Following Optus's recent success in legal proceedings brought by the Australian Football League (AFL) and the National Rugby League (NRL) (Singtel Optus Pty Ltd v Australian Football League  FCA 138), Andrew Demetriou, chief executive officer of the AFL, made several remarks about Optus's TV Now Service. Optus commenced proceedings against the AFL (and Demetriou) claiming misleading and deceptive conduct in relation to those remarks. The court's decision acts as a reminder of the difficulties in bringing actions for misleading and deceptive conduct.
In February 2012 Optus prevailed in preliminary proceedings in the Federal Court brought by the AFL and NRL, alleging that Optus's TV Now Service infringed the sporting codes' copyright in games broadcast on free-to-air television (for further details please see "Optus wins first round against football bodies"). Following the decision, Demetriou made several remarks, such as, "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.
In a short judgment, the court held that Optus's application failed for two fundamental reasons. First, 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" and conduct that is "in trade or commerce".
As Demetriou's comments were statements of his opinion relating to the ongoing debate surrounding IP 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's application was that, in determining a contravention of Section 18 of the Consumer Law Act, the issue is not whether the conduct is truthful, but rather whether the conduct is likely to mislead or deceive - that is, to lead one into error.
In the circumstances, the court considered that Demetriou's statements 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.
This decision highlights the issues that 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 (eg, Section 9 of the Defamation Act 2005 (Victoria)). Nevertheless, 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 not just that the alleged infringing statement is false, but also that there was malicious intent on the part of the party making the statement. Given the facts in this case, it is not clear that Demetriou maliciously intended to cause Optus any reputational harm.
For further information on this topic please contact Tim Clark or Ivor Kovacic at Piper Alderman by telephone (+61 2 9253 9999), fax (+61 2 9253 9900) or email ([email protected] or [email protected]).