Paramount Films of Australia Inc. and ORS v Galaxy Communication Pty Limited and ORS S52/1998 [1998] HCATrans 146 (6 May 1998)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S52 of 1998

B e t w e e n -

PARAMOUNT FILMS OF AUSTRALIA, INC.

First Applicant

SPE AUSTRALIAN VENTURES PTY LIMITED

Second Applicant

UNIVERSAL STUDIOS PAY TELEVISION AUSTRALIA, INC.

Third Applicant

TCI MOVIES AUSTRALIA PTY LIMITED

Fourth Applicant

TWENTIETH CENTURY FOX PAY TELEVISION (AUSTRALIA) PTY LIMITED

Fifth Applicant

PARAMOUNT GENERAL ENTERTAINMENT AUSTRALIA, INC.

Sixth Applicant

SPE GENERAL ENTERTAINMENT PTY LIMITED

Seventh Applicant

UNIVERSAL STUDIOS TV1 AUSTRALIA, INC.

Eighth Applicant

and

GALAXY COMMUNICATION PTY LIMITED

First Respondent

AUSTRALIS MOVIES PTY LIMITED

Second Respondent

AUSTRALIS TV1 PTY LIMITED

Third Respondent

Application for Expedition

KIRBY J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON WEDNESDAY, 6 MAY 1998, AT 9.34 AM

Copyright in the High Court of Australia

MR A.J. MEAGHER, SC: May it please the Court, I appear for the applicants, with my learned friend MR F. KUNC. (instructed by Blake Dawson Waldron)

MR A.J.L. BANNON, SC: May it please the Court, I appear for the respondents. (instructed by Harper Watson)

HIS HONOUR: This is an application for expedition of an application for special leave to appeal?

MR MEAGHER: That is so, your Honour. The material relied on - - -

HIS HONOUR: Is it affected by the appointment of receivers of one of the respondents that I heard on the news this morning?

MR MEAGHER: I think the position is this, your Honour, that under what is referred to as the TV1 distribution agreement - I am not sure whether your Honour is familiar with the subject matter of the proceedings - but under one of the distribution agreements a ground entitling my clients to terminate is the appointment of a receiver. So that to that extent, the appointment of the receiver would affect the TV1 agreement in the sense that there is another ground available at the present time to terminate that agreement. But, otherwise - - -

HIS HONOUR: Anyway, you want to press on with your application for special leave to appeal and you want to have it heard as quickly as possible, is that correct?

MR MEAGHER: Yes, your Honour.

HIS HONOUR: And it is still relevant, notwithstanding this latest development?

MR MEAGHER: Yes, your Honour, certainly in respect of the other distribution agreement.

HIS HONOUR: Place on the record, if you would, the affidavit material that you rely on in support of the application.

MR MEAGHER: The affidavit material relied upon is contained in an affidavit of John Francis Ford, sworn on 30 April 1998.

HIS HONOUR: You have seen that, Mr Bannon?

MR BANNON: Yes, I have.

HIS HONOUR: Do you have any objection to anything in that affidavit?

MR BANNON: No.

HIS HONOUR: Is there any other affidavit?

MR MEAGHER: No, your Honour.

HIS HONOUR: Do you have anything in reply?

MR BANNON: No, your Honour.

HIS HONOUR: What is the attitude of the respondents to this application?

MR BANNON: We do not consent to it. There are a couple of matters which we should inform the Court of. One is formally inform the Court of the fact that receivers and managers were yesterday appointed to each of the respondent companies. That is Messrs Walker and Sherman, Ferrier Hodgson. I am here on, effectively, their instructions.

HIS HONOUR: Do you say that that alters in any way the viability of the proceedings before the Court or - - -

MR BANNON: One of the matters relied upon in support of the expedition is that the matter needs to be determined before a receiver is appointed.

HIS HONOUR: That is right.

MR BANNON: Paragraph 14. That has already happened so that - and receivership seems to be lumped together with the other matters without differentiation. Secondly, the Telstra Corporation, last Wednesday, commenced winding-up proceedings against the respondent companies. They have been before the Equity Division Monday this week and yesterday. As a result of directions made, the hearing of those winding-up proceedings has been set down in two stages, in effect; the first stage commencing this coming Monday and the second stage commencing the following Monday. Having said that, those proceedings were initially commenced to be defended prior to the appointment of a receiver. The defence of those proceedings continued yesterday afternoon.

