Authors Workshop v Bileru Pty Ltd

[1989] FCA 437

3UDGMEiUi" No. 433.9...3L	,.
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CATCHWORDS

INTERLOCUTORY INJUNCTION - Motion to set aside ex part€? orders - whether orders akin to Anton Piller order and subject to same preconditions - whether orders made pursuant to Order 25 rule 2 of Federal Court Rules - whether orders which enjoin conduct in terms of cause of action alleged are oppressive - whether order to swear affidavit may expose recipient to a risk of criminal proceedings - whether such orders should be set aside - claim of privilege against self incrimination.

AUTHORS WORKSHOP and HODDER & STOUGHTON (AUSTRALIA) PTY.

LIMITED V BILERU PTY. LIHITED and DENNIS LEWY

LOCKHART J.
SYDNEY
14 JULY 1989

LIMITED DISTRIBUTION

- IN THE FEDERAL COURT OF AUSTRALIA )

)

NEW SOUTH WALES DISTRICT REGISTRY ) No. NG470 of 1989

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GENERAL DIVISION 1

IN THE MATTER OF THE COPYRIGHT

ACT, 1968 (AS AMENDED)

BETWEEN :  AUTHORS WORKSHOP

First Applicant

HODDER & STOUGHTON (AUSTRALIA)

PTY. LIMITED

Second Applicant

AND :  BILERU PTY. LIMITED

First Respondent

DENNIS LEWY

Second Respondent

JUDGE NAKING ORDER:	LOCKHART J.
DATE ORDER MADE:	14 JULY 1989

WHERE ORDER MADE:  SYDNEY

MINUTES OF ORDER

THE COURT ORDERS THAT:

1.    The motion be dismissed.

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

LIMITED DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA )

)

NEW SOUTH WALES DISTRICT REGISTRY ) NO. NG470 of 1989

1

GENERAL DIVISION 1

IN THE MATTER OF THE COPYRIGHT

ACT, 1968 (AS AMENDED)

BETWEEN:  AUTHORS WORKSHOP

First Applicant

HODDER & STOUGHTON (AUSTRALIA)

PTY. LIMITED

Second Applicant

AND :  BILERU PTY. LIMITED

First Respondent

DENNIS LEWY

Second Respondent

14 July 1989

REASONS FOR JUDGMENT

LOCKHART J.

I propose to now give my reasons for judgment in relation to the notice of motlon brought by the respondent to these proceedings heard by this Court on 11 and 12 July 1989.

The motion seeks to set aside two of seven orders made
by the Court last Friday afternoon ex parte in chambers on
the application of the applicants. The second applicant,

Hodder & Stoughton (Australia) Pty. Limited ("Hodder and Stoughton"), is a book publisher. There is evidence that on 15 September 1987 Hodder & Stoughton entered into a publishing agreement with the first applicant, Authors Workshop, pursuant to which Hodder & Stoughton was granted the exclusive licence to print and publish the novel by John le Carre, "The Russia House", to which I shall refer as "the book". There is evidence that the owner of the copyright in the book is Authors Workshop.	i
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Following the signing of the agreement Hodder & ; '

Stoughton took steps to ensure that the Australian edition of the book would be distributed to retailers in Australia within a fortnight of its first appearance overseas. 15,000 copies of the book have been distributed to retailers by Hodder & Stoughton and the book should be available for purchase soon in all Australian States, the Northern Territory and the Australian Capital Territory. The recommended retail price for the book is $29.95.

The book has been extensively advertised during the last few months by various means and to date Hodder & Stoughton has spent approximately $18,000 on promotional literature and has budgeted a further $15,000 for the cost of radio advertising which is sheduled to take place next month. Hodder & stoughton has not provided the respondents with copies of the book although the first respondent, Bileru Pty. Limited ("Bileru"), placed an order for 300 copies of the book with Hodder & Stoughton on 16 May 1989.

There is evidence that the respondents have secently been selling, offering for sale or displaying the book at a book store on the corner of King & York Streets, Sydney without the licence of the owner of the copyright and that edition of the book which is on sale in the store cannot be obtained from Hodder & Stoughton. There is also evidence that the respondents have imported copies of the book from the United States of America but not with the authority of the applicants.

This is a brief statement of some of the evidence that was before the Court last Friday when the ex parte orders now under challenge were made.

Those orders were made upon the applicants, by their counsel, giving the usual undertaking as to damages, and the orders are as follows:

"l. Up to and including Tuesday, 11 July, 1989, the respondents by themselves, their servants and

agents be restrained from, without the licence of

the applicants:

(a)	importing into Australia for the purpose of selling or by way of trade offering or exposing for sale copies of the book "The Russia House" by John Le Carre ("the Book") which if made in Australia by the importer without the licence of the Authors Workshop would have infringed the copyright of the Authors Workshop in the Book;
(b)	selling by way of trade offering or exposing for sale imported copies of the Book which if made in Austrlaia by the importer without the licence of the Authors Workshop would have infringed the copyright of the Authors Workshop in the Book.

