Aristocrat Technologies Australia Pty Ltd and Ors v Global Gaming Supplies Pty Ltd and Ors

[2012] HCATrans 296

[2012] HCATrans 296

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney   No S168 of 2012

B e t w e e n -

ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LTD (ACN 001 660 715)

First Applicant

ARISTOCRAT INTERNATIONAL PTY LTD (ACN 000 148 158)

Second Applicant

ARISTOCRAT TECHNOLOGIES INC

Third Applicant

and

GLOBAL GAMING SUPPLIES PTY LTD (ACN 008 548 589)

First Respondent

ANTHONY EDWARD ANDREWS

Second Respondent

IMPACT GAMING PTY LTD (ACN 109 299 461)

Third Respondent

FRANCIS GEORGE BERNARD CRAGEN

Fourth Respondent

Office of the Registry
  Sydney   No S169 of 2012

B e t w e e n -

ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LTD (ACN 001 660 715)

First Applicant

ARISTOCRAT INTERNATIONAL PTY LTD (ACN 000 148 158)

Second Applicant

ARISTOCRAT TECHNOLOGIES INC

Third Applicant

and

RIAD ALLAM

First Respondent

GLOBAL GAMING SUPPLIES PTY LTD (ACN 008 548 589)

Second Respondent

ANTHONY EDWARD ANDREWS

Third Respondent

IMPACT GAMING PTY LTD (ACN 109 299 461)

Fourth Respondent

FRANCIS GEORGE BERNARD CRAGEN

Fifth Respondent

TONITA ENTERPRISE PTY LTD (ACN 120 737 402)

Sixth Respondent

Applications for special leave to appeal

FRENCH CJ
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 16 NOVEMBER 2012, AT 9.44 AM

Copyright in the High Court of Australia

__________

MR A.J.L. BANNON, SC:   If the Court pleases, I appear with my learned friend, MR J.M. HENNESSY, SC, for the applicants.  (instructed by Gilbert & Tobin Lawyers)

MR M.L.D. EINFELD, SC:   May it please the Court, I appear with my learned friend, MR A.C. HARDING, for the respondents in the first application, and in the second application for the second, third, fourth and fifth respondents.  (instructed by Paul Bard Lawyers)

MR M. GREEN:   If the Court pleases, in the second application I appear for the first and sixth respondents.  (instructed by Bruce Stewart Dimarco Lawyers)

FRENCH CJ:   Yes, Mr Bannon.

MR BANNON: Your Honours, the proceedings concern infringement of copyright in literary works consisting of game software by dealing with infringing articles pursuant to section 38 of the Copyright Act 1968 (Cth) which relevantly provides that:

the copyright in a literary . . . work is infringed by a person who:

(a)      sells . . . an article;

if the person knew, or ought reasonably to have known, that the making of the article constituted an infringement of the copyright –

That involves three elements.  Firstly, the making of the article must in fact have constituted an infringement of copyright.  Secondly, the person must have sold the article, relevantly for this case, and thirdly the person knew or ought to have known that the making of the article was an infringement of copyright.

There are concurrent findings of fact in relation to two of those elements, namely, that Global and Impact sold machines as to three, Global on its own as to the balance in joint venture, which were in fact machines, the making of which constituted an infringement of Aristocrat’s literary work copyright in game software.  Those findings of fact were based on four propositions.  Firstly, the transactions were evidenced by invoices issued in the name of Global and Impact.  That is a matter which appears from the Full Court reasoning at 297 of the book, paragraph 266.

FRENCH CJ:   I am sorry, Mr Bannon, just to try to cut to the chase; there is a fairly strong emphasis in your submissions on the use of the email evidence.

MR BANNON:   Yes.

FRENCH CJ:   Does ground 3 encapsulate the thrust of your submissions?  That is at 372 in one of the appeal notices.  I think it is in 168.  They are identical, of course.

MR BANNON:   Yes.

FRENCH CJ:   We do not need to worry about the others?

MR BANNON:   Yes.

HEYDON J:   But do you not press in paragraph 28 of your written submissions a point distinct from the emails, namely, that the company knows what its own records disclose?

MR BANNON:   We do press that, your Honour.

HEYDON J:   If you do wish to press that, do you not need a ground that it can be fitted under?

