161    Cricket Australia relied on the following evidence and circumstances in support of its allegation that Seven had leaked the First Martin Affidavit and relevant correspondence between solicitors.

162    Seven filed an Originating Application, accompanied by the First Martin Affidavit, on 30 November 2020 but failed to serve those documents on Cricket Australia until 7 December 2020. From that date until the date of the hearing, Cricket Australia gave Seven every opportunity to deny that they had leaked the First Martin Affidavit and the other adversarial correspondence between solicitors. At no point did Seven ever positively deny leaking the materials.

163    More specifically, on 2 December 2020, following media articles regarding the dispute in the Sydney Morning Herald newspaper, Cricket Australia’s solicitors wrote to Seven’s solicitors in the following terms (the 2 December 2020 Letter):

The Publications [in the media] refer to an application for preliminary discovery filed by your client in the Federal Court of Australia and supported by an affidavit of Mr Lewis Martin, your client's Melbourne managing director and head of sport (the Affidavit).

Our client has not been served with the application, nor the Affidavit. The effect of rule 2.32(4) of the Federal Court Rules 2011 (Cth) is that non-parties are not entitled as of right to inspect the Affidavit. That is, leave of the Court is required to inspect the Affidavit.

Surprisingly, however, the media has had access to the Affidavit. It appears to us, therefore, that your client may have provided a copy of the Affidavit, or parts of it, to the news media, along with correspondence from us to you, to which reference is also made.

Our client is most disturbed that the Affidavit appears to contain correspondence and records of discussions which were highly confidential. This material should not be distributed to the media. Our client is at a loss to understand why your client would disclose such information to third parties.

If it be the case that it is your client that has provided the Affidavit to the news media (and we are not aware of how it may otherwise have been in the news media's possession), your client's conduct would not only be scandalous and in breach of its duty of good faith to our client, but it would be appear to be plainly calculated to exert commercial pressure on our client in the most inappropriate of ways.

Our client demands that by 4:00 pm today, 2 December 2020, you explain to us:

1. whether your client, or any person acting on its behalf, provided the Affidavit, or parts of it, to the news media;

2. if yes to (1 ), who provided the Affidavit, or parts of it, to the news media; and

3. if yes to (1 ), to whom has the Affidavit, or parts of it, been provided, and when.

…

164    In a further comprehensive letter dated 8 December 2020, Cricket Australia’s made detailed legal arguments and concluded by noting (the 8 December 2020 Letter):

…

Finally, it is concerning that we have not had a response to, or acknowledgment of, our letter to you dated 2 December 2020.

Our client genuinely hopes that the content of this letter is such as to encourage Seven to rethink its current approach, and move to repairing its relationship with CA, so that each can benefit from the exciting summer ahead…

165    There followed some ‘back and forth’ correspondence, in which Cricket Australia’s solicitors sought answers to its earlier demands.

166    On 21 December 2020, Seven’s solicitors addressed the issue as follows (within the context of an otherwise detailed letter concerning a number of other matters) (the 21 December 2020 Letter):

…

Service of the originating process

We do not understand the basis on which you complain that we served the originating process and supporting affidavit one week after filing. Our service letter of 7 December 2020 explained that we waited until a return date had been allocated before serving. Your client was served 8 days before the first Case Management Hearing, in compliance with the relevant court rules. You have not identified any advantage our client may have sought or obtained by not serving the material sooner.

Alleged abuse of process

You assert that the Preliminary Discovery Proceeding “may be” an abuse of process. Our client denies this serious allegation (if actually made). Your assertion appears to be premised in part on the correctness of your client’s assertions about the matters dealt with above (to which we have just responded), and in part on the proposition that our client’s objectives are commercial rather than legal (which we do not understand, and which is certainly not a basis for concluding that the proceeding is an abuse of process).

…

167    On 9 February 2021, Cricket Australia’s solicitors responded by explaining that a number of matters regarding the leaking of the First Martin Affidavit were not explained by the 21 December 2020 Letter. The letter included the following:

…

As general observation, we note in particular the following matters raised in our 14 December 2020 letter which were not addressed in you 21 December 2020 letter:

1. Who leaked Mr Martin's 30 November 2020 affidavit to the media? The affidavit was obtained by the media before it was served on our client and, despite repeated requests, you have not disclosed who was responsible. Indeed, it was obtained by the media by the evening of 30 November 2020, the day it was affirmed. Absent third party data theft, the only plausible source of the leak seems to be your client.

2. If your client leaked or authorised the leak of Mr Martin's 30 November 2020 affidavit to the media, what objective did the leak serve your client if not a commercial objective? Given the nature of the headlines that followed the leak (eg, "Explosive documents claim cricket fixture changes 'driven by' India" via the Sydney Morning Herald on 1 December 2020; " 'Ridiculous': Tense transcripts show Seven, Cricket Australia's schedule battle" via the Sydney Morning Herald on 1 December 2020), and the contemporaneous leak of our letter dated 30 November 2020 concerning preliminary discovery (which was not leaked by our firm, and we are instructed was not leaked by our client), it is a reasonably open proposition that your client leaked the materials to the media in an attempt to publicly embarrass our client and thereby attempt to weaken our client's commercial position.