2. The respondents shall, by 4 pm on Monday, 10 July 1989 deliver up to the solicitors for the applicants, all copies of the Book referred to in Order 1 hereof which are in the possession, power or control of the respondents.

3. The respondents shall by 10 am on Tuesday, 11 July 1989 file and serve an affidavit setting out the following information:

(a)	the number of copies of the Book referred to in order 1 hereof in the possession, power or control of the respondents at the date of this Order;
(b)	the number of copies of the Book referred to in order 1 hereof sold by the respondents prior to the date ofservice of this Order; and

(C) the name and business place of the supplier or suppliers to the respondents of the copies of the Book referred to in Order 1 hereof and the number of copies supplied to the respondents and the number of copies imported by the respondents.

4. The application be returnable before the Court

at 2.15 on 11 July 1989.

5. Time for service of the application, supporting affidavits and this Order is abridged to 12 noon on 8 July, 1989.

6. Direct the applicants to serve the respondents

with a copy of the application, supporting affidavits and this Order by 12 noon on 8 July 1989.

7. The costs of this application be reserved."

On Tuesday, 11 July counsel for the respondents obtained leave to file the notice of motion which is presently before the Court, returnable instanter, and the motion was heard during portions of Tuesday and Wednesday of this week and today.

Orders 2 and 3 are the orders which the respondents seek

to set aside.

of the submissions on behalf of the applicant are based on the premise that orders 2 and 3, though not precisely Anton Pillar orders, are nevertheless so closely akin to them that the three essential preconditions for the making of such orders should apply in this case. Those preconditions are set out by Ormrod L.J. in Anton Pillar KG v Manufacturing Processors Limited (1976) Ch 55 at 62:

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"There are three essential preconditions for the making of such an order, in my judgment. First, there must be an extremely strong prima facie case. Secondly, the damage, potential or actual, must be very serious for the applicant. Thirdly, there must be clear evidence that the defendants have in their possession incriminating documents or things, and that there is a real possibility that they may destroy such material before any application inter partes can be made."

It was submitted that there was no such prima facie case with respect to a number of essential ingredients in the claim by the applicants for orders 2 and 3, namely:-

(i)    that Authors Workshop is the owner of the copyright in

the book;

(ii)    explaining how Authors Workshop became the author when the evidence suggests, so it is submitted, that the author is in fact John le Carre;

(iii) that Mr. Graham Gardiner Foxcroft, the secretary and financial director of Hodder & Stoughton, had

authority to make admissions or give evidence on
behalf of Authors Workshop;

(iv)  that the first publication of the book was within Australia and therefore there is no evidence of the requisite connecting factors to establish the alleged infringement of copyright in the book;

1. as against Bileru that there is no evidence of any authority of the second respondent, Mr. Dennis Lewy, to make statements binding Bileru, or insufficient evidence thereof;

(vi)   that there is no, or no sufficient, evidence of any potential or actual damage being caused to the applicants or either of them by the alleged infringement of copyright or, in the alternative, that there is no, or no sufficient, evidence that the damage is serious or irrepairable. It was submitted that indeed there is affirmative evidence that any

damage is trivial;

(vii) that there is no, or no sufficient, evidence of any real possibility that the respondents may destroy the books before any application interpartes could be made ;

(viii)that there is no, or no sufficient, evidence that the books would be likely to be destroyed by the respondents;

It was also submitted that orders 1 and 3 are oppressive and unfair in their terms because they incorporate order 1 by reference, that is the injunction, which requires the respondents to make a judgement as to whether their conduct would constitute an infringement of the alleged copyright of Authors Workshop in the book.

Finally, it was submitted that compliance with order 3 would be likely to expose the respondents to criminal liability, and, therefore, in the light of the authorities, order 3 should be set aside.

The last two submissions are not based on the premise that orders 2 and 3 are essentially Anton Piller orders.

In my opinion none of the orders 1, 2 or 3 made last
Friday is an Anton Piller order, or an order substantially or

reasonably akin to such an order. Anton Piller is the name

by which an order of the kind made in Anton Piller KG v

Manufacturing Processors Limited, are customarily called. It is an order made by courts to prevent the disposal by the defendants before discovery of documents or things in their possession which are vital evidence which might be destroyed or disposed of so as to defeat the ends of justice before any application inter partes can be made. It is an order designed to preserve vital evidence, and it can only be made in the circumstances mentioned earlier.

Order 2 is either an order pursuant to Order 25 rule 2 of this Court's Rules or akin thereto. That is an order made for the custody, preservation or inspection of property with which the proceeding is concerned or as to which a question may arise. It is an order which goes beyond the preservation of evidence and is directed to the preservation of the very subject-matter of the proceeding itself.

It has been held with respect to similar provisions to
Order 25 rule 2 that an enquiry into the merits is not

required upon the hearing of an application under the

provisions of that rule:  see Campbell v Brownless (1901) 26

VLR 609 at 611; Johnson v Tobacco Leaf Marketing Board
[l9671 VR 427 at 430.

Order 3 is directly based upon the form of order in Norwich Pharmacal Co. v Customs and Excise Commissioners [l9741 AC 133; see also British Steel Corporation v Granada Television Limited [l9811 AC 1096.

