Big TIme Phonograph Record Company (Australia) Pty Ltd (In Liquidation) v Arista Ariola Ltd

[1989] FCA 572

JUDGMENT No. ........ ...... ..... - 57ay 8s

IN THE FEDERAL COURT OF AUSTRALIA )

1

VICTORIA DISTRICT REGISTRY	)	No. VG 199 of 1989
)
GENERAL DIVISION	1

BETWEEN: BIG TIPIE PHONOGRAPH RECORD

COMPANY (AUST) PTY LTD

(In llquldatlon)

(Firstnamed Applicant)

AND :	ARISTA ARIOLA LIMITED (Secondnamed Applicant)
AND :	SIG TIME RECORDS (AMERICA) INC.
(Flrstnamed Respondent)
AND :	FREDERICK GEORGE BESTALL (Secondnamed Respondent)

-	Coram: Ryan J
Date:  4 August 1989
- Place: Melbourne

EX TEMPORE REASONS FOR JUDGMENT

Gurus".

Thls is an application for an interlocutory injunction by the applicants which c l a m that one or ocher of chem is exclusively entitled to exploit in Australia rlghts in the nature of intellectual property In certain musical works composed and performed by a group known as the "Hoodoo

Those works include "Leilani", "What's My Scene", "Like Wow-Wipeout", "Tojo", "Poison Pen", "Bittersweet", "I Want You Back", "Good Times", "Middle of the Land", "Death Defying", "My Girl", and "I Was a Kamikaze Pilot".

The evidence Indicates that the respondents, or at least the firstnamed respondent, propose, unless restrained, to release and market in Australia a recording comprising "the best of" the works of the Hoodoo Gurus. That evldence is embodied In a letter to the Hoodoo Gurus dated 8 June 1989, written by the secondnamed respondent on behalf of the firstnamed respondent, which is in these terms:

"Dear Band members

Please find attached a proof of the cover for the "Hits of the Hoodoo Gurus" album. Following is the track listing.

SIDE 1

LEILANI
WHAT'S MY SCENE

LIKE WOW-WIPEOUT

TO JO

POISON PEN

BITTERSWEET

SIDE 2

I WANT YOU BACK

GOOD TIMES
MIDDLE OF THE LAND
DEATH DEFYING
MY GIRL
I WAS A KAMIKAZE PILOT

For your information we expect to have the album available in stores no later than July. Please return proof to the above address a.s.a.p.

Yours sincerely

Fred Bestall"
It is accepted by Mr McDonald of counsel, who appears

for the respondents, that the substantive application and the present appllcatlon for an lnterlocutory injunction ralse serious Issues to be tried between the appllcants and the respondents. However, Mr McDonald contended that the balance of convenience is against the grant of any lnterlocutory ~njunction because any detriment which might be suffered by the appllcants as a result of the release and promotion in Australla of the presumptively pirate album can be compensated by an adequate award of damages. He submitted that records of sales of the presumptively pirate album can be kept and that by quantlfylng those sales it wlll be possible to obtain a preclse lndlcation of the effect of the presence on the market of the album which the respondents, on the evidence, propose to produce.

It was also contended that the effect on the commercial Interests of the applicants would be relatively mlnlmal because sales of the recording of the latest works of the group, which has been marketed under the name "Magnum Cum Louder", are already declining and are no longer susceptible

product featur~ng works of the same group. However, I am not	of any detriment as the result of the presence of a competing
persuaded by the evidence, as it presently stands, that that contention has been made out. The only evldence adduced by the respondents is the evldence of Mr Dwyer, thelr Australian solicltor, who has deposed, in paragraph 18 of hls affidavit, that the artists have recently released, in Australla, a new
album, "Magnum Cum Louder", and single, "Come Any Time". This release, according to Mr Dwyer, "has been a disappointing failure" because:

"On the latest national charts prepared by Radio Station Fox/FM the following results have been attained. The album peaked at 13 and is now at 27. The single peaked at 26 and is now at 45. On the Station 3XY Melbourne charts the album peaked at 12 and 1s now 30. The single peaked at 19 and has now dropped out of the charts. These figures represent total album sales of approximately 25,000 units."

There is nothing in the evidence, as it presently stands, to contradict the assertion on behalf of the applicants in the affidavit of Mr Smith, sworn 10 July 1989, that:

"5. 'Best Of' records have a special connotation in the market place. They are often associated with groups reaching the end of their recording careers. The Group is still actively recording new songs, and it would be highly damaging to convey any impression to the contrary. The Group is also very conscious of its public image of being innovative and serious about its music, and not out to make a 'cheap saler, which the release of a 'Best Of' album, at a time when the Group is producing new recordings, might convey. Fans of the group may hold it in less esteem if it was perceived that the Group had

substantial commercial and musical integrity.	compromised on its image of having
The Group would suffer significant damage if its image in the market place was damaged in this way and would be unlikely ever to be able to recover its former good reputation and image.

6.  BMG'S policy is to hold back the release of a 'Best Of' record until a group had reached the end of its actlve recording life. At that polnt of a group's career, a 'Best Of' album is a desirable release, and is often financially very successful. In addltlon to image factors, there is also the commercial benefit of drawing on as broad a range of music as possible in selecting songs for a 'Best Of' record. BMG has no present plans for the release of a 'Best Of' record ln the case of the Group.

Once a 'Best Of' album has been released in respect of a group, it 1s very rare that another 'Best Of' album can be successfully released in relation to the same group. Were the Respondents to release the 'Best Of' album in respect of the Group, BMG would be effectively deprived of the abllity ever to release a 'Best Of' album in relatlon to the

group. "

In addltlon, ln my view, the respondents have not demonstrated any counterveiling inconvenience which they would suffer if an interlocutory injunction were to go preserving the status quo. I understand the status quo to be that the respondents have not Imported into Australia, nor indeed, produced, in any great numbers copies of the recording proposed in Mr Bestall's letter of 8 June 1989.

It is undesirable that I express any more concluded views because of the incomplete state of the evidence. I conslder that I have sufflclently lndlcated the basis on which an interlocutory injunction should be granted. There has been no crltlclsm of the form of injunction proposed by

orders in terms of the draft mlnutes whlch have been handed	counsel for the applicants. I propose, therefore, to make
up, subjec~ to those orders being prefaced by the usual undertaking as to damages whlch Dr Pannam Q.C. assured me counsel for the applicants had instructions to give. Sub-paragraph (B) of paragraph 1 should be in these terms:

"Manufacturing, offering for sale, advertising,
promoting, distributing or selllng as the case
may be records reproducing the recording and/or
any other recording embodying the compositions

referred to in the letter."

The directions hearing is adjourned to 8 September

1989.

I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment of his Honour Mr Justice Ryan.

ssociate: ?&+e Dated: *L k%J,&#

Counsel for the Applicant:	Dr C.L. ~annam,	QC
Mr C.D. Golvan

Solicitors for the Applicant: Lilley Brereton

Counsel for the Respondent:  Mr M. McDonald

Solicitors for the Respondent: Dwyer & Company

Date of Hearing:	4 August 1989
Date of Judgment:	4 August 1989