In light of our client's evidence being due to be filed by 12 February 2021, we request a response to this letter by no later than 4:30pm Thursday 11 February 2021 as our client may seek to rely on it.

[Footnotes omitted]

168    On 11 February 2021, Seven’s solicitors responded by noting:

…

As to the balance of your letter, it seeks to draw irrelevant inferences from assumed or asserted facts that have not been established. We note your client's evidence is due on 12 February and our client will respond to that material, as appropriate, in its own evidence. Any suggestion that our client has engaged in any inappropriate conduct is, of course, completely rejected.

169    It is significant that at no point after 11 February 2021 did Seven or its solicitors deny leaking the First Martin Affidavit or the other contentious correspondence. To the contrary, Seven elided the issue and, instead of expressly denying the leak, sought to shift the onus onto Cricket Australia. Seven simply submitted that Cricket Australia should have made its allegation of leaking in plain terms and identified the evidence that supported the finding, if it believed that had occurred. However, as Senior Counsel for Cricket Australia submitted at the hearing, it was unnecessary, and arguably inappropriate, to advance that proposition until Seven had the opportunity to put on evidence that it had not leaked the relevant materials. Consistent with that position, Cricket Australia made the unequivocal allegation during the hearing that Seven had deliberately leaked confidential information to the media and urged that I make that finding.

170    Seven made three submissions in reply in relation to this issue:

(1)    Whether or not the materials were leaked is not relevant to whether any of the three limbs in r 7.23 are satisfied. Accordingly, that tangential question is also not relevant to the Court’s discretion, because that discretion is meant to be applied consistently with the purpose of the rule.

(2)    There is no reason to infer that Seven was motivated by an ulterior purpose in bringing this application. To the contrary, Seven submitted that the application was pursued for a legitimate forensic purpose, as evidenced by the extensive pre-litigation correspondence between Seven’s solicitors and Cricket Australia’s solicitors. That correspondence included repeated requests for further information and documents, and relevantly foreshadowed the present application.

(3)    It is unnecessary to embark on an inquiry as to whether Seven engaged in an abuse of process. If the application is an abuse of process, the appropriate remedy for that conduct is a permanent stay of the application and Cricket Australia has neither made nor particularised such a position.

171    In my view, although these matters are not irrelevant to the present application, Cricket Australia, in effect, sought to instigate a satellite inquiry in relation to questions that necessarily involve some degree of speculation and are ultimately not germane to the present application. I accept that there is evidence to suggest that the documents were leaked by Seven to the media, particularly given the absence of any blanket and categorical denial by Seven. However, in my view, even if that occurred, it does not provide a sufficient basis to refuse the relief sought under r 7.23.

172    It is not uncommon for parties to litigation, before and after a proceeding is commenced, to pursue a ‘communications strategy’ as one of several tactical tools designed to advance its commercial interests, whatever they may be. It is too simplistic to view such conduct, without more, as necessarily revealing an improper collateral purpose in bringing the proceeding, or in the present case, an application for preliminary discovery.

173    The curial process is rightly a public process, with limited exceptions when necessary to protect legitimate commercial (and other) interests that may be irrevocably harmed if certain confidential information were to be disclosed: Mobil Oil at 38 (Hayne JA), (Winneke P and Phillips JA agreeing at 35). There are also many instances where a party to a court proceeding may legitimately take steps to publicly protect its reputation or the goodwill of its business or other intellectual property rights. Such legitimate ‘self-help’ often arises in the context of passing-off cases, commonly brought under the rubric of a claim for misleading and deceptive conduct in contravention of s 18 of the ACL, or in misleading advertising claims, especially comparative advertising cases.

174    I mention these examples to illustrate the point that, as I have said, it is too simplistic to view steps taken by parties to advance their interests via public statements to the media as being, necessarily, an abuse of process. There are, of course, limits to the legitimate public self-protection, or self-advancement, of a party’s cause via the mass media and ever burgeoning social media platforms. If the motivation of such media campaigns, conducted in parallel with an actual or threatened proceeding is found to be the actuating offensive strategy of a claimant, and the curial process is but a pawn in that strategy, such conduct may constitute an abuse of process.

175    It is not possible to delineate in an abstract way the boundaries between a party’s legitimate interest in publicly defending or advancing its position, including its reputation, on the one hand, and the use of the Court’s processes as a pretext to exert improper commercial or reputational pressure on the opposite party, on the other hand. It is sufficient for present purposes to say that I am not satisfied the conduct complained of by Cricket Australia crosses the line between the legitimate interest in public communication strategies and the abuse of the Court’s processes in aide of a strategy designed to put improper pressure on the opposite party.

