Monte v Fairfax Media Publications Pty Ltd
[2015] FCCA 1633
•7 August 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MONTE v FAIRFAX MEDIA PUBLICATIONS PTY LTD | [2015] FCCA 1633 |
| Catchwords: COPYRIGHT – Infringement – photograph – damages – consideration of loss caused by the publication – additional damages – hurt and distress. |
| Legislation: Copyright Act 1968 (Cth), ss.115, 195AZA, 195AZGG |
| Aristocrat Technologies Australia Pty Limited v DAP Services (Kempsey) Pty Limited (in liquidation) (2007) 157 FCR 564 Corby v Allen & Unwin (2013) 297 ALR 761 Eagle Rock Entertainment v Caisley [2005] FCA 1238 Interfirm Comparison (Australia) Pty Ltd v Law Society of NSW (1975) 6 ALR 445 Krueger Transport Equipment Pty Ltd v Glen Cameron Storage & Distribution Pty Ltd (No 2) (2008) 79 IPR 81 Microsoft Corporation v Atifo Pty Ltd (1997) 38 IPR 643 Raben Footwear Pty Ltd v Polygram Records Inc (1997) 75 FCR 88 Ravenscroft v Herbert & New English Library [1980] RPC 193 Rutter v Brookland Valley Estate Pty Ltd (2009) 81 IPR 549 Sutherland Publishing Co Ltd v Caxton Publishing Co Ltd [1936] Ch 323 |
| Applicant: | FRANK MONTE |
| Respondent: | FAIRFAX MEDIA PUBLICATIONS PTY LIMITED |
| File Number: | SYG 1604 of 2014 |
| Judgment of: | Judge Driver |
| Hearing date: | 16 June 2015 |
| Delivered at: | Sydney |
| Delivered on: | 7 August 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr C Evatt with Ms L Andelman |
| Solicitors for the Applicant: | Beazley Singleton Lawyers |
| Counsel for the Respondent: | Mr P Flynn |
| Solicitors for the Respondent: | Banki Haddock Fiora |
ORDERS
Within 28 days the respondent shall pay the applicant the sum of $10,001 as damages for breach of copyright, pursuant to ss.115(2) and 115(4) of the Copyright Act 1968 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1604 of 2014
| FRANK MONTE |
Applicant
And
| FAIRFAX MEDIA PUBLICATIONS PTY LIMITED |
Respondent
REASONS FOR JUDGMENT
Introduction and background
On Sunday, 14 July 2013 the Sun Herald newspaper published by the respondent (Fairfax) published a report on the applicant (Mr Monte) under the heading “Alarm as Monte’s back on the case”. The article was strongly critical of Mr Monte as is indicated by the précis immediately before the article which states:
Liar, cheat and unlicensed private investigator Frank Monte is again using aliases to scam unsuspecting clients, reports Kate McClymont.
The article featured a photograph of Mr Monte as well as what appears to be a professionally created photograph of his partner Sharon Sargeant (Ms Sargeant) posed on a bed and semi naked from the waist up.
Mr Monte is not alleging in these proceedings that he was defamed by Fairfax. Rather, he is suing for breach of copyright in the photograph of Ms Sargeant. Fairfax does not dispute that copyright subsists in the photograph, that Mr Monte owns that copyright and that his copyright was infringed. By the time this matter reached trial on 16 June 2015 the only issues between the parties were whether Mr Monte should receive compensation for the infringement, and if so, how much?
The present proceedings
These proceedings commenced with an application and statement of claim (and Genuine Steps Statement) filed on 12 June 2014. As I have already indicated, the only issue to resolve is the issue of compensation. Fairfax relies upon its defence (to the extent that it is still relevant) as well as affidavit evidence from three deponents:
a)Alisdair James Doctor who made two affidavits on 3 June 2015;
b)Matthew Bevan Martel who made an affidavit on 3 June 2015; and
c)Magnolia Christine King who made an affidavit on 3 June 2015.
Annexed to Mr Martel’s affidavit is a confidential exhibit which details sums paid by Fairfax for the right to publish photographs.
Mr Monte relies upon his own affidavit made on 2 June 2015. I also received the following exhibits:
A1 – Applicant’s Genuine Steps Statement
A2 – The Sun-Herald, page 11, 14.07.2013
A3 – “Alarm as Monte’s back on the case”, Sydney Morning Herald online edition, 15.07.2013
Only Mr Monte was cross-examined on his affidavit.