MR BANNON:   Yes.  It would be ground 2, I suppose, your Honour.  There is a relationship between the 97 ground and ground 2, namely, that the only real use his Honour made of any of the emails was this one specific email which was originally tendered against both parties, which is the email which he relied upon to make a finding as to when the joint venture commenced.  That email involved whether both parties to the email were offering to supply machines with fake compliance plates.  That fact was something which was necessary to be established.  That bears on whether that is something which is a 97 issue or not, but it is also relevant if, according to your own records, you sell the same machine twice in effect; then you know.  So your Honour is right; we do need ground 2 as well.  That is a long‑winded answer, but there is relationship between the two, I am sorry.

HEYDON J:   Does anything underlie ground 4?

MR BANNON:   My learned friends are right when they say that the Full Court dismissed the compensatory damages, or overturned the compensatory damages finding, but that does not leave an end to damages.  There would still need to be a remitter in relation to additionals if we were successful on the finding of infringing conduct because the additionals were independent of the compensatory element.  It would be a consequential amount which would flow.  We would still press ground 2, notwithstanding the apparent inconsistency with an answer I gave to the Chief Justice earlier.  We would press grounds 2, 3 and 4, but 4 is really consequential on success on 2 and 3.  If I have made that unclear ‑ ‑ ‑

HEYDON J:   I think the grounds actually are so amorphous that if the fortunes of war turn up in your favour – it is only my opinion – they might have to be revised.

MR BANNON:   Yes.  We can certainly undertake to be more specific, your Honour.  Ultimately, your Honours, as I say, the Full Court accepted, for example at paragraph 25 of the Full Court’s reasons at 237, that the emails could be used – that is appeal book 237 at paragraph 25 – the emails could be used, and were used, to establish the existence of the joint venture, and indeed in the second half of that paragraph:

His Honour made this finding on the basis of a chain of emails to which Mr Andrews and Mr Cragen were parties.  That chain of emails related to the provision of compliance plates to be used for a large number of refurbished Aristocrat gaming machines –

That is the critical email which was tendered originally against both parties, which is dealt with by the trial judge commencing at AB 54 where the relevant email chain is set out starting at paragraph 278, which is in effect the contents of the email chain set out.  Both the principals of Global and Impact were parties to it.  Paragraph 280 records that they were tendered against both parties originally.

His Honour, at application book 64 between paragraphs 331 and 334, found that as part of their joint venture activity they were offering fake serial number plates.  His Honour relied upon it again in terms of credit grounds at AB 119 in relation to Mr Cragen’s evidence – this is paragraphs 656 to 659 – and at the foot of AB 127 his Honour found what flows from the credit findings, over the page at 721 that they were aware that they were “manufacturing false compliance plates for export to foreign markets”, and that is again picked up at AB 132.  His Honour correctly noted, if one goes back to AB 49 at paragraph 242, that another Full Court in Raben Footwear v Polygram had found that:

regard may be had to the “knowledge, capacity and circumstances of the particular defendant”–

The joint venture findings, which are not under attack, were that they commenced in connection with an offer of fake compliance plates.  The only way we sought to establish that the particular transactions were infringing was the basis of comparison of genuine machines with – I am sorry; doubling up of plates.  Either they had already pre‑sold them or they existed in machines in clubs.  But for that evidence we could not have established that they were infringing machines, and both the primary judge and the Full Court accepted that the inference was there would be no point in having fake compliance plates unless you were selling machines which had infringing software.  That is referred to both by his Honour the learned primary judge at 155 of the application book in paragraph 897 at about line 30:

There would have been little point in having fake serial numbers for gaming machines containing genuine Aristocrat software –

Again, by the Full Court to the same effect at 262, at the top of the page at about line 10:

it ignores the use of fake serial numbers for the impugned gaming machines in each of those transactions and the reasonable inference that there would be no point in using fake serial numbers –

So against that background one comes to how the Full Court determined that this was tendency evidence, or in some way that the primary judge had erred.  The critical paragraphs in that regard are paragraphs 241, starting at AB 290, and the critical statement at line 10 at 291 within that same paragraph:

The primary judge necessarily had to connect the particularised infringing transactions with the joint venture.  The only way that he could have made this connection was to draw the inference from the contents of the emails that the respondents had the tendency to act in a particular way, that is, engage in the alleged infringing transactions –

That emphasis continues at the bottom of that page:

Used in this way, the evidence in the emails could show nothing more than a tendency on the part of the respondents at trial to engage in infringing transactions.

