BBC World Limited v Special Broadcasting Service Corporation
[2003] FCA 247
•22 MARCH 2003
FEDERAL COURT OF AUSTRALIA
BBC World Limited v Special Broadcasting Service Corporation [2003] FCA 247
BBC WORLD LIMITED v SPECIAL BROADCASTING SERVICE CORPORATION
N 378 of 2003
BRANSON J
24 MARCH 2003
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 378 of 2003
BETWEEN:
BBC WORLD LIMITED
APPLICANTAND:
SPECIAL BROADCASTING SERVICE CORPORATION
RESPONDENTJUDGE:
BRANSON J
DATE OF ORDER:
22 MARCH 2003
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
(a)the application for interlocutory relief be dismissed;
(b)the final hearing of the proceeding be expedited.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 378 of 2003
BETWEEN:
BBC WORLD LIMITED
APPLICANTAND:
SPECIAL BROADCASTING SERVICE CORPORATION
RESPONDENT
JUDGE:
BRANSON J
DATE:
24 MARCH 2003
PLACE:
SYDNEY
REASONS FOR DECISION
INTRODUCTION
On Saturday, 22 March 2003 the applicant, BBC World Limited (‘BBC World’), made an urgent application to the Court for interlocutory orders restraining the respondent, Special Broadcasting Service Corporation (‘SBS’), from broadcasting or rebroadcasting ‘BBC World Channel’ television broadcasts (‘BBC World material’). It is not in dispute that SBS is broadcasting BBC World material to provide its viewers with coverage of the war in Iraq. BBC World claims that SBS, by rebroadcasting BBC World material, is infringing BBC World’s exclusive rights as licensee of the copyright in that material.
At the close of argument on 22 March 2003 I ordered that the claim by BBC world for interlocutory relief be dismissed. I gave brief ex tempore reasons for my decision. I indicated at that time that expanded reasons for my decision would be published promptly. These are the expanded reasons for the decision given by me on 22 March 2003.
THE APPLICATION
By an application filed in Court on 22 March 2003 BBC World claims final relief against SBS pursuant to ss 115 and 116 of the Copyright Act 1968 (Cth) (‘the Copyright Act’). Section 131C of the Copyright Act confers jurisdiction on the Court in respect of the claims so made by BBC World. By its application, BBC World also claimed the interlocutory relief identified above.
Section 23 of the Federal Court of Australia Act 1976 (‘the Federal Court Act’) relevantly provides:
‘The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, … as the Court thinks appropriate.’
It is thus clear that the Court has the power to make the interlocutory order sought by BBC World. The issue to be determined on the BBC World’s application for interlocutory relief was whether it was appropriate in all of the circumstances of this case for the power to be exercised.
PROPER APPROACH TO CLAIM FOR INTERLOCUTORY RELIEF
The parties accepted that the proper approach, in considering whether the interlocutory relief sought should be granted, was first to enquire whether there is in this proceeding a serious question to be tried as to whether the SBS is infringing BBC World’s exclusive rights as licensee of the copyright in the material being broadcast by SBS. If satisfied that there is a serious question to be tried on this issue, the next question to be considered was whether the balance of convenience required the grant of the interlocutory relief sought (Australian Coarse Grain Pool v Barley Marketing Board of Queensland No 1 (1982) 57 ALJR 425).
BACKGROUND FACTS
SBS did not challenge the claim of BBC World to be the exclusive licensee of the copyright in BBC World material. SBS claims that it is licensed to broadcast BBC World material.
As is mentioned above, the present application was brought on as a matter of urgency. An application has been filed but no pleadings have been filed. The only evidence received by the Court is evidence, gathered in haste, directed to the issues to be determined on the application for interlocutory relief. I am not in a position to make, nor is it appropriate on an application of this kind to make, findings of fact concerning dispute issues.
Both parties placed before the Court a copy of an agreement dated 4 September 2001 (‘the News Packages Licence Agreement’). The News Packages Licence Agreement is an agreement between BBC Worldwide Limited (‘BBC Worldwide’) and SBS as licensee. Its term is one year commencing on 1 April 2001. It appears that the News Packages Licence Agreement is in similar terms to agreements between BBC Worldwide and other Australian television broadcasters and TV New Zealand. Together these agreements are known as the ‘Auspool Agreement’. SBS has been a party to the Auspool Agreement for many years. It is accepted by the parties that the BBC World material does not fall within the News Packages Licence Agreement.
