Australian Sports Connection Pty Ltd v Queensland Rugby Union Ltd [2000] QSC 252

SUPREME COURT OF QUEENSLAND CITATION: Australian Sports Connection Pty Ltd v. Queensland Rugby Union Limited [2000] QSC 252 PARTIES: AUSTRALIAN SPORTS CONNECTION PTY LTD (Plaintiff-Applicant) v. QUEENSLAND RUGBY UNION LIMITED (Defendant-Respondent) FILE NO: 2065 of 1999 DIVISION: Trial Division DELIVERED ON: 27 July 2000 DELIVERED AT: Brisbane HEARING DATE: 8 May 2000 JUDGE: Helman J. ORDER: Application dismissed CATCHWORDS: PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PLEADING – GENERALLY – whether plaintiff able to resile from a position previously taken. Rules of the Supreme Court Uniform Civil Procedure Rules Bennett v. Murray (1940) 64 C.L.R. 382 Smith v. Baker (1873) L.R. 8 C.P. 350 COUNSEL: Mr R.W. Gotterson Q.C. and Mr J. Sullivan for the plaintiff- applicant Mr D.J.S. Jackson Q.C. and Ms J.H. Dalton for the defendant-respondent SOLICITORS: Rogers Matherson Clark for the plaintiff-applicant Corrs Chambers Westgarth for the defendant-respondent [1] HELMAN J: This action began on 6 June 1997 as claim no. 64 of 1997 in the Federal Court to $US108,675.00 from Australian Rugby Union Limited and was transferred to this Court by an order made by Kiefel J. on 19 January 1999. In this Court it was given the number 2065 of 1999. In the much amended statement of claim, the current version of which is dated 20 January 2000 (exhibit JER 14 to the affidavit of Mr James Rogers filed on 24 March 2000), various relief is sought. The plaintiff company makes this application, which has been formulated in a number of ways. It concerns the pleadings relating to the cause of its alleged loss and the -- 1 of 11 -- 2 quantification of its damages: in particular paragraphs 8B, 8C, 8D, and 8E of the statement of claim. Those paragraphs, to which I shall return in greater detail later after explaining the context in which they appear, may be summarized by saying that in them the plaintiff alleges that it was entitled to receive certain specified sums of money annually for at least ten years from Australian Rugby Union for the value of its interest in television broadcasting rights to international ten-a-side Rugby Union tournaments to be held at Ballymore Rugby Park in Brisbane and called the ‘Ballymore Tens’. [2] In paragraph 4 of the statement of claim the plaintiff alleges that it conceived and developed the idea of the Ballymore Tens, and that it owns all intellectual property in those tournaments. In paragraphs 3, 5, and 6 it alleges an undated written agreement made in or about April or May 1995, varied orally on or about 18 November 1995, called the ‘Tens agreement’ between it and the respondent, the defendant, providing for the joint running, marketing, and promotion of the tournaments. The plaintiff alleges that under the Tens agreement, as varied, all receipts in respect of the domestic and international television broadcasting rights of the tournaments would be shared between the plaintiff and the defendant, the plaintiff to have three-fourths and the defendant one-fourth. In paragraph 18A the plaintiff alleges that it has ‘now’ received full payment of its entitlement in respect of the television broadcasting rights for the first and second Ballymore Tens tournaments held - as appears from paragraphs 14 and 18 - in February 1996 and February 1997 respectively. In paragraph 56 the plaintiff alleges that in late 1997 the defendant wrongfully repudiated the Tens agreement, which, the plaintiff alleges in paragraph 57, it terminated by a facsimile letter dated 13 October 1997. In paragraph 58 it is alleged that by reason of breach by the defendant of the Tens agreement the plaintiff has suffered loss and damage including, but not limited to, the loss of future income of not less than $US616,688.46 (being moneys otherwise payable to the plaintiff by Australian Rugby Union had the Ballymore Tens tournaments continued to be held as pleaded in paragraph 8E, or alternatively being the agreed value to the plaintiff of the television broadcasting rights to the tournaments for a period of not less than eight years beginning in 1998) from the television rights in respect of the tournaments and the loss of sponsorship income during that period. [3] The allegations made in paragraph 18A followed settlement, on 23 December 1998, of the plaintiff’s claims in the Federal Court against Australian Rugby Union and the defendant concerning the 1996 and 1997 tournaments. The plaintiff’s claim in the Federal Court had originally been against Australian Rugby Union only and was in respect of the 1996 and 1997 tournaments only, but the defendant was later joined as a second respondent against which that claim and others were made. The defendant cross-claimed against Australian Rugby Union in relation to the plaintiff’s claim concerning the 1996 and 1997 tournaments. Following the settlement, the plaintiff’s action against Australian Rugby Union was discontinued by a notice dated 19 January 1999, and, by the same notice, the claim against the defendant in relation to the 1996 and 1997 tournaments was discontinued, but the plaintiff proceeded with its other claims against the defendant. The defendant discontinued its cross-claim against Australian Rugby Union, by a notice also dated 19 January 1999. -- 2 of 11 -- 3 [4] In paragraph 8B of the statement of claim the plaintiff alleges a written agreement dated 20 June 1995 between an unincorporated entity called SANZAR acting as agent for and on behalf of the South African, New Zealand, and Australian rugby unions and News Corporation Limited, and a formal agreement between those rugby unions and News Corporation executed on various dates in May or June 1995. The first of those agreements is referred to as the ‘heads of agreement’, and the latter may conveniently be called the ‘News agreement’. The plaintiff alleges that by those agreements Australian Rugby Union sold or licensed to News Corporation the television broadcasting rights to, among other matches, the Ballymore Tens tournaments for the ten years beginning with that in the 1996 rugby season with an option for renewal for a further five years. In paragraph 8C it is alleged that the defendant and the plaintiff ‘agreed to and/or acquiesced in’ sale or licensing of the television broadcasting rights by Australian Rugby Union to News Corporation on the basis that the rights had an agreed, specified value in United States dollars: $US70,000.00 ‘in the first year (1996) indexed by 7% per annum for each subsequent year’. In paragraph 8D it is alleged that in the premises the plaintiff’s interest in the television broadcasting rights was valued at three-quarters of the agreed value: $US52,500.00 ‘in the first year (1996) indexed by 7% per annum for each subsequent year’. In paragraph 8E the plaintiff alleges that pursuant to the agreements referred to in paragraph 8B News Corporation was obliged to pay to Australian Rugby Union specified annual amounts by quarterly instalments for the rights sold under the agreements, including the television broadcasting rights to the Ballymore Tens tournaments, and that Australian Rugby Union agreed to pay specified amounts to the plaintiff and the defendant out of the payments to be received by it from News Corporation, or alternatively Australian Rugby Union was obliged to account to the plaintiff and the defendant out of the receipts from News Corporation ‘on the basis of moneys had and received’, or, in the further alternative, Australian Rugby Union held such receipts from News Corporation upon trust ‘for the parties and their respective interests’. It is further alleged in paragraph 8E that Australian Rugby Union’s obligations to the plaintiff continued through 1996 and 1997 and would have continued after 1997 provided the Ballymore Tens tournaments were conducted ‘during the continuance of the agreements referred to in paragraph 8B (including any renewal thereof)’. [5] The first two orders sought on this application, as they appear in an amended version of it admitted at the hearing as exhibit 3, are: 1. Pursuant to Rule 483 the issues raised in paragraph IJ(f) of the Plaintiff’s Further Amended Reply and Answer in action number S2065 of 1999 be decided as a separate question and that separate question be decided contemporaneously with this application. 1A. Further or alternatively that paragraphs 8B to 8W of the Further Amended Further Amended Defence inclusive be disallowed to the extent that they are relied upon by the Defendant to assert a position contrary to that pleaded by the Defendant in the Federal Court, namely, that the Australian Rugby Union Limited (“ARU”) was obliged to make payments to the Defendant out of moneys received by ARU from News -- 3 of 11 -- 4 Corporation under the News Agreement in the sum of USD70,000.00 per annum for the 1996 Ballymore Tens Tournament and for subsequent tournaments in that sum indexed at 7% per annum in respect of the Ballymore Tens and that the Defendant was obliged to account to the Plaintiff for 75% of such payments. Other orders sought are for costs, and such further or other order as to the Court seems appropriate. The order numbered 1A was formulated in the course of the hearing and argument focussed on it. Mr Gotterson Q.C., for the plaintiff, conceded that if his client failed in its application for that order it could not succeed in obtaining the order numbered 1. On behalf of the defendant objection was taken to amendment of the application to include the order numbered 1A on grounds that appear at p.62 of the transcript, but since argument focussed on it and I take the view that the plaintiff must fail in any event on this application I shall not consider those grounds further. [6] Paragraph 8B of the amended defence and counter-claim dated 28 February 2000 (exhibit JER 17 to Mr Rogers’s affidavit filed 24 March 2000) is as follows: 8B. (a) The defendant denies the allegations made in paragraphs 8B, 8C, 8D and 8E of the Statement of Claim because it says that the facts concerning those matters, and conclusions to be drawn from them, are as set out in paragraph 8C-8W herein, and are not as alleged at paragraphs 8B, 8C, 8D and 8E of the Statement of Claim. (b) The defendant denies the allegations made in paragraph 18A of the Statement of Claim because the payment pleaded was not paid as the plaintiff’s entitlement in respect of television broadcasting rights for the first and second Ballymore Tens Tournaments, but as part of a without prejudice settlement of the plaintiff’s Federal Court proceedings no. 64 of 1997 against the Australian Rugby Union Limited and partial settlement of the plaintiff’s Federal Court proceedings against the defendant, also in no. 64 of 1997. [7] In paragraph 8C to 8V the facts on which the defendant relies are set out. Various letters (paragraphs 8E, 8G, 8H, 8I, 8J, and 8K), a meeting (paragraph 8F), and facsimiles (paragraphs 8L, 8M, 8N, 8O, 8P, and 8Q) are referred to, as are the heads of agreement and the News agreement (paragraphs 8C, 8R, and 8S). Paragraphs 8T to 8W are as follows: 8T. The defendant has never received any monies in respect of the television broadcasting rights to the Ballymore Tens from the ARU or from any other person. -- 4 of 11 -- 5 8U. The ARU asserts that it is not liable to pay any monies to the plaintiff or defendant in respect of the television broadcasting rights to the Ballymore Tens. 8V. The ARU refuses to pay any monies to the plaintiff or defendant in respect of the television broadcasting rights to the Ballymore Tens. 8W. In the premises, the plaintiff had no rights to receive any monies for television broadcasting rights in respect of the Ballymore Tens under the agreement pleaded at paragraph 8B of the Statement of Claim or otherwise. [8] In making this application the plaintiff relies on an earlier version of the defence in response to an earlier version of the statement of claim. Argument before me proceeded on the premiss that the relevant versions were the amended statement of claim filed on 2 June 1998 and the amended defence and cross-claim filed on 9 June 1998 (exhibits JER 1 and JER 2 respectively to Mr Rogers’s affidavit filed on 13 May 1999). [9] At that time there were the two respondents to the plaintiff’s application before the Federal Court: Australian Rugby Union and the defendant. The parts of the earlier statement of claim which are relevant to this application concern the claim to money payable in respect of the first and second Ballymore Tens tournaments. Paragraphs 17, 17A, 21, 21A, 24AA, and 28A were as follows: 17. The First Respondent is obliged to account to the Applicant for the sum of USD52,500.00 (being three fourths of the said sum of USD70,000.00) in respect of the first Ballymore Tens Tournament. 17A. In the alternative, if (which is not admitted) as alleged by the First Respondent, the First Respondent has paid the said sum of USD70,000.00 or any part thereof to the Second Respondent by including the same in quarterly payment of moneys out of those received by it from News in accordance with arrangements between the Respondents (which arrangements the Applicant cannot better particularise before discovery), then the Second Respondent is obliged pursuant to the Tens Agreement (as varied) (either expressly or by necessary implication) to account to the Applicant for the sum of USD52,500.00 (being three fourths of the said sum of USD70,000.00) in respect of the first Ballymore Tens Tournament. . . . 21. The First Respondent is obliged to account to the Applicant for the sum of USD56,175.00 (being three fourths of the said sum of USD74,900.00) in respect of the second Ballymore Tens Tournament. -- 5 of 11 -- 6 21A. In the alternative, if (which is not admitted) as alleged by the First Respondent, the First Respondent has paid the said sum of USD74,900.00 or any part thereof to the Second Respondent by including the same in quarterly payment of moneys out of those received by it from News in accordance with arrangements between the Respondents (which arrangements the Applicant cannot better particularise), then the Second Respondent is obliged pursuant to the Tens Agreement (as varied) (either expressly or by necessary implication) to account to the Applicant for the sum of USD56,175.00 (being three fourths of the said sum of USD74,900.00) in respect of the second Ballymore Tens Tournament. . . . 