WIN Corporation Pty Limited -v- Nine Network Australia Pty Limited [2016] NSWSC 205

Supreme Court New South Wales

Medium Neutral Citation: WIN Corporation Pty Limited -v- Nine Network Australia Pty Limited [2016] NSWSC 205 Hearing dates: 8 March 2016 Decision date: 08 March 2016 Jurisdiction: Equity - Commercial List Before: Hammerschlag J Decision: Application for interlocutory relief refused Catchwords: INTERLOCUTORY INJUNCTION – plaintiff regional television broadcaster seeks to restrain, pendente lite, the alleged breach by the defendant national television broadcaster of an exclusive licence given to the plaintiff to broadcast the defendant's channels in live streaming of programming into the area said to be covered by the licence – HELD balance of convenience does not favour the grant of injunctive relief. Accordingly, such relief refused. Category: Principal judgment Parties: WIN Corporation Pty Limited - Plaintiff Nine Network Australia Pty Limited - Defendant Representation: Counsel: A L Bannon SC with J R Williams and J Burnett - Plaintiff N C Hutley SC with E Peden - Defendant

Solicitors: Atanaskovic Hartnell - Plaintiff Gilbert + Tobin - Defendant File Number(s): 2016/41896

EX TEMPORE Judgment 1. HIS HONOUR: The plaintiff ("WIN") owns and operates television stations throughout Australia. It is the largest regional television broadcaster. The defendant ("Nine") is a national television broadcaster. 2. Nine and WIN are parties to a written Program Supply Agreement ("the PSA"), which they concluded on 3 June 2013 and varied on 31 December 2015, under which Nine granted WIN 'the exclusive licence to broadcast, on and in the licence areas covered by the WIN stations, the program schedule broadcast by Nine on each of the channels known as "Nine", "Go!" and "Gem", to be picked up by WIN at Nine's NPC' (meaning National Playout Centre). The PSA was originally to expire on 31 December 2015 but was extended to expire on 30 June 2016. 3. In late October 2015, Nine announced the launch, in early 2016, of 9Now ("the service"), a new streaming and video on demand product which allows members of the public ("users") to log in via an internet website or application to view via the internet live or near live streaming (commonly referred to as live streaming) of Nine's programming, or on a video on demand basis. The latter allows users to watch that programming at a time of their choosing. The service is available to users who have access to the internet and who are located in licence areas determined by the Australian Communications and Media Authority which are referrable to the television commercial licences held by WIN and Nine respectively. About 75% of Australia's population resides in the Nine licence areas, and about 25% reside in the WIN licence areas. The service went live on 27 January 2016, and has since then been available to users of a range of devices, including personal computers, smart phones and tablets. 4. On 9 February 2016, WIN commenced proceedings in this Court seeking a declaration that by providing the live streaming service of its programming to recipients in the WIN licence areas Nine is breaching the PSA, and a final injunction restraining Nine from providing live streaming of its program schedule to recipients located in those areas. The Summons also seeks an interlocutory injunction restraining Nine, pending final determination, from providing the live streaming service to recipients located in the WIN licence areas. 5. On 11 February 2016, the Chief Judge in Equity fixed the interlocutory hearing for today before me, and fixed the matter for final hearing on 13 and 14 April 2016. 6. WIN now moves for the interlocutory injunction. This is against the background that Nine announced the service in late October 2015 and has been providing it since late January 2016, the PSA will expire in not much more than three months and, as things currently stand, there will be a final hearing in a month's time. 7. The ultimate issue in the final hearing will be whether or not, as a matter of contractual construction, live streaming is "broadcasting" on and in the licence areas covered by the WIN stations. If it is, Nine is in breach of the negative stipulation to be inferred from the exclusive licence given to WIN under the PSA. In that event, a question will arise as to whether final injunctive relief should go to enforce it. 8. WIN's evidence for the final hearing (subject to any evidence in reply) is complete. Nine proposes to serve evidence, in support of its construction, of background circumstances, including matters of a technical nature and some evidence of negotiations. Directions previously made require that evidence to be served by 21 March 2016. Nine puts that even without this additional material, WIN's construction is so lacking in merit that there is no serious issue to be tried. WIN, for its part, puts that its construction is so clear that evidence of so-called background circumstances will not displace or affect it. To my mind, both constructions are arguable. It is not necessary, nor would it be appropriate, given that the ambit of Nine's additional evidence has not precisely been articulated, to express any view as to which I presently think is the better construction. There is a serious issue to be tried. 