Golden Editions Pty Ltd (t/as Hughes Leisure Group) v Polygram Pty Ltd

[1995] FCA 1143

IN THE FEDERAL COURT OF AUSTRALIA  )
  )
NEW SOUTH WALES DISTRICT REGISTRY  )    No.  NG 629   of  1993
  )
GENERAL DIVISION                 )

BETWEEN:GOLDEN EDITIONS PTY LTD T/AS HUGHES LEISURE GROUP

Applicant

AND:POLYGRAM PTY LIMITED & ORS

Respondent

13 December 1995

REASONS FOR JUDGMENT
LOCKHART J.
     The Court has before it a notice of motion by the applicant and cross-respondent, Golden Editions Pty Limited, seeking essentially two orders: (1) that leave be granted to file an amended defence today; and (2) that it be granted leave to file an affidavit of Mr Hoghton Hughes sworn on 1 December 1995.

Particularly, the motion arises out of the orders made by another judge of the Court, Lindgren J, on 10 November 1995, when his Honour ordered amongst other things that by consent Golden Editions be granted leave to file an amended defence by 24 November 1995, the leave being limited to the following amendments: (a) the incorporation of all admissions made by Golden Editions to date, whether in response to a notice to admit or otherwise, and (b) the raising of the defence in ss. 115(3) and 116(2) of the Copyright Act, provisions which raise
the issue of knowledge and questions of innocent infringement.

His Honour in order (1) concluded that no leave was granted to withdraw any admission previously made.  His Honour also directed that Golden Editions file and serve any further affidavits on which it proposed to rely by 24 November 1995 (order (2)); and that Golden Editions be precluded from filing any further affidavits after 24 November 1995 without first obtaining the leave of the Court (order (3)).  Those are the relevant orders that his Honour made.

What occurred was that no amended defence was filed by 24 November 1995 and nor has it been filed to date.  Also, no relevant affidavits were filed by Golden Editions by 24 November. The notice of what is sought by Golden Editions has been given to the respondents, Polygram Pty Limited and Island Records Limited, to which I shall simply refer as Polygram.

I have heard oral argument from counsel for the parties and I have read very helpful written submissions.  I do not propose to refer to the facts in detail; they are canvassed in those submissions, both oral and written.

The orders of Lindgren J in relation to the filing of an amended defence and the filing of additional evidence plainly have not been complied with.   Some explanation has been given for that by sworn evidence which I accept, although I must say the evidence was not entirely satisfactory.

Nevertheless, in all the circumstances, and balancing the interests of both parties and prejudice, particularly to Polygram, I think it would be wrong to shut Golden Editions out from filing its amended defence and the affidavit which it wishes to rely upon, namely the affidavit of Mr Hughes which goes to the issue of knowledge arising from ss. 115(3) and 116(2) of the Copyright Act.  I therefore propose to grant leave.  I shall explain the basis on which that is given, the conditions that are to be imposed, and the consequential orders as to costs that will be made.

I have the form of amended defence which it is sought to file.  When argument commenced, Golden Editions wished to put in issue in paragraph 4 of that document matters alleged in paragraph 8 of Polygram's statement of claim.  That paragraph asserted that the record which is defined in paragraph 6 of the statement of claim, as specified in schedule B thereto, embodies copies of the whole or a substantial part of the Bob Marley Recordings.  Plainly paragraph 4 of the amended defence in the form which it was sought to press initially put the allegation in paragraph 8 of the statement of claim in issue.  
     However, in response to the notice to admit facts which was served by Polygram upon Golden Editions, Golden Editions previously admitted that the record embodies copies of the whole or a substantial part of each of the Bob Marley recordings.  Now, counsel for Golden Editions does not press the amended defence in respect of paragraph 4's admission, and it has subsequently been amended so that it reads "the Cross-Respondent admits the matters alleged in paragraph 8 of the Cross-Applicant's Statement of Claim".  That is therefore not a matter which is now in issue. 

But still, the proposed amended defence asserts in paragraph 2 that Golden Editions does not admit the matters alleged in paragraph 5 of the statement of claim.  That paragraph asserts that Polygram - and I mean for this purpose the first respondent, Polygram Pty Limited - is the exclusive licensee for Australia of the copyright in each of the relevant Bob Marley recordings.  Particulars are given in paragraphs 5.1 and 5.2 of the statement of claim to establish the assertion of exclusive licence, and reference is made in those subparagraphs to agreements.

The notice to admit facts to which I have already referred contains paragraphs 2, 3 and 4, which I need not recite but which are plainly intended to obtain admissions to constitute proof of the matters asserted in paragraph 5 of the statement of claim.  Those admissions were made.  Nevertheless, the amended defence now seeks to put those matters in issue.  That would, in my view, constitute an amendment that without more would travel outside the leave granted by Lindgren J on 10 November last. 

