FEDERAL COURT OF AUSTRALIA Optus Networks Pty Limited v Telstra Corp Limited [2002] FCA 381 PRACTICE AND PROCEDURE – application for stay of orders - whether detriment would be suffered if application for stay is refused or granted – public inconvenience and uncertainty Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 cited Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 cited OPTUS NETWORKS PTY LIMITED AND OPTUS MOBILE PTY LIMITED v TELSTRA CORPORATION LIMITED N269 OF 2002 TAMBERLIN J SYDNEY 3 APRIL 2002 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N269 OF 2001 BETWEEN: OPTUS NETWORKS PTY LIMITED (ACN 008 570 330) FIRST APPLICANT OPTUS MOBILE PTY LIMITED (ACN 054 365 696) SECOND APPLICANT AND: TELSTRA CORPORATION LIMITED (ACN 051 775 556) RESPONDENT JUDGE: TAMBERLIN J DATE OF ORDER: 3 APRIL 2002 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application for a stay is granted in accordance with Order 1 of the Amended Notice of Motion filed in Court on 28 March 2002. 2. Costs of this application are awarded in accordance with the costs on the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N269 OF 2002 BETWEEN: OPTUS NETWORKS PTY LIMITED (ACN 008 570 330) FIRST APPLICANT OPTUS MOBILE PTY LIMITED (ACN 054 365 696) SECOND APPLICANT AND: TELSTRA CORPORATION LIMIITED (ACN 051 775 556) RESPONDENT JUDGE: TAMBERLIN J DATE: 3 APRIL 2002 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application by Telstra Corporation Limited ("Telstra") filed on 21 March 2002, as amended, seeking a stay of an Order made by Moore J on 28 February 2002, which required Telstra to cease providing a service to existing customers, known as "HomeLine Net Service", on terms which include a requirement that the customer should not acquire services from Optus by dialling an access override code which would supersede the Telstra Service. 2 The appeal is set down for hearing in approximately six weeks time. 3 On this application one starts with the approach that prima facie the applicants ("Optus" collectively) are entitled to the fruit of the judgment and that the Court should act on the basis that the judgment is prima facie, at least,correct. There is no requirement that there should be any special or exceptional circumstances which need to be demonstrated by Telstra. Telstra has an onus to persuade the Court that there is a proper basis for this starting point to be displaced and for Optus to be denied the benefit of its judgment: see Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 694 applied by the Full Federal Court in Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 at 66. The exercise is not simply one of achieving a balance of convenience but that is a factor which must be taken into account. 4 It is submitted for Optus that if the appeal is successful Telstra can re-introduce its HomeLine Net product on terms which include the "no override" condition. The right of appeal is preserved without the need of a stay. It is said that the refusal of the stay would not have a devastating effect on Telstra or do irreparable harm in the event that the decision appealed from is wrong. The cross examination of Mr Walther indicates that any monetary loss to Telstra would not be as great as claimed by Telstra. Optus contends that the damage which would be suffered by it as a consequence of Telstra's conduct is continuing but that it is difficult to quantify the amount in any monetary terms. Its detriment is said to include shortfalls in the nature of direct revenues from override calls, reduced marketing opportunities to those customers who would otherwise use the override alternative, and the reduced opportunity to persuade HomeLine Net override customers to acquire all their pre-selectable services from Optus rather than Telstra. 5 It is said that Telstra has not adduced evidence as to the quantitative loss it expects to suffer if it pursued the choice open to it to simply continue offering the HomeLine Net product to existing HomeLine Net customers on terms which exclude the "no override" condition. Telstra submits that it would be "commercially irrational" for it to offer its discounted service without the condition but Optus says it has not pointed to any manifest detriment. 6 The transcript records that the primary Judge in an exchange with counsel, said that he was inclined to indicate that if an application were pressed for a stay before him he would refuse it. Reliance is placed by Optus on the fact that the primary Judge was fully conversant with the issues in the case and had the benefit of detailed argument and written submissions on the form and content of the injunctive orders, including detailed argument on the appropriate period to allow before the orders came into effect. At that stage, however, his Honour did not have the additional evidence which has been placed before me. It is understandable, given the fact that the Judge had formed an opinion on the merits of the case, that the application was not pursued before the primary Judge and that it was decided to make the application to another Judge. 7 While considerable weight must be given to the remarks of the primary Judge, I am satisfied that they were expressed on a tentative basis and without the benefit of all the evidence which is before me. In reaching my conclusion I have of course given weight to the observations of his Honour. 8 No submission has been made in this case that the appeal is without substance. Nor is there any suggestion of any attempt on the part of Telstra to delay the prompt hearing of the appeal. 9 Telstra points to a number of considerations which it says, taken cumulatively, justify a stay. The first is that it will lose revenue during the period of the stay if it is successful on the appeal. However, in cross-examination it emerged that this does not appear to amount, in relative terms, to a large sum. It is also said that Telstra would find it extremely difficult to quantify the amount of any lost revenue. 10 The second matter raised by Telstra is the waste and expense which it alleges would arise if it is ultimately successful in its appeal and that the monetary amount of this would be in the order of $50,000. In cross-examination it was pointed out that there may be an offset in the form of savings on expenses and that the amount of $50,000 is a maximum amount, and that it is most likely considerably more than that which would be ultimately suffered. 11 The third factor raised for Telstra is the public inconvenience and uncertainty generated among its existing customers if Telstra is required to comply with the Order at this stage of the proceedings. 12 While a substantial case has been presented for not staying the proceedings I am satisfied that the combined weight of the considerations pointed to by Telstra and particularly the public inconvenience and uncertainty caused by the implementation of the Order, which could be reversed on appeal, coupled with the early hearing date for the appeal, justify the grant of a stay of Order 2 until judgment on the application for leave and on the hearing of the appeal if leave is granted. In doing so, I have taken into account the interest of fairness to both sides. 13 For the above reasons I propose to grant the application for a stay and I make an order in accordance with Order 1 of the Amended Notice of Motion filed in Court on 28 March 2002. The costs of this application shall be awarded in accordance with the costs on the appeal. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. Associate: Dated: 3 April 2002 Counsel for the Applicants: Mr A Bannon SC Mr J Stoljar Solicitor for the Applicants: Gilbert & Tobin Counsel for the Respondent: Mr R MacFarlan QC Mr N Manousaridis Solicitor for the Respondent: Mallesons Stephen Jaques Date of Hearing: 28 March 2002 Date of Judgment: 3 April 2002