Over the top of the next page, his Honour treated the chain of emails:

to prove the particularised infringing transactions, and to use the contents of the emails to demonstrate the connection with the particularised infringing transactions –

FRENCH CJ:   You are saying there is a misapplication of 97 because this was good for other purposes?

MR BANNON:   Exactly.

FRENCH CJ:   Is that a question of principle?

MR BANNON:   To the extent that it stands as authority for the proposition that ‑ ‑ ‑

FRENCH CJ:   It stands as authority for no more than what it decided on the particular facts of the case, does it?

MR BANNON: Yes, subject to this. It stands as authority that in a section 38 case, section 97 precludes one from leading evidence as to the nature of the person’s business and what they themselves knew as to the nature of their business and what they had done before. We did not rely on that evidence to prove that the transactions were infringing, as explained.

FRENCH CJ:   You say it was relevant to knowledge and was not there to prove tendency ‑ ‑ ‑

MR BANNON:   Exactly.

FRENCH CJ:    ‑ ‑ ‑which is a matter of characterisation of the particular factual relationship between this evidence and the fact in issue.

MR BANNON:   Yes, I accept that, but the analysis is that that is the proposition for which it stands.  Further, the outcome – that is why we say it raises a matter of principle, your Honour.  The other bases on which we obviously rely upon is the so‑called visitational jurisdiction or administration of justice.  It is an outcome which is so at odds with, we respectfully submit, reality and the undisputed facts in the concurrent findings that it serves as a message which is not one which should be endorsed by this Court if it has the opportunity to reconsider it.

HEYDON J:   Well, you just say it is completely unjust ‑ ‑ ‑

MR BANNON:   Yes.

HEYDON J:    ‑ ‑ ‑crude and blatant error.

MR BANNON:   Yes.  May it please the Court.

FRENCH CJ:   Thank you.  Yes, Mr Einfeld.

MR EINFELD:   If your Honours please, our learned friends began by suggesting that there were concurrent findings at first instance and on appeal that the respondents, the Global and Impact parties, sold infringing machines.  That is not correct.  Can I direct your Honours’ attention to paragraph 248 of the Full Court’s judgment, which appears in the book at page 292.  Their Honours, having addressed the email questions and the section 136 rulings, having concluded at paragraph 247 that the primary judge’s principal findings certainly as against our clients could not stand, went on to say:

On the assumption that the primary judge was correct in using the emails in the way he did –

Then they would proceed to address the various transactions which they held infringed.  Now, the critical consequence of that is that what the Full Court was there saying was his Honour had misused the emails to find knowledge on the part of the principals of the respondents for whom we appear.  In accepting therefore the premise that they were aware of the counterfeiting by Mr Green’s clients, therefore we will proceed to look at the transactions, and on that basis we find they constituted infringements.  That said, of course the Full Court had held that the emails were not available for the purpose for which Mr Bannon now contends.

Your Honours, the issues raised by this application were not argued by the applicants during the appeal to the Full Court.  They arise from evidentiary rulings, and they concern factual matters.  In our submission, they raise for consideration no question of law or general importance.

After the Full Court delivered judgment below, adverse as it was to the applicants, the applicants sought to reopen to argue the very questions they now seek to argue in this Court.  The Full Court did not permit that course.  Their reasons included the fact that the applicants had had ample opportunity to argue those very matters but had failed to do so, that that failure was a product of a deliberate choice and, indeed, that so much had been acknowledged by the applicants to this Court.

If confirmation be required of those matters, it can be found firstly in the book at 355, in paragraph 31 in particular. Aristocrat complains as to the admissibility of the emails, the section 136 question, and ultimately for the purpose of knowledge for section 38 and the application of 97 was not a matter, so Aristocrat complained after judgment, that it was able to address. That is not so, they say.

They then provide a number of references to passages in the transcript of the appeal, and we have provided to your Honours as the materials for the purposes of this application copies of those extracts.  May we just inform your Honour, without taking your Honour to them, having regard to time constraints, that in at least one of those extracts at 121.7, the second to which their Honours referred at 355 at about line 53, Mr Bannon himself submitted that the emails were available and to be used for tendency purposes.  That is a submission made on behalf of the present applicants.

