Australasian Performing Right Association Limited v Escape Bar & Night Club Pty Limited & Anor
[2017] FCCA 2690
•3 November 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| AUSTRALASIAN PERFORMING RIGHT ASSOCIATION LIMITED v ESCAPE BAR & NIGHT CLUB PTY LIMITED & ANOR | [2017] FCCA 2690 |
| Catchwords: PRACTICE AND PROCEDURE – Application for default judgment based on statement of claim alleging infringement of copyright in musical works – whether on the face of the statement of claim the applicant has established an entitlement to relief for infringement of copyright – whether it is appropriate to grant declaratory and injunctive relief – whether it is appropriate to assess damages on the basis of the licence fee that would have been paid to applicant – whether additional damages should be ordered – relief granted. |
| Legislation: Copyright Act 1968 (Cth), ss. 30, 31(1)(a)(iii), 32, 35, 36(1), 115, 115(1), 115(2), 115(4), 119, 126, 196, 196(1) Federal Circuit Court Rules 2001 (Cth), rr. 1.05, 4.05(3), 6.01, 13.03A, 13.03A(2), 13.03A(2)(b), 13.03B, 13.03B(1), 13.03B(2), 13.03B(2)(c), 13.03B(4), 13.03C(2) |
| Cases cited: Angelo Mitanis & Anor v Pioneer Concrete (Vic) Pty Ltd & Ors [1997] FCA 1040 Australian Competition and Consumer Commission v Dataline.Net.Au Pty Limited [2006] FCA 1427 Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) [2011] FCA 352 |
| Applicant: | AUSTRALASIAN PERFORMING RIGHT ASSOCIATION LIMITED ACN 000 016 099 |
| First Respondent: | ESCAPE BAR & NIGHT CLUB PTY LIMITED ACN 165 620 959 |
| Second Respondent: | STEVEN RITCHARDSON |
| File Number: | SYG 2587 of 2017 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 24 October 2017 |
| Date of Last Submission: | 24 October 2017 |
| Delivered at: | Sydney |
| Delivered on: | 3 November 2017 |
REPRESENTATION
| Counsel for the Applicant: | Mr A Spies |
| Solicitors for the Applicant: | Banki Haddock Fiora |
| No appearance by or on behalf of the respondents. |
DECLARATIONS
The first and second respondents infringed the applicant’s copyright in the following musical and literary works, namely:
(a)Break Free music;
(b)Break Free lyrics;
(c)Wannabe music;
(d)Wannabe lyrics;
(e)Beauty And A Beat music;
(f)Beauty And A Beat lyrics;
(g)It’s My Life music;
(h)It’s My Life lyrics;
(i)Some Kinda Rush music;
(j)Some Kinda Rush lyrics;
(k)Body Ache music;
(l)Body Ache lyrics;
(m)You An’ Your Hand music;
(n)You An’ Your Hand lyrics;
(o)What I Did For Love music;
(p)What I Did For Love lyrics;
(q)Highway To Hell music; and
(r)Highway To Hell lyrics,
by performing these works between 9:30 pm and 11:00 pm on 13 February 2015 by means of recorded music for dance use at the “Escape Bar and Club” at Surfers Paradise Surf Life Saving Club in Surfers Paradise, Queensland (Premises).
The first and second respondents infringed the applicant’s copyright in the following musical and literary works, namely:
(a)24K Magic music;
(b)24K Magic lyrics;
(c)Side To Side music; and
(d)Side to Side lyrics,
by performing these works between 2:05 am and 3:10 am on 26 February 2017 by means of recorded music for dance use at the Premises.
ORDERS
The respondents by themselves or agents are restrained from:
(a)performing in public without the licence of the applicant the works referred to in the declarations made in paragraphs 1 and 2 (Works);
(b)performing in public without the licence of the applicant the musical and literary works referred to in the schedule to these orders (APRA Repertoire); and
(c)authorising the performance in public of any of the Works or any of the works contained in the APRA Repertoire.
Judgment against the first and second respondents in the sum of $36,749.32.
Pursuant to s.115(4) of the Copyright Act 1968 (Cth), judgment against the first respondent in the sum of $35,000.
Pursuant to s.115(4) of the Copyright Act 1968 (Cth), judgment against the second respondent in the sum of $35,000.
The first and second respondents pay the applicant’s costs set in the amount of $8,930.
THE COURT NOTES
The liability of the respondents under the judgment granted in paragraph 4 of these orders, and on the order for costs referred to in paragraph 7 of these orders, is joint and several.
The liability of each of the respondents under the judgments granted in paragraphs 5 and 6 of these orders is separate from each other’s liability with the intent that the satisfaction of one judgment is not to be taken as satisfaction of the other judgment and vice versa.
SCHEDULE
APRA REPERTOIRE
The Applicant:
(a)owns the copyright in respect of its application to the performance in public; and/or
(b)has the power to grant licences for the performance in public
of practically all musical and literary works performed throughout Australia. The Repertoire comprises the works written by members of the Applicant – who constitute more than 90,000 Australian composers, authors and publishers of music – and members of affiliated societies in countries throughout the world.
The Applicant has carried on business as an association of composers, authors and publishers of music for the purpose of licensing the public performance of musical and literary works since 1926.
The Applicant maintains a catalogue of its Repertoire. The catalogue lists the works in which the Applicant owns the copyright in respect of their applications to the performance of the works in public. At present there are about 10 million works listed in the catalogue. The items in the catalogue may be inspected by arrangement with the Applicant.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2587 of 2017
| AUSTRALASIAN PERFORMING RIGHT ASSOCIATION LIMITED ACN 000 016 099 |
Applicant
And
| ESCAPE BAR & NIGHT CLUB PTY LIMITED ACN 165 620 959 |
First Respondent
| STEVEN RITCHARDSON |
Second Respondent
REASONS FOR JUDGMENT
Introduction
The applicant (APRA) applies under r.13.03B(2) of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) for default judgment against the respondents on causes of action under the Copyright Act 1968 (Cth) (Act).
