Boomerang Investments Pty Ltd v Padgett (Damages Phase Discovery)

[2021] FCA 1071

FEDERAL COURT OF AUSTRALIA

Boomerang Investments Pty Ltd v Padgett (Damages Phase Discovery) [2021] FCA 1071  

File number:	NSD 1738 of 2017
Judgment of:	PERRAM J
Date of judgment:	7 September 2021
Catchwords:	PRACTICE AND PROCEDURE – discovery application – where documents relevant to damages inquiry – where respondents allege flawed theory of damages – whether allegation procedurally appropriate
Legislation:	Copyright Act 1968 (Cth) s 115(4)
Cases cited:	Boomerang Investments Pty Ltd v Padgett (Costs of the Liability Phase) [2021] FCA 385
Division:	General Division
Registry:	New South Wales
National Practice Area:	Intellectual Property
Sub-area:	Copyright and Industrial Designs
Number of paragraphs:	6
Date of last submissions:	3 August 2021 (First Applicant) 27 August 2021 (First and Second Respondents)
Date of hearing:	Determined on the papers
Counsel for the First Applicant:	Mr M R Hall SC with Ms J Beaumont
Solicitor for the First Applicant:	Banki Haddock Fiora
Counsel for the Second, Third, Fourth and Fifth Applicants:	The Second, Third, Fourth and Fifth Applicants did not appear
Counsel for the First and Second Respondents:	Mr R Cobden SC with Mr W H Wu
Solicitor for the First and Second Respondents:	Gilbert + Tobin
Counsel for the Third and Fourth Respondents:	The Third and Fourth Respondents did not appear

ORDERS

NSD 1738 of 2017

BETWEEN:

BOOMERANG INVESTMENTS PTY LTD ACN 009 670 919

First Applicant

JOHANNES VAN DEN BERG

Second Applicant

ALEXSANDRA MILLER MALCOLM YOUNG

Third Applicant

AUSTRALASIAN PERFORMING RIGHT ASSOCIATION LTD ACN 000 016 099
Fourth Applicant

AUSTRALASIAN MECHANICAL COPYRIGHT OWNERS SOCIETY LTD
Fifth Applicant

AND:

JOHN PADGETT

First Respondent

LORI MONAHAN

Second Respondent

KOBALT MUSIC PUBLISHING AUSTRALIA PTY LIMITED ACN 144 996 609

Third Respondent

SOCIÉTÉ AIR FRANCE, SA
Fourth Respondent

ORDER MADE BY:	PERRAM J
DATE OF ORDER:	7 SEPTEMBER 2021

THE COURT ORDERS THAT:

1.By 21 September 2021, the First and Second Respondents are to give verified discovery, in accordance with rules 20.17 and 20.22 of the Federal Court Rules 2011, of all documents (as defined in the Evidence Act 1995 (Cth)):

(a)recording any licence agreement in relation to ‘Warm in the Winter’ dated on or after 25 March 2013, or the terms of any such agreement, entered into between:

(i)either or both of the First and Second Respondents, or any entity associated with, or agent of, either of them (including Italians Do It Better); and

(ii)any other party;

and

(b)recording or evidencing any royalty or other payment received on or after 25 March 2013 which was wholly or partially paid in respect of a licence of the copyright in Warm in the Winter anywhere in the world.

2.The First and Second Respondents pay the First Applicant’s costs of the discovery application.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

PERRAM J:

1. The parties are in dispute as to the entitlement of the First Applicant (‘Boomerang’) to discovery from the First and Second Respondents (together, ‘Glass Candy’) on the issue of quantum.  Broadly speaking, Boomerang would like Glass Candy to discover all licensing agreements relating to Warm in the Winter dated after 25 March 2013 anywhere in the world together with any records of royalty payments.  The relevance of the date 25 March 2013 is not entirely clear but from a reference at [16] of Boomerang’s submissions it seems to turn on the fact that Boomerang identifies this as the date of the first infringing digital download of Warm in the Winter in Australia.  I assume that Boomerang is seeking to obtain at least the licensing arrangements Glass Candy had with the Fourth Respondent (‘Air France’). 

2. Boomerang says that this material is relevant to the determination of quantum for two reasons.  First, the existence of material of this kind is relevant to its case that it is entitled to a notional reasonable licence fee.  It says it is entitled to the notional licence fee that it would have charged Glass Candy if its permission to use Love is in the Air had been sought.  The evidence Boomerang has prepared suggests that it would have sought to have negotiated an arrangement under which it took a substantial interest in the copyright in Warm in the Winter.  If it had done so, so the argument runs, it would now be entitled to royalties for all uses of Warm in the Winter around the world.  This would include not only any royalties from Air France but also any other royalties which Glass Candy has obtained by licensing the use of Warm in the Winter to any other person.

3. Secondly, Boomerang says that these kinds of licensing arrangements and the royalties they generated are relevant to its claim for additional damages under s 115(4) of the Copyright Act 1968 (Cth). It says that the benefit derived by Glass Candy from its licensing of Warm in the Winter to third parties is relevant to the assessment of these damages because of s 115(4)(b)(iii) which requires the Court to have regard to ‘any benefit shown to have accrued to the defendant by reason of the infringement’.

4. Glass Candy submits that both of these damages theories are so flawed that the Court should not permit discovery on the basis of them.  I rejected a cousin of this argument when dealing with the question of costs in Boomerang Investments Pty Ltd v Padgett (Costs of the Liability Phase) [2021] FCA 385 at [12]-[16]. At that time Glass Candy sought to have me determine the entitlement to costs of the liability phase on the basis that Boomerang would only recover $11.50 at the quantum trial (being the money associated with the 12 downloads which were proved at trial). The recovery of such a sum was said in substance to be a loss. The ability of Boomerang to recover any more than this was said to be so hopeless that I could conclude what the outcome of the quantum trial would be even before I heard it. On that basis I was invited to determine the costs of the liability phase on the premise that Boomerang’s compensatory damages would be limited to $11.50 and it would not be entitled to additional damages. I rejected this misguided submission. I concluded that I should not determine Glass Candy’s complaints about Boomerang’s damages case under the guise of a costs dispute.

5. Glass Candy now seeks to make the same point again this time not as an aid to a costs argument but as a reason for resisting discovery.  The only difference is the detail of its submissions and the urgency of their tone.  As I did with the argument when it was clothed in the garb of a costs argument, I am going to reject it as procedurally inappropriate.  The time to assess the correctness of Boomerang’s damages case is at the damages trial.  Whilst it would be possible for Glass Candy to seek summary judgment on the basis of its present contentions, it has not sought to do so.  I am not going to entertain a summary judgment application dressed up as a discovery dispute.  If Glass Candy wants summary judgment it will need to apply for it. 

6. I see no reason not to make the orders sought by Boomerang.  Glass Candy will have to pay Boomerang’s costs of the discovery application. 

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perram.

Associate:

Dated:       7 September 2021