Nomad Films International Pty Ltd v Export Developments Grants Board

;

1 ,_ --

!	CATCHWORDS

,+#	c
I	5.
P ,

Administrative Law - Export Market Development Grants Act

Board - application by way of appeal from the Administrative

claim for gkant fjrom the Export Market Development Grants copyrlght - licence - exclusive llcencee of copyright -

asslgnment of rights - rights in relation

to copyright etc.

Export Market Development Grants Act 1974

ss.3(1)

and

(2).

4(l)(h), 14(3).

Copyrlsht Act 1968 ss.86, 87, 196

Acts Interpretation Act 1901 ss.23(b).

15AA

NOMAD FILMS INTERNATIONAL

PTY.

LTD. v.

W O R T

DEVELOPMENT

GRANTS BOARD

VG No. 159 of 1985

Ymithers, Sweeney and Northrop

30 May 1986

Melbourne.

4 '

IN THE FEDERAL COURT OF AUSTRALIA	)
)

VICTORIA	DISTRICT	REGISTRY	I VG No.	159	of 1385
I

GENERAL DIVISION

On appeal from the

Administrative Appeals

Tribunal

Between:

NOMAD

FILMS

INTERNATIONAL PTY.

LTD.

(Applicant)

-	AND:	EXPORT DEVELOPMENT
GRANTS BOARD

(Respondent)

COURT

Smlthers, Sweeneg and Northrop

JJ.

DATE OF ORDER: 30 May 1936

WHERE MADE:

Melbourne

MINUTE OF ORDER

THE COURT ORDERS THAT:

1. The appeal be allowed.

2 .

The

applicatlon

remitted

the

Administrative

Appeals Tribunal for reconsideration in accordance with the reasons for ~udqment.

2 .

3.	The respondent pay the costs	of the applicant	of the
appeal.

NOTE:

Settlement

and

entry of orders

dealt

wlth

Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

)

VICTORIA DISTRICT REGISTRY

) VG No. 159 of 1985

)

GENERAL DIVISION

On appeal

from the

Administrative Appeals

Tribunal

Between:

NOMAD FILMS

INTERNATIONAL PTY.

LTD.

(Applicant)

EXPORT

DFJELOPMENT

GRANTS BOARD

(Respondent)

m: Smithers. Sweeney and Northrop

JJ.

U:	30 May 1986

REASONS FOR JUDGMENT

Smithers J.:

This is an application by

way of appeal to

this Court from a decision of the Administrative Appeals

Tribunal dismlssing

an applicatlon to

It by the applicant

(Nomad) seeking a review of

a decision adverse to it of

the

Export Development Grants Board in respect

a claim by

Nomad for a grant under the Export Market Development Grants

Act 1974 (the Act) in respect

of expenditure incurred in the

exploitation overseas of rights of copyright in respect of	a
film called "Sun Kosi - River of Gold".

2 .

The rlghts In lndustrlal property for the purpose

first questlon before the Tribunal was whether

seeking

opportunlties for the dlsposal

which Nomad had incurred

expenditure, were rights owned

by it.

That questlon arose

under s.4(l)(h) of the Act whlch

1 s in the following

terms:

"4.(1)

Subject to the succeeding provisions

of this section. a

reference In thls Act to

eligible

xpendlture

a reference

expenditure that, in

the oplnion of

the

Board, has been incurred by a person

primarily and principally for the purpose of

creating or seeking opportunlties, or

creating or lncreasmg demand, for -

...

(h) the

disposal, by

that

person,

for

reward, in the course

of carrying

business

Australia,

persons

resldent outside Australia, for use and

enjoyment outside Australia, of eliglble

industrial property rlghts owned by him

or of ellgible know-how owned by him;"

The galned as a result of the efforts of Nomad

second question was whether the financial rewards

In	exploiting

rights In the film overseas constituted earnings

Nomad.

The Board had taken the

view that those earnings were not its

earnings within the meaning of s.14(3)

the Act. That

question arose because Nomad had recelved grants under the

Act In respect of three

years prlor to the grant year for

which the current claim was made,

Sectzon 14(3) is in the following terms:

"Where a person, other than an approved body,

received, or became entitled

receive,

grants

in respect of eligible expenditure

incurred by him during any

or more grant

years preceding

a partlcular grant

year, a

grant 1 s

not payable to him ln respect

ellgible expenditure incurred by him during

that grant year unless the amount of his

export earnlngs in that grant year exceeds

$25,000 or, if the

whole

that

amount

consists of consideratlon for the disposal

eligible industrial property	rlghts	or
eliglble know-how, $10,000."

The Administrative Appeals Tribunal decided not to review the

declslon of the Board on the ground that the rlghts In

respect of which Nomad had incurred the relevant expendlture

were not rights owned by Nomad, but were rights in which Its

only interest was that

of an exclusive licensee of rights of

it did not deal

wlth the second

question on the

ground

that

Its

decision

the

first

determined the fate of Nomad's appllcation.

I turn therefore to consider that decision. It

appears

that on 11 December 1980

an agreement called "This production

agreement" was entered into between Radial Industries Pty.

Ltd. (Radial) (called, in the agreement

"the Investor") and

Nomad Films International Pty. Ltd. (called the Producer). m e agreement reclted that:

The Producer has been arranglng for

the

productlon

a documentary

film, provislonally entitled "River

of Gold"

( "the Film") based on

script or treatment prepared by the

Producer and annexed hereto

("the

Script") and	has made all the
arrangements	necessary to enable

the

production

the

Film to

commence.

The Producer has agreed to transfer

and assign

the copyright to

the

Investor ln the Film and

to produce

the Fllm on the terms	contamed in
this agreement

Provislons of the agreement included the following:

l.(a) the copyrlght in the

Script;

(b) the

produce as a fllm the Scrlpt and to

exhibit the Film anywhere In the

world;

sole and exclusive right to

reproduce

the

Script

and

any

adaptations

thereof

means

sound recordings;

(d)

the sole and exclusive right to use for the purposes of the productlon

of the Film

any lnformation about

the Film or its

method

productlon

communlcated

the

producer or employees to investor.

Its dlrectors

and

The producer

hereby

transfers

and

assigns to

the

Investor

all

Its

rlght tltle and interest in and to

the

Rlghts

Including

wlthout

limlting the generality thereof the

copyrlght in the

Fllm.

3 . The Producer warrants that:

It is the beneficial owner of

the copyright in the Script

and

holds

the sole

and

exclusive

right

its

reproduction by means of

film;

the Script does not in any way other person or corporatlon;

part

the

Script

actionable for defamation or

otherwise;

at the date

of this

agreement

It has not

encumbered

mortgaged or charged

the

Scrlpt

the

copyrlght

thereof;

(V)	that it has not granted to any other person a licence of the Rlqhts or any part thereof;

(v1) that It holds a valid

and

subsisting certiflcate Issued

pursuant to Section

124K

the Income Tax Assessment

Act

1936 in respect of the film. the exclusive licence subject to the duperformance of the producer's obligations hereunder. to use the Script and all of the

4. The Investor grants to the producer

rlqhts of the Investor thereln

produce the Film.

The producer

shall:

(a) be responsible for all aspects

the

production

of the

Film

including, without limitatlon - ...

...

7. Upon the completion of the Film to

the extent contemplated in Clause

5, it shall be delivered

to the

Investor or such dlstrlbutor as the

Investor dlrects, and the

dellvery

of the Film shall complete the obligations of the Producer hereunder.

8.(1) The Investor

shall

pay

the

Producer a fee of $60,000.00 for the production of the Film ...

...

15. This agreement shall be interpreted in accordance with the laws of the State of Victoria.

On the same day,

11 December 1980 another agreement,

also called "production" agreement, which, however. provided

not for production of the film, but for its distribution, was

entered into between Radial Industries Pty. Ltd. (called "the Manager") and Nomad (called the Distributor). This agreement recited that, Sun Kosi - River of Gold Producer (the

"Partnership) was the beneficlal owner

of the film, that the

partnership was desirous

of appolnting the distributor a3

exclusive distrlbutor thereof. and that the dlstributor had

agreed to accept that appolntment upon the terms contained in

the agreement. Included	m the agreement were the	following
provlslons:

2. Fiduciarv Capacity:

(a) The Manauer

nters

into

hese

presents In its capacity as manager

of the Partnership.

(b)

The Partnershlp Agreement empowers

the Manager to enter

into

thls

Agreement in the terms hereof, and to bind the partners thereto.

3 .

Grants of

Licence:

( a )

The Manager hereby grants

the

Distributor an exclusive licence to distribute the film throughout the world.

(b) Without limlting the generality

the foregoing, the licence shall

confer

upon

Distributor

the

exclusive	right	throughout	the
world -

(i)

exhiblt,

distribute,

market,

reissue,

transmit,

perform

and

otherwise deal in and exploit the

film, in any and all languages and

versions and in any form, in all

media and for all purposes;

and

(11)

to exercise the rights conferred

herein in relatlon to television,

including

any

diffusion

service,

cable

other

proprletary

transmlsslon

networks.

and

any

other

means

exhibition,

transmission or broadcasting.

shall

subsist

for a

period fo slxty calendar	months
from the date hereof.

7 .