Subrule 13.03B(2) of the FCC Rules applies to a respondent who “is in default”. Under r.13.03A(2) a respondent is in default if the respondent has not satisfied the applicant’s claims, and the respondent has failed to do one or more of the things identified in r.13.03A(2)(b) of the FCC Rules. The things identified in r.13.03A(2)(b) that are relevant to the application before me are the failure to give an address for service before the time for doing so has expired, the failure to file a response or defence before the time for doing so has expired, and the failure to defend the proceedings with due diligence. Also relevant is r.13.03C(2) of the FCC Rules which provides that the Court may make an order of the kind mentioned in r.13.03B(1), (2) or (4), if a party to a proceeding is absent from a hearing.
When a respondent is in default, or when a respondent is absent from a hearing, the Court may make one of the orders set out in r.13.03B(2) of the FCC Rules. Relevant to the application before me is r.13.03B(2)(c) which provides that the Court may:
if the proceeding was commenced by an application supported by a statement of claim or the Court has ordered that the proceeding continue on pleadings – give judgment against the respondent for the relief that:
(i)the applicant appears entitled to on the statement of claim; and
(ii) the Court is satisfied it has power to grant . . .
APRA submits the respondents are in default and, because it commenced the proceeding by an application supported by a statement of claim, APRA applies under r.13.03B(2)(c) of the FCC Rules for a declaration that the respondents have infringed APRA’s copyright, injunctions restraining the respondents from future infringements of copyright, damages, and additional damages under s.115(4) of the Act. APRA also claims interest and costs.
Procedural history
APRA commenced this proceeding by application filed on 16 August 2017. The application was supported by a statement of claim which, in broad terms, alleges as follows:
a)APRA is the owner, or is the representative of the owners, of that part of the copyright that subsists in the musical works identified in the statement of claim that consists of the exclusive right to perform the works in public (performing rights);
b)the first respondent (Escape Bar) is and was at all material times the proprietor of the business named “Escape Bar and Club” at Surfer’s Paradise Surf Life Saving Club (Business);
c)the second respondent, Mr Ritchardson, is the sole director of the first respondent; and
d)both Escape Bar and Mr Ritchardson infringed APRA’s performing rights in the works by performing without APRA’s licence the works by recorded music for dance use at premises of the Business.
The matter came before me on a first court date on 6 September 2017. APRA appeared by its counsel, but there was no appearance by the respondents. I stood the matter over for directions at 9.30 am on 20 September 2017, and ordered that personal service on Mr Ritchardson of the application and statement of claim be dispensed with. Instead of personal service, I ordered that those documents be served on Mr Ritchardson by email, by leaving the documents at the two addresses identified in the order, and by Facebook message. I ordered that service by each of these methods take place by 5 pm on 11 September 2017.
When the matter came before me on 20 September 2017 the respondents again did not appear. Counsel for APRA informed me that the application and statement of claim were served in the manner required by the orders I made on 6 September 2017, and counsel indicated APRA proposed to apply for default judgment. I listed the matter for a default judgment hearing on 24 October 2017. I ordered that APRA file the material on which it intends to rely for that hearing and that, until further order, or until Mr Ritchardson files a notice of address for service, personal service on him of all documents in the proceeding be dispensed with and that, instead of personal service, all documents be served on Mr Ritchardson by email and by registered post to the address identified in the order.
I am satisfied that on 20 September 2017 APRA caused to serve on the respondents a sealed copy of the orders I made on 20 September 2017 by email. [1] APRA also sent a copy of the sealed orders by express post, rather than, in the case of Mr Ritchardson, by registered post, as provided for by my orders made on 20 September 2017.[2] Nevertheless, I am satisfied the respondents have received notice of the orders I made on 20 September 2017.
[1] Affidavit of H F Knight 12.10.2017
[2] Affidavit of H F Knight 12.10.2017
Are the respondents in default?
The first question I must address is whether the respondents are “in default” within the meaning of r.13.03A(2) of the FCC Rules. The answer to that question depends, in the first instance, on whether the application and statement of claim were served on Escape Bar in accordance with the FCC Rules and, in the case of Mr Ritchardson, as required by the orders I made on 6 September 2017. I am satisfied these documents, together with a sealed copy of those orders, were served on Escape Bar as required by the FCC Rules,[3] and on Mr Ritchardson in the manner required by the orders I made on 6 September 2017.[4] That means that Escape Bar and Mr Ritchardson were both served by no later than 11 September 2017.
[3] See affidavit of H F Knight 17.08.2017
[4] As to service by Facebook message and email, see the affidavit of H F Knight 08.09.2017. As to service by delivery see the affidavit of R Williams 11.09.2017.
Given the application and statement of claim have been served on the respondents, I am satisfied that both respondents are in default. There are a number of things referred to in r.13.03A(2) of the FCC Rules the respondents have failed to do.
a)They have not provided an address for service, as required by r.6.01 of the FCC Rules. That rule does not provide a time by which a respondent must provide an address for service, but it is to be implied that this must be done within a reasonable time of being served, and I am satisfied a reasonable time has passed for both respondents.
b)They have not filed a defence as required by r.4.05(3) of the FCC Rules. Although that rule does not expressly state the time by which a defence must be filed, it has been held that it is to be read as requiring a defence to be filed within 14 days of service of the application.[5]
c)By failing to appear before the Court or otherwise take any step in the proceeding, the respondents have failed to defend the proceedings with due diligence.
[5] Hartnett Legal Services Pty Ltd v Ballantyne [2015] FCA 744 at [55] (Rangiah J)
In any event, whether or not the respondents are in default, they did not appear at the hearing for default judgment. For that reason, r.13.03C(2) of the FCC Rules empowers me to make one of the orders provided for by r.13.03B(2) if the conditions for making those orders are otherwise satisfied.
The next question is whether APRA is entitled to the orders it seeks. Before I can be in a position to answer this question, it will be necessary to:
a)consider the nature and scope of r.13.03B(2)(c) of the FCC Rules;
b)set out the elements of a cause of action for infringement of copyright; and
c)examine the causes of action APRA pleads in its statement of claim, and its claims for relief.