The parties made oral submissions at trial. I was also assisted by an outline of submissions prepared on behalf of Fairfax.
Consideration
Compensatory damages – s.115(2)
I accept the submissions of Fairfax that only nominal damages should be awarded pursuant to s.115(2) of the Copyright Act 1968 (Cth) (Copyright Act).
Damages pursuant to s.115(2) of the Copyright Act are intended to compensate for the wrong done to the applicant’s copyright; traditionally the “depreciation caused by the infringement to the value of the copyright, as a chose in action”[1]. While this approach has been adopted in Australia, the difficulties in applying this test means other methods of calculating damages such as looking at the licence fees that would have been payable had the infringement been licensed are more commonly applied[2].
[1] Sutherland Publishing Co Ltd v Caxton Publishing Co Ltd [1936] Ch 323 at 336
[2] Interfirm Comparison (Australia) Pty Ltd v Law Society of NSW (1975) 6 ALR 445 at 446 per Bowen CJ in Eq
This “licence fee” approach asks the Court to consider the notional bargain which would have been struck by hypothetical willing parties in the shoes of the copyright owner and infringing user[3].
[3] Eagle Rock Entertainment v Caisley [2005] FCA 1238 at [11]
However, in the present case, on the basis of Mr Monte’s evidence, it is plain that Mr Monte would not have issued a licence for the photograph[4]. Accordingly, the “licence fee” approach is unavailable in the present case on the authority of Aristocrat Technologies Australia Pty Limited v DAP Services (Kempsey) Pty Limited (in liquidation)[5], for reasons explained below. In that case, Black CJ and Jacobson J considered the evidence relating to compensatory damages, and said at [26]-[28]:
In some cases, a royalty may provide the appropriate measure of damages; Interfirm 6 ALR at 446; Bailey 53 FCR at 111-112. Aristocrat argued that damages could be assessed on that basis as an alternative to its primary claim for loss of the value of sales.
However, a royalty does not provide the appropriate measure of damages where the copyright owner would not have granted a licence; Columbia Pictures Industries Inc v Luckins (1996) 34 IPR 504 at 509 (Tamberlin J); Autodesk Australia Pty Ltd v Cheung (1990) 94 ALR 472 at 476-477 (Wilcox J); Microsoft Corp v Goodview Electronics Pty Ltd (2000) 49 IPR 578 at [55].
In the present case, Aristocrat did not seek to establish that it would have granted a licence to Vidtech. The plain inference was that it would not have been prepared to do so. A royalty does not therefore provide an appropriate measure of damages
[4] Affidavit of Mr Monte at [7]
[5] (2007) 157 FCR 564
In Rutter v Brookland Valley Estate Pty Ltd[6], Buchanan J applied Aristocrat and said:
… a royalty will not provide an appropriate measure of damages where it appears a copyright owner would not have been prepared to grant a licence (see Aristocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (in liq)[2007] FCAFC 40 (Aristocrat) at [27]).
[6] (2009) 81 IPR 549 at [98]
Similarly, in Krueger Transport Equipment Pty Ltd v Glen Cameron Storage & Distribution Pty Ltd (No 2)[7], Gordon J said:
One method for assessing damages is the licence fee or royalty method. Under this approach, the owner of the copyright recovers “a sum equal to the fee that would fairly be charged for use of the copyright work”: TS & Bat [206]. As Vawdrey properly conceded, such a method is often rejected if the court takes the view that the applicant would not have granted such a licence to the respondent because, for example, the parties are competitors or the copyright work was devised for a particular purpose and that purpose was frustrated or destroyed by the infringing use of the work by the respondent: see Bailey at FCR 112; ALR 238; IPR 156 (concluding that lost profits is the better measure of damages where the copyright work was created for a specific purposes which has been frustrated by the infringement) and TS & B Retail Systems [206] (stating that the a lost profits approach is preferable to a licence fee approach where the plaintiff and infringer are “in actual or potential competition in relation to the copyright work”). See also Aristocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (2007) 157 FCR 564 at [27]–[29]; Norm Engineering Pty Ltd v Digga Australia Pty Ltd (2007) 162 FCR 1 at [257], appeal allowed in part on other grounds at 166 FCR 268.