4. Piqhts of the Distributor:

The distributor

shall

have

the

Iollowlng additlonal rights:

to change the tltle

of the Film,

to grant sub-licences,

to enter into agency agreements,

to make copies of the film in Its

orlglnal version, and in any other

size, or by

way

transfer to

video tape, or make dubbed, titled,

cut-m, synchronized

and

super-

imposed

versions

any

or all

languages, or authorise

sub-

licencees or agents to do

s o .

to use its name, and any trade mark

or servlce mark on copies

of the

Film and relating thereto.

all

publlcity

materlal

(i)

to make extracts

or trallers of the

Film,

(9)

protect the copyright

the

Partnership in the Fllm.

Covenant by the Distributor:

The	Distributor covenants to use

its	best endeavours to promote,

publiclse and erplolt the Film.

Distributlon Fees:

(a)

In consideration of the

covenants

the

dlstributor

hereln,

the

Manager

shall

p y

the

Distributor by way of

fees,

the

amount

specified

the

Second

Schedule hereto.

(b)

The said fees shall be paid by the

instalments,

and

the

times

specified in the Third

Schedule.

Distribution Costs:

The Distributor shall bear all of

the costs and

expenses of

every

kind which are or may be incurred in or in connection with the distribution and exhlbltlon of the

Film. Provlded

however,

that the

Distrlbutor shall have the rlght to

deduct from the gross proceeds of

the Film, as deflned hereunder,

wlthholding or other taxes imposed

by countries other than Australla

or any reasonable and usual fees or

commlssions due to any non-resident

agents or sub-contractors.

8. Appropriatlon of Proflts:

In thls clause, "gross proceeds

the

Film" means

money

recelvable by the Manager from:

the distribution and eshlbltlon of the Film Ln any part of the

wor Id ;

the disposal of the whole or any

part of the

copyrlght

any

music score, song or

incldental

muslc composed for the

Film, or

the disposal of the whole or any

part of the

the

Script from which the Film	1s
produced -

net of any wlthholding or other taxes Imposed by countries other

than

Australia

any

reasonable

and

usual

fees or

commlssions

due to any

non-resldent

agents

sub-

distributors.

The Distributor shall maintain

at Its office books of account

records

and

sufflcient

accurately

disclose

gr s

proceeds

the

Film.

The

Distributor

provlde

shall

reasonable access to books of

account

and

records

the

Manager or Its authorised agent.

The	Distributor shall pay the

gross proceeds of the Film into

a bank account to be operated by

the

Distributor.

The

Distributor

shall

appoint

director to be

co-signatory to

cheques

drawn

against

the

account.

The Distributor shall be deemed to receive the gross proceeds of

the Fllm as the agent	of	the
Manager.

The Distributor shall account to

the manager for all gross proceeds of the film, at

intervals	not	exceeding	s1x
months.

the gross proceeds of the Film

shall be appropriated by the

Manager as follows:

The first gross proceeds of the

film, representing recoupment by

the Manager of capital expended

to purchase the copyright in the

Film and the distribution fees,

belng the amount specified in

the Fourth Schedule hereto,

shall be paid to the Manager.

And thereafter:

Seventy per centum of the gross proceeds shall be paid to the Manager :

Thirty per centum of the

gross

proceeds shall be paid to Nomad Films International Pty. Ltd.

9. Covenant by the Manaaer:

The manager

covenants

with

the

Distributor to do any acts and execute any documents necessary to enable the

Distributor to exercise

the

rlghts

conferred herein.

10. Termination of Llcence:

On the termination of the licence granted herein, the Distributor shall deliver to

the

Manager.

as the

Manager

may

direct, all negatives, video tapes and

advertising

a d

publicity

materlal

relating to the

Fllm, then its possession

or under Its control.

11. Proper Law:

The proper law of

this Agreement shall be

the laws fo r the time being of the State

of Victoria."

1 0 .

The sum specified in the second schedule was

$10,000. The

sum speclfled in the

fourth schedule was

$70,000.

Thus it appears that Radial or the Partnership agreed

pay to Nomad

$60,000 for the production of the fllm and

$10,000 as distribution tees and

that the proceeds

the

distrlbutlon less taxes

forelgn countries and certaln

comrn1sslons were

to be pald by Nomad into

a bank account

controlled by It, then paid to Radial to be appropriated by

Radial, flrst, to recoup

the Manager, presumably for the

Partershlp, In the sum of $60,000 paid to Nomad for the

production of the film and

$10,000 for distribution

fees, and

thereafter 70% of the gross proceeds to Radial as Manager, presumably for the partnership and 30% to Nomad. The return to Nomad for its distribution work was $10,000 received from

the Manager and

30% of the gross proceeds after provision of

sums of $60,000 and $10,000 to the Manager.

clear

that,

as a result

the

productlon

agreement between Radial and Nomad, Radial became the owner of the copyright in the film. The introductlon of the Partnership into the distributlon agreement raises questions

as to who were the partners therein and how they acquired the beneficial ownership of the film. But the proceedlngs before the Tribunal and in thls Court have been conducted on the

basis that the Partnership did have such beneficlal	ownership
including ownership of the copyright therein.

11.

It is apparent that for Nomad to succeed in this appeal It must establlsh, either that the effect

of the distribution

agreement was to asslgn the copyright in the film to

it for

the five years

of the agreement, or, that being an

exclusive

licensee of copyrlght rights in the

film, ownership of

the

licence constltuted

an eliglble lndustrlal property right

owned by it within the meaning of s.4(l)(h) of the Act.

Construction of the definition in s.3(1)

I	turn first to this latter aspect of the problem.

Eligible industrial property rights are defined in s.3(1)

follows

"'eligible industrial property rights' means

rights in relation to inventions or trade

marks, or copyright in relation to works,

deslgns and other things, being

(a) inventions,

works,

designs

things

that, in the oplnlon of the Board, have,

to a substantial extent, resulted from

research or work performed in Australia;

(b)

trade marks that, in the opinion of the

Board, were first used in Australia

have increased in significance or

value

by reason of thelr use In Australla;"

The question is whether upon its proper construction the

expression "eligible lndustrial property rights" means, in

relation to copyright, the rights comprised in copyright, in

relation to works, designs or other things. conceived of as

some person.

1 2 .

It is clear operative statutory provlslon of the Act. It is designed to

that s.4!l)(h) of the Act

is the relevant

ldentify expenditure expenditure upon which

whlch

wlll

constitute

eligible

a claim for an export grant may be

founded. One category of such expenditure

that it was

Incurred in seeking opportunlties for disposal overseas of

rights in industrial property.

It is disposal of rights in

property, not property Itself whlch is contemplated. Section

3(1) of the Act contains the

definition of rights spoken of

I n s.4(1) (h).

If the

xpression

"eligible

industrial

property rights" is

to be defined, that objective

might

achleved by defining the relevant classes of rlghts In

property, or the relevant classes of property in which the

rights might be held,

or both.

The word "industrial"

satlsfied by the nature of the property

m which the relevant,

rlghts are stated

to exist, namely Inventions, trade marks

and copyrlght. All of these are industrial in nature.

So far as the definition purports to define the property

whlch is to qualify satisfied by the speciflcation of three kinds

as lndustrlal property, that also is

property,

namely, mventions, trade marks and copyrlght.

The

question

then arises whether the definition purports to specify the

kind of rights in the speclfied property whlch qualify,

for

the purposes of the definition,

as rights In that property,

or, whether, on the other hand, the definition

1s unconcerned

with the kind of rlghts, e.g. original ownership, ownership

by assignment, exclusive licence on mere llcence

or any other

13.

class of rlght, and

1s satisfied by the

enstence of any kind

of rlght In the specifled property.

The definitlon, so far as

It relates to inventions and

trade marks, does not concern Itself with the kind

of rights

in those classes ot property which qualify. It 1s

satisfled

where rlghts

of any kind exist In such property.

1 s

suggested,

however,

that

the posltron

dlfferent

relatlon to copyrlght

and

that,

for

some

reason,

the

definitlnn In relation to copyrlght descends to deal

wlth the

nature of the

rlghts

held

the

person

concerned

and

speclfles that the only rlght In copyrlght

whlch

satisfles

the deflnitlon is the rlght	of absolute ownership. I cannot
accept this.

If one were permitted to construe the definition without

reference to

the presence of the comma between the words

"trade marks" and

"or", it would be clear that eliglble

industrlal property rlghts Included rights of any kind

relatlon to copyrlght.

Such rights would of course Include

rights

held

under

licences,

exclusive

or otherwise,

perform acts the

rlght

to perform which are comprlsed In

1s said, however, that the comma must be glven full welght,

and If that IS done It wlll prevent the

expression "rlghts In

relatlon to" havlng

any

relationship

wlth the

word

"copyrlght". There is, to my

mnd. much to be sald for the

14.

vlew that thls approach

to the constructlon of the deflnltion

IS too narrow, and glves to the comma	a slgnlflcance that It
does not properly possess.

Rut accepting expresslon "rights in relation

for the present.

the vlew

that

the

to" does not apply to or

quallfy the word "copyrlght". one is requlred to interpret

the

definition

accordlngly.