176    As ever, context matters. The notional line I have described above will more readily be crossed when the relationship between the parties is by its nature imbalanced in terms of the parties’ respective economic or commercial positions. In the present case, there is no such apparent power imbalance between Seven and Cricket Australia. Further, and significantly, both parties are important participants, albeit in different capacities, in the sports and entertainment business and both operate in different but related ways in the broadcast of sporting spectacles. It is hardly surprising in this context that the mass media generally has an interest in the controversy that underlies any future claim that may be brought by Seven.

177    It goes without saying that merely because Seven and Cricket Australia are engaged in the sports and entertainment business that does not licence Seven to deploy a media strategy that is designed to exert improper commercial pressure, including by contriving to harm or vilify Cricket Australia’s reputation. At one level, at least the public and media interest in the much loved game of cricket, from the traditional test format of the game to its various re-imagined forms, inevitably attracts interest from commentators and aficionados. Therefore, the grievances expressed by Seven concerning the quality and standard of the spectacle will inevitably attract the attention of the sports media, in which Seven is obviously a major participant, as is Cricket Australia (albeit, as I have said, in different capacities). Viewed in this context, I do not accept that even if Seven leaked the material about which Cricket Australia complains, that should of itself be found to constitute an abuse of process sufficient to refuse the present application.

178    Having regard to the above conclusion, it is unnecessary for me to find, one way or the other, whether Seven leaked the material. Indeed, in the absence of it being necessary to do so, I consider it undesirable to make such a finding for the purposes of the present application; as such finding could pre-empt a later claim or cross-claim by Cricket Australia in relation to its allegations that by leaking the material, Seven breached confidentiality obligations under the MRA. That complaint, if pressed by Cricket Australia, is better left for determination at the hearing of any later claim by Cricket Australia, or later cross-claim, should Seven bring its putative claim. In this regard, I am mindful of the caution expressed by the Full Court in Pfizer against allowing preliminary discovery applications to become ‘mini-trials’.

179    The final matter Cricket Australia insisted was relevant to my discretion is the Expert Determination process in the MRA. Seven submitted that this was irrelevant to discretionary considerations on an application of this nature. Specifically, Seven reiterated its position that the Expert Determination mechanism is concerned with changes made by Cricket Australia in compliance with the contract pursuant to cll 6.3(b)(ii) and 6.3(d)(ii) of the MRA: see also cl 6.11(a) of the MRA.

180    For the reasons I have given above, it is at least reasonably arguable that the Expert Determination process does not preclude Seven from seeking relief from this Court, including potentially for an award of damages for breach of cl 6.9(b) of the MRA. It is unnecessary to decide the extent to which, if any, the Expert Determination process supplants other legal rights Seven may be able to enforce by relief available in this Court. Again, consistent with the desirability of avoiding the present application morphing into a ‘mini-trial’ on certain issues, this issue, along with others I have referred to above, should await determination in any proceeding that may be commenced, including any cross-claim by Cricket Australia.

181    In conclusion, in relation to the Court’s residual discretion to refuse Seven’s application, I find there is no warrant to exercise that discretion. For the above reasons, I do not accept Cricket Australia’s contentions as to abuse of process. I am satisfied that Seven brought the present application for a legitimate forensic purpose, as mandated by the requirements in r 7.23(1).

Costs

182    As to the costs of and incidental to the preliminary discovery application, I shall adopt a similar approach as I did in Gold Coast Marine Aquaculture Pty Ltd v HTC Trading Pty Ltd [2020] FCA 684, for substantially the same reasons I gave in that judgment at [15]. The application was thoroughly and vigorously argued by both parties and, in my view, all parties acted reasonably and made appropriate concessions during the hearing of the application.

183    In relation to Cricket Australia’s costs of making preliminary discovery, r 7.29 provides:

A person against whom an order is sought or made under this Division may apply to the Court for an order that:

(a)    the prospective applicant give security for the person’s costs and expenses including:

(i) the costs of giving discovery and production; and

(ii) the costs of complying with an order made under this Division; and

(b)    the prospective applicant pay the person’s costs and expenses.

[Emphasis added]

184    In the event that Cricket Australia applies for its costs and expenses of making discovery pursuant to r 7.29(b), presently I see no reason why those reasonable costs should not be paid by Seven. I will give Cricket Australia an opportunity to make such an application by no later than seven (7) days after the date on which discovery categories are agreed or, if they are unable to be agreed, determined by the Court. I would expect this question to be resolved between the parties but, if necessary, I will direct that Cricket Australia and Seven provide submissions, limited to two pages, by no later than seven (7) days after the making of an application (in the case of Cricket Australia) and that Seven do likewise no later than 14 days after the making of an application by Cricket Australia.

Disposition

185    For the reasons given, I will make orders that Cricket Australia provide preliminary discovery in relation to categories of documents relevant to the prospective proceeding, to be agreed between the parties and, insofar as such categories are disputed, to be determined by the Court.

Associate:

Dated:    27 August 2021