Your Honours, at the passages referred to in the transcript and, as I say, they are there in the materials we have provided, at those very passages either counsel for Aristocrat interests or for the Global‑Impact interests or Mr Green or the court itself raised the question of tendency evidence as being the only possible available use for the emails.  As their Honours record, that provided the opportunity for Aristocrat to make whatever submissions it wished to during the course of the appeal, especially as the appeal was adjourned after those references for a period of about four months, and they failed to do so.  Your Honours, at page 357, if your Honours turn to and just look quickly at paragraph 40:

Aristocrat had the opportunity of dealing with that alternative –

This is the alternative case built upon proof of knowledge derived from the invoices and duplicate machines without reliance upon the emails –

It did not point to findings of fact in the reasons of the primary judge upon which it relied, other than by reference to the emails –

Over the page at 358, paragraph 43, the third sentence:

It is apparent that Aristocrat is asking the Court to make findings of fact on the basis of a case that was not apparently advanced before the primary judge, nor on appeal.

The next sentence but one:

It is apparent that the emails constituted the very basis of Aristocrat’s case . . . and Aristocrat accepts that this Court has not, in the course of the appeal, received arguments as to how it should weigh the evidence in the absence of consideration of the emails.

Over the page at 359, paragraph 47:

Aristocrat submits that the Court has not, in the course of the appeal, received specific argument as to how it should itself weigh the evidence –

In paragraph 48, the last three or four sentences:

It is too late to put to this Court the evidence that was before his Honour to support such a conclusion.

That is, that the Aristocrat interests can succeed without reliance on the emails:

Aristocrat has not demonstrated that such an alternative case was advanced before the primary judge.  It was not advanced on appeal.

And so on.

HEYDON J:   If Mr Bannon’s arguments that he is relying on now, you say for the first time, had been advanced at the trial, was there any possibility of tendering evidence to meet those arguments that has not been tendered?

MR EINFELD:   Your Honour, the emails were tendered by our friends not to prove the facts contained in them, and there is a reference in the primary judge’s judgment at paragraph 321 to that effect.  They were tendered to establish the existence of a joint venture between our respective clients, and that was the purpose of their tender.  His Honour limited the admissibility to that purpose and for that reason, right through from then till the end of the case there was no need to tender evidence to address anything other than the fact that they evidenced the existence of the joint venture.

At the very end of the case, in the course of his judgment, the primary judge reversed those rulings and admitted that for all purposes against all parties, including materials, counterfeit plates, fake plates and fake software found in Mr Green’s client’s premises were admitted against us.  That was the subject of the 136 rulings issue that was addressed by the Full Court.  Their Honours reversed the decision of the primary judge, and that very critical factor is not the subject of any submissions made in this Court on this application.  So the answer is while there was an opportunity to address the emails, and they were addressed, the only purpose for which they were initially tendered was not as evidence of the fact contained in them, so his Honour concludes.

FRENCH CJ:   They were never used for that purpose, were they?

MR EINFELD:   I am sorry, your Honour?

FRENCH CJ:   They were never used for that purpose, as evidence of the truth of what was contained in them?

MR EINFELD:   That is right, yes.  They were used as evidence ‑ ‑ ‑

FRENCH CJ:   Of state of mind.

MR EINFELD:   ‑ ‑ ‑ of a state of mind for the purpose of section 38 as tendency, and this could only be because none of them related ‑ ‑ ‑

FRENCH CJ:   Not to be equated with tendency evidence.

MR EINFELD:   None of them related to the subject transactions, your Honour.  All the emails related to other transactions, and therefore could only be relevant on the question of knowledge as a tendency to counterfeit goods and the like.

FRENCH CJ:   That is the step that is contested, I think, is it not?

MR EINFELD:   That is correct.

FRENCH CJ:   Knowledge is not necessarily to be equated with tendency?

MR EINFELD:   The point we make is that up until now, that point was not argued at first instance and was not argued on the appeal.  It is significant, your Honours, that the applicants make no challenge in this Court to the conclusions of their Honours that they would not permit those matters to be argued because the opportunity had been available but not availed of.  There is no challenge to those conclusions here.

HEYDON J:   It is one thing for the Full Court to have done what it did and to accept that they were entitled to do what they did.  It is another thing whether Mr Bannon is entitled to raise some new argument on appeal.  If it is an argument of law not defeasible by the possibility of calling evidence at the trial, he does not have complete carte blanche to do it but he has kicked most of the door down.

MR EINFELD:   Your Honour, there is no true question of law, as we will demonstrate in a moment, either in respect of the section 38 knowledge point or in respect of the section 97 tendency point, and if I can proceed to develop the reasons why that is so. Your Honours, our primary submission is, however, that the applicants having elected not to argue the matter at first instance or on appeal, this Court would be slow to permit them to do so now unless it was likely that the outcome was such as it would have an influence on the result at the end and, as we say, we will submit in a moment as to why that is not so.