[7] (2008) 79 IPR 81 at [31]
In the present case, because Mr Monte would not have issued any licence, he has suffered no loss in the form of a licence fee or royalty forgone. He has adduced no evidence of suffering any other form of economic loss. As was said in Aristrocrat at [35]:
If a court finds that damage has occurred it must do its best to quantify the loss, even if some degree of speculation and guess work is involved; Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 57 ALR 167at 183 (Sheppard, Morling & Wilcox JJ). But, as their Honours emphasised, this principle applies only where a court finds that loss or damage has occurred; it is not enough merely to show wrongful conduct by a defendant. See also the observations of Mason CJ and Dawson J in The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 83 (emphasis added).
The result in Aristocrat was that only nominal damages were awarded under s.115(2), because no loss had been proved to occur. That is the same as the present case; no evidence has been adduced that would allow the Court to assess damages on any basis other than the licence fee approach, and that approach is inapplicable because Mr Monte would not have issued a licence.
Notably, the passages quoted above were not referred to in detail in Corby v Allen & Unwin[8], where the parties agreed that damages were at large[9]. However, in light of the reasoning of Aristocrat, no damages other than nominal damages should be awarded under s.115(2) given Mr Monte’s evidence that he would not have licensed use of the photograph, and therefore that he suffered no loss compensable under those heads. Nor has any evidence been adduced to support the assessment of compensatory damages on any other basis. As a matter of authority, Aristocrat is a binding decision of the Full Federal Court to the effect that:
a)where the owner of intellectual property would not have granted a licence to the defendant, no damages are recoverable under the reasonable royalty or licence fee head; and
b)the Court must be satisfied that some loss has occurred before it proceeds to attempt to determine damages on any other basis.
[8] (2013) 297 ALR 761
[9] at [110]
I will award nominal damages of one dollar.
Additional damages – s.115(4)
Section 115(4) of the Copyright Act is in the following terms:
(4) Where, in an action under this section:
(a) an infringement of copyright is established; and
(b) the court is satisfied that it is proper to do so, having regard to:
(i) the flagrancy of the infringement; and
(ia) the need to deter similar infringements of copyright; and
(ib) the conduct of the defendant after the act constituting the infringement or, if relevant, after the defendant was informed that the defendant had allegedly infringed the plaintiff's copyright; and
(ii) whether the infringement involved the conversion of a work or other subject-matter from hardcopy or analog form into a digital or other electronic machine-readable form; and
(iii) any benefit shown to have accrued to the defendant by reason of the infringement; and
(iv) all other relevant matters;
the court may, in assessing damages for the infringement, award such additional damages as it considers appropriate in the circumstances.
Flagrancy has been described as meaning a “calculated disregard of the plaintiff’s rights, or [a] cynical pursuit of benefit”[10], and as reflecting “the existence of scandalous conduct, deceit and such like”, and as including “deliberate and calculated copyright infringement”[11], and “deliberate, deceitful and serious” conduct[12]. However in Raben Footwear Pty Ltd v Polygram Records Inc Lockhart J said that flagrancy did not include mere mistakes or carelessness[13].
[10] Prior v Lansdowne Press Pty Ltd (1975) 29 FLR 59 at 65 per Gowans J
[11] Ravenscroft v Herbert & New English Library [1980] RPC 193 at 208 per Brightman J
[12] Microsoft Corporation v Atifo Pty Ltd (1997) 38 IPR 643 at 648 per Tamberlin J
[13] (1997) 75 FCR 88 at 461-462
Fairfax submits that the infringement of Mr Monte’s rights in the photograph was not flagrant, in that it was not calculated or scandalous, or deceitful. It submits that the use was merely careless. Fairfax further submits that there is no evidence of any conduct by it subsequent to the notice of the infringement, or any conversion of the photograph or any benefit that has accrued to it because of the infringement, that would give rise to a claim of additional damages. Fairfax submits that no award of additional damages should be made.
Mr Monte contends that the publication of the photograph caused grief to him as, coupled with the article, it drew attention to the fact that Ms Sargeant operates an escort business that was not previously known to her family and children. Fairfax contends that the photograph itself would not have revealed that. I do not accept that submission. The photograph is professionally taken and shows Ms Sargeant reclining on a bed in an alluring pose, naked from the waist up (except for a loose mesh item over her breasts and “pasties” over her nipples. There is no doubt in my mind that the photograph is suggestive of professional sexual activity and the article simply confirms that suggestion.