After the appointment of the receiver, yesterday's proceedings went all day yesterday and the receiver's initial position was that the matter should continue as envisaged before the Equity Division until at least they have had a time to review the matter, which they are doing and are continuing to do today. So that one cannot guarantee that they will be in a position to meet the present timetable or desire to run it. On the assumption that case runs, the fact of the matter is that there is set down a hearing in relation to the solvency of these particular companies which lies behind the proceedings before this Court. In other words, they seek a declaration that we are insolvent - or they are a number of steps removed from that, as your Honour will appreciate. They need special leave, then they need a hearing from the High Court and then it be remitted eventually all the way back to the Commercial Division.

HIS HONOUR: But so far you are the winner in these proceedings.

MR BANNON: Yes.

HIS HONOUR: I cannot imagine that the receivers would not wish to hold on to that success and one would think that it would be desirable, in looking at the overall position of the receivers, that they know whether they are going to maintain the success that they have had in the Court of Appeal or not. They will maintain that success if they are denied special leave to appeal - that is to say if the applicants are denied special leave to appeal. So that looking at the broad picture, and conceding that there are multiple pressures of litigation coming from several directions at the one moment, one can see a quite strong argument that this one, being one in which the respondents are in front, is one which could quite readily be put out of the calculations if the respondents hold on to their success.

MR BANNON: I could not argue with that, your Honour.

HIS HONOUR: And that that is, in my mind, something of an argument to clearing that issue out of the way, one way or the other.

MR BANNON: Yes. As I say, your Honour, we do not argue one way or another for expedition. We do not consent to it. The matters I have put forward might, we would think, suggest that there may not be great utility in it, but there we have it.

The only other matter I wish to comment on was, I think, my learned friend said, or expressed a view, that there may be now a ground of entitlement under one of the - determined under one of the distribution agreements. We do not accept that for present purposes.

HIS HONOUR: That, presumably, is a matter upon which the parties will be separately advised and will proceed extraneous to this litigation.

MR BANNON: I just did not wish - - -

HIS HONOUR: You were putting something on the record.

MR BANNON: Or at least to have it not answered on the record. It might be used against us at some stage. That is our attitude, your Honour.

HIS HONOUR: Gentlemen, there are two dates that are possible, I think, 19 May and 21 May. Neither of those are particularly good days. The 19th is a day which is already extremely heavy and though it was thought that one matter would be withdrawn, I was informed yesterday afternoon that it will not be. Therefore it may be difficult. I have spoken to Justice McHugh who would be presiding on that day and he is willing to allow the matter to be added to the list if it is absolutely essential. The other possibility is on 21 May, which is the afternoon after the retirement ceremony of Chief Justice Brennan. That would be in Canberra. I have not been able to speak to the presiding Judge on that day and, therefore, I am not sure that that is a possibility.

I would be inclined at the moment simply to order that the hearing of the special leave application be expedited and that the date be fixed by the Registrar in consultation with the parties. 21 May would mean a hearing in Canberra because it is a special leave day by video link from Darwin. The 19th would be a special leave hearing day in Sydney and, obviously, is more convenient, but it is a very heavy list and you might just not get reached. So that that is the sort of thing which the parties can discuss with the Registry and, in the meantime, when I have the opportunity to speak to the Judge who would be presiding on the afternoon of the 21st, we will see whether we could make space on that afternoon in Canberra.

Would either of those days be convenient to your team, Mr Meagher?

MR MEAGHER: Your Honour, either day ultimately would be acceptable. Obviously we seek the indulgence and we will take either date. We may prefer 19, but we will take either date.

HIS HONOUR: Is either day acceptable to your side?

MR BANNON: The current difficulty with that week is that that is the present envisaged hearing of the insolvency of the respondent parties.

HIS HONOUR: Yes. If it were not heard on that date, it would not be heard until late June.

MR BANNON: Perhaps if I just mention that. If we wait to hear from the Registry, perhaps - - -

HIS HONOUR: I am sure that the judge in the Equity Division of the Supreme Court of New South Wales would make some adjustments to allow this matter to be dealt with, if it is still then relevant.

MR BANNON: Yes.

HIS HONOUR: I will just have to leave that to the parties to negotiate with his Honour and with the Registrar of this Court.

MR BANNON: I take it it is not feasible to have a video link from Sydney on the Thursday?

HIS HONOUR: I think that is extremely expensive, Mr Bannon. Unless the administrators are offering to pay the price of the video link, you would have to travel.

MR BANNON: Receivers at the moment, your Honour.

HIS HONOUR: Receivers. Very well, the only orders I will make are:

1. Order expedition of the hearing of the applications for special leave to appeal.

2. Costs of this motion to be costs in those applications.

3. Certify that it was proper that counsel appear before the Court in chambers.

I will leave it to the parties to negotiate with the Registry. Court will now adjourn.

AT 9.45 AM THE MATTER WAS CONCLUDED