Can I deal with the section 38 knowledge point? The applicants submit that it is obvious by reason of duplicate invoices and machines that the companies must have known that their machines involved infringing materials. In fact, it is far from obvious. The Full Court concluded that the primary judge, as we have said, erred in reversing his original 136 rulings and, as we say, there is no challenge to that conclusion here. The result is that a vast part of the evidence was not properly admitted against the Global and Impact parties, including, for example, the fake materials that were found at Mr Green’s premises and which were made by Mr Green’s clients.

Now, all this evidence, the emails, the fake materials which his Honour ultimately admitted against us – incorrectly, according to the Full Court – was relied upon by the primary judge to conclude that the explanations for the duplications offered by the principals of our clients were not to be accepted.  In other words, on the foundation of the fact that their knowledge, which his Honour found by admitting the materials against us, the emails, the counterfeit items, that they clearly heavily weighed upon his Honour’s conclusion in rejecting the evidence of the principals of the two respondents for whom we appear.

That being so, and the section 136 rulings having been reversed but not the subject of argument here to suggest that they were erroneously reversed, all of that evidence would require a substantial re‑evaluation before one could conclude that the explanations proffered by the two principals for why there were duplications, there were errors – some of the machines were returned and re‑invoiced and the like – would have to be weighed in order to determine whether there was likely to be a different result than that to which the Full Court has now arrived.

Your Honours, while it is correct that the Full Court, as we say, did reach a conclusion about those transactions, it was expressly on the basis that the 136 rulings which the court had reversed would be, to the contrary, assumed to have been valid in the first instance, the emails and the other materials, the seized materials admissible, and it was only on that basis that the Full Court itself reached the conclusions that the infringements took place.

We submit, therefore, that the Court ought not enter upon an argument that requires upon a re‑evaluation of what was really a morass of material, described by the Full Court as “a vast amount of material”, that would be required in order to determine whether the explanations provided by the respondents for duplications were acceptable or otherwise.  The mere fact that the company ought be taken to know what is in its own records, if that be a sound proposition, does not answer the question in this case because it very much depends upon a careful reassessment of all the factual evidence.

Your Honours, may I turn to the section 97 tendency point.  Our essential point here, again, is the failure of the applicants to argue the inapplicability of the tendency rule.  The opportunity to address those matters was extensive, as the Full Court indicated, and as we say at one point during the course of the evidence – we have provided a reference in our written outline to 121 of the transcript – Mr Bannon himself submitted to the Full Court that the emails did show a tendency to undertake transactions of the relevant kind, a position entirely contrary to that which is now submitted.  That actual submission is extracted in our written outline in the book at page 391 in paragraph 14.1.

HEYDON J:   Can I just say this?  “Tendency” is a common word.  To say, “These show their preparedness and tendency to do exactly what we say they did” is not necessarily an invocation of the reasoning that makes evidence admissible under section 97.

MR EINFELD:   No, not at all, but the first point is that it is an example of the fact that the tendency issue was alive and available to be debated.  If there were said to be, as there is now, a reason or there are said to be reasons why the tendency rule has no application, there was full opportunity to argue that before the Full Court and indeed at first instance, and the applicants not having availed themselves of it, they should not be permitted to do so in this Court.

Your Honours, the applicants’ reply submissions contain an assertion that neither party asserted that the emails constituted tendency evidence and, for the reasons we have indicated, that is not so.  The further point is this.  While the applicants assert in their written submissions that the emails were available as direct and not tendency evidence of constructive knowledge, the critical point here, your Honours, is this is an alternative case that was not run at first instance and indeed, as the Full Court observed, it was not argued on appeal.

The only argument that was conducted at first instance and on appeal was that the respondents had actual knowledge, not constructive knowledge, actually knew about Mr Green’s client’s counterfeiting of component parts and knew that they had been included in the second‑hand machines that had been collected and sold by the Global and Impact parties overseas.  Aristocrat’s case always was one of actual knowledge, so that the question that they now seek to agitate in this Court – namely, that the invoices and the like can be used as direct evidence of the fact at least that the respondents ought to have known of the infringements – has never been argued until now.  Their case was actual knowledge.  They relied on the emails, they relied on the seized materials that were tendered against our clients – and, as the Full Court said, incorrectly tendered against our clients – and no appeal is sought to be brought against that conclusion.

