Art International Ltd v Bennetts, D

[1991] FCA 761

:<Or_' FOP, PI3T.iIEUTIOIi

IN THE FEDERAL COURT

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JUDGMENT No ...... ........ ..

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OF AUSTRALIA

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No. VG 148 of 1991

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VICTORIA DISTRICT REGISTRY

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GENEIUL

DIVISION

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BETWEEN :

ART INTERNATIONAL LTD AND MORGAN SCHIFF PTY LTD

Applicants

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DON BENNETTS AND PRIMELINE IM?iGES PTY LTD

, < Respondents

. 7	ECEIVED	-	and	-
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PEDERAL COURT OF DON BENNETTS

'\ AUSTW	pfllNClPAl	Cross-Claimant
RMISTRV

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ART INTERNATIO- LTD AND MORGAN SCHIFF PTY LTD

Cross-Respondents

JUDGE :  Heerey J.

PLACE : Melbourne

B:	7 November 1991
acquired an equitable assignment from "the producer" (a

EX TEMPORE REASONS FOR =NT

I propose to order judgment for the cross-respondents on the

cross-claim, other than the matters raised in paragraphs 59 and 60. I observe that the cross-claim is only made in the alternative, that is, if contrary to the cross-claimant's contention, in June 1986 the cross-respondent, Morgan Schiff Pty Ltd, acquired the right to distribute the film and the cross-respondent Art International Pty Ltd in October 1989

company now defunct) of a 50% share in the copyright of the film, then those cross-respondents became "in equlty bound to bear the obligations attached to" the distribution rights and copyright respectively.

Paragraphs 4 3 to 53 are entirely taken up with complaints concerning a "production agreement" said to be made "in or about 1986" between the cross-claimant and the producer under which the cross-claimant "was engaged to make the film and to have creative control thereof". In that production agreement there were various terms as to exhibition of the film by the ABC and to obtaining the consent of the late Lloyd Rees, the famous Australian artist who was the subject of the film, as to the use of copyright of images. These are the very sorts of arrangements that one might imagine a producer undertaking in the course of producing a film. It is alleged there was a breach by the producer of these terms and in particular in relation to the exhibition of the film on the ABC and to "maintaining a good relationship" with Lloyd Rees. It is only from paragraph 54 onwards that there is any mention of the cross-respondents.

There is no basis as far as I can see on which the obligations undertaken by the producer were obligations which "attached to the copyright" or "attached to the rights to distribute the

as to the production of the film which the producer saw fit to	film". At best these seemed to be quite separate arrangements
enter into with the cross-claimant. The mere fact that someone who was at the time the holder of the copyright made some contractual arrangements with others for the purposes of the exploitation of the copyright does not "attach" any rights, still less obligations, to the copyright. The same may be said of the distribution rights. Nor do I see how equity imposed any burden on the cross-respondents. No novation, trust or other form of acceptance of obligation is alleged. The fundamental rule is that obligations cannot be imposed on someone not a party to a contract without that
person's consent. I refer to Greig and Davis, The Law of Contract the passage cited by Mr Golvan, at page 1032. There is the further feature that most of the terms of the "production agreement" as to which the cross-claimant complains were matters as to which undertook an obligation, such as the procurement of the consent of Lloyd Rees.
Insofar as it is alleged that the producer was at fault in repudiating an alleged agreement with the ABC and failing to ensure the production agreement was performed, I do not see how that makes out a cause of action against the cross- respondents.
There are allegations in paragraphs 59 and 60 of "wrongful interference in the contractual relationship between the cross-claimant and producer" and alternatively that "the cross-respondents wrongfully procured a breach of the Production Agreement" which presumably is a reference to the same contractual relationship. These paragraphs are devoid of particulars. They should no doubt be read in the context of the rest of the cross-claim. From what was said in the course of argument, it may be that they are based on the same misconception that underlies the rest of the cross-claim. However, on their face they are distinct courses of action. They do not strike the same fundamental conceptual problems as
contract. I think I should simply strike them out. to the imposition of obligations on persons not party to a
As to the defence, I shall strike out paragraphs 29 to 40. It was properly conceded in the course of argument that there were substantial matters that needed amendment. I refer particularly to the issue of notice and also to paragraph 37. I note also that the applicants did not seek summary judgment on their claim. I shall therefore strike out paragraphs 29 to 40 with a right to replead as of course will be the case of paragraphs 59 and 60 of the cross-claim. I order that the respondents pay the costs of the motion.

I certify that this and the

preceding three (3) pages are a true copy of the Reasons for Judgment of the Honourable Mr Justice Heerey

Dat ed: 7 y- 1111

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Counsel for the Applicants

and Cross-Respondents:	Mr D Golvan
Solicitors for the Applicants
and Cross-Respondents:	Minter Ellison
Counsel for the Respondents
and Cross-Claimant:	Mrs S M B Morgan
Solicitors for the Respondents
and Cross-Claimant:	Marshalls & Dent