9. I turn to the balance of convenience. 10. WIN puts that its prejudice if Nine is permitted to continue, is that its asset of regional exclusivity is wasting away. It cannot guarantee its advertising clients the first screening of Nine channels to viewers. Advertisers who wish to advertise on television throughout, or in multiple areas of, Australia commonly contract with national broadcasters first and after that with regional broadcasters such as WIN. WIN is concerned that such advertisers will place fewer advertisements with it if Nine provides them with access to viewers in the WIN areas, and are likely to pay less for advertisements on the WIN stations if they can access the same programs in real time from somewhere else, and that Nine will correspondingly do better. 11. WIN puts that the status quo, which should be maintained, is how things were before the service went live, and that Nine went into the enterprise with its eyes open in the face of the applicable contractual negative stipulation, which, if breached, would on final determination, strongly warrant injunctive relief. It adds that Nine will have the comfort of the usual undertaking as to damages from WIN if an injunction is granted. 12. Further, WIN puts that damages will be an inadequate remedy because of difficulties in quantification, but in the face of clear commercial detriment. 13. For its part, Nine puts that interlocutory relief should not be given because it will in effect be final relief in that it will have to shut down the service. 14. It puts that WIN's evidence does not establish any real damage but merely articulates fears, and that the absence of such evidence is explained by the fact that no real damage has been, or is being, suffered by WIN. It points to the fact that there is no material to suggest that advertisers are acting, or have acted, any differently to the way they otherwise might have, or that WIN's revenue has been, or is being, adversely affected. 15. Next, it points to the precise form of relief sought by WIN, namely that Nine desist from providing the service to recipients located in the licence areas. It says that by reason of the nature of the service and the fact that it has no control over people moving in and out of the relevant areas, the only way it could comply with an order in the form sought by WIN is to shut down the service nationally. I observe that there was a suggestion, strictly as a fall back by WIN, that there could be a limited shutdown linked to the residential postcodes of users. This suggestion can be disregarded. First, the terms of the relief sought do not accommodate it. Secondly, Nine put (which I accept) that it came prepared only to meet the relief sought and may have led additional evidence on it. Thirdly, to my mind it is not a solution which would serve the interests of justice because it would cause detriment to both sides. 16. Next, Nine too laments the commercial detriment to it if it were now to have to shut down the service. It identifies that damage as reputational damage and being placed at a disadvantage to its competitors who run similar services. 17. It puts that WIN stood by after Nine's announcement of the service and waited to move the Court until well after the service was up and running. I mention that WIN says that it did not take the announcement as foreshadowing that Nine would stream into WIN areas contrary to the PSA. 18. Taking all matters into consideration, I am unpersuaded that the balance of convenience favours the grant of the injunctive relief sought. 19. I consider that the position is, at best for WIN, evenly balanced. It may be accepted that each party will suffer some commercial detriment by the grant or refusal of relief, respectively. However, in my view, the consequences to Nine of stopping the service (which has been provided for six weeks now) are more severe than those to WIN if the service continues until judgment can be given on the final hearing. 20. I also think the difficulty attendant upon quantifying Nine's loss would be more severe than that attendant upon quantifying WIN's loss which is more directly related to advertising revenue, and therefore, more easily determined. 21. I think there is some substance in Nine's submission that a relevant factor against the grant of interlocutory relief is that WIN moved only once the service had started. 22. In all the circumstances, I am unpersuaded that interlocutory relief should be granted. The application is refused. 23. After brief argument his Honour made an order that WIN pay Nine's costs of the application. 24. His Honour also vacated the current hearing date of 13 April 2016 and fixed the matter to be heard commencing on 4 April 2016.