The

restrxtion necessitates

that the relevant part of the definltion be read as follows, namely, "eligible mdustrlal property rights means copyrlght in relatlon to works, deslgns and other things", or perhaps

"ellglble Industrial copyrlght In relatlon to works, deslgns and other things."

property

rights"

means

rlghts

...

Obviously each of these

15, In its context, an

awkward

sentence.

And it

I S difficult to

believe

that

draughtsman would countenance Its use.

The former slips from

the plural to the singular and each sentence slips from a reference to rights to a designation of a class of property. The definition being expressed to concern itself with rights

one

would

expect identlficatlon of

to find

thereln

descrlption

o r

rlghts, of

some kind in some klnd

property. In the

flrst part of the definition,

namely,

"eligible industrial property rights means rlghts

In relation

to inventlons or

trade marks", it is clear that the rights

referred to

are rlghts of any kind In speclfied klnds of

property. And

perslst in relation to copyrlght unless there was some reason

for a different approach. Approaching the problem from thls

it would be

natural

t o r

this feature to

15.

angle the key to the Interpretation of the defmitlon

would

appear to be to recognlse property, a chose In actlon comprlslng

that

copyrlght

1 s

personal

a collection of rlghts

asserted by statute and recognlzed by the law

(see per Lord

Danckwerts in Chaplin

v. Leslle Frewin Publishers Ltd.

(1966)

Ch 79 at 93. When, therefore, one deflnes the expresslon "eliglble industrial property rlghts" as meanlng copyrlght,

one

1 s

inevitably

saying

that

the

eliglble

industrial

property rlghts In questlon are those rlghts which are recognlzed by the law as appertalning to copyrlght. In thls

definltion, copyright has wide coverage, namely copyrlght

relation to works, designs and other thlngs. And in relation

to films, those rlghts comprlse the exclusive rlghts to make

a copy of the

film, to cause It to be seen and heard

publlc, to broadcast It and transmltted to subscribers to a diffusion servlce. (See s.86

cause

the

fllm to

of the Copvrlqht Act 1968).

On this basis It is clear that

the expresslon "eliglble Industrial property rlghts" includes

the exclusive rights to do each and all

of these things. The

right to do each or any

of these thlngs is

an eligible

industrial property rlght

f o r

the purpose

the Export

Market Development definltion 1 s concerned, it matters not whether that rlght is

Grants

Act 1974. And so far as

the

held as owner, asslqnee or llcensee.

Of course so far as the

definltlon IS concerned the plural includes the slngular.

See Acts Interpretation

Act 1901 s.23(b).

In a deflnitlon where property rights are being defined and the form of words in the definition is that those rights

16.

"means rlghts"	etc. it 1 s peculiar to say that to accommodate
the effect of	the comma after "trade marks" one must, with

respect to copyrlght, ellmlnate the word	"rlghts" or the
notion of rlghts from the expresslon "means	rights", and read

the definltion as though. in relation to copyrlght, It

read

"eliglble industrlal property rights means

COpyrlght", and

Interpret that as meanlng ownership of copyright.

Yet

that

appears to be the result

ot accomodatmg the comma in the way

suggested. One property rights and one sees that

knows

that

what

are

being

defined

are

a class

Industrial

property IS speclfled. One knows that

that

1 s a class of

property in which

the holding of varlous classes of rlghts to

exerclse one or more

o f the rlghts comprised in copyright

1 s

provided for by law.

One 1 s left to conclude therefore that

the rather inelegant sentence "eligible industrlal property

rlghts" means copyright In relation to works, deslgns and

other things, and does not descend to speclfy what kind of

right In the rlghts comprised in copyrlqht

or one or more of

them quallfles as a relevant property right.

Any klnd of

rlght in

what is COmprlSed In copyrlght will satisfy the

definitlon.

In this way

it matters not whether

the words "rights in

relation to", where first appearlnq, qualify copyrlght. The notion that the definitlon purports to Identify the klnd of

Industrial property satlsfied where rlqhts of any kind exlst In that property,

which

rlghts

may

exlst

and

strong. And rlghts In inventions and trade marks.

this

manifest, of

course, in respect of

17.

And all of thls It is the leglslatlve purpose

1s supported by the conslderation that

of the Act that, for natlonal

purposes, persons shall

q a m

export earnings through the

exploltation of lndustrial rights owned by them. There is no

hint therein that the rlghts the

sub~ect

of that ownership

must be those of absolute

ownership

the

lndustrial

property concerned rather than rlghts

m the property arlsmg

from an Interest thereln. such as those of a licensee. When

one comes to s.4(l)(h) ownership of rights in the

industrial

property the sub~ect of exploltation is	essential, but not
ownershlp of that property.

Accordlngly, It 1 s my

n e w that even If the expresslon

"in relatlon

to"

"rights

relation to" In thls

definition are not to be read

s quallfying "copyrlght", the

definltion is to

be interpreted

as saylng that e1iglbl.e

industrial property rlghts means each of those rights which appertain to the class of property known as copyrlght m

relation to works,

deslgns and other

thmgs.

Accordlng to

clrcumstances persons other than

the

orlginal owner of

the

copyrlght, namely, an asslgnee,

an excluslve llcensee and

bare licensee, will have those same rlghts or

ne or more of

them. Whether or not the exploltatlon, otherwise than by the

grant of sub-licences, to do any of the relevant acts, a

llcensee 1 s authorlsed to do, and whether or not an excluslve

licensee has the rlght to grant sub-llcences, Nomad certainly

had that rlght pursuant to clause 4 ( b ) of the distrlbution

agreement. If thus owned, rlghts of copyright are capable of

18.

disposal, Includlnu bemq granted, to another. In accordance

wlth s.4(l)(h) or the Act. See the defmition of "disposal"

In s .r l ( l ) of the Act. And to refer to the rights of a

licensee as rlghts in copyrlght or rights of copyright

copyrlght rlghts, would	be a natural use of words and reflect
the relevant concept.

The derinltlon If inserted into s.4(l)(h)

If one accepts that wherever

the

Act,

"eligible

lndustrlal

property rlghts" are

referred to, one

shouLd

substltute the words of the

deflnltlon, then one would read

s.4(l)(h) as referrmg to expendlture for the purpose

seeking opportunltles

for the disposal by

a person "of rlqhts

In relatlon to inventlons

trade marks,

or copyright in

relatlon to works, deslgns

or other thmgs owned by him or of

ellglble know how owned by him.

The "of" before "eligible

know how" indicates that where It was the intentlon to refer to an Item of property as opposed to a rlght in property, it was felt necessary to Include that prepositlon. Similarly,

one would think, that

lt had been lntended to refer to

copyrlqht as an item of personal property as distlnct from a

right therein

would have been natural to Include the

prepositlon "of" after "or" in the expresslon "or copyrlght

etc.

'I.

If it is sald that the comma after

"trade marks" does

the work of such an "ot", and copyright is m the

ob~ectlve

case after the expresslon "seeklng opportunities

t o r

the

disposal ot", rather than after the expresslon "rlghts In relatlon to", then the "or" before copyrlght is unnecessary.

19.

Indeed lf the expression copyrlght was used in the sense of

an Item oi property as opposed to being related to rights In

property, one might have expected to flnd the expresslon

"owned by him" after the words "trade

marks", lust as it

appears atter the bundle of Items ending

with "and other

things," and

agam after "eligible know how".

Indeed the appearance 01

the expression "owned by him"

after

the

words

"and

other

things", belng

obviously

applicable

the

rlghts

referred

earlier,

including

"know-how" indicates that

there was a change In

the composltlon. in whlch there was

logical break between the concept the

sub~ect

of the tirst

"owned by him".

whlch were rights, and that of the second,

whlch was an Item of property.

rlghts

and

Items

property e.g. copyright, were equally the

ob~ect

of "disposal

of" the sentence might have read "disposal

rights In

relatlon to inventions or trade marks, or copyright in works designs and other things or know-how owned by hlm." But If,

as I think, "copyright" was in the objectlve

to "rights in

relation to", but "know-how" was

not, it was necessary to

indlcate this by the "of" before "ellglble know-how".

In my opinion thls examination of the situation which

obtalns ~f

one Inserts the words

of the definition into

s.4(L)th) in lieu of the words "eligible industrial property

rights" tends to support the view

that, despite the comma.

the words "rlghts In relatlon

to" In

the deflnitlon

quallfy the Words "copyrlqht In relatlon to	works,	designs
and other thlngs.
"Rlqhts In relation to" copvrlsht etc.