Phillip Martin, Director of Television News and Current Affairs Programs, SBS (‘Mr Martin’), gave affidavit evidence that in early 1999 he became concerned that although SBS had in place agreements with major international television news suppliers which allowed SBS to use individual items from their scheduled news programs, it had no arrangement in place under which SBS could access ‘rolling news coverage’ which might be transmitted in the case of a breaking news story such as an emergency or major international event. It was his view that to maintain its reputation and position as a serious news and current affairs broadcaster, SBS required access to rolling news coverage. He instructed his staff to open discussions with the BBC in an attempt to obtain access to rolling news coverage.
Both parties also placed before the Court a letter, also dated 4 September 2001 (‘the Side Letter’), by which BBC Worldwide confirmed, and SBS accepted, the addition of certain provisions to the News Packages Licence Agreement. The additional provisions included the following:
‘2.The Licensee shall also have the right by way of a non‑exclusive licence during the Term to transmit five (5) hours in total of any Breaking News which appears on BBC World by way of inclusion in the Licensee’s daily news and sports news programmes.
3.For the purposes of this letter “Breaking News” shall mean live coverage of a pre‑arranged event produced by the BBC News directorate of the BBC or of a news story of international significance, which causes a scheduled news bulletin or news programme to be extended or which interrupts or replaces scheduled programming on BBC World (for the avoidance of doubt live coverage of a pre‑arranged event produced by the BBC’s domestic Events Department shall not constitute Breaking News).
4.… The Licensee shall pay [BBC Worldwide] an additional fee of eight hundred Australian dollars (A$800) for each hour of Breaking News transmitted by the Licensee after it has first transmitted five (5) hours of such material.
5.… The Licensee shall transmit any Breaking News simultaneously with the delivery of the BBC World without delay, interruption, addition, deletion, editing or alteration of any description. All rights relating to BBC World not specifically granted to the Licensee are expressly reserved to [BBC Worldwide].’ (emphasis added)
The understanding of Mr Martin was that the Side Letter entitled SBS to transmit unlimited amounts of any breaking news material appearing on BBC World. He understood that the fee to be paid in relation to that entitlement was the base fee for the first five hours of breaking news in any year and thereafter a fee of AU$800 per hour.
Mr Martin gave affidavit evidence, the accuracy of which was acknowledged by Stephanie Dovey, Channel Manager for BBC World (‘Ms Dovey’), that SBS broadcast BBC World material concerning the terrorist incident of 11 September 2001 almost non-stop for a period of at least fifteen hours. No protest was made by BBC World about its having done so.
Ms Dovey under cross examination by Mr Blackburn, counsel for SBS, agreed that up until the controversy broke out in relation to SBS’s access to BBC World material in late December 2002 or early January 2003 she had understood that ‘the practice of SBS had been to take as much breaking news as they wanted, providing they paid for it, and providing that they used it as news’. Ms Dovey also agreed that sometime during the Christmas season of 2002 she discussed with colleagues in London that ‘the old arrangement with SBS whereby they could just basically take unlimited feed from BBC World, providing they paid for it, had to change’.
Negotiations between the parties in relation to the renewal of the News Packages Licence Agreement began in April or May 2002. The negotiations were protracted. The reason for this need not be examined. By an undated letter from Ms Amber Knight of BBC Worldwide (‘Ms Knight’), BBC Worldwide confirmed that it had agreed:
‘to provide the daily satellite feeds as per the 2001/2002 Agreement for a period of 1 month (from 1/4/02 to 30/4/02) whilst a subsequent News Packages Licence Agreement is being negotiated.
Save as varied by this letter the existing terms and conditions shall remain in full force and effect.’
An endorsement on the letter indicating agreement and acceptance was signed on behalf of SBS on 28 March 2002.
No further extension of the News Packages Licence Agreement as varied by the Side Letter was apparently evidenced in writing. BBC Worldwide and SBS proceeded on the basis that the News Packages Licence Agreement as varied by the Side Letter was being extended from month to month.
On 1 December 2002 the BBC group of companies was restructured. The licence to distribute BBC World material was transferred from BBC Worldwide to BBC World. SBS was not immediately informed of the transfer of the licence. Ms Dovey’s evidence was that SBS was first informed of the restructure when she provided information on that topic to Mr Martin by e-mail on 8 January 2003 (see [20] below).Ms Dovey was aware that Ms Knight was speaking to SBS about BBC World matters later than 1 December 2002.