Fairfax counters, in effect, that Mr Monte is crying “crocodile tears” because the photograph had already been published to the world on the internet and on Ms Sargeant’s own Twitter account promoting her escort service. Annexed to the longer of Mr Doctor’s two affidavits are screenshots from a website entitled “Careless Whispers” which contains a photograph of Ms Sargeant either the same as, or indistinguishable from, the photograph published by Fairfax. Annexed to Mr Doctor’s shorter affidavit are screenshots from Ms Sargeant’s Twitter account which include several revealing photographs of her, including in large format a photograph either the same as, or indistinguishable from, the photograph published by Fairfax. Ms Sargeant is described in the Twitter account as “sexy super MILF”[14].
[14] “MILF” is an acronym, the meaning of which is known to me but which, somewhat surprisingly, I had to explain to counsel for Mr Monte
Mr Monte gave evidence that he took around 40 photographs of Ms Sargeant on a single day at a hotel in Los Angeles and these were intended only for private purposes. Many of the photographs (black and white copies of which were annexed to Mr Monte’s affidavit) are very similar and it is impossible to say with precision which was the photograph published by Fairfax. There is no doubt that one of them was. Given the usage of several of the photographs in order to promote Ms Sargeant’s escort business on Twitter and further usage on the internet about which there was no complaint from Mr Monte in evidence, I do not accept that the photographs were intended for private use only. It does not follow, however, that Mr Monte is not entitled to additional damages. It is Ms Sargeant’s own business where and in what manner she wishes to promote her escort services. A person wishing to use her services can no doubt find information about them by searching on the internet. It is quite another thing to have a promotional photograph relating to an escort service published in the mass media. There is no doubt that the article in relation to which the photograph was published was intended to denigrate Mr Monte. In my opinion, there is no doubt that the photograph of Ms Sargeant was intended to catch the reader’s eye and to provide some spice to the article. The use of the photograph was intended to increase the readership of the article. It is entirely plausible (and I accept) that Mr Monte (and Ms Sargeant) were highly embarrassed by the publication of the photograph. In my opinion, the circumstances warrant the awarding of additional damages.
Fairfax submits that if additional damages are awarded, it should be a modest sum. Counsel for Fairfax took me to the circumstances in Corby where five photographs had been used without permission in a book (with a long publication currency) and in circumstances where the publisher knew that only a limited licence had been given for the use of the photographs which did not include the publication of the book in question. Fairfax submits that in circumstances where only a single photograph was published in a newspaper with a limited readership life and where the photograph had been removed from the online edition of the newspaper, nothing like the $45,000 awarded in Corby pursuant to s.115(4) should be awarded.
I agree that the circumstances of this case do not call for an award of additional damages anywhere near the amount awarded in Corby, although the amount should be more than nominal. I will order that additional damages in the sum of $10,000 be paid.
Damages for breach of moral rights – s.195AZA
I agree with the submissions of Fairfax on this issue.
Pursuant to s.195AZA(b) of the Copyright Act damages may be awarded for an infringement of an author’s moral rights, in this case, a breach of attribution of authorship. However, pursuant to s.195AZGG(3) of the Copyright Act, any damages awarded for infringement of copyright must be taken into account in assessing damages for moral rights infringement[15].
[15] Corby at [133]
In Corby, Buchanan J stated that an applicant cannot be said to have suffered loss for non-attribution where they would not have wished their “name to be published in connection with a photograph of which they were the author, thereby suggesting they were somehow implicated in, or receiving credit for, reproduction of the photograph in connection” with the publication[16].
[16] Ibid at [134]
Mr Monte has given evidence that the publication made him angry and upset[17], and consistently with that evidence it should follow that he would not want to have been connected with the publication of the Photograph within it. Further, in Corby at [135], Buchanan J drew a distinction between hurt or embarrassment to the applicant’s status as a photographer, and hurt or embarrassment suffered as a family member, and pointed out that damages should not be awarded for an infringement of moral rights where the hurt is the result of the latter rather than the former. That is the present case.
[17] Affidavit of Mr Monte at [8]-[12], [14],[15]
It appears that the photograph of Ms Sargeant was faithfully reproduced by Fairfax in its publication. There is no evidence that Mr Monte has been injured in any professional calling as a photographer. I will not award any amount for breach of moral rights.
Conclusion
Breach of copyright in the photograph published by Fairfax is not disputed. Mr Monte has not suffered any financial loss because of the breach of copyright as he would not have licensed the use of the work. He should only receive nominal compensatory damages. The circumstances of the publication, however, warrant the award of more than nominal damages as additional damages. I will award a total amount of $10,001. There will be no award for breach of damages for moral rights.
I will hear the parties as to costs.
I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Judge Driver
Associate:
Date: 7 August 2015
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