I therefore reject the argument that orders 2 and 3 are so closely analogous to Anton Piller orders as to require the application of the same stringent tests enunciated in the Anton Plller case and subsequently followed by Australian Courts including this Court: see Hiero Pty. Limited v Somers (1983) 68 FLR 171; Calsil Limited v Ferriles Pty Limited, an unreported decision of Toohey J. of 12 July 1985; Polygram Records Pty. Limited v Monash Records (Australia) Pty.

Limited, a decision of Spender J., (1985) 10 FCR 332; Warman International Limited v Envirotech Australia Pty. Limited (1986) 11 FCR 478, a decision of Wilcox J.

Accordingly, in determining whether the orders under challenge should have been made, the Court was entitled to approach the matter by asking the question whether there was a serious question to be tried: see Peter Pan Electrics Pty. Limited v Newton Grace Pty. Limited (1985) 8 FCR 557; Murphy v - Lush (1986) 65 ALR 651; Martin Engineering v Trison Holdings Pty. Limited (1988) 81 ALR 543.

~t an early stage of the case such as existed last Friday, the evidence is often incomplete and the test whether there is a serious question to be tried o r a triable issue applies to all elements in the case of an applicant: see Peter Pan Electrics Pty. Limited v Newton Grace Pty. Limited (supra) and Martin Engineering v Trison Holdings (supra). The Court was satisfied last Friday, as it is now, that the evidence then adduced was sufficient to establish a serious

were founded on the analogy to Anton Piller fail.	question to be tried. In the result the submissions which
I also reject the argument that orders 2 and 3 are oppressive in their terms. It is true that they incorporate by reference the terms of order 1 insofar as the reference to copies of the book is concerned; but I do not regard the orders as imposing an unfair obligation upon the respondents in order to comply with them. The terms of orders l(a) and

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l(b) fall far short of orders that have long been made in the	!
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Courts of Chancery which in effect enjoin a defendant not to	I..
engage in conduct complained of by stating such conduct in terms of the cause of action alleged, for example, not to so act as to create a nuisance. More recently the courts have tended to require orders to enjoin defendants not to engage in conduct more specifically defined, Order 1 meets any such general requirement.
~t was also submitted by counsel for the respondents that, to comply with order 3, would tend to expose the respondents to criminal liability. As was pointed out by Wilcox J. in Warman International Ltd. v Envirotech (Australia) Pty. Limited (supra) there is no federal legislation dealing with self incrimination and the objection to compliance must be determined according to the principles of the common law (p. 486). Wilcox J. reviewed the relevant authorities with respect to this question including Rio Tinto Zinc Corporation v westinghouse Electric Corporation [l9781 AC 547; Rank Film Distributors Limited v Video Information
Waddell C.J., in Eq. in BPA Industries Limited v Black (1987)	Centre [l9821 AC 380. The question was also discussed by	11 NSWLR 609.
The relevant questlon for present purposes is whether the Court is satisfied in all the circumstances that there is a real and appreciable risk of criminal proceedings being taken against the respondents or either of them or, to put the test another way, whether there is a real prospect of criminal proceedings being brought against them. If the answer to that question is in the affirmative the Court will not compel self incrimination by the respondents or either of them. It was submitted by counsel for the applicants that the possible offences were offences of conspiracy under S. 86 of the Crimes Act, 1914 (Cth) or S. 132 when read in conjunction with S. 133 of the Copyright Act (Cth) 1968.
No evidence has been adduced on behalf of the respondents in support of their claim for immunity from compliance with order 3. I am not satisfied on the material presently before the Court that there is a real and appreciable risk of criminal proceedings of the kind mentioned being taken against the respondents; but I do not propose to shut them out from raising the claim by swearing and filing affidavits if they wish to do so. Accordingly, I propose to give leave to the respondents to take this course. Order 2 was in fact complied with by the respondents and as they sought to set aside order 3 I suspended the operation of the order until further order. I should add that, even if
the Court was satisfied that there was a real prospect of	criminal proceedings being brought against the respondents, I
would not regard in the circumstances of this case the appropriate order as being to set aside order number 3 made last Friday. A claim of privilege on the ground of self incrimination may be raised by a party. Unless it is raised, the relevant order of the Court can be made and must be complied with. If I had been satisfied that there was such a risk of criminal proceedings being brought rather than setting order 3 aside I would have vacated it or suspended its operation. Notwithstanding the able argument of Mr. Curtis of counsel for the respondents I am of the opinion that the motion must be dismissed.

Accordingly, the motion is dismissed.

I certify that this and the preceding eleven (11) pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Lockhart.

Associate

Date: 14 July 1989

Counsel for the Applicants:  Mr. D. Catterns,

Mr. Nicholas

Solicitors for the Applicants:  westgarth - . niddlstons

Counsel for the Respondents:  Mr. C.D:.cujtis . -. .

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Solicitors for the Respondents:  walter nickson -,": ,. .L

Date of Hearing:  11, 12 ~ ; l i : ' l 9 0 ~ I > ._

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Date of Judgment: