Following Optus’ recent success in legal proceedings brought by the AFL and NRL, Andrew Demetriou CEO of the AFL made several remarks about Optus’ TV Now Service. Optus commenced proceedings against the AFL (and Mr Demetriou) claiming misleading and deceptive conduct in relation to those remarks. The decision of Justice Edmonds acts as a reminder of the difficulties in bringing actions for misleading and deceptive conduct.
Singtel Optus Pty Ltd v Australian Football League [2012] FCA 138
Background
In February 2012, Optus was successful in preliminary proceedings in the Federal Court brought by the AFL and NRL alleging that Optus’ TV Now Service infringed the sporting codes’ copyright in games broadcast on free-to-air television (see article in Piper Alderman’s March 2012 issue of Ebulletin). Following that decision, Andrew Demetriou, CEO of the AFL made several remarks including: “the thought of Optus deciding to lift our content and not pay for it, and pretend and purport to be doing it for the customer, is a complete disgrace”; and, “they are not paying for it; they are lifting it. It is akin to stealing”.
Optus commenced proceedings seeking a declaration that the AFL had, in trade or commerce, engaged in conduct that was misleading or deceptive or likely to mislead or deceive and had, therefore, contravened section 18 of the Australian Consumer Law in the Competition and Consumer Act 2010 (Cth). Optus also sought injunctions and damages.
Decision
In a short judgement, the court held that Optus’ application failed for two fundamental reasons. Firstly, Mr Demetriou’s comments were not “in trade or commerce”. The court recognised a distinction, previously approved by the High Court, between conduct that is “in respect of trade or commerce” compared with conduct that is “in trade or commerce”. As the comments made by Mr Demetriou were statements of his opinion relating to the on-going debate surrounding intellectual property issues to sports media rights in the digital age, it could not be said that his comments occurred “in trade or commerce”.
The second fundamental problem with Optus’ application was that, in determining a contravention of section 18 of the ACL, the issue is not whether the conduct is truthful, but whether the conduct is likely to mislead or deceive: that is, to lead one into error. In the circumstances, the court considered that the statements made by Mr Demetriou were opinions honestly held by him, and did not purport to be statements of fact. His comments, when viewed in the context of the Federal Court litigation, were not misleading or deceptive.
Implications
This decision highlights the issues corporations may encounter when trying to seek redress for damage to their business reputation caused by the comments of others. Unlike individuals, corporations generally cannot bring a cause of action for defamation due under the uniform legislation passed by the States in 2005 (see e.g. section 9 of the Defamation Act 2005 (Vic)). However, as this case illustrates, an action for misleading and deceptive conduct will not always be an appropriate alternative given the difficulty in establishing that the other party’s conduct was “in trade or commerce”. Corporations have another cause of action in the tort of injurious falsehood. However, the corporation will need to satisfy the court that the alleged infringing statement is not just false, but there was malicious intent on the part of the party making the statement. Given the facts in this case, it is not at all clear that Mr Demetriou maliciously intended to cause Optus any reputational harm.