Nature and scope of r.13.03B(2)(c) of the FCC Rules
Rules 13.03A and 13.03B of the FCC Rules were adapted from, and are substantially similar to, the rules contained in Or.35A of the now repealed Federal Court Rules 1979 (Cth) (old FC Rules); and r.13.03B(2)(c) of the FCC Rules is almost identical to Or.35A r.3(2).
Before Or.35A was introduced into the old FC Rules in 2004, [6] the Federal Court could enter default judgment against a respondent only if an application for default judgment was supported by admissible evidence that proved the applicant’s claims for relief.[7] In Australian Securities Commission v MacLeod & Ors Drummond J described this limitation in the old FC Rules by reference to the rules of other courts which had as their source the rules of court of the English High Court after the passing of the Judicature Acts:[8]
This rule[[9]] (and other Federal Court Rules which permit the making of the same orders where a respondent is in default in complying with other procedural requirements, eg, O 11, r 23; O 15, r 16 and O 16, r 9) differs from provisions found in the rules of other courts which are derived from the post-Judicature Act rules of the English High Court. In certain classes of action, eg, where the plaintiff's claim was for a liquidated demand, the rules of other courts allowed the plaintiff to enter judgment by the ministerial act of a court official and without the intervention of the court; but the general rule empowered the entry of such judgment in default as the plaintiff appeared entitled to on his statement of claim. Initially there was some uncertainty as to whether on an application under English O 27, r 11 (the rule permitting judgment in default of defence), proof of the facts alleged in the statement of claim was required. It appears that late in the 1880s, a meeting of the judges resolved that, on such an application, the court should not receive evidence but should give judgment on the statement of claim alone: see Smith v Buchan (1888) 58 LT 710. From this time, it was firmly established that, on a motion for judgment in default, the plaintiff was not required (or entitled) to produce any evidence in support of the allegations in the statement of claim: see Young v Thomas [1892] 2 Ch 134, where Bowen LJ identified the justification for the practice: the defendant's failure to plead amounted to an admission of the facts in the statement of claim. The English practice thus proceeded on the basis that evidence was required on a motion for judgment in default of defence, but that that evidence was to be found, and found only, in the defendant's admission of the facts alleged in the statement of claim constituted by his failure to plead to them.
[6] By the Federal Court Amendment Rules 2004 (Cth) (No 4) – see Australian Competition and Consumer Commission v Dataline.Net.Au Pty Limited [2006] FCA 1427 at [40] (Kiefel J, as her Honour then was)
[7] Australian Securities Commission v MacLeod & Ors (1994) 130 ALR 717 at page 721: “An application for “judgment”, rather than for “an order”, pursuant to O 10, r 7(1)(b) is an application for final rather than interlocutory relief. It is therefore a proceeding which constitutes a “trial” within the meaning of that term in O 1, r 4. It follows that all facts must be proved by direct, as opposed to hearsay, evidence.”
[8] (1994) 130 ALR 717 at pages 719-720
[9] O 10, r.7(1)(b) which provided that, where a respondent failed to comply with a court direction, any other party could move the Court on notice for judgment or an order against that party.
The purpose of the addition to the FC Rules of Or.35A r.3(2)(c), therefore, was to include in the old FC Rules a rule to the effect that had been used in State and Territory courts for years that authorised the entry of default judgment on the assumption that the defaulting respondent has admitted the allegations of fact made in the statement of claim.[10]
[10] “Paragraph 3 (2) (c) is a new rule that has been used in State and Territory Supreme Courts for many years. . . . The relief that may be granted under the rule is not limited to a judgment for a debt of liquidated damages.” (Explanatory memorandum to Federal Court Amendment Rules 2004 (Cth) (No. 4))
There are a number of matters to note about r.13.03B(2)(c) of the FCC Rules. First, and consistently with the purpose for which Or.35A r.3(2)(c) was introduced into the old FC Rules, r.13.03B(2)(c) “does not require proof of the claim by evidence, but only requires that – on the face of the statement of claim – there is a claim for the relief sought”.[11]
[11] Rathner, in the matter of Mildura Grand Pty Ltd (in liq) v Bendigo Skyrider Pty Ltd [2011] FCA 626 at [9] (Gordon J)
Second, before the Court may make an order under r.13.03B(2)(c) of the FCC Rules it must be satisfied that the document which the applicant has filed with the application is in fact a “statement of claim”. A statement of claim is a pleading, which means it must comply with the rules of pleading.[12] Thus, for example, the purported statement of claim must “state the material facts on which a party relies that are necessary to give the opposing party fair notice of the case to be made against that party at trial, but not the evidence by which the material facts are to be proved”.[13] Here, “material facts” are facts whose existence is “necessary for the purpose of formulating a complete cause of action”.[14] A “cause of action”, in turn, is “a factual situation the existence of which entitles one person to obtain from the court a remedy against another person”.[15] Another example of a rule of pleading is that the statement of claim must not allege “conclusions drawn from unstated facts”.[16]
[12] Under r.1.05 of the FCC Rules, the rules of the Federal Court Rules 2011 (Cth) (FC Rules) identified in Part 2 of Schedule 3 to the FCC Rules apply, with necessary changes, to general federal law proceedings. The FC Rules there identified include the rules of pleading.
[13] Federal Court Rules 2011 (Cth) r.16.02(1)(d).