24AA. In the alternative, if (which is not admitted) as alleged by the First Respondent, the First Respondent has paid the said sums of USD70,000.00 and USD74,900.00 or any part thereof to the Second Respondent, then – (a) despite demand and in breach of its obligations under the Tens Agreement the Second Respondent has failed, neglected or refused to pay the sum of USD108,675.00 (being the aggregate of the said sums of USD52,500.00 and USD56,175.00) or any part thereof to the Applicant and the Applicant has thereby suffered loss and damage; (b) in the alternative the Second Respondent has had and received the sum of USD108,675.00 to the use and benefit of the Applicant and the Second Respondent has been unjustly enriched thereby. . . . 28A. Notwithstanding that, as between the Second Respondent and the Applicant, the Applicant is entitled to three fourths of the said sums of USD70,000.00 and USD74,900.00, the Second Respondent wrongfully asserts that it is entitled to be paid by the First Respondent the full amount of each of those sums. Those paragraphs were omitted from the statement of claim following the settlement. [10] The defendant’s response was not to plead to paragraphs 17 and 21 of the statement of claim as in those paragraphs there were no allegations against the -- 6 of 11 -- 7 defendant: paragraph 2 of the defence and cross-claim. In paragraph 7 the defendant pleaded to paragraphs 17A, 21A, and 24AA of the statement of claim: 7. In respect of paragraphs 17A, 21A and 24AA of the Statement of Claim, the Second Respondent: (a) denies that it has received payment of the sums referred to in those paragraphs from the First Respondent: and (b) otherwise denies the allegations therein contained. In paragraph 8A the defendant pleaded to paragraph 28A of the statement of claim: 8A. In respect of paragraph 28A of the Statement of Claim, the Second Respondent: (a) admits that, as between the Second Respondent and the Applicant, the Applicant is entitled to 3/4ths of the sums referred to therein; (b) admits that the Second Respondent asserts that it is entitled to be paid by the First Respondent the full amount of the sums referred to therein; and (c) denies that the assertion is wrongful. [11] In response to a request by the plaintiff for further and better particulars of paragraph 8A (‘state the facts, matters and circumstances by which the Second Respondent asserts that it is entitled to be paid by the First Respondent the full amount of the sums referred to in paragraph 28A of the Statement of Claim’), the defendant repeated and relied ‘upon the facts, matters and circumstances outlined in the Cross-claim by the Second Respondent against the First Respondent filed on 20 April 1998’. In that cross-claim the defendant pleaded in paragraph 2 that it had denied all and any liability to the plaintiff in respect of the alleged loss in respect of broadcasting rights to the 1996 and 1997 Ballymore Tens tournaments, but continued in paragraph 3 to plead that if the defendant were found liable to the plaintiff in respect of the loss then certain facts were so. Those facts included an oral agreement between the defendant and Australian Rugby Union made on a date prior to the execution of the News agreement under which the Ballymore Tens tournaments would be added to the list of ‘properties’ in respect of which News Corporation would be granted exclusive broadcasting rights pursuant to the News agreement, the value of the broadcasting rights for the tournaments would be $US70,000.00 for 1996 and $US70,000.00 ‘indexed at 7% per annum for each year thereafter’, and ‘the amount in respect to the Ballymore Tens’ would be paid to Australian Rugby Union ‘in the first instance’ for the benefit of the defendant which was not to be a party to the News agreement. In the cross-claim the defendant also pleaded that payments received by Australian Rugby Union under the News agreement included payments in respect of the broadcasting rights for the -- 7 of 11 -- 8 tournaments and that in breach of its obligation to do so, and despite numerous demands for payment, Australian Rugby Union had failed to pay the sums received by it from News Corporation for the benefit of the defendant. [12] In essence, as it was put in written submissions on behalf of the plaintiff, a determination is sought whether the defendant is entitled ‘to resile from a position previously taken both formally in its pleadings and by its counsel in earlier interlocutory proceedings’. The reference to the position previously taken in the defendant’s pleadings is to paragraph 8A of the defence and cross-claim filed on 9 June 1998, the contents of which no longer appear in the defendant’s latest version. The reference to the position previously taken by the defendant’s counsel is to statements made by Ms Dalton, for the defendant, at a directions hearing before Kiefel J. on 14 December 1998 at which the issues arising on the pleadings, as they were then, were discussed. Ms Dalton