A questlon arlses expressed In the deflnltlon, were that

as to why, ~f the meanmq sought to be

whlch It would bear lf

the expresslon "rlghts In relatlon

to" applled to copyrlght.

the same

form or enumeratlon of Items was not used following

the expresslon "m

relatlon to", where It flrst appears, as

1 s used where It secondly appears. why repeatedly insert the

expresslon "or"? Why was the deflnrtion not expressed in the

terms "eligible industrlal property rlghts" means rights in relatlon to Inventions, trade marks and copyrlght In relation

to works, designs and other thlngs"? However,

l f

this form

of expresslon had been adopted the words

"In relatlon to

works, deslqns

and

other

things"

might

regarded

attached to copyrlght. In addltion, the repetltlon

lnventlons

and

trade

marks

as well

as to

of "in relatlon

to"

would not repetltion is separated by the comma.

have

been

less

elegant

than

It 1 s when

the

There was,

therefore,

reason to use the expression

"or" before trade marks and

facilitates readlng and does not Interfere

with or determme

the interpretatlon of

the words In the definltion. The role

1 s to reflect the circumstance that inventions and trade

marks are smgle items spoken of

by single words, whereas the

71.

reference to copyrlght

1 s not copyrlqht slmpllclter, but

concept encompassed In a

Long phrase, namely, "copyrlght in

relatlon to works. deslqns and other thlnqs". The comma

lntroduces a pause approprlate to the text, "copyrlqht" belnq

a compound involvlnq numerous words. Normally punctuatlon 1 s

Intended to serve the words, accordlnq to the meanlnq sought

to be expressed thereby. Wlthout the words there

meanlng.

1s the meanmq conveyed by the words whlch is

the operatlve meanlnq. And where, as In this case, the comma 1 s exp llcable In the role of the servant rather than a

master	, that 1s	the role which should be regarded as belng
played	by It.

It lnterpretatlon or as supportlve

1 s

proper

use

punctuatlon

as an aid to

partlcular

lnterpretatlon where, In the context, It does

ald

support. See per Glbbs CJ in Rvde Municlpal Councll v. Macsuarle Unlversltv (1978) 23 ALR 41 at 44. But it 1s always necessary to ldentlfy the role whlch the comma plays.

If, as for instance In relation to the comma

the

deflnltlon after enumeration 1 s in progress, or that a pause is convenlent. It

"works"

IS merely

indicate

that

does not have any effect on the meanlng.

If, as In my view,

In	relatlon to the comma after "trade marks" It merely

lndlcates a convenlent place t o r a pause because there 1 s

change in the constructlon

of the enumeration, or because

1s convenient

reflect

the

tact

that

the

descrlptlon

2 2

expressed In respect to copyrlght,

"In works. deslgns and

other thlngs," does not

a p p l y to lnventlons and trade marks,

It also has no place

as a tactor controlllnq meanlnq.

Mr. Pearce In Australia" 2nd Ed. at pp.54 and 55 expresses the

his

work "Statutory Interpretatlon In

vlew that In

general courts are loath to pay regard to the punctuatlon

of.

an Act.

He bases that

m e w upon the declslon

of the High

Court In Presldent of

the Charleton Shlre v. Ruse 11912) 14

CLR 2 2 0

where the problem before the

Hlgh Court was not

essentlally different Referring to English decisions that

from

that

arlslng

thls

case.

In the constructlon of

statutes punctuation 1 s to be disregarded Isaacs	J. at p.229
sald:

"But although I

am not prepared to

disregard

wholly the punctuatlon of an Act,

It would be

unsate to allow It to govern constructlon."

The declslon

of the Court reflected th15 approach.

Also

Schutt J. in Mayor

of Geelons v. Geelons Harbour Trust

Commlsslon (1923) VLR b52 sald at p.657.

"although

punctuatlon

not

ntlrely

dlsregarded, It is not to be allowed to control

the meanlng of. the words where such meanlng seems

otherwlse reasonably

clear."

Brlnsden J. in Conlqrave v. Tanner (1978) WAR 225 at 230, said :

"if the meaning of the statute 1 s so strong,

punctuatlon and brackets, however used, would not

persuade a court to Interpret the statute contrary

to that meaning".

In relatlon to the detlnltlon In question case, that lf the comma 1s glven lts proper role, not only are

It IS

the

rlghts In relatlon to copyright wlthln the meanlng of the expresslon being defined, but that meanlng accords	with	the
purpose and oblect of the Act.

Accordmg to s.15PA of the Acts Interpretatlon Act 1901 a constructlon of: a provlslon of

an Act that would promote the

purpose or ob~ect

underlylng the Act (whether that purpose

ob2ect 1 s

expressly

stated In the

Act or not] shall

preferred to a purpose or obJect. Obvlously the underlylng purpose

construction that would not promote that

of the

Export Market Development Grants Act

1974 is to encourage

persons to overseas of rights In industrlal property such as

expend

effort

and money In

the

exploltatlon

mventlons,

trade marks and copyrlght and to

so for

the purpose

encouraging Australlans to lmprove thelr skllls and capaclty

to produce works

slgniticance and

bullding up the

iorelgn credits to be reflected

In Australla's balance of

trade.

Both of these

purposes

are

importance

to the

nation. It

1 s clear that the encouragement factor. the grant

under the overseas rlghts of any k m d In inventions and trade marks. It

Act,

IS available to the

person who

explolts

is clear that It is avallable to a person who exports a

is the

owner

authorship

assignment. There is, as Lord Danckwerts sald

In Chaplm

Leslie Frewln (Publishers) Ltd. (supra) at p.93 very little

2 4 .

dlffrrence between an asslgnment and an exclusive licence

relatlng to copyrlght. The amount

of ?tfort and expendlture

put Into the exploltatlon

or the copyrlght by a llcensee wlll

not be Less than that used

or expended by

an asslgnee or

orlglnal owner. The ob~ect

01 bulldlnq up of export earnlngs

wlll be achleved by the llcensee to the same extent and

with

the same benefit to Australla

as it would by

an author

assignee exploltinq the copyrlght. And the merlts

the

Licensee, In the way of expendlture of money or effort in

earnlng export income

1s no less than that

owner.

Exclusion of the licensee

of copyrlght rights

from those

encouraged to expend relevant ettort would be

In contlict with

the purposes and

ob~ects

of the Act.

It would discrunmate

against a llcensee for

no concelvable reason. It would bear

all the marks

or caprlce or

accident. Such exclusion could

not be accepted lt,

on a reasonable mterpretatlon

the text

of the Act would permlt the lncluslon

01 the licensee. As

Indicated above, to Interpret the Act

as providlng t o r

such

lnclusion does not Involve tampering with the text in any way.

I have no doubt that the intentlon

of Parliament was

Include

wlthin

the

meanlng

of the

expression

"eligible

lndustrlal property licensee of rights in a copyrlqht. In other words that on the

rlghts"

the

rights

of an exclusive

proper Interpretation of the deflnitlon In the expression,

"in

relatlon to" where It flrst appears qualliles "copyrlght

relation to works, deslgns and other thlngs". The

deflnition

may be likened to

tree, the trunk

ot whlch

IS that part

2 5 .

thereoi

whlch

states

that

"ellglble

Industrial

property

rlghts" means supported by that trunk.

rlghts

and

every

other

part

which

1 s

It 1s said, however, that ~f the appllcant IS only the llcensee of the right to perform acts. of the nature of

those

which the owner has the excluslve rlght to perform under the

CoPvrlqht Act,

1 s

not the owner

o t rlghts within the

meanlnq of s.4(L)(h) of the Act. It

1 s to be noted that the

Interest of

the applicant In the rlqhts

question, as

licensee. 1s that

of one to whom has been granted

an excluslve

llcence to distrlbute the fllm throught the world, which thlngs In relatlon to the film, includlng those thlngs which by virtue of 5.86 of the Copvrinht Act the owner ot the copyright thereln had the exclusive rlght to d unless he has

licence, accordmg to the terms of the grant, conferred upon

parted with such risht. When one speaks

of rights in relatlon

to copyrlght it is clear that

llcence granted to the

llcensee to pertorm acts whlch the owner is entitled to

perform by reason of hls excluslve rlqhts therem confers a

right within that descrlptlon. When one speaks of copyrlght

consldered as a collection of rights recognlzed by the

law

resldlng in the owner and entitling

hlm to the exclusive rlght

to perform certam acts wlth respect

to the relevant work, and

considers the sltuatlon

of an excluslve llcensee of rlghts

qranted by the owner to

those same acts or one or more of

26 .

them, the rlqht ot the llcensee

to do those same acts 1 s .

my n e w a property rlght.

The collection o t rights known as

copyrlght 1 s a sublect ot personal property the very nature

which is that it conslsts ot

rights in respect of any one

whlch, separate rights in others may be created by asslgnment

o r llcence. It is the excluslve rlght

to do any one or

of those acts which constltutes

rlght of copyright. When

the excluslve right to do those same things 1 s granted to another by way of licence, that grant IS of a property rlght in the relevant sense. Expenditure In seeking opportunities

f o r the disposal o f such a rlqht wlll qualify as	a support f o r
a claim for a grant under the Act.

By sub-s.(Z~ of 5.196 of the Copyrwht Act an asslgnment may be llmited In any way, including any one or more of	the
followlng ways:

" ( a ) so as

to apply to one

more of

the

classes of acts that, by virtue of this Act, the owner of the copyrlght has the excluslve rlght to do (Including a class

of acts that is

not separately specified

in this Act

as belng comprised in the

copyrlght but falls within a class of

acts that 1 s so speclfled);

(b) so as to apply to

a place in or part

Australla;

o t

the period f o r

which the copyrlght

1s to subsist."

"A licence granted in respect ot a

by the owner

of the copyrlght blnds every

successor in tltle to the Interest in the

copyrlght of the grantor

the licence to

27.

the same extent

as the llcence was blndlng on

the grantor.

