By Elisabeth Sexton
SEVEN years, one month and $200 million after the directors of the Seven Network resolved to launch legal action seeking compensation for the demise of its pay television arm C7, the company has quietly decided that enough is enough.
Seven is understood to have decided against taking its grievance to the High Court.
A day after losing its appeal before a full bench of the Federal Court 3-0 on Wednesday, the company is believed to have concluded that any further legal moves could be fruitless and that, commercially, it was time to move on.
As noted by Justice Ronald Sackville, who presided over the main trial, ''the transactions that gave rise to this litigation are long passed and have been overtaken, not only by later events, but a changed commercial environment in the industries in which they operate''.
This year Seven has built up a 22 per cent stake in one of its targets in the case, Consolidated Media Holdings. This gives it an indirect holding in the company it argued in court had most to gain from C7's 2002 demise, Foxtel.
Justice Sackville made his comment in a short section of his long judgment headed ''a Cautionary Tale''. He urged the C7 parties not to repeat the Duke Group case, a South Australian civil suit which went to the High Court twice and ended seven years after the primary judgment. Seven did not take that advice in 2007, although its appeal involved fewer parties (just Foxtel and its owners News Ltd, Consolidated Media and Telstra) and far fewer issues than the main trial.
An order about the costs of the appeal is yet to be made, but it will probably cost Seven about $3 million.
On Wednesday Justices John Mansfield, John Dowsett and Bruce Lander delivered a second round of humiliation for Seven, although their language was more measured than Justice Sackville's.
Their 340-page decision, while overturning some of Justice Sackville's legal conclusions, reinforced that a big problem for Seven was not the way the law was applied but the evidence given in the main trial.
This included significant concessions made by Seven's chairman, Kerry Stokes, during a three-week stint in the witness box in 2005.
Mr Stokes's evidence was ''critical in relation to Seven's [misuse of market power] case and relevant to Seven's [anti-competitive agreement] case,'' the appeal judges said.
They referred to his agreement that it was ''pretty easy'' to set up a new pay television channel and that Foxtel had paid ''a good price'' (from its point of view) for the AFL rights in 2000. A central plank of Seven's case was that Foxtel had overbid for the AFL rights in order to kill C7.
In a costs ruling handed down in December 2007, Justice Sackville said ''the complexity and sheer size of the litigation were directly attributable to the manner in which Seven chose to conduct its case''.
The minutes of a Seven board meeting on November 1, 2002, tendered as evidence, said that ''directors were advised that the costs could be as high as $20 million''.
As it turned out, News and its affiliates spent $40 million, Cons Media and Telstra $21 million each, and Optus $9 million. Smaller sums were spent by the AFL, the ARL, the NRL and the Ten Network. After spending more than $100 million itself, Seven had to pick up about 60 per cent of its opponents' costs.
Few will remember the case for the trade practices issues it exposed, but it has entrenched the term ''megalitigation'' thanks to Justice Sackville's comments that the cost ''border[ed] on the scandalous''.
In June the federal Attorney-General, Robert McClelland, said cases like C7 and the recent Bell Group case ''show that, if Australia is to have a legal framework that provides fair access to justice for all, reform is essential''.