However, at my suggestion, and following discussion between counsel for the parties, it has become clear and it will be apparent from the transcript, that the argument which Golden Editions wishes to propound with respect to the allegations in paragraph 5 of the statement of claim is a limited one.  Certainly, it does not require proof of the documents particularised in paragraphs 5.1 and 5.2 of the statement of claim.  It simply wishes to assert a proposition of law based upon the construction of the relevant documents in the light of the terms of the relevant provisions of the Copyright Act.

Counsel have agreed that if leave is granted to allow the amendment to paragraph 2 of the defence, which is opposed by Polygram, any leave should be on a limited basis.  I propose to allow the amended defence to be filed, putting in issue the matters alleged in paragraph 5 of the statement of claim, but on the more limited basis to which I have referred, and which I will deal with later when coming to the terms of the leave. 

The affidavit of Mr Hughes which is sought to be filed by Golden Editions seeks to establish the case of Golden Editions that at the time of any alleged infringement Golden Editions was not aware and had no reasonable grounds for suspecting that the acts constituting the infringement were an infringement of the copyright (see s. 115(3)), and that for the purposes of s. 116 Golden Editions was not aware and had no reasonable grounds for suspecting that copyright subsisted in the relevant work to which the proceeding relates.

I say nothing about the form of Mr Hughes' affidavit and whether it is admissible or not; I have not considered that. I note that Polygram has indicated that it will object to portions of that affidavit, and of course it is free to do so at the trial. 

The orders which I propose are as follows:

(1)That leave be granted to Golden Editions to file and serve an amended defence in the form of the document initialled by me, dated today, and placed with the papers, that document to be treated as the amended defence.

(2)That leave be granted to Golden Editions to file in court the affidavit of Hoghton Hughes sworn 1 December 1995.

(3)That Polygram Pty Limited and Island Records Limited are not required at the trial to formally prove the documents particularised in paragraph 5 of the statement of claim other than by formally tendering them.

(4)That leave be granted to Polygram Pty Limited and Island Records Limited, pursuant to s. 120 of the Copyright Act 1968, to proceed with the cross-application without joining Polygram International Music BV (PIM) as a party.

(5)In the event that the court finds infringement of copyright and that Polygram International Music BV (PIM) is the exclusive licensee of any infringed copyright, then the court grants leave to Polygram Pty Limited and Island Records Limited to joint Polygram International Music BV (PIM) for the purpose of any assessment of damages, in addition to Polygram Pty Limited.

(6)Golden Editions shall pay the costs of this motion and of and occasioned by the amendment to its defence in any event and, in the case of Polygram Pty Limited and Island Records Limited, on an indemnity basis. Costs of Polygram Pty Limited and Island Records Limited concerning their case in answer to the issue of knowledge under ss 115(3) and 116(2) of the Copyright Act are reserved. 

(7)Polygram Pty Limited and Island Records Limited shall file and serve any affidavits in response to the affidavit of Mr Hughes by 29 January 1996. 

(8)The Court notes that the affidavit of Simon Fentiman Gilchrist sworn 7 December 1995 was read in support of the opposition of Polygram Pty Limited and Island Records Limited to Golden Editions' motion, and therefore forms part of their costs of the motion.

(9)The orders of Lindgren J of 10 November 1995 are varied by the above orders, but otherwise his Honour's orders remain in force.

The Court makes those orders.

A notice of motion has also been filed by Polygram Pty Limited and Island Records Limited, in substance seeking summary judgment.  That was filed on the basis that as the case then stood, Polygram and Island Records had the benefit of the admissions in the defence and in response to the notice to admit facts to which I have already referred.  Counsel for Golden Editions states that even if the Court had not allowed the amendments, which it has, he would have resisted the motion on other grounds.  Most of the costs of today, of course, are embodied in the motion of Golden Editions which I have already dealt with, including the affidavit of Mr Gilchrist.  So, I think the proper order is that the notice of motion of Polygram Pty Limited and Island Records Limited

dated 7 December 1995 is dismissed with no order as to costs. I make that order. 

I certify that this and the preceding eight (8) pages are a true copy of the reasons for judgment herein of the Honourable Justice Lockhart.

Associate

Dated:   13 December  1995

Counsel for the Applicants    :        Mr J M Ireland QC

Solicitors for the Applicants :        Banki Palombi Haddock & Fiora

Counsel for the Respondents   :        Mr R Cobden

Solicitors for the Respondents:        Gilbert & Tobin

Date of Hearing             :        13 December 1995

Date of Judgment            :        13 December 1995