'Thus a licence or an excluslve licence may be granted so

to apply to any one or

more o t the classes of acts that the

owner of the copyrlqht has the exclusive right to do, durlng any part of the period for which the copyrlqht 1 s to subsist

1 s clear.

Accordlnqly, the right to do the thlng to the llcensee IS Itself

which 1 s

qranted

a chose in actlon and property of

an lncorporeal kind. It

is therefore something of whlch

there may appertainlng to the copyrlqht in the film

be ownershlp. The right to exploit

rlqhts

by dolng the things

which copyright conters

the rlqht to

d o ,

is not something

capable of belnq in the

possession

of any person. Because

one has an excluslve rlqht to

do something, one lnevltably

owns that right.

There is nothlnq incongruous about

the

notion of ownership of a licence, that is ownership of

the

right to

exercise an

authorlty to

do somethlnq. Thus to

speak of ownershlp of ;1 llcence to sell liquor, to sell anythlnq, to travel over land, is a natural use of the word

and describes

a well understood concept.

In my view, theretore. if Nomad 1 s but a llcensee, expendlture Incurred by It in creating or seekmq to create

opportunltles €or the

dlsposal of rights for use

and

en~oyment

outside Australia to do the things referred to in

clause 3 and in clause 4(c)

of the agreement whlch are those

thlnqs set forth In

9.86 or 5.87

of the Copvrwht Act,

28.

constitutes eliglble expendlture wlthln the mealng	or'	s . 4 ( 1 )
of the Act.
Asslunment or Llcence

said agreement oi l1 December 1980 operated	by the applicant	that	the	dlstrlbution
as a llmited

It 1 s

asslgnment to It of copyrlght In the film "Sun Kosi -

River

of Gold". The agreement does not contain words expressly purportlng to asslgn the copyrlght to the appllcant. It

sald. however, that thls feature of the agreement is not concluslve. What has to be ascertained from all the terms of the agreement, interpreted m Its relevant clrcumstances, 1 s

whether it was the copyright be assigned rather than that an exclusive licence

Intention

the

parties

that

the

of copyright

rlghts

granted.

This

proposition,

apprehend. is not In dispute. It

is discussed and relevant

authorltles referred to In Ricketson, Intellectual Property

1st Ed. at p.359.

The following authorltles

are In pomt

Messauer

v. BBC C19293 AC 151;

Jonothan

Cape

Ltd.

Consolidated Press Ltd.

C1954J

3 All ER

253:

Re Jude's

Musical Compositions Co. Ltd.

(1907) 1 Ch. 651; and Chaplln

v. Leslle Frewln Publishers Ltd. (1966) Ch.

i 9 .

It is pointed out by the applicant that each

the

rights constltutlng copyrlght In the

iilm, as provided by

ss.86 and 87 of the Copvrlsht Act is the sublect of the grant

2 9 .

ot the excluslve llcence reterred to

In clause 3(a) of

the

agreement.	Thus	the	Llcence	confers	on	the	llcensee	the
right :

(a)

to cause the fllm to be seen and heard in publlc (clause 3ta) and 3(b)(l) and (li));

( b )

to broadcast the film (clause 3(b)(ii);

(c)

to cause the fllm to be transmltted to subscrlbers to

dlifuslon servlce; (clause 3(b)(ll).

Clause 4 confers. as

an addltional rrght, the rlght to make

coples of the film (clause 4td)).

It 1s

clear therefore that the llcence together wlth

copyrlght conslsted. And It 1s pointed out that the operatlve

words used In the grant of the licence are very close to those

which would constitute an express assignment.

clause 4(d)

extended to every rlght

which the grantor's

By clauses 3(a) and 3(b) there is an express grant ot an exclusive llcence to dlstrlbute the film throuuhout the world

which "shall confer upon

the dlstrlbutor the excluslve right

throughout the world"

to exerclse the rights referred to In

items (a), (b) and (c) above.

There can certain clrcumstances and contexts, evldence an asslgnment.

be llttle doubt that these words could. In

30.

But there 1s. I thlnk. one clrcumstance of importance whlch I

thmk is properly to be taken Into account which polnts In the

other dlrectlon. between the applicant and Radlal on the same

That

is that

two

agreements

were

made

day and each was

concerned with the

f l l m and the copyrlght rights therein.

The

flrst was the productlon agreement by whlch the appllcant

agreed In express terms

"to

transfer and asslgn to (Radial

Industrles Ptg. Ltd.) all Its rlght, tltle and Interest In and

the

rlghts thereof the copyrlght In the Film".

lncludlng

wlthout

llmltlng

the

generallty

It was a grant ot

rlghts

same dlstrlbutlon agreement.

whlch

was the sublect of the

that

The	terms of the operatlve words of

that agreement are In contrast: to those

In the production

agreement. It

IS to be noted

also that the second agreement

descrlbes the role

of Nadlal as a Manager and the appllcant as

the Distrlbutor.

It IS In

those capacltles that they enter

Into that agreement.

The agreement arlses from the desire of

Radlal to appoint

an excluslve dlstributor of the film and the

desire of the appllcant to accept appolntment

as excluslve

dlstrlbutor upon the stated terms.

Essentially the agreement

1 s deslgned to provide

for

dlstrlbution of the

fllm by the

applicant f o r the beneflt of both the appllcant and Radlal or the Partnershlp. It would be reasonable that only those rlghts In the copyright necessary to permlt the applicant to

carry out the exhlbltlon in theatres and on televlsion by vldeo throughout

dlstribution

of: the film, to

achleve

Its

31.

the world, would

conferred

the

dlstrlbutor.

'Those

rlghts would be the rights to exhlblt,

and the rlght to

authorise other persons to exhiblt. And those rlqhts conferred by clause 3(b)(l) and clauses 4(b) and (c).

are

Arguments have been submltted by the partles based upon various clauses In the agreement that wlth the exception

clause 8ta)(lll) no declslve indlcatlons are to be discerned

thereln.

It seems to me, however, that wlth regard to clause

8ta)(lii) a

declslve lndlcatlon does arlse. It acknowledges

that the llcensee has the rlght

to dlspose the whole or

any

part of the copyright

In the scrlpt from whlch the film IS

produced. Cop;rrlght

the scrlpt was expressly assigned by

the appllcant to Radlal In the productlon agreement

December 1980.

(Clause Ita) and 2 ) . Clause 8ta)tlii) of

the

distribution agreement provldes expressly

that, amongst the

proceeds of the film whlch are receivable by Radlal from the

llcensee, are moneys irom the dlsposal of the whole

any

part of the copyrlght in the script	from	which the fllm	is
produced.

A llcensee does

not have the right to dlspose of the

copyrlght In respect

of. whlch he 1 s a mere licensee, exclusive

or otherwlse. If there

are to be proceeds from the

dlsposal

of the copyright

In the scrlpt

can only be because the

llcensee may lawfully dlspose of It.

And that can only be if

the llcensee owns that copyrlght.

Of course. In the context,

ownershlp of the copyrlght would refer to ownershlp

of only

those aspects

ot the copyright Llmlted in tune which were

3 2 .

asslqned to It according to the provlslons of 5.196 of the Copvrlsht Act. And dlsposal of the copyrlqht by the applicant

could only "dlsposal" is, In the context, not flexible In meanlng.

extend

those

aspects

thereot.

The word

lnevltably lncludes "qettlng rld

of". Accordlngly, It would

Include a sale

the

copyrlqht

m the

scrlpt.

The

clrcumstance that acknowledges that the llcensee,

the

dlstribution

agreement

expressly

so called, has the capaclty

dlspose o t the

scrlpt. I s slqnlficant with

respect to the copyrlqht in the tilm generally.

The

capacity

to dispose of the copyrlqht

In the script could have been

acqulred only from the operative words in clause

3 ot

the

dlstribution agreement.

If by those words the copyright in

the script was asslgned to the applicant, the copyright in the

tilm was similarly assigned.

Whatever surrounding clrcumstances have to be qlven welqht in the lnterpretatlon

of the distrlbutlon agreement,

1 s clear, that the

plam meaning and necessary

implication

from an express compelllng contrary lndicatlon, must

provision.

whlch

1 s not subject to some

ultimately be accorded

Its full welqht.

I see nothing in or relatlng to the terms of

the

agreements of l1

December

1980 carrying

any

such

compelllnq contrary Indication. Clause

3 ( q ) does not do

so.

On the contrary infringements ot copyright which might injuriously affect the

It requires

Nomad

not

overlook

value of the reverslonary Interest therein

of Radial or

the

Partnership on terminatlon

of the period

of the appllcant's

ownershlp thereof.

The Tribunal attached great welght to the

33.

probabllity that Radlal

or the Partnership It represented,

would have been unllkely to part

with the copgrlght because of

income tax consideratlons.

I have the greatest doubt whether

It 1s permlsslble

use

such

conslderation

the

interpretatlon of this wrltten agreement. especlally as

It was

drafted by legal advlsers

ot Radlal

or the Partnershlp. It

would be equally arguable that,

if. the respondent be correct

In saying that the export grant depended

on the appllcant

ownlng the copyrlght. the appllcant would have been unllkely to enter the agreement unless it dld asslgn the copyrlght to

It. In addltion It 1 s not clear from the reasons for declsion

of the Tribunal or trom anythlng put before thls Court in this

appeal, that if the agreement dld operate as a llmlted

assignment of the copyrlght, income tax benetlts to Radial or

the Partnership would have been lost.

