Australian Tape Manufacturers Association Ltd v The Commonwealth

[1990] HCA 38

HIGH COURT OF AUSTRALIA

Dawson J.

AUSTRALIAN TAPE MANUFACTURERS ASSOCIATION LIMITED AND ORS v. THE COMMONWEALTH OF AUSTRALIA

24 August 1990

Decision

DAWSON J. The applicants seek to be joined as defendants in this action pursuant to O.16, r.4(2). Their application is supported by the Commonwealth as defendant, but is opposed by the plaintiffs. The first applicant, Australian Record Industry Association Limited ("ARIA"), is a trade association which represents the owners and exclusive licensees of copyright in sound recordings. The second applicant, Australasian Mechanical Copyright Owners' Society Limited ("AMCOS"), is the owner of, or the agent for owners of, copyright in musical works. The action is brought by the plaintiffs, who are involved in the distribution or sale of blank audio tapes, claiming a declaration that the provisions of Divs 2, 3 and 4 of Pt VC of the Copyright Act 1968 (Cth) (other than s.135ZZM) and the provisions of s.153E of that Act are invalid, being beyond the legislative power of the Commonwealth.

2. Part VC of the Copyright Act was inserted by s.16 of the Copyright Amendment Act 1989 (Cth) and imposes a royalty upon the first sale, hiring or other distribution in Australia of each blank audio tape on or after a day to be proclaimed. The royalty is payable by the vendor and is payable to a collecting society. The collecting society is to be a body declared by the Attorney-General whose membership is to be open to all relevant copyright owners or their agents. It is to have rules providing for, amongst other things, the collection of amounts of royalty from vendors, the distribution of amounts collected by it and the holding on trust of amounts for relevant copyright owners who are not its members. The amount of the royalty is to be an amount worked out using the formula A x NM, where A is the amount per minute determined by the Copyright Tribunal and NM is the number of minutes of normal playing time of the tape. A relevant copyright owner is the owner of the copyright in a sound recording or a literary, dramatic or musical work. Under s.135ZZM, copyright subsisting in a published sound recording, or in any work included in a published sound recording, is not infringed by making on private premises a copy of the sound recording if the copy is made on or after the day proclaimed for the imposition of the royalty on a blank tape for the private and domestic use of the person who makes it.

3. A number of questions of fact are raised by the pleadings. In particular, par.17 of the statement of claim, which is denied in the defence, alleges that the amount of the levy payable in respect of a tape is wholly unrelated to the payment of consideration for any particular exercise of a right to utilize copyright material in connection with that tape.

4. According to an affidavit filed on behalf of the applicants, the members of the applicants, ARIA and AMCOS, are also to be members of Private Audio Copyright Collecting Society Limited ("PACCS"), a company in the process of being formed, which is to be declared the collecting society under the Copyright Act. The affidavit deposes to the fact that the applicants have a detailed knowledge of the recording and music publishing industries and the nature and utilization of copyright in both musical works and sound recordings. Both applicants are said to have been actively involved in all stages of consultation and negotiation with the Attorney-General leading up to the introduction in 1989 of Pt VC of the Copyright Act. Each of the applicants is also an applicant before the Copyright Tribunal for the determination of the amount of the blank tape royalty, although it appears that their applications are made on behalf of PACCS. As part of the process of negotiation with the Attorney-General, ARIA in 1986 commissioned a survey to determine the extent to which blank tapes are used to make copies of sound recordings. An update of that survey has been commissioned for use in the proceedings before the Copyright Tribunal.

5. The applicants contend that the facts upon which the allegation made by the plaintiffs in par.17 of the statement of claim is based are not facts which, by virtue of the nature of their business, are within the knowledge of the plaintiffs. They are, say the applicants, facts within the applicants' knowledge and will, when it is incorporated, be within the knowledge of PACCS. The applicants deny the allegation contained in par.17 and say that, as PACCS is to be the collecting society under the Copyright Act and is to be the recipient of the levy referred to in par.17 of the statement of claim, they are able to provide detailed information as to the proposed manner of distribution of the levy and are also able to provide information as to the extent to which the distribution of the levy is related to the exercise of a right to utilize copyright material.

6. Order 16, r.4(2), so far as is relevant, provides:

"The Court or a Justice may - (a) at any stage of the proceedings; (b) either upon or without the application of a party; and

(c) on such terms as appear to the Court or Justice to be just,

order ... that the names of parties, whether plaintiffs or defendants, who ought to have been joined, or whose presence before the Court or Justice may be necessary in order to enable the Court or Justice effectually and completely to adjudicate upon and settle all the questions arising, be added."

7. The applicants do not, as I understand their argument, assert that they ought to have been joined as defendants. Indeed, such an argument would be untenable. But they urge upon me a broad interpretation of the rule, submitting that it is sufficient that the applicants would themselves have had standing to bring proceedings raising the question of the validity of the relevant legislation. They point to the application currently before the Copyright Tribunal for the determination of the blank tape royalty. They say that the application will be a "nullity" if the plaintiffs succeed in having the legislation declared invalid and that they or those they represent will not receive any amounts through the collecting society, PACCS, if and when it is formed. The applicants concede that the relief claimed by the plaintiffs in the action cannot affect any actual rights which they might have, but they assert that their commercial interests may be affected.

8. The plaintiffs point out that the applicants merely represent the owners of copyright in musical works or sound recordings, although AMCOS is the owner of copyright in some musical works. They observe that the proposed collecting society, PACCS, has yet to be formed, but if it is and is declared by the Attorney-General to be the collecting society under the Copyright Act, the royalties collected by it will be distributed by it to the relevant copyright owners.