The penultimate matter concerns the statutory exceptions to the tendency rule to which Mr Bannon refers.  Your Honours have not been addressed as to those exceptions but, in fact, none of them applies.  None of them has application on the facts.  We submit that no question arises, with

respect, to the construction of section 97, as his Honour the Chief Justice raised in the course of argument with our learned friends.  At every point the matters sought now to be adumbrated by the applicants involve an application of the sections and the subsection exceptions to the facts as found by the primary judge or, alternatively, by the Full Court.

There is no question of law or general importance that arises.  Rather, in our submission, each of the subsections to which our friends advert in 97 and in 94 of the Evidence Act 1995 (Cth) has no application on the facts. The exception in 97(2)(b) has no relevance. That involves tendency evidence, to rebut tendency evidence, but there was no tendency evidence called by the respondents. Mere denials of infringement do not amount to tendency evidence.

The exception in section 94 relates to emails tendered only on the question of credit, and these emails were not tendered only on the question of credit.  They were tendered to prove the existence of the joint venture, and 94(3) has no application because they were tendered on our friends’ case now that they seek to argue – in fact, not on the question in issue.  The question in issue is whether the 11 transactions involved infringement that were found by the primary judge, and the question of tendency so as to give rise to knowledge of a fact is not itself a fact in issue.  The fact in issue was not some past experience in relation to other transactions.  The question in issue was the subject transactions that have been pleaded to which the emails made no reference.

Your Honours, in our respectful submission, all of the matters sought to be raised are evidentiary.  They all relate to facts which were very complex which would require to be unravelled before this Court could determine whether or not the matters sought to be raised have any significance.  The critical and central fact that they were not raised either at first instance or on appeal otherwise than by way of attempt to reopen, which was rejected by the Full Court, and no appeal is sought to be raised against that rejection of that application or militate in favour of a refusal of a grant of special leave.  May it please the Court.

FRENCH CJ:   Thank you, Mr Einfeld.  Mr Green.

MR GREEN:   If the Court pleases.  Your Honours have received from the first and sixth respondents a tender bundle.  That tender bundle on page 3 contains a discussion which occurred between his Honour, at first instance, the trial judge and myself and then following that, Mr Cobden, in which the question of tendency evidence, at transcript page 2186, was raised.

FRENCH CJ:   At what stage of the trial did this occur?

MR GREEN:   This occurred in final oral submissions.  It occurred at the very end of Mr Cobden’s submissions.  Your Honour will see that from line 21 of page 2186.  I raised on line 25 the question, subject to correction in the transcript, about the use by Mr Cobden during the course of his address of “in the habit of”.  That was put squarely, as your Honours will see from that transcript – I will not read it out – and Mr Cobden came to disavow that after his Honour asked me whether or not my submission was in relation only to section 115 or whether it was generally and I informed his Honour for any purpose.  So that matter was in play.

Mr Cobden had an opportunity to address that in final oral submissions and make any application he saw fit and the applicants before this Court chose to eschew that.  That is in addition, of course, to the matters that the Full Court, in the supplementary judgment that is in the application book, addressed in relation to various parts of the transcript before it.

The first and sixth respondents embraced what Mr Einfeld has put to your Honours.  There are a couple of additional matters.  Firstly, Mr Allam was not a party to the joint venture.  That appears at AB237, appeal judgment, paragraph 26.  At all times Mr Allam was a service provider to the joint venture as pleaded.

What really happened at the trial was the applicants sought to bring a case based upon primary infringement and a separate case based upon a series of transactions. Those series of transactions were based upon an allegation that section 38 of the Copyright Act had been contravened. What Mr Bannon has endeavoured to do before your Honours is to merge those two planks, the two separate aspects of tortious conduct. Mr Allam’s role, on any view, in relation to the section 38 contravention is very different to that in relation to the section 36 contravention and it is wrong, for the reasons submitted in the written submissions to this Court, to merge those two.

Another matter, your Honours, is that the chain of six emails, on any view, for the purpose of section 136 – the chain of two of those emails was admitted against Mr Allam.  Again, those two emails fall very well short, were this Court to grant special leave, to demonstrate anything in the nature of tendency, even if the court was held to have erred in the manner in which it approached the matter.