[14] Bruce v Odhams Press Ltd [1936] 1 KB 697 at 712 quoted with approval by Goldberg J in Angelo Mitanis & Anor v Pioneer Concrete (Vic) Pty Ltd & Ors [1997] FCA 1040
[15] Letang v Cooper [1965] 1 QB 232 at pages 242-243
[16] Communication, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union v Stanwell Corporation Ltd (No 2) [2014] FCA 593 at [12]
Third, it follows from what I have said in the previous paragraph that the statement of claim must plead at least one reasonable cause of action that supports the granting of the relief the applicant seeks in the application. More particularly, “each element of the relevant civil wrong” of which the applicant complains must be “properly and discretely pleaded in the statement of claim”.[17]
[17] Macquarie Bank Limited v Seagle [2005] FCA 1239 at [24] (Conti J); Macquarie Bank Limited v Seagle [2008] FCA 1417 at [20] (Jagot J)
Fourth, although r.13.03B(2)(c) does not require proof of the claim by evidence, it is permissible for the applicant to adduce evidence that is relevant to the relief sought. That point was made by Lord Woolf MR Phonographic Performance Ltd v Maitra:[18]
It is clear from the terms of O19, r 7 and para 19/7/10 that judgment in default is given upon the facts pleaded in the statement of claim and that affidavit evidence to supplement or support those facts is not appropriate as the pleaded facts are deemed to be admitted. However, that cannot be rigidly applied where the judge has to exercise a discretion whether to grant the relief sought. Where an injunction is sought facts relevant to the grant of that injunction, which are not deemed to be admitted, should be brought to the attention of the judge by way of affidavit or otherwise. Further, if the judge is aware of matters relevant to the exercise of his discretion, he can seek an appropriate explanation before coming to any decision.
[18] (1998) 41 IPR 225 at page 230
It has been confirmed that it is permissible on an application for an order under Or.35A r.3(2)(c) of the old FC Rules to adduce evidence relevant to relief. In Australian Competition and Consumer Commission v Dataline.Net.Au Pty Limited , Kiefel J (as her Honour then was) said:[19]
It may be accepted that some further affidavit material may be accepted by the court in relation to the relief sought. . . . Evidence which would alter the pleaded case should not be admitted. . . . Regard should not be had to evidence of facts which could have been, but were not, pleaded concerning the conduct of the respondents.
[19] [2006] FCA 1427 at [50] and [51]
Fifth, there is the question of the approach that should be taken to construing the statement of claim. The question of construction of a statement of claim was considered by the Court of Appeal of the Supreme Court of New South Wales in Penthouse Publications Ltd v McWilliam in the different context of an application to strike out a statement of claim.[20] Priestley JA, with whose reasons Meagher JA and Waddell AJA agreed, gave a “liberal construction to the plaintiff’s statement of claim”. His Honour was of the view that a statement of claim would be given a liberal construction by answering the question of what a “demurring” party will be taken to accept when that party claims the statement of claim discloses no reasonable cause of action. His Honour said that a demurring party “is in the position not only of having to accept the truth of all allegations in the statement of claim, but also the truth of the ranges of meaning of the assertions of fact in the statement of claim which those assertions are reasonably capable of bearing”.[21] In my opinion, that approach should be followed in the context of an application for an order under r.13.03B(2)(c) of the FCC Rules.
[20] BC9102223 (19 October 1990, 14 March 1991)
[21] BC9102223 at page 11
Also relevant to construing a statement of claim is the principle that “[p]articulars control the generality of the pleadings”.[22] That means that the generality of an allegation contained in the statement of claim will be limited by any particulars appended to that allegation.
[22] Baffico v YMCA of Great Lakes Inc [2014] NSWCA 61 at [25] (Bergin CJ in Eq, Ward JA and Tobias AJA agreeing)
Finally, the Court retains a discretion not to make an order under r.13.03B(2)(c) of the FCC Rules even if the preconditions for making an order are satisfied.[23]
[23] See the authorities decided under the old FC Rules referred to by Flick J in Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227 at [20]
Elements of cause of action for infringement of copyright
Copyright is a set of exclusive rights created by the Act in relation to different types of subject matter. The subject matter that is relevant to the application before me is original literary, dramatic, musical, or artistic works (works).
The rights the Act creates in relation to a work are specified in s.31 of the Act. These include the exclusive right to perform the work in public.[24] The Act identifies what constitutes a work, the circumstances in which copyright in a work first subsists in the work,[25] and the person who is the owner of the copyright when the copyright first subsists.[26] The Act also provides for the assignment and licensing by the owner of copyright.[27]
[24] Act, s.31(1)(a)(iii)
[25] Act, s.32
[26] Act, s.35
[27] Act, s.196
Additionally, s.115 of the Act confers a right of action for infringement of copyright. The right is conferred on two classes of persons. One is “the owner of a copyright”, and the right of action conferred on the owner by s.115(1) of the Act is to bring “an action for an infringement of the copyright”. The owner of the copyright includes the person who was the owner at the time the copyright came into being, and also persons to whom the original owner has assigned his or her copyright (and persons to whom assignees have assigned the copyright), and to persons to whom the copyright has been transmitted by will or by devolution by operation of law.[28] Further, given there are distinct rights that may comprise the copyright in a work, those distinct rights may be the subject of separate assignments and dealings by the owner, with the consequence that different persons may become the owners of the distinct rights of copyright that have been so assigned or dealt with.[29]
[28] Act, s.196(1)
[29] Act, s.30
The second class of persons on whom the Act confers a right of action for infringement is the exclusive licensee of the copyright that has been infringed. The right of exclusive licensees to bring an action for infringement of copyright is conferred by s.119 of the Act, paragraph (a) of which provides:
except against the owner of the copyright, the exclusive licensee has the same rights of action as he or she would have, and is entitled to the same remedies as he or she would be entitled to, by virtue of section 115 or 115A if the licence had been an assignment, and those rights and remedies are concurrent with the rights and remedies of the owner of the copyright under that section
The Act defines what constitutes infringement of copyright. In relation to a work, s.36(1) of the Act provides:
Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes the doing in Australia of, any act comprised in the copyright.
Under s.13 of the Act the expression “act comprised in the copyright in a work or other subject matter” is to be read “as a reference to any act that, under this Act, the owner of the copyright has the exclusive right to do”.
From this brief description of the structure and contents of the Act as it applies to works, the elements of a cause of action in an action for infringement of copyright in a work may be stated to be as follows:
a)There is subject matter that is a literary, dramatic, musical, or artistic work.
b)The acts necessary for the subsistence of copyright in the work as provided for by s.32 of the Act have occurred.
c)The person bringing the action is either the owner of one or more of the rights comprised in the copyright in the work or the exclusive licensee of the copyright in the work.
d)The respondent, without the licence of the owner, has done an act that is comprised in the copyright; that is, the respondent has, without the licence of the owner, done an act in relation to the work that, under the Act, the owner of the copyright has the exclusive right to do.
APRA’S pleaded case and claims for relief
Paragraph 4 of the statement of claim identifies musical and literary works (Works) in which copyright subsists.[30] In the particulars to paragraph 4 it is stated that each Work is an original musical work, and each particular identifies the person or persons who wrote the Work, and who was or were at all material times qualified persons.
[30] Statement of claim, [4]
Paragraph 5 of the statement of claim then alleges that APRA “is the owner, or representative of the owner, of the copyright in each of the Works in respect of its application to the performance of each of those works and the APRA Repertoire in public” (performing rights).[31] The particulars identify assignments of the performing rights in the Works to various entities, including APRA. The entities other than APRA that are identified in the particulars as assignees of the performing rights in the Works are Svenska Tonsättares Internationella Musikbyrå (STIM), PRS for Music Limited (PRS), and Société des Auteurs, Compositeurs et Editeurs de Musique (SACEM). The assignment to APRA of performing rights relates to the musical and associated literary works of Angus McKinnon Young, Malcom Mitchell Young and the late Ronald Belford Scott. “Highway to Hell” is the only Work listed in the particulars of Works of which Angus McKinnon Young, Malcom Mitchell Young and the late Ronald Belford Scott are the authors. The particulars further state that each of STIM, PRS, and SACEM entered into reciprocal agreements with APRA under which APRA “owns in Australia the performing right in works” in the repertoire’s of each of STIM, PRS, and SACEM.
[31] Statement of claim, [5]
The allegation in paragraph 5 of the statement of claim uses the expression “APRA repertoire”. This is not defined in the statement of claim, but is defined in the schedule to the application as follows:
APRA REPERTOIRE
The Applicant:
(a)owns the copyright in respect of its application to the performance in public; and/or
(b)has the power to grant licences for the performance in public
of practically all musical and literary works performed throughout Australia. The Repertoire comprises the works written by members of the Applicant – who constitute more than 90,000 Australian composers, authors and publishers of music – and members of affiliated societies in countries throughout the world.
The Applicant has carried on business as an association of composers, authors and publishers of music for the purpose of licensing the public performance of musical and literary works since 1926.
The Applicant maintains a catalogue of its Repertoire. The catalogue lists the works in which the Applicant owns the copyright in respect of their applications to the performance of the works in public. At present there are about 10 million works listed in the catalogue. The items in the catalogue may be inspected by arrangement with the Applicant.
The statement of claim then alleges the respondents infringed APRA’s copyright by performing without its licence in public the Works and other works in the APRA Repertoire (APRA Repertoire works) and, or in the alternative, authorising the performance in public of the Works and APRA Repertoire works. The particulars to the allegation of infringements are as follows:
a)The first respondent was at all material times the proprietor of the Business.
b)The Business was conducted from premises situated at Surfers Paradise Surf Life Saving Club in Surfers Paradise, Queensland (Premises).
c)Between 9.30 pm and 11 pm on 13 February 2015 the Works, excluding “24K Magic” and “Side To Side”, and “other works in the APRA Repertoire”, were performed by means of recorded music for dance use at the Premises.
d)Between 2.05 am and 3.10 am on 26 February 2017, two of the Works, namely, “24K Magic” and “Side To Side” and other works in the APRA Repertoire were performed by means of recorded music for dance use at the Premises.
e)On various dates from on or about 1 September 2014 to the date of the application, the respondents have performed, or authorised the performance in public of, works in the APRA Repertoire by way of recorded music for dance use at the Premises. APRA, however, is unable to give particulars of all infringing acts of the respondents, but rely on and claim relief for all such acts.
f)APRA requested the respondents desist from infringing its copyright in the Works and the APRA Repertoire works but the respondents repeated the infringing acts.
g)The respondents engaged in the infringing acts: knowing they did not have APRA’s licence to do those acts; knowing that to do those acts without the licence of the owner of the copyright in the Works constituted an infringement of the copyright in the Works; in circumstances where, by avoiding payment of licence fees to APRA, a substantial benefit accrued to the respondents; and wilfully persisting in doing those acts despite receiving notice stating they did not have APRA’s licence to do those acts and knowing that to do those acts without the licence of the owner of the copyright in the Works constituted an infringement of the copyright in the Works.
APRA claims a number of forms of relief:
a)First, it claims a declaration that the respondents have infringed “the Applicant’s copyright in the” Works.
b)Second, APRA claims orders restraining the respondents from performing in public without licence the Works, from performing in public without licence the APRA Repertoire works, and from authorising the performance in public of the Works or the APRA Repertoire works.
c)Third, APRA claims damages. APRA claims as damages the licence fees it would have received from the respondents under APRA’s usual “Recorded Music for Dance Use licence” had the respondents entered into such licence agreement that covered the period 1 September 2014 to 23 July 2017.[32] APRA has adduced evidence to show that those fees would have been $32,899.84.
d)Fourth, APRA claims additional damages under s.115(4) of the Act in the range of $50,000 to $75,000. APRA seeks judgment for additional damages against each of the respondents.
e)Fifth, costs and interest.
[32] Affidavit of J A Gome 17.10.2017
Does the statement of claim support the claims for relief?
In relation to the allegation that copyright subsists in the Works and that APRA is the owner or representative of the owner of the performance rights in the Works or in the APRA Repertoire works, APRA relies on the presumptions provided for by s.126 of the Act:
In an action brought by virtue of this Part:
(a) copyright shall be presumed to subsist in the work or other subject-matter to which the action relates if the defendant does not put in issue the question whether copyright subsists in the work or other subject-matter; and
(b) where the subsistence of the copyright is established -- the plaintiff shall be presumed to be the owner of the copyright if he or she claims to be the owner of the copyright and the defendant does not put in issue the question of his or her ownership.