In the end, in my new, the question of assignment licence, must be declded by reference to the terms

of the two

agreements of 11 December 1980.

It is a strong argument for

the respondent that the productlon agreement uses language

asslgnment

and

that

the

dlstrlbutlon

agreement

uses

the

language of

llcence.

But

the

language

llcence

may

sufficient accordlng to context and surrounding clrcumstances to effect an assignment. The Court will look to the substance rather than the form.

If one clause 3 of the distributlon agreement one tlnds

looks at the form of

the operatlve words In

a “grant“ of

“an exclusive llcence to distribute the film throughout the

world", tcgether

wlth a statement that that llcence "shall

confer upon the dlstrlbutor excluslve right throughout the

world" to perrorm the very acts the rlght to pertorm whlch are

sald by s.86 of the Copvriaht Act. 19b8 to constltute the

copyrlght in the

fllm. That sectlon provldes, "copyrlght

the escluslve rlght to do

all or any ot the following acts".

llcence

1 s

somethlng which authorlses the llcensee to

perform certaln acts. But the agreement under conslderation

consers something dlfterent, namely the exclusive rlght to do

the

acts

ln certainly describes

question. Thls is repetitlve of s.86. It

a situation in which, to the limited

extent specified, the owner of the

copyrlght 1s conferring

upon

the

llcensee

the

very

rights

which

constltute

hls

copyrlght. If contalned In clause 8ta)(lll) of the agreement, one is

one

adds

this

the

posltlve

lndicatlon

forced

to the concluslon that the agreement should be Interpreted as

effectuatlng an asslgnment.

From a commercial polnt of

m e w

there was a conslderation which

may have led to the use in the

distrlbution agreement interest being glven to the applicant was not the whole

the

language

llcence.

The

of th

Interest thereln belonged at all tunes

Radial

the

Partnershlp.

And

the

film

did

belong

Radial

or the

Partnership. The otherwise than as an agent tor those partles. and it

appllcant

was

distribute

the

fllm,

had

substantial obligatlons to them. And they had

distinct

Interest In assoclatlon, and so far as money was

maintaining

what

might

called

a close

concerned, a dominant

position.

So that Radial or the Partnership or their advlsers

35.

although wllling to

grant to the appllcant the rights which

constltuted the copyrlght, may have wished,

so far as words

went, to emphaslze that the prolect was

I n a sense, ultlmately

thelrs and Nomad's Interest was essentlally

a partlal one.

And	of course, as a matter ot substance, It was quite

lmmaterlal

Radlal

or the Partnership

whether

the

transaction was a llcence or an asslqnment. For thelr

purposes It was deslrable to equlp the dlstrlbutor, upon whose

success rn dlstrlbutlng the f l l m their hopes of recoverlng the

expenses already Incurred by

them depended, wlth such rlghts

It was deslrable

It should have to explolt tully the

potentlal of the film. And It

IS relevant that under the

modern copyrlght licensee may differ very llttle from that of

statutes,

the

posltion

of an excluslve

an asslgnee

the same rlght or rlghts.

Accordlngly, agreement dld confer upon the appllcant ellglble

1 s my

vlew

that

the

dlstrlbution

industrial

property rlqhts in the relevant copyrlght, even

If In

that

descrlptlon ot

such rlghts.

ownership of copyright is an

essentlsl element.

Whose Earninqs?

There were two other Issues wlth which the Tribunal appears not to have dealt. Flrst, whether the money gained by

the applicant in Its transactions

wlth strangers In the course

of dlstrlbutlng the fllm were its earnings

or those of Radial

or the Partnership. Hereinafter

use the term "Radial" as

comprehendlnq Radial or the Partnershlp.

It the answer were

that those sarnlnqs were earnlngs

of kadlal and not

the

appllcant, then, dlstrlbutlon ot the fllm would not constltute earnlngs of the

the

moneys

galned

the

course

appllcant wlthln the meaning of "his earnings" In s.14(3)

the Act. The second was whether In

distributmq the fllm

pursuant to Its

obllqatlons under the dlstrlbutlon agreement

the appllcant acted as agent

for Radlal.

the answer to thls latter question were In the afilrmatlve then, by reason

of s . 3 ( 2 ) of the Act all the work

of dlstrlbutlon would be deemed to have been performed by

Radial and not by the applicant and the proceeds thereof would

not be earnlnqs of the appllcsnt but of Radial.

Also In

that

event a

questlon would arlse

as to whether the expendlture

Incurred by expendlture incurred by it wlthln

the

appllcant

dlstributlnq

the

fllm

was

the meanmg of s . 4 ( 1 )

of the

Act.

These issues respect thereto 1 make the following observatlons.

were debated before this Court and with

It was argued by Mr. Nomad could not be sald to have any export earnings wlthin

Pose, for the respondent, that

s.l4(3) of the Act because

all proceeds recelved by It, were

held pursuant to the dlstrlbutlon agreement between Itself and

Radlal.

That

agreement

created

a princlpal

and

agency

relatlonshlp regarding thereunder. As the act or

thelr

r spective

obligations

earnmg export earnings by Nomad

3 7 .

was done as an agent on behalf

ot Its prmclpal, s.3(2) of the

Act deems that act as done by the prlnclpal and theretore the export earnlngs are those not o r Nomad but of Radml. The substance of the total transactlon between the appllcant and Radial was that Radlal wlshed to particlpate in a prolect

which would have had advantages tor

It and under whlch, If the

film were a success, protlts would accrue to

It from the

exploitatlon of the film.

The appllcant desired to sell the

film and to dlstrlbute

it throughout the world for

a fee, and

also to make proflt from the distrlbutlon In addltlon to that

fee.

But Radlal did not deslre

or intend

to do any of the

work or incur any

of the expense of

exportlnq the film. It

Incurred the outlay to buy the

f l l m and was wlllinq to pay a

fee to the appllcant

to do the work and bear the incldental

expense ot distrlbutlnq it. To achieve

these

objectives

Radlal bought the

f l l m

for

$ 6 0 , 0 0 0

and agreed to pay the

$10,000 dlstrlbutlon fee to the appllcant. It agreed also to

equlp It wlth authorlty to exhlblt and deal with the film and rlghts of copyright for the purpose of distrlbutlng the film.

The applicant agreed to use

Its best endeavours to distrlbute

the film and to bear the expenses Involved therein and thus, hopefully, galn money from the exploitation of the t l lm. It agreed to hold that money when received t o r the purposes of approprlation in accordance wlth clause 8 of the distrlbution

agreement

under

whlch

each

party

would

receive

benefits

lncludinq profits.

The answers to each of the questions cited above depend on similar conslderatlons.

The baslc question 1s whether

performmg the work and incurrlng the expense Involved In distributing the r l l m the appllcant acted as

a prlnclpal or as

the employee or agent

of Radial or perhaps In partnershlp wlth

Radial.

answer this questlon one must

go to the two

agreements of 11 December 1980. Did they or elther of them provlde that In dolng the work and lncludlng the expendlture Involved In distributlng the fllm the appllcant was to be the employee or agent or partner of Radlal?

It 1s clear that the

terms

of the agreement dld not

constitute the applicant an employee. None

ot the elements ot

control or rlqht to

control the appllcant In the performance

of Its work In dlstributlng the

tilm were present. Slmllarly,

to my mind It provlde that in dlstrlbutlng the film the appllcant was to be

1s equally clear that the agreements do not

the agent of Radlal.

The essence of the relationship

principal and agent 1 s

that contracts made by the agent with

another In relationslps between the prlnclpal and that other. Agency

the

course

hls

authorlty,

create

legal

prlmarily involves "the employment of a person" purpose of placlng the prlnclpal

for

the

In contractual

or other

relationshlp wlth a third party.

The essence o t such an

agent's posltlon is that he is but an intermediary between the

other two partles". See Halsbury

4th Ed. Vol. 1 p.701.

the two agreements

11 December 1980 the crltical one

f o r

present purposes agreement proceeds

1 s

the

distrlbutlon

agreement.

That

on the basis that the film belonged

Radlal. that the Partnership desired to appolnt the appllcant as exclusive dlstrlbutor thereof and that the applicant agreed

3 9 .

to accept the appolntment upon the terms contalned

In the

agreement. Those terms provlded that Hadlal conferred on

the

appllcant an excluslve llcence to exhlbit, dlstrlbute, market

deal

applicant covenanted to use its best endeavours to promote,

publlcise. and exploit the fllm. And "In conslderatlon of the

covenants" of the appllcant Hadlal should pay to It by way of

the

tilm

for all

purposes.

The

and

otherwlse

fees the sum of $10,000.

It wa5 a term of the agreement that

the appllcant should bear all the costs and expenses whlch

mluht be Incurred In connectlon

with the distrlbutlon and

exhlbltion of the tilm.

The agreement provlded further, by

clause 8(d), that the proceeds from distrlbutlon of the tllm,

less certaln foreign taxes and commlssions should be deemed to

be recelved by %he

applxant for and on behalf

of Radlal,

should be pald

to a bank account

In the name

of the appllcant,

thereafter pald to the Manager

of Radlal and "approprlated" by

the Manager tlrst.