said, referring to a statement of the issues in relation to ‘that payment dispute’ she had prepared and handed to her Honour: It is clear from that, I think, that the ASC, and there is no issue between the ASC and the QRU that the ASC is entitled to three- quarters of the funds when received. There is also no issue between us that those funds should be received from the ARU and then distributed between us. I think the main issue is really between ourselves and the ARU. We say that the ARU has never paid us, and that it ought to have paid us pursuant to an oral agreement which is evidenced in writing and a couple of the letters are attached. But pursuant to an oral agreement whereby would pay us that - - - The transcript continues: HER HONOUR: And it pleads that it has paid you. MS DALTON: We say that the oral agreement was that we would get this amount of $70,000 indexed at 7 per cent as a separate payment from the payments which we received from the ARU generally in respect of television rights. Generally they paid us for what they call property, which are television rights. And we say that this was something new introduced into that agreement, and that the oral agreement between us was that we would receive a separate payment in relation to that, and that we never have. So that issue is still in dispute between us. HER HONOUR: And they say that the payments were bound up with other payments they made to you? MS DALTON: They deny the oral agreement, and deny – the plaintiff actually pleads the correspondence that evidence it in some detail, and as between the applicant and the first respondent -- 8 of 11 -- 9 they deny that those pieces of correspondence have the meaning attributed to them in the statement of claim. So essentially their position is that they were never to pay us any separate amount in relation to the Ballymore 10s Agreement. Now the problem with splitting that issue off is that it - - - HER HONOUR: I am sorry, does that mean that they say that they haven’t paid you? MS DALTON: They say they have never paid us any separate amount, but that they are not obliged to, and they deny the oral agreement whereby we say that they are obliged to pay us a separate amount. HER HONOUR: Yes. MS DALTON: They say that they have paid us generally in relation to the television rights, but our position is that we were going to get a separate payment for that. That the general payment wasn’t just in relation to the sale of television rights, it was a more general payment than that. So in one sense it is discrete, and in one sense it is fairly pivotal between the ARU and the QRU. But unfortunately it is going to come down to questions of credit between the witnesses - - - HER HONOUR: About the agreement. MS DALTON: - - - who figure in the rest of the dispute. And for that reason, my submission would be, it shouldn’t really be hived off because you are only going to see them for half an hour talking about one oral agreement rather than for however long you see them in the rest of the trial. HER HONOUR: Yes. MS DALTON: The other thing is that it pre-supposes that the ASC is successful in its claim, because our claims are just derivative, our claims against the ARU are just derivative claims. And I am instructed that efforts are being made between the respondents to see if that issue can be taken out of this litigation. HER HONOUR: That is the best way to leave it, I suppose. Yes, all right, thank you for that. [13] In Mr Rogers’s affidavit filed on 24 March 2000 there is set out in paragraph 10 an estimate of the consequences of the defendants being permitted ‘to resile from its previous formal position’: a longer trial than would otherwise be necessary, more witnesses, more documents, more non-party disclosure, increased costs etc. -- 9 of 11 -- 10 [14] The plaintiff made a previous attempt to obtain the relief it seeks as the order numbered 1 on this application, when an application came before me on 21 June 1999. The plaintiff sought an order under Order 39 Rule 12 of the Rules of the Supreme Court that the issues raised in paragraph 1J of the plaintiff’s amended reply and answer be tried as a preliminary issue. My conclusion was then that the application should be dismissed. My reasons were these: This is an application by the plaintiff in action no. 2065 of 1999 under Order 39 Rule 12 for an order that the issues raised in paragraph 1J of the plaintiff’s amended reply and answer be tried as a preliminary issue. Action no. 2065 of 1999 is to be heard with action no. 8270 of 1997. In the latter action the defendant is Air New Zealand Limited and in the former Queensland Rugby Union Limited is the defendant. There is clearly, on what has been put before me, an important issue for determination raised in paragraph 1J of the plaintiff’s amended reply and answer, and I have heard quite an extensive argument