The presumptions that arise because of the operation of s.126 of the Act in any given proceeding depend on the particular allegations of subsistence and ownership of copyright that are made in that proceeding. There are two matters to note about the allegations of subsistence of copyright and ownership of copyright made in the statement of claim before me. First, although the statement of claim alleges that copyright subsists in the Works, it does not expressly allege that copyright subsists in the APRA Repertoire works. It is open to me, however, to infer from APRA’s allegation in paragraph 5 of the statement of claim that it is the owner or representative of the owner of the APRA Repertoire works.[33]
[33] It is permissible when construing a statement of claim to take account of allegations of fact that are implied in the express allegations of fact, as opposed to facts that may be inferred from those allegations of fact. That distinction was highlighted by Isaacs J in Lubrano v Gollin & Company Pty Ltd [1919] HCA 61; (1919) 27 CLR 113 at page118: “The difference between an inference and an implication must be borne in mind. An implication is included in and part of that which is expressed: an inference is something additional to what is stated. It may reasonably or even irresistibly follow from what I may call the evidentiary facts, but it is a further conclusion in the nature of an ultimate fact.” These observations were made in the context of the hearing of a demurrer.
Second, paragraph 5 of the statement of claim alleges APRA is “the owner, or representative of the owner” of the performing rights in the Works and in the APRA Repertoire works. Considered alone, an allegation that someone is the representative of the owner of copyright does not render the representative the owner or the exclusive licensee of the copyright and, hence, does not entitle the representative to bring an action for infringement of copyright. The generality of APRA’s allegation, however, is to be limited by the particulars in paragraph 5 of the statement of claim.
The particulars to paragraph 5 of the statement of claim refer to the assignment by qualified persons of the performing rights to each of STIM, PRS, SACEM, and APRA. As I have already noted, APRA is the assignee of the performing rights in only one of the Works. The particulars do not allege that STIM, PRS, or SACEM assigned to APRA the performing rights they held in the Works, or that STIM, PRS, or SACEM appointed APRA exclusive licensee of the performing rights. Instead, the particulars allege that each of STIM, PRS, and SACEM “entered into a reciprocal agreement . . . whereby the Applicant owns in Australia the performing right in works in” the STIM, PRS, and SACEM repertoires, with these agreements having effect on 1 July 1972, 1 January 1996, and 1 January 1962 respectively. The particulars do not explain the basis on which these reciprocal agreements rendered APRA the owner in Australia of the performing rights of which STIM, PRS, and SACEM are the owners.
If I were to consider this matter without reference to paragraph 126 of the Act, I would not rely on the allegations made in paragraph 5 of the statement of claim or in the particulars to that paragraph of ownership of the performing rights to find APRA is the owner of the performing rights in the Works (except “Highway to Hell”) or in the APRA Repertoire works. That is so because the allegations of ownership are conclusions based on material facts that are not pleaded.
The position changes, however, when s.126 of the Act is considered. Paragraph (b) of that section provides that where the subsistence of the copyright is established, and the applicant “claims to be the owner of the copyright”, and the respondent “does not put in issue the question of” the applicant’s ownership, the applicant “shall be presumed to be the owner of the copyright”. APRA claims in the statement of claim it is the owner of the performing rights in the Works and in the APRA Repertoire works, and the respondents have not put in issue APRA’s ownership of those performing rights. It follows that it must be presumed APRA is the owner of the performing rights in all these works.
I am satisfied, therefore, that, on the face of the statement of claim, which incorporates the description of “APRA Repertoire” contained in the application:
a)copyright subsists in the Works and in the APRA Repertoire works;
b)given APRA alleges it is the owner of the performing rights in the Works and in the APRA Repertoire works, and the respondents have not put in issue these allegations, the presumption provided for by s.126 of the Act applies and, therefore, APRA is the owner of the performing rights in the Works and in the APRA Repertoire works;
c)between 9:30 pm and 11:00 pm on 13 February 2015 without APRA’s licence the respondents infringed APRA’s performing rights in the Works other than “24K Magic” and “Side To Side” and other APRA repertoire works;
d)between 2.05 am and 3.10 am on 26 February 2017, without APRA’s licence the respondents infringed APRA’s performing rights in two of the Works, namely, “24K Magic” and “Side To Side” and other APRA repertoire works; and
e)on various dates from on or about 1 September 2014 to the date of the application, without the licence of APRA the respondents have performed, or authorised the performance in public of, works in that APRA Repertoire works, and by so doing, the respondents have infringed APRA’s performing rights in those works.
Given these findings, it follows that the preconditions for the granting of relief have been satisfied. I then turn to the relief APRA seeks.
Relief
As I have already noted, APRA claims a number of forms of relief.
Declaration
The first is a declaration that the respondents have infringed APRA’s copyright in the Works. Counsel for APRA submits it is appropriate that declarations be made because they identify the respondents’ infringements. That has utility because the public could see what specific works the respondents have infringed, and how the infringements occurred. That, in turn, serves to deter other night club owners from infringing copyright in musical works.
This Court has power to make binding declarations of right, whether or not any consequential relief is or could be claimed.[34] That power extends to making declarations when orders are made pursuant to r.13.03B(2)(c) of the FC Rules. The principles that are relevant to whether or not declarations should be made under Or.35A of the old FC Rules were considered by Gordon J (when her Honour was a judge of the Federal Court) in Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2):[35]
[34] Federal Circuit Court of Australia Act 1999 (Cth), s.16
[35] [2011] FCA 352 at [66]-[68]
The Court has a wide discretionary power to make declarations under s 21 of the FCA. How does O 35A sit with this discretionary power? Order 35A imposes no restraints upon the relief sought. It is now established that refusals by the Courts in the past to make declarations in cases of default and deemed admissions were based on a practice, not a rule of law: Dataline at [52] – [59]; Bank of Kuwait and the Middle East v Ship MV “Mawashi Al Gasseem” (No 2) [2007] FCA 815; (2007) 240 ALR 120 at [15]
Consistent with that line of authority, it is necessary to identify considerations relevant to the exercise of the discretion to grant or not grant declarations in a case such as the present. Considerations include:
1.whether the declaration will have any utility;
2.whether the proceeding involves a matter of public interest;
3.whether the circumstances call for the making of the Court’s disapproval of the contravening conduct,
Tobacco Institute at 99-100; Australian Competition and Consumer Commission v Powerballwin.com.au Pty Ltd [2010] FCA 378 at [41] and Forster v Jododex Australia Pty Limited[1972] HCA 61; (1972) 127 CLR 421 at 437-438.