By 16 December 2002 negotiations in respect of a new Auspool Agreement were well advanced. By a letter of that date addressed to Mr Martin, Ms Knight set out agreed heads of agreement. On receipt of the letter Mr Martin spoke by telephone to Ms Knight concerning renewal of the Side Letter. There is a serious dispute between the parties as to what was said during the course of this telephone conversation. Mr Martin says that Ms Knight advised him that she agreed to the renewal of the Side Letter on the same terms and conditions subject to a price increase in line with CPI. Ms Dovey says that she was with Ms Knight at the time of her telephone conversation with Mr Martin and that Ms Knight advised Mr Martin that he would need to deal with her (i.e. Ms Dovey) concerning the Side Letter. No evidence was placed before me from Ms Knight who left Australia on Friday 21 March 2003 to attend a business commitment in France. I make no criticism of BBC World in this regard.
The letter of 16 December 2002 sought SBS’s acceptance of the heads of agreement. The acceptance of SBS, dated 16 December 2002, is indicated on a copy of the letter which bears the following endorsement in handwriting:
‘This document is signed by SBS subject to the renewal of the “Variation to BBS News packages Heads of Agreement” (dated 4th September 2001) allowing access to BBC World content. The renewal is to be for a period of two years on identical terms, but subject to yearly CPI increases.’
Mr Martin asserts that he wrote the handwritten endorsement on the letter of 16 December 2002 at the dictation of a lawyer employed by SBS after he sought from the lawyer a form of words appropriate to record his agreement with Ms Knight. No response from BBC Worldwide concerning the handwritten endorsement was received by SBS until 18 February 2003 (see [24] below).
Mr Martin was on leave from his employment in early January 2003. On 8 January 2003 Ms Dovey sent an e-mail to Mr Martin. By that e-mail Ms Dovey advised Mr Martin of the BBC restructure and that he should now liaise with her, and not Ms Knight, concerning BBC World matters. She went on to set out the basis upon which BBC World wished to renew SBS’s entitlement to access BBC World material. That basis included:
‘Breaking news access is limited to 2 hours over a 24 hour basis and must be a simultaneous transmission.’
Mr Martin saw the e-mail of 8 January 2003 on his return from leave on 13 January 2003. He responded by e‑mail on 20 January 2003. After apologising for his delay in responding he stated:
‘You should be aware that SBS renewed on December 16th last year the agreement with BBC Worldwide for the provision of the Prime bulletins to the Auspool. We noted in that document that the renewal was subject to a renewal of the BBC Worldwide agreement on access to the BBC World 0800, 0900, 1000, 1100 and 1200 GMT bulletins and to breaking BBC World News on the basis of identical terms for two years, but subject to yearly CPI increases.
We, therefore, are unable to accept the limitations you now seek to impose.
Can I refer you to Amber Knight who agreed to that condition on behalf of the BBC?
We agree, however, to the proposed fee.
If you would like to send me an invoice, I will be happy to arrange payment.’
On 22 January 2003 Ms Dovey e-mailed Mr Knight as follows:
‘Thank you for your e-mail.
I am aware that Amber indicated to you that SBS could have access to BBC World and I believe this to be a fair statement. However at no time would she indicate that the deal terms would be identical as she was very aware that the finer details of the deal would need to be negotiated with myself.
In saying that Phil, the terms for BBCW access cannot remain the same although in my opinion very few amendments have been made. We do not have any sports rights to offer you and we must limit the amount of news packages and breaking news SBS take. As I’m sure you’re aware the news market place constantly changes and as you well know we have very little control over this.
This is a very special arrangement we have with SBS and we would very much like to continue it.
….’
By an e-mail dated 14 February 2003, Ms Dovey advised Mr Martin as follows:
‘Further to our recent telephone conversation I am happy to renew the current access to BBC World deal on the same terms with exception to the following:
Contract start date – 1 January, 2003
Term – 2 years
……
Breaking News – Breaking news access is available for up to 5 hours per day. If SBS wishes to take more than 5 hours of Breaking News on any given day they must contact BBC World who will in turn use reasonable endeavours to grant them extended access. This remains at the discretion of BBC World.
….’