In recoupmg

the partnershlp's

$ 6 0 , 0 0 0

bemg the cost to

of productlon ot

the tllm and $10,000

belng the fees of distribution and next by paylng 70% of the balance to the Partnership and 30% thereot to the appllcant.

Putting clause B(d)

aside f o r the

moment, the terms provlde

that the appllcant shall use its best endeavours to dlstrlbute

the film, and that it shall enter mto such transactlons with

thlrd partles as are necessary to exploit the fllm. It gives

It no authority to

these thlngs otherwise than as

principal contractor dolng business on its

own behalf.

The

agreement 1 s speclfic that the expenses

of the

distribution

are to be borne by the appllcant.

Obviously nelther Radlal

nor the Partnershlp could be brought Into contractual

any

40.

other relationshlp Radlal would have been surprlsed to

wlth

thlrd

persons

the

appllcant.

be told

It had entered

Into any contract neqotlated

by the appllcant. The agreement

dld not constitute

the applicant the agent

of Radlal in any

way.

It 1 s clear also that for cognate reasons there was

partnershlp between obviously no agreement between Radial and the appllcant that

Radlal

and

the

appllcant.

There was

losses incurred

the appllcant In dlstrlbutlng the

f l l m

should be shared equally or at all between Nomad and Radlal.

The contrary was expressly stlpulated.

It is not unnatural that clause agreement should raise questlons

8(d) of the distributlon

as to whether In carrylng on

Its busmess as dlstributor of the tilm the appllcant was not

acting as agent for Radlal. Why

else, on the receipt or money

earned by It In carrylng on that business should

that money be

deemed to be received on behalf

o Radlal. The answer 1s that

clause R(d) 1 s a

provlslon deslgned to change as between the

applicant and Radlal. the capaclty

In which

the applicant

should be deemed to have recelved and held the proceeds

ot Its

business 01- dlstributing the fllm. Clause

8(d) 1 s

expressed

flction. been earned by the appllcant In transactlons undertaken by

The reallty was that the proceeds had

in terms

as a prlnclpal.

The agreement provided that as between the

applicant and Radlal the proceeds, when received, should

deemed to have been recelved by the appllcant

f o r

and on

behalf of Radial.

This was a binding, albeit fictional basis

upon whlch the relatlonshlp between the appllcant and Radlal

should thencetorth proceed. It dld not affect

the

character

41.

or capaclty

m whlch In tact the appllcant had galned the

entitlement

to that monev. It was because the appllcant had

earned and owned that money that

was able

to make the

fictional agreement wlth Radlal In the terms o t clause 8(dl.

Clause 8(d), In turn, recoqnlzes the reallty, namely, that the

proceeds when recelved belonsed to Nomad. It then proceeds,

by way of agreement, to provide that the appllcant should hold

the money f o r Radlal for the purposes of clause 8.

Clause

8td) 1 s but a machinery provlslon, part

of a scheme of

approprlatlon ot money earned and owned by the appllcant

from

the dlstrlbutlon of the fllm, but sub~ect	to approprlatlon by
agreement, on terms calculated to beneflt	both Radlal and the

appllcant. as therem provlded. purports to change the character in whlch the applicant earned	It 1 s not a clause whlch
the gross proceeds referred to.	It 1 s an agreement by the

appllcant to hold on behalf of another. money which It had earned and owned. When a person agrees that, upon recelpt of

money due to hlm as

a prlncipal party to some contract, he

wlll hold that money as agent for another, that does nothlng

to the capaclty as prlnclpal contractor in which the person

earned, and thus came to

own,

the money. Once he has

entitlement as

prlncipal to the money In question, he can

agree to hold It as agent or trustee

or deal wlth It m

any

manner

wlthout

compromislng

his

origlnal

capacity

prlnclpal contractor. Of course, from the moment of recelpt. the new agreement stamps his relationship wlth the new party

as agent or trustee

as the case may be.

42.

There was, accordmgly, no basls

f o r the n e w that the

qross proceeds of the appllcant In dlstrlbuting the tllm were not "Its" earnings or, that In distrlbutmg the film it dld so

as agent

t o r Radial or the Partnershlp. Looked at in this way

the aqrcements of l1

December 1980 achieve the ob~ectlves of

the

partles In rPlatlon

the

prolect

comprlslng

the

production, dlstributlon and profltable exploitatlon

the

fllm. and defined the capaclty	in which each should act In the
carrying out of the pro~ect.

Accordlngly, there 1s no earnlngs referred to in clause

basls to doubt that the

gross

B of the distrlbutlon agreement

were moneys earned by the applicant and were earned as Its

money.

The existence of an agreement that when earned

would deal wlth

or hold that money In a partxular way would

not atfect the nature

or ownership 01 those earnings when

earned. And the Important consideration

moneys. They were owned by the person who as a prlnclpal

performed the servlces and incurred the expense whlch entitled

hlm thereto In the course of his business.

1s who earned those

Having regard to the foregoing

I would allow the appeal

and remlt the application to the Tribunal for reconslderatlon In accordance wlth the concluslons expressed. I further order that the respondents pay the applicant's costs of thls appeal.

I certlfy that th is and the precedinq forty-one	(41)
pages are a t rue copy of the Reasons for J u d w t

herein of his H0

UT Mr. Jus t i ce SmitherS.

;"7

> ? -

Associate

Dated:

30 W r i l 1986

On appeal from the AdmlnlstratLve Appeals Trlbunal

Between:

NOMAD FILMS INTERNATIuNAL PTY LTIj

Appellant

and

EXPORT

DEVELOPMENT

GRdNTS BOARE

Respondent

i G R A H

Smithers, Sweeney and Northrop

JJ.

: 30 May 1986

: Melbourne

Reasons for Zudqment

Sweeney J

By notlce dated 4 July 1985 Nomad Fllms International Pty Ltd

("Nomad") appealed

against

decislon

the

Admlnistrative

Appeals Tribunal ("the Tribunal",, glven on 7 June 1985, by

which

It aftlrmed a decislon

OF the Export Development

tirants Board

("the Board"), re~ectinq a claim by Nomad tor

a grant under the

Export Market Development Grants Act

1974 ("the Grants Act").

The facts were conveniently set out by the Trlbunal. which reclted that Nomad makes documentary illms and promotes

hem sale

and exhibltlon.

In the qrant years c1.e.

1 July to

30 June,

L 3 7 8 / 7 3 ,

1373:Au

and

l r B O / d l It

Incurred expendlture promotlnu In

overseas countries tllms vhlch It had made: lt zas pald In respect

of that expendlture urants under the Gr'ants Act.

In 1 3 8 1 / 8 2

Incurred espendlture overseas In respect or the promotlon of

two

films whlch It had made, "Some o i Our Alrmen

... Are No Longer

Mlsslng" and "Sun

Kosi -

Rlver or Gold". In December

1 4 8 2

~ubmltted to the the Board

a clam Tor

a grant to be pald to It

under The Grants Act

respect of

that expendlture. In crctober

1383 the

clam was relected bp the Board.

The appllcant then

soughr: reconslderatlon

or the declsion by the Board. but the Board

conflrmed It ln June Trlbunal under section 4OA(b) of the Grants Act for review

1384. The appllcant then applled to the

of the

declslon.

Section 15 or the entltlement of a clalmant as follows:-

Grants

Act

provides

f o r

the

grant

"15. Sublect to thlv

Act, the grant entltlement ot a

claimant In relatlon to

a grant pear 1 s an amount equal

( 0 %

the ellglble expendlture Incurred by the

clamant durlng that year."

The meanlng of

"ellglble expendlture" 1 s stated In sectlon 4

of the Grants

Act.

So tar as 1s relevant to these proceedlngs

that section 1 s as follows:-

"4. (11 Sublect to the succeeding provlslons

of thls

sectlon, a reference In this Act

to ellglble expendlture

1 s a reterence to expendlture that, in the oplnlon of the Board, has been Incurred by a person prlmarlly and prlnclpally f o r the purpose 01 creatlng or seeking opportunltles. or creatlng or lncreaslng demand, for -

!h1 tne dlsposal.

by that person. fur reward. In

the

course

o i

carrylnq

buslness

Australla, to persons

resldent

outslde

Australia, for

use

and

enloyment

outside

Bustralla. of ellqlble	lndustrlal	property
rlqhts owned by hlm:

. . I

(2,) For the purposes or thls sectlun. expenditure'

means expendlture to the extent to	whlch It 1s incurred
by a clalmant . . . by way of -

(a] expenses o r .

contrlbutions

towards

expenses

o r , or paIrments made to an agent for the

purpose or -

( 1 1

the carrylng out

of market research or

the obtalnlng o t market mformatlon: or

1 1 1 r advertlsinq or other means

of securlnq

publlcitjr or sollcitlnq DuSlness,

tbr expenses clncludlng costs

of dellveryr that.

In the oplnlon

the Board, are dlrectly

attrlbutable

provldlnq,

wlthout

charqe.

samples or technical	lniormatlon to a person
outsiae Australla;

. . .