Consistent with that exercise of discretion, a further question which then arises is whether the declarations sought contain appropriate and adequate particulars of how and why the conduct complained of is a contravention of the TPA: BMW Australia Ltd v Australian Competition and Consumer Commission[2004] FCAFC 167; (2004) 207 ALR 452 at [35], applying the decision of the High Court inRural Press Limited v Australian Competition and Consumer Commission[2003] HCA 75; (2003) 216 CLR 53 at [90], and Australian Competition and Consumer Commission v Francis [2004] FCA 487; (2004) 142 FCR 1 at [113].
In my opinion, there would be utility in granting declarations that the respondents have infringed APRA’s copyright in the Works, provided the generality of the declarations as framed in the application are limited by particulars of the date, time, place, and means by which the respondents infringed APRA’s copyright in the Works. That would identify more clearly the respondents’ acts that constituted the infringement of copyright; it will communicate to the public the kinds of acts that constitute infringement of copyright of musical and literary works and deter persons from engaging in such acts; and it will communicate the Court’s disapproval of the respondents’ acts. I propose, therefore, to grant declarations that include these particulars.
Injunction
The granting of an injunction under s.115(2) of the Act is discretionary. Matters that are relevant to the exercise of that discretion include the period over which the infringing conduct has taken place, the flagrancy of the infringement, and other matters which prevent the court from being satisfied there is no substantial risk the respondent will again infringe copyright.[36]
[36] See, for example, Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2016] FCAFC 22 at [178]-[181]
I am satisfied I should grant injunctions in terms of those sought by APRA, even though it appears on the evidence that at around 23 July 2017 Escape Bar disposed of the Business it was conducting at the Premises. The infringements took place from 1 September 2014 until the date on which APRA commenced these proceedings,[37] and the respondents ignored letters from APRA dated 23 January 2015, 30 March 2015, and 23 June 2017 informing the respondents they did not have APRA’s licence to perform the Works and APRA Repertoire works.[38]
[37] Statement of claim, [6]
[38] Statement of claim, [7]
Damages
APRA has elected to claim damages rather than an account of profits. It claims as damages the licence fees it says it would have received from the respondents under APRA’s usual “Recorded Music for Dance Use licence” had the respondents entered into such licence agreement that covered the period 1 September 2014 to 23 July 2017.[39] APRA has adduced evidence to show that those fees would have been $32,899.84.[40]
[39] Affidavit of J A Gome 17.10.2017
[40] Affidavit of J A Gome 17.10.2017
A useful starting point for identifying the principles that govern the assessment of damages for infringement of copyright is the discussion of those principles by Wilcox J in Autodesk Australia Pty Ltd v Cheung.[41] That is a particularly instructive judgment because the issue in that case was whether damages should be assessed using the “licensee fee” approach.
[41] (1990) 94 ALR 472
Wilcox J begins[42] with Lord Wright MR’s statement in Sutherland Publishing Co Ltd v Caxton Publishing Co Ltd[43] that the measure of damages in a copyright case “is the depreciation caused by the infringement to the value of the copyright as a chose in action”. Wilcox J noted, however, that this formulation must be:[44]
applied with caution because it is potentially misleading. It will usually be difficult, often impossible, for a copyright owner to establish that a particular unauthorised reproduction has caused a diminution in the capital value of a copyright. There may be cases where this occurs, perhaps because of low-quality reproductions or saturation of the market. But, on other occasions, unauthorised reproduction may actually increase the residual value of a copyright.
[42] (1990) 94 ALR 472 at page 475
[43] [1936] 1 Ch 323 at 336
[44] (1990) 94 ALR 472 at page 475
Wilcox J then referred to the following passage from the judgment of Blackburn J in Australasian Performing Rights Association v Grebo Trading Co Pty Ltd & Ors:[45]
The phrase ‘the depreciation of the value of the copyright as a chose in action’ is no more than a convenient label for the various ways of assessing damages which are available in particular cases. In the case before me, the phrase means that the copyright has been less valuable to its owner than it was before the infringement, because it then had the potentiality of generating the income which would have been derived from the lawful performance of these musical works, and it has not in fact generated that income. The difference is the income which should have been generated; that is to say, the fees which the infringers should have paid in order to perform the works lawfully. That amount, for the purposes of this case, is the ‘depreciation of the value of the copyright’.
[45] (1978) 23 ACTR 30 at page 31
After referring to competing submissions about whether the “licence fee” approach to assessing damages was appropriate in the case before him, Wilcox J said:[46]
The “licence fee” approach to assessment has often been applied. . . . The approach has the attraction of precision. In a case where the court may infer that, presented with a choice between paying the licence fee and not using the work, the infringer would have paid the licence fee, the approach is also a logical one. Ex hypothesi the copyright owner has been deprived of a licence fee. But, where this inference cannot be drawn, it is much more difficult to say that the damage sustained by the copyright owner is equal to a licence fee. No assumption can be made that, if forced to obtain a licence, the defendant would have copied the work, or copied it to the same extent. It seems to me that this case falls within the latter category.
[46] (1990) 94 ALR 472 at pages 476-477
The question before me, therefore, is: if the respondents had been presented with the choice between paying APRA’s usual licence fees to perform the Works and the APRA Repertoire works by means of recorded music for dance use at the Premises and not performing these works, would the respondents have chosen to pay APRA’s usual licence fees?