An e-mail dated 18 February 2002 from Ms Knight to Mr Martin includes the following paragraph:
‘Apologies for the delay in my responding to you re SBS’s returned signed heads of agreement for the Auspool deal. BBCW are unable to agree to the hand written terms and conditions you have added to our heads of agreement document. As per our previous discussion BBC Worldwide and BBC World are now separate organisations and the new deal will need to be agreed with Stephanie Dovey – Channel Manager, BBC World Distribution Limited.’
By a letter on SBS letterhead dated 20 February 2003 an SBS lawyer advised Ms Dovey that she was instructed ‘to set out SBS’s position for your clarification’. The letter sets out what is, in effect, Mr Martin’s version of the events of 16 December 2002. It notes that there was no response from BBC disputing the notation on SBS’s signed copy of the heads of agreement and that:
‘SBS was duly given access to the newspool on 1 January 2003, consistently with BBC’s acceptance of Phil’s signed letter. BBC has since invoiced SBS.’
The letter concludes:
‘SBS maintains that the side letter renewal was agreed verbally on 16 December 2002, confirmed in writing by SBS the same day and to the extent further confirmation was necessary, further confirmed by BBC’s conduct on 1 January 2003. We trust that this now clarifies the position.’
SBS has received no direct response to its letter of 20 February 2003. It appears that Ms Dovey sought guidance from the London office of BBC World. Ms Dovey gave affidavit evidence that:
‘[w]e agreed that whilst we did not agree with SBS’ position, we would endeavour to resolve the situation.’
Although some limited discussions between senior officers of BBC Worldwide and senior officers of SBS followed, no resolution of the dispute between them has been achieved.
Ms Dovey was not in her office on 20 March 2003, the day that the war in Iraq broke out. When she arrived at her office on the morning of 21 March 2003 she was advised that SBS had broadcast the breaking news commentary from BBC World in the early hours of the previous morning and that SBS had been running BBC World continuously from the previous evening. She received an e-mail from a senior officer of Foxtel Management Pty Limited (‘Foxtel’) which complained of the SBS broadcasting and asserted, in effect, that it significantly devalued the BBC World Channel as a twenty‑four hour service to the subscription broadcasting market.
On 21 March 2003 Ms Dovey telephoned Mr Martin and asserted that there was no agreement in place which authorised SBS to broadcast BBC World material. She told him that the broadcasting must stop. Mr Martin said that he was not prepared to stop the broadcasting but would meet with her to discuss the issue ‘next week’.
By a letter dated 21 March 2003 addressed to a lawyer apparently employed by SBS the Sydney solicitors for BBC World asserted, amongst other things, that:
‘There is no arrangement in place licensing SBS to broadcast BBC World and, in particular “Breaking News”.’
The letter sought an undertaking by 6.00pm that evening that SBS would immediately cease broadcast of all BBC World ‘Breaking News’ footage, and all BBC Worldwide footage.
No such undertaking was given by SBS. This proceeding was initiated, and interlocutory relief sought, the following day.
SERIOUS QUESTION TO BE TRIED
I am satisfied, and indeed SBS did not suggest to the contrary, that there is a serious question to be tried as to whether an agreement was reached between BBC Worldwide and SBS on 16 December 2002 as to the heads of agreement. I am further satisfied that there is a serious question to be tried as to whether Ms Knight was, at that time, authorised to negotiate with Mr Martin on behalf of BBC World with respect to the subject matter of the Side Letter.
I am therefore satisfied that there is a serious question to be tried as to whether an agreement was reached between BBC World and SBS on 16 December 2002 to renew the Side Letter for a period of two years.
It is important to identify the respective positions of the parties as to what would be the legal position if the contention of BBC World (i.e. that the handwritten endorsement on the copy of the letter of 16 December 2002 signed by SBS had the effect that no agreement was reached on that day as to the heads of agreement or as to the renewal of the Side Letter) is correct. The position of BBC World is that in that event SBS would have no licence to broadcast BBC World material including breaking news material. The position of SBS is that in that event the previous licence arrangements remained in place on a month to month basis until terminated by appropriate notice.
It is not disputed that SBS has since 1 January 2003 been broadcasting BBC World material and, until 21 March 2003, it had been doing so without evoking protest from BBC World. There is no evidence as to whether any of the material broadcast between 1 January and 20 March 2003 was breaking news material. Ms Dovey has sent e-mails during 2003 which refer to the terms on which SBS obtains access to BBC World material in a way which implies that such terms have a current applicability. There is no evidence before me of a communication between BBC World and SBS which explicitly terminates the extension month by month of the News Packages Licence Agreement as varied by the Side Letter.