on that subject. If the plaintiff were to be successful on that issue it would mean that Queensland Rugby Union Limited would be unable to depart from admissions which the plaintiff alleges it made concerning agreements which are relevant to these proceedings, and indeed which have given rise to the issues in the proceedings. The difficulty is, however, that even though those admissions may be ones from which the Queensland Rugby Union Limited will not be permitted to resile, the issue the subject of the admissions is still one that will be for determination between the plaintiff and Air New Zealand Limited. In those circumstances I am not in the least persuaded that it would be convenient to make the order sought. It appears to me that the preferable course is to leave the issues for determination at the trial. I, therefore, shall dismiss the application. [15] After the action had been transferred to this Court White J. ordered that it and another action, no. 8270 of 1997, which the plaintiff had brought against Air New Zealand Limited, the sponsor of the Ballymore Tens tournaments, be heard together. Her Honour gave directions as to the delivery of pleadings by the parties. She ordered that each defendant deliver its amended defence and counter-claim, if any, by 1 April 1999. The plaintiff’s action against Air New Zealand was settled after my decision of 21 June 1999, and after that settlement the pleadings were amended yet again. It is unnecessary to give a detailed account of the history of precisely when this or that first appeared in the pleadings: it suffices to record that after the settlement of the plaintiff’s claim in relation to the 1996 and 1997 tournaments, and before 1 July 1999, paragraphs 8B, 8C, and 8D of the plaintiff’s statement of claim were added to the statement of claim (8E came after 8B, 8C, and 8D), and that it was only after those amendments to the statement of claim that paragraphs 8B to 8W appeared in the defence, which they did before 1 June 1999. [16] On behalf of the plaintiff it was argued that the defendant should have, and did not, seek and obtain leave to withdraw the admissions made in paragraph 8A of its -- 10 of 11 -- 11 earlier defence either under Order 36 Rule 2(3) of the Rules of the Supreme Court, which were in force until 30 June 1999, or under Rule 188 of the Uniform Civil Procedure Rules, which were in force from 1 July 1999. On behalf of the defendant it was submitted that neither rule could apply in this instance: the former because it applied only to admissions made in response to a notice to admit facts, which was not what happened here, and the latter because it was not in force at the relevant time. But in any event neither rule could apply to a case like this one in which the admission was made in response to an allegation not persisted in. It is quite clear that paragraph 8A of the earlier defence was a response to an allegation made concerning the plaintiff’s claim to the sums allegedly owing to it in respect of the 1996 and 1997 tournaments. Ms Dalton’s explanation of the issues on the pleadings to Kiefel J. on 14 December 1998 is consistent with that assessment: Ms Dalton explained to her Honour the issues concerning ‘that payment dispute’. That dispute is no longer in issue and so it has disappeared from the pleadings. I was referred to no rule requiring a party to seek leave to withdraw an admission concerning a matter no longer in issue between parties. Furthermore, the defendant’s paragraphs 8B to 8W appeared following White J’s. order and after the plaintiff had reformulated its case following the settlement. The plaintiff having reconsidered its case, the defendant was entitled, and probably obliged, to reconsider its. [17] There was one further matter to which I should refer raised at the hearing. On behalf of the plaintiff it was argued that in the defendant’s counter-claim it has adopted an impermissibly inconsistent position from that adopted in its defence. It suffices to say that the defendant has taken the permissible course in paragraphs 41 and 42 of pleading inconsistent alternatives: in those paragraphs paragraph 33 is repeated and relied on, and, in the latter, particular (a) of loss and damage contains a pleading alternative to paragraph 8W. Pleading inconsistent alternatives is altogether different from a case in which rights have been exercised, and so dicta concerning a claim inconsistent with an assumption adopted by the claimant for the purpose of exercising a right on a previous occasion (see Smith v. Baker (1873) L.R. 8 C.P. 350 at p. 357 per Honyman J., cited with approval in Bennett v. Murray (1940) 64 C.L.R. 382 at p. 404 per Dixon J.) are in my view not in point. [18] For those reasons I conclude that the plaintiff’s application must be dismissed. I shall invite further submissions on costs. -- 11 of 11 --