Australian Competition and Consumer Commission v Warner

[1999] FCA 1396

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Warner
Music Australia Pty Ltd [1999] FCA 1396

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v
WARNER MUSIC AUSTRALIA PTY LIMITED (ACN 000 815 565) AND OTHERS
N 924 OF 1999

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v
UNIVERSAL MUSIC AUSTRALIA PTY LIMITED (formerly known as
PolyGram Pty Limited) (ACN 000 158 592) AND OTHERS
N 925 OF 1999

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v
SONY MUSIC ENTERTAINMENT (AUSTRALIA) LIMITED
(ACN 000 033 581) AND OTHERS

N 926 OF 1999

HILL J

2 DECEMBER 1999
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

BETWEEN:	AUSTRALIAN COMPETITION AND                  N 924 OF 1999 CONSUMER COMMISSION APPLICANT
AND:	WARNER MUSIC AUSTRALIA PTY LIMITED (ACN 000 815 565) AND OTHERS RESPONDENTS
BETWEEN:	AUSTRALIAN COMPETITION AND                  N 925 OF 1999 CONSUMER COMMISSION APPLICANT
AND:	UNIVERSAL MUSIC AUSTRALIA PTY LIMITED (formerly known as PolyGram Pty Limited) (ACN 000 158 592) AND OTHERS RESPONDENTS
BETWEEN:	AUSTRALIAN COMPETITION AND                  N 926 OF 1999 CONSUMER COMMISSION APPLICANT
AND:	SONY MUSIC ENTERTAINMENT (AUSTRALIA) LIMITED (ACN 000 033 581) AND OTHERS RESPONDENTS
JUDGE:	HILL J
DATE OF ORDER:	2 DECEMBER 1999
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.No motion, whether referred to in the Short Minutes or not, is to be filed by a party unless accompanied by a document signed by the solicitors or counsel of that party, that the subject matter of the motion has been the subject of full discussion between the parties and has been unable to be resolved.

2.Except so far as I have dismissed that part of the motion filed by the third and sixth respondents dealing with whether the third respondent is a trading corporation, any notices of motion be stood over until 10 March 2000.

3.No order as to costs in that part of the motion filed by the third and sixth respondents concerning the whether the third respondent is a trading corporation.

4.Costs of the motions ultimately to date are to be costs in the proceeding

5.          Liberty to apply on 7 days notice.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

BETWEEN:	AUSTRALIAN COMPETITION AND                  N 924 OF 1999 CONSUMER COMMISSION APPLICANT
AND:	WARNER MUSIC AUSTRALIA PTY LIMITED (ACN 000 815 565) AND OTHERS RESPONDENTS
BETWEEN:	AUSTRALIAN COMPETITION AND                  N 925 OF 1999 CONSUMER COMMISSION APPLICANT
AND:	UNIVERSAL MUSIC AUSTRALIA PTY LIMITED (formerly known as PolyGram Pty Limited) (ACN 000 158 592) AND OTHERS RESPONDENTS
BETWEEN:	AUSTRALIAN COMPETITION AND                  N 926 OF 1999 CONSUMER COMMISSION APPLICANT
AND:	SONY MUSIC ENTERTAINMENT (AUSTRALIA) LIMITED (ACN 000 033 581) AND OTHERS RESPONDENTS
JUDGE:	HILL J
DATE:	2 DECEMBER 1999
PLACE:	SYDNEY

EX TEMPORE REASONS FOR JUDGMENT

1. Before the Court are motions by Sony Music Entertainment (Australia) Limited and a related company Sony Music Entertainment Holdings (Australia) Pty Limited, Universal Music Australia Pty Limited and Mr Jackman's client, Mr Fitzallan, in essence seeking that orders that the proceedings commenced against them by the Australian Competition and Consumer Commission be struck out and alternatively that certain particulars be ordered. 

2. The matters before me were for directions on 13 September 1999 on which day it was foreshadowed that applications would be made to strike out the applications and statements for claim.  On a number of occasions on that day I indicated to the parties that before a motion was filed the parties should discuss the basis of it in an endeavour to avoid unnecessary interlocutory applications. 

3. Indeed, as the transcript disclosed, when I was told that a motion was expected to be filed seeking to strike out the statement of claim I expressly commented on the need for discussions of what was said to be wrong with the pleadings.  The transcripts indicate only that it was said that there were flaws.  On 8 October 1999 I made further directions that any motion be returnable for hearing on 2 December.  Despite my hope that prior to a motion being filed the matter would have been the subject of discussion, it was not. 