I conclude that there is a serious question to be tried as to whether SBS currently has any licence to broadcast BBC World Channel material. However, I am not satisfied on the evidence before me that the case of BBC World that there is no such licence is strong.
BALANCE OF CONVENIENCE
In Bullock v The Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464 at 472 Woodward J, with whose reasons for judgment Smithers and Sweeney JJ agreed, observed:
‘… when it becomes necessary to consider the balance of convenience, it is, I believe, quite proper to continue to bear in mind the apparent strength of the applicants’ case; the two legs of the test need not be considered in isolation from each other. Thus an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even. A more doubtful claim (which nevertheless raises “a serious question to be tried”) may still attract interlocutory relief if there is a marked balance of convenience in favour of it.’
I approach the assessment of the balance of convenience in this case on the basis that the case of BBC World that SBS has presently no licence to broadcast BBC World Channel material has not been shown to be a strong case. The material placed before the Court on the final hearing of this proceeding may, of course, reveal a much stronger case.
In assessing the balance of convenience, weight must also be given to the failure of BBC World, before the outbreak of the war in Iraq, to assert that there is no agreement in place pursuant to which SBS is entitled to broadcast BBC World material. The position of SBS that there is such an agreement in place was made pellucidly clear by its letter of 20 February 2003. Yet, although presumably aware of the real possibility of a war breaking out in Iraq in the short term, BBC World did not immediately challenge the assertions and conclusions contained in SBS’s letter of 20 February 2003. Nor did BBC World move immediately to seek relief from the Court. Although the commercial considerations which may have influenced the course taken by BBC World are readily identified, they do not, in the context of an application for interlocutory relief, detract from the significance of BBC World’s delay. As the Full Court of this Court pointed out in Carlton and United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Limited (1987) 76 ALR 633 at 638:
‘The grant of injunctive relief, interim or final, is, of course, discretionary. Delay by an applicant in instituting or in prosecuting a claim for an injunction may be a ground for refusing relief, even at a final hearing. Where an interim injunction is sought on the basis that the applicant need show only a “serious” question of fact or of law, delay in seeking that relief is an important discretionary consideration ….’
I accept that the loss to SBS at this time (i.e. during the currency of the war in Iraq) of the BBC World material, and in particular the breaking news service, would seriously damage the reputation of SBS. SBS is a significant broadcaster of international news in Australia. It is extremely unlikely that SBS will now be able to conclude negotiations with an alternative supplier of breaking news material before the conclusion of the war in Iraq. Damage to the reputation of SBS as a broadcaster of international news would be likely to have significant and, I accept, long term financial and other consequences for SBS. I also accept that the reputation of SBS would be damaged should it immediately lose access to the material which it currently obtains under the Auspool Agreement. In each case the damage likely to be suffered by SBS would be at the least difficult, and more likely impossible, to measure in financial terms.
So far as BBC World is concerned, its principle concern is that if SBS, as a free-to-air broadcaster, continues to broadcast the BBC World material as it is presently doing, BBC World’s ability to enter into licence agreements with pay TV providers either at all, or on acceptable financial terms, will be harmed or destroyed. BBC World is currently negotiating with Foxtel for a renewal of a licence to broadcast BBC World material. I accept that BBC World is likely to suffer financial harm as a result of the conduct of SBS of which it complains.
However, if the conduct of SBS is legally unjustified, an early trial of the proceeding should bring that conduct to a relatively early end. I am willing to order an expedited hearing of the proceeding. An expedited trial should limit the extent of any harm that BBC World might be wrongly suffering by reason of the conduct of SBS of which it complains in this proceeding. It should also mean that such harm should be capable of being, in at least large measure, compensated by an award of damages.
CONCLUSION
Having regard to all of the above factors, I conclude that the balance of convenience dictates that the application for interlocutory relief be dismissed. I order that the final hearing of this proceeding be expedited.
I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson. Associate:
Dated: 24 March 2003
Counsel for the Applicant: Mr N Manousaridis Solicitor for the Applicant: Tress Cocks & Maddocks Counsel for the Respondent: Mr T Blackburn Solicitor for the Respondent: Gilbert & Tobin Date of Hearing: 22 March 2003 Date of Judgment: 24 March 2003
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