9. As I have said, the applicants contend that it is sufficient to justify their joinder as defendants against the wishes of the plaintiffs that they would have sufficient standing to commence an action for themselves seeking a declaration of the validity of the legislation. I doubt whether the applicants, or at least ARIA, would have sufficient standing for that purpose (see British Medical Association v. The Commonwealth (Pharmaceutical Benefits Case) (1949) 79 CLR 201, at p 257), but I am prepared to assume for the purposes of this application that they would.

10. It is unnecessary in this case, as it was in Foxe v. Brown (1984) 59 ALJR 186, at p 187; 58 ALR 542, at pp 544-545, to enter into the controversy whether the jurisdiction to join defendants under the second limb of O.16, r.4(2) is limited to persons whose legal rights will be affected by the result of the action or extends to persons who may be affected in their commercial interests. See Amon v. Raphael Tuck and Sons Ltd. (1956) 1 QB 357; Gurtner v. Circuit (1968) 2 QB 587; In re Vandervell's Trusts (1971) AC 912; Bradvica v. Radulovic (1975) VR 434; In re Multi-Tech Services Pty. Ltd. (in liq.) (1982) 30 SASR 218. In any event, that dichotomy, particularly in a case such as the present where the validity of legislation of general application is contested, tends to divert attention from the real question which is posed by the language of the rule, namely, whether the joinder of the persons seeking to be joined as parties "may be necessary in order to enable the Court or Justice effectually and completely to adjudicate upon and settle all the questions arising". It was upon this question that the House of Lords in In re Vandervell's Trusts thought that attention ought be concentrated. The language of the rule in England now differs somewhat, but not significantly in this respect. Lord Morris of Borth-y-Gest said, at p 930:

"The only question is whether their presence before the court is 'necessary' - that is necessary 'to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon.' I do not think that any process of giving a wide or liberal interpretation to the rule can be employed to alter it or to give it an enlarged meaning which, on a fair and reasonable interpretation, it does not bear."

And in speaking of a wider interpretation contended for, Viscount Dilhorne said, at pp 935-936:

"I cannot construe the language of the rule as meaning that a party can be added whenever it is just or convenient to do so. That could have been simply stated if the rule was intended to mean that. However wide an interpretation is given, it must be an interpretation of the language used."

See also per Lord Wilberforce, at p 940.

11. It cannot, in my view, be successfully argued that merely because a person may have had sufficient standing to contest the validity or invalidity of legislation in a separate action, that person falls within the terms of O.16, r.4(2) as a necessary party in an existing action brought to determine the validity or invalidity of the same legislation. Those who may be affected in their person or property by contested legislation and who, for that reason, may have standing to maintain proceedings may well be numerous. In the present action, for example, all of the relevant owners of copyright could be said to fall within that category. It can hardly be maintained that the presence of each of them as a party "may be necessary in order to enable the Court or Justice effectually and completely to adjudicate upon and settle all the questions arising" in the action. The question which arises in the action is the validity of the impugned legislation. Whether the legislation is or is not beyond Commonwealth legislative power does not raise any different question between the applicants and the plaintiffs and, the plaintiffs having commenced their action against an appropriate defendant, they are entitled to pursue it without the addition of further defendants against their wishes.

12. The applicants do not seek to have the Court adjudicate upon any question other than that already arising in the action. Indeed, the plaintiffs have no claim against the applicants. All that the applicants seek to do is to support the defendant in its contentions, in particular by calling evidence in support of its case. For all I know, the evidence which the applicants seek to place before the Court is essential to the defendant's case. But that does not make the applicants necessary parties in the action, even if it makes them, or those they seek to put forward, necessary witnesses. Perhaps it is convenient that the applicants be joined as defendants. The existing defendant regards it as so and for that reason supports the application. But however convenient it is, that does not make the joinder of the applicants as parties necessary to determine the question which arises.

13. In the end, all that the applicants are able to demonstrate is that they have an interest in the outcome of the litigation, which I have assumed to be sufficient to support an action of their own, and that they wish to ensure that the case in favour of the validity of the legislation is adequately presented. They maintain that their knowledge and understanding of the factual matters involved are superior to those of the defendant and that their presence as parties in a position to call evidence is necessary for that reason for the effectual and complete adjudication of the question which arises in the action, namely, whether the legislation attacked is beyond the legislative power of the Commonwealth. The applicants do not suggest that, if their application is not successful, they will not make available to the defendant their evidence and expert knowledge for the purpose of advancing the defendant's case. But even if that were not so, the mere fact that a person claims to be in a better position to call relevant evidence and to make submissions in support of a case which an existing party already seeks to make is plainly insufficient to justify the joinder of that person as a party. However desirable his presence may be to advance the presentation of the existing party's case, he is not for that reason a person whose presence may be necessary before the Court as a party. Whether such a person has a sufficient standing to intervene and, if so, the role which he might play as an intervener are questions which raise different considerations: see, e.g., Australian Railways Union v. Victorian Railways Commissioners (1930) 44 CLR 319, at p 331. Nevertheless, what the applicants in fact seek to do by invoking O.16, r.4(2) is in effect to intervene in the action in support of the defendant. That rule does not allow their joinder as parties for that purpose.

14. I would dismiss the application.

Orders

Application dismissed with costs against the applicants in favour of the plaintiffs. Certify for counsel.