4. A motion was filed on 10 November and consistently with the orders I gave, written submissions were filed thereafter. In the case of Sony Music the submissions were filed and served on 18 November. I do not know the precise date on which other submissions were filed and served but assume they were around the same time. The gravamen of the complaint concerned the definition of what was said to be CDs imported in purported reliance on s 10AA of the Copyright Act 1968 (“the Act”).  It is not necessary to go into the details of the argument. 

5. It is true that the pleading as drawn presented difficulties having regard to the definition in the Act, although the substance of the case which the Commission sought to bring was not difficult to understand. In essence, the case sought to be brought was that the various music companies had by agreements with others or otherwise sought to prevent the importation into Australia of CDs which would fall within one or other of the paragraphs of s 10AA of the Act, at least if imported into Australia. The particulars which were sought and which were also the subject of the summonses required details of CDs which were said to be non-infringing copies within that definition and the subject of various acts alleged in the statement of claim.

6. The drafting of the statement of claim was certainly not elegant and was ambiguous, a matter which was recognised by the Commission when on or around 29 November 1999 it produced new versions of the statement of claim overcoming the problem in part although not completely as senior counsel for Sony and other counsel pointed out in the course of submissions.  It is now agreed that the Commission will deal with the matters the subject of debate today in new draft statements of claim and if necessary amended applications.  Orders have been made requiring amended pleadings to be filed in due course.

7. Although it is true that, in part, the need for the motion was brought about by the difficulties of drafting to which I have referred, it is also true that had the real problem been drawn to the Commission's attention, as it was only after the motion had been filed, the matter might very well have been resolved without the need for a protracted interlocutory hearing today which has occupied the time of numerous counsel, solicitors and the Court.

8. Legal costs, access to justice and the limited nature of the Court's resources which necessitates that matters which might involve liberty, compete for hearing with interlocutory motions, all make it essential that parties endeavour, where possible, to resolve interlocutory matters, particularly pleading matters, so that it is only where a matter is unable to be resolved that the considerable resources which have been occupied in the present proceedings, will be utilised.  I can only hope that in the future conduct of the present matter, the parties do endeavour to discuss interlocutory matters before motions are filed so that this waste of resources is not repeated.

9. I should add that it is not long ago since it was regarded as unethical conduct for parties to commence interlocutory motions without first discussing the substance of them.  That apparently has fallen into some desuetude.  I hope that it is revived.  Ultimately it is important that the substantial matter, and it is a substantial matter that this case involves, can be brought to hearing in as short a time as possible, consistent with all sides having the opportunity both to know the case that is put on the one hand and to deal with it on the other.

10. It is for this reason that I am of the view that the appropriate order in the circumstances, should be that the costs of the motion be costs in the proceedings.  The difficult questions which the pleadings raise having regard to the structure of the Copyright
    
    

    Act are difficulties which the submissions that have been made by counsel make abundantly clear.  Liberty to apply on seven days notice.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hill.

Associate:

Dated:             2 December 1999

Counsel for the Applicant:	P Comans,  M Green,  J Lockhart
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Respondents Warner Music (N 924 of 1999):	D Hammershlag
Solicitor for the Respondents Warner Music (N 924 of 1999):	Tress Cocks & Maddox
Counsel for the Respondents Universal Music (N 925 of 1999):	R Cobden
Solicitor for the Respondents Universal Music (N 925 of 1999):	Gilbert & Tobin
Counsel for the Second, Third and Fourth Respondents (N 925 of 1999):	S Lewis
Solicitor for the Second, Third and Fourth Respondents (N 925 of 1999):	Coudert Brothers
Counsel for the First and Second Respondents Sony Music (N 926 of 1999):	A Archibold QC,  J Nicholas
Solicitor for the First and Second Respondents Sony Music (N 926 of 1999):	Allen Allen & Hemsley
Counsel for the Third and Sixth Respondents Sony Music (N 926 of 1999):	A J Bannon SC,  R Cobden
Solicitor for the Third, Fourth and Sixth Respondents (N 926 of 1999):	Gilbert & Tobin
Counsel for the Fifth Respondent Sony Music (N 926 of 1999):	I Jackman
Solicitor for the Fifth Respondent Sony Music (N 926 of 1999):	Clayton Utz
Date of Hearing:	2 December 1999
Date of Judgment:	2 December 1999