So on the basis of the administration of justice, your Honours, whatever be the view in relation to the other parties, the other respondents, Mr Allam and Tonita are in a different position and, in any event, I submit that special leave should be refused in relation to Mr Allam and Tonita.  If the Court pleases.

FRENCH CJ:   Thank you.  Yes, Mr Bannon.

MR BANNON:   Firstly, so far as the section 97 submissions were concerned, could I invite your Honours’ reference to 291 of the application book?  At paragraph 243 of the Full Court’s judgment, the first judgment, their Honours accurately record that neither at trial nor on appeal did the Aristocrat parties assert that this was tendency evidence or seek to rely on Part 3.6, and that is an accurate recording.

Secondly, at 292 of the application book their Honours made it clear in paragraph 248 that the emails were relevant to the “knowledge” requirement:  the words in parentheses, “(such that the “knowledge” requirement was established)”.  That was the only relevance that his Honour had misused those in relation to the knowledge requirement.  Their Honours then proceeded to deal with the argument, by reference to the comparisons of numbers.  That argument is correctly encapsulated by their Honours at 297, in paragraphs 266 and 267, where their Honours record in the first sentence:

Duplicate Numbers

The DN category describes transactions . . . where the Global/Impact parties issued invoices for gaming machines in which the serial numbers were the same as serial numbers on machines which had already been shipped . . . The Aristocrat parties invited the Court to infer that these transactions represented dealings made in infringement of s 38 –

which is exactly the submission we made and we made the same submission at trial.  The next sentence, “In each case the Global parties submitted”, and the only explanation they gave was not that the transactions took place but they had a belief that they were genuine transactions.  The only explanations they put forward was to say that duplicate transactions did not happen or the machines found in clubs were not genuine.  They never sought to assert that they had a belief, which is normally what happens in these sorts of cases, that the transactions did not involve infringing transactions.

On each of their explanations the trial judge on credit grounds rejected them, including reliance on the emails, which everybody accepts, including the Full Court says, he was entitled to do by use of the emails.  The Full Court went through each of their explanations in relation to why it is you could have duplicate transactions or selling machines which were already in clubs and each of them rejected again the attempt to overcome the credit findings.  All of those findings of the Full Court were based on ‑ to the extent that they were based on emails – on the basis everybody accepted was permissible.  So that the proposition that there are not current findings of fact raised for the first time orally are not contested in the summary of arguments is incorrect and the emails only went to the knowledge point.

That is further emphasised by what appears at AB356.  This is the second judgment.  Paragraph 32 encapsulates the fundamental difficulty and conundrum which the reasoning of the Full Court approaches:

Aristocrat seems to have misunderstood the relevance of s 97 . . . The primary judge necessarily had to connect the particularised infringing transactions with the joint venture. 

Pausing there, they were issued on invoices of the joint venture.  That sentence, with the greatest respect, does not admit of reasoning process:

The emails themselves did not relate to the particularised –

Correct:

The only way to make the connection was to ‘draw the inference –

But the words in brackets improved, distinguishing those cases where –

the evidence was not tendered to prove a tendency but to prove a state of mind at a particular time –

That is exactly ‑ to the extent that the emails were used it was only to state of mind.  That paragraph encapsulated the Full Court’s approach to say why we got it wrong.  We rely on that very paragraph to submit that this case demonstrates a significant failure in the administration of justice.  Paragraph 34 – again, a repetition of the same proposition where words are used by the Full Court to say section 97 applied to the state of mind evidence but an analysis of the words do not, with respect, reflect a reasoning process which is an acceptable or critical consideration.

Just one last point in relation to the use of the emails in relation to credit findings.  For example, if one goes to 150 of the application book, which forms part of his Honour the learned primary judge’s reasoning process, in relation to rejecting the explanations his Honour said in 868 and 869:

It is possible that these transactions were superseded by a later transaction . . . However, my findings as to Mr Andrews’ credit

affect the weight that I give . . . In particular, in the absence of any corroborating evidence –

Paragraph 869 says the more probable explanation relates to the email in 279, the one admitted against both parties in the first instance, which is their business offers fake compliance plates.  May it please the Court.

FRENCH CJ:   The Court will refer the application to an enlarged bench.  Mr Bannon, you will have leave within 14 days to consider amendments to the application for special leave in the draft notice of appeal to, as it were, sharpen the focus of those grounds in such a way that they reflect the submissions that you are putting.

MR BANNON:   May it please the Court.

AT 10.27 AM THE MATTER WAS CONCLUDED