It is reasonable to infer that the respondents desired to operate the nightclub on the Premises. It is also reasonable to infer that an essential element of a nightclub such as the one the respondents, on the evidence, conducted, is the performance of music for dancing. In those circumstances, the probabilities are that the respondents would have elected to pay a licence fee and continue the Business rather than not pay the licence fee and, therefore, cease the Business. That the Business appears to have operated from 1 September 2014 to 23 July 2017 and that, at around the latter mentioned date, the Business had been disposed of, is a basis for finding, and I do find, that the Business would have been able to afford to pay the licence fee.
I am satisfied, therefore, that:
a)it is appropriate in the circumstances of this case that damages should be assessed using the “licence fee” approach;
b)the relevant period for which the licence fees should be calculated is 1 September 2014 (being the date the statement of claim alleges the respondents commenced their infringing conduct) to 23 July 2017 (being the date the evidence indicates the respondents disposed of the Business); and
c)on the evidence before me, the licence fee APRA would have charged for the period 1 September 2014 to 23 July 2017 is $32,899.84.[47]
[47] Affidavit of J A Gome 17.10.2017
I propose to order there be judgment against the respondents that includes this amount. I also propose to award interest on this amount. I adopt the interest calculations contained in the note of calculations counsel for APRA handed up during the hearing.[48] In that note, interest has been calculated for the period 1 September 2014 to 24 October 2017, and the amount is $3,849.48.
[48] I have in chambers marked the note as “MFI1”
Accordingly, I propose to order that there be judgment against both respondents for $36,749.32 and will note that the respondents will be jointly and severally liable for the judgment.
Additional damages under s.115(4) of the Act
Subsection 115(4) of the Act provides as follows:
Where, in an action under this section:
(a)an infringement of copyright is established; and
(b)the court is satisfied that it is proper to do so, having regard to:
(i)the flagrancy of the infringement; and
(ia)the need to deter similar infringements of copyright; and
(ib)the conduct of the defendant after the act constituting the infringement or, if relevant, after the defendant was informed that the defendant had allegedly infringed the plaintiff's copyright; and
(ii)whether the infringement involved the conversion of a work or other subject-matter from hardcopy or analog form into a digital or other electronic machine-readable form; and
(iii)any benefit shown to have accrued to the defendant by reason of the infringement; and
(iv)all other relevant matters;
the court may, in assessing damages for the infringement, award such additional damages as it considers appropriate in the circumstances.
The principles concerning the assessment of additional damages under s.115(4) of the Act are conveniently set out by Yates J in Dynamic Supplies Pty Ltd v Tonnex International Pty Ltd (No 3),[49] and it is unnecessary for me to repeat what his Honour said.
[49] [2014] FCA 909 at [37]-[53]
The evidence reveals the following. Escape Bar conducted the business of a nightclub in which people danced to recorded music, that the Business has been conducted from at least 16 August 2014 up to 23 July 2017, and that, during this period, music had been performed at the nightclub.[50] Further, shortly after 23 January 2015 APRA, through its solicitors, sent a letter to Mr Ritchardson as director of Escape Bar in which it set out who APRA was, that APRA was the owner of the performing rights “by virtue of assignments from its local members and affiliation with overseas societies”, that the Business performed music in public by way of recorded music for the purpose of accompanying dancing, that such performance of the music required the licence of APRA being the owner of the performing rights in such music, and that APRA was willing to offer a licence for a fee to permit such performance of the music to continue at the Premises.[51] APRA, through its lawyers, sent further letters dated 30 March 2015 and 23 June 2017.[52] The respondents did not respond to these letters.[53]
[50] Affidavit of H F Knight 17.10.2017, [5]
[51] Affidavit of H F Knight 17.10.2017, annexure “C”
[52] Affidavit of H F Knight 17.10.2017, annexure “C”
[53] Affidavit of H F Knight 17.10.2017, [8]
On the basis of these matters, I am satisfied that the respondents were aware from at least shortly after 23 January 2015 that APRA claimed the public performance of music at the Premises infringed the performing rights that APRA owned; that, given the respondents did not respond to APRA, the respondents did not believe they had the licence to perform the musical works at the Premises and they did not dispute that APRA was the owner of the performing rights in the music that was being performed by recorded music at the Premises; and, for these reasons, the respondent’s contraventions were, as APRA submits, flagrant and sustained. There is no evidence of the precise benefit that accrued to the respondents. Assuming the Business was profitable enough to continue if it paid the licence fees, the benefit either or both of the respondents received is an amount equal to the licensing fees the respondents would have paid, but did not pay, to APRA.
APRA has referred me to a number of cases as illustrations of the amount of additional damages that have been awarded. Although useful, it is not appropriate, and APRA has not submitted it is appropriate, that I undertake any detailed comparison between circumstances considered relevant in those cases, and the circumstances of the application before me. As APRA submitted, the amount of additional damages is uniquely a matter for the Court, and the Court may award such additional damages it considers appropriate.
In my mind, the flagrancy and sustained infringement of APRA’s performance rights, and the need to deter other persons generally, and the owners of nightclubs in particular, from infringing the performing rights of others by publicly performing the music by means of recorded music, are matters that weigh in favour of awarding substantial additional damages. In all the circumstances, I consider it is appropriate that each of the respondents pay additional damages in the amount of $35,000.
Costs
APRA seeks an order for costs in the sum of $8,930. That sum has been calculated by reference to the scale set out in Part 1 of Schedule 1 to the FCC Rules. I am satisfied it is appropriate to make an order for costs against the respondents, and that those costs be set in the amount of $8,930.
Disposition
I propose to:
a)make declarations in the form I have discussed earlier in these reasons;
b)grant injunctions in terms of the injunctions sought by APRA;
c)order there be judgment against both the first and second respondents for $36,749.32;
d)order that pursuant to s.115(4) of the Act there be judgment against each of the respondents for $35,000;
e)order that the respondents pay APRA’s costs set in the amount of $8,930; and
f)note that the liability of the respondents on the judgment against them for $36,749.32 is joint and several, and that each of the respondents is separately liable for the judgments for $35,000 that will be ordered pursuant to s.115(4) of the Act.
I certify that the preceding sixty-seven (67) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Date: 3 November 2017
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