However, a llmltatlon on the payment of grants

is Imposed by

section 1 4 t 3 ) of the Grants Act in the following terms:-

"14. ( 3 1 Where

a person, other than

an approved body,

recelved, or became

entltled to recelve,

grants

respect ot ellglble expendlture incurred by hlm during any 3 o r more grant years precedlnq a partlcular grant

year, 3 grant 1s not payable to him

In respect of

ellglble expendlture lncurrred by

h m durlng that grant

year unless the amount

of his export earnlnqs

that

grant year exceeds

$25.0011

or, ~f the whole

that

amount consists

oi: conslderatlon tor the dlsposal

ellglble mdustrlal property

rlghts

ellqlble

know-how, $10

,uU0.

As Nomad had recelved grants under the tirants Act for the three grant years lmmedlately precedlng the

qrant year In respect

of whlch the

c l a m whlch

w a s the subject

the declslon under

review In these proceedlngs ~ 7 a s made.

a grant was not payable to

It unless the amount

of Nomad S

export earnlnas elther exceeded

$25,300 or, 1f the whole

o t Its export earnlnus

consisted of

conslderatlon for

the dlsposal

or ellglble lndustrlal property

rlghts. $13.000.

After investlgatmq the clam, the Board came to

the concluslon

that, although Income had been earned by Nomad

overseas In respect of

the two fllms, It had ncjt been earned by

Nomad In Its o m rlqht but

as agent for the beneflclal owners of

the

copyrlqht In the

fllms.

Section

3 ( 2 )

of the

Grants

Act

provides that acts done by an agent on behalf of his prmcipal ace to be deemed, for the purposes of the Act, to be done anly by the prlnclpal and not by the agent. Consequently the Board declded

that Nomad's export earnlnqs were	n11, so that It dld not meet the
requlrements o t sectlon 14(3~.

At the hearlng berore the Tribunal there was evldence -

and

lt was aureed by the parties - that the export earnlngs

In respect

of the tllm "Some of Uur Airmen . . . I '

in 1981182 was

conslderably less than $10,000 and that the export earnings In respect of the r l l m "Sun Kosl - Rlver of Gold" were well in excess of $25.000. Counsel fo r Nomad, Mr Magee. accepted that, it the

export earnlnqs ln respect of the film "Sun Kosl - River of

Gold"

were not the export earnlngs

of Nomad. its export earnings did not

reach the mlnlmum requlred by sectlon

14(3), even 1t the export

earnmgs in

respect of "Some of Uur Airmen . . .

" were

attrlbutable to Nomad. Consequently, both partles concentrated

their presentatlon

o t evldence,

and thelr arguments before the

Tribunal on matters related to the film

"Sun Kosi - River of Gold"

( "the f llm"

Evldence was glven berore the Tribunal by Nomad's flnance dlrector, Mr N.S. Manthorpe, that fllms made

Nomad

were

financed by other persons. Provlslon was

contamed In the Income

Tax Assessment Act 133b

("the Income Tax Act") for amounts spent

on maklng Australlan

tllms

to be deductible from gross lncome In

result of the production agreement and the provisions of the

Copvrlqht Act 1968, Radial acquired the copyright in the

film.

Thls is accepted by the parties

to this appeal.

Before the Admlnistrative Appeals Tribunal, the

then counsel for Nomad presented the case for Nomad on the

basis

that

distribution

agreement

constituted

assignment of the copyright in

the film from Radial to Nomad

and thus at all relevant times, Nomad, as asslgnee, was

the

owner of the copyright in the film.

The Tribunal found that

the distribution agreement did not constltute an

assignment

of the copyright in the film and held therefore that Nomad

was

not

the

owner

the

copyrlght

the

film.

presenting the case for Nomad before this Court, senior

counsel for Nomad adopted a similar approach to that which

had been adopted before the Tribunal and made

his submissions

by reference to the two agreements and by reference to

authorities which held that agreements which were in the form

of licences were to be construed

in an appropriate case as

assignments.

During

the

course

his submissions, hls

attention was drawn

to the provisions of the Copvrisht Act

1968 relating to exclusive licences. As

a result, counsel

relied upon a further submission that under the distribution

agreement,

Radial

had

granted

an exclusive

licence

the

film

Nomad

and

that

as a result,

- 7 -

was, under and for the purposes of the

Grants Act, owned by Nomad.

There 1s

much to

be said

f o r the

view that the

distribution agreement does not constitute an assignment

from Radial to Nomad. On this issue, I

agree with the reasoning of Sweeney

Nevertheless, in my

opinion, the licence of copyright in the

distribution

agreement

grants

an exclusive

film to Nomad and that by reason

of having that exclusive licence, Nomad

is the owner of

of the words "owned

by him" in paragraph

4(l)(h) of the Grants Act.

In these proceedings, the Court

has to apply the

provisions of the Grants Act. In applying those provisions, the Court must keep in mind the policy and purpose of that

Act. To that end, in giving reasons

for judgment in thls

case, it

is neither necessary nor desirable to develop

exegesis in relation

to the concept of copyright and the law

relating to copyright. It is necessary however, to make	a
brief reference to some aspects of copyright.
These days, copyright forms part of the law which comes within the generic phrase "intellectual property".

upon

statute. Since

May 1969, copyright in Australia has been

regulated by the CoDvrisht

Act 1968.

There are differences

between the provisions

of that Act and the equivalent Engllsh

statutes

relating to copyright.

Nevertheless,

the

basic

- 8 -

concept of copyright is the same in England

as in Australla.

As	Danckwerts

L.J. (Publishers) Ltd. C19663 Ch. 71 at 93:-

sald

Chaplin

v. Leslie

Frewin

"There can,

of course, be no question of possession

because copyright is a chose in action, that

is to

say, a

collection of rlghts recognised by law.

There

is,

therefore,

very

little

dlfference

between assignment of the copyright and	the grant
of an excluslve licence."

In Pacific Film Laboratories Pty. Ltd. v.

Federal

Commissioner of Taxation (1970) 121 C.L.R. 154, Windeyer

dlscussed the essential nature of copyright

copyrlght

existed before the Copyright Act

1968 came into operation.

The passage of his

judgment at pages 166-170 should be read

in full.

At p.167, in discussing the essential nature of

"It is not a

right in an existlng physical thing.

It is a negative right, as It has been called, a

power to prevent the making of

a physical thing by

copying.

At one time the single word 'copy' meant

the right or privilege

now called copyright."

Since 1 May 1969,

the provisions of the Copyright

1968 have

governed

all

questions

Australia. It

1s in this context that consideration must be

given to the meaning

of "eligible industrial property rlghts"

in the Grants Act. For present purposes, the relevant part

of the defined meanlng to be given to that phrase

is:-

"means ... copyright in relation to works, designs

and other things, being-

(a)

... works, designs or things that, in the

opinlon of

the

Board,

have,

substantial

extent,

resulted

from

...

work performed in Australla

... ' I.

- 9 -

The Copyright

Act

does

not

contain

any

one

definition of

the

word

"copyright".

Part

I11 of the

Copvriqht

Act,

containing

sections

to 83, is

headed

"Copyright

Orlginal

Literary,

Dramatlc,

Musical

and

Artistic Works". That part contalns provisions relating to

the nature of copyrlght in works.	Thus, sub-section 31(1)
provides:-

"31. (1) For the purposes of this Act, unless

the

contrary intention

appears,

relation to

a work, is the exclusive rlght-

(a) in the case of

a literary, dramatic or

musical work, to	do all or any	of the
following acts:

(i) to reproduce

the

work

material form;

(ii) to publish the work;

(iii) to perform the work in public;

(iv) to broadcast the work;

(v)

cause

the

work

transmitted to subscribers to	a
diffusion service;

(vi) to make an adaptation of the work;

(vii) to do, in relation to a work that

is an adaptation of

the

first-mentioned work, any

of the

acts specified in relation to the

first-mentioned

work

sub-paragraphs (i)

to (v),

inclusive;

and

(b) in the case

of an

artistic work, to do

all or any of the following acts:

(i) to reproduce

the

work

material form;

(ii) to publlsh the work;

(iii) to include

the

work

televlsion broadcast;

- 10 -

(iv) to cause

a television programme

that

includes

the

work

transmitted to subscribers	to a
diffusion service."

Division 8 of Part I11 of contains provisions relating to deslgns. Those provisions

the

Copvriqht

Act

are necessary because	of the provisions of the Desiqns Act
1906.

Part IV of

the Copvriqht Act, containing sections

84 to 113, is headed "Copyright

In Subject-Matter Other Than

Works". That part contains provisions relating

to the nature

of copyright in

a number of things.

Thus s .85 relates to

copyrlght in sound recordings,

6 .87 relates to copyright in

television broadcasts and sound broadcasts and s.88

relates

to copyright in publlshed editions of works.

For

present

purposes, the copyright in cinematograph films smce here the film

relevant

provision

is that

relating

"Sun

Kosi - River of Gold" is a cinematograph film. That section is set out in full:-

"86. For the purposes of this Act, unless the

contrary intention appears, copyright, in relation

to a cinematograph film, is the exclusive right o

do all or any of the following acts:

(a) to make a copy of the film;

(b) to

cause

the

film,

so far as it

consists of visual images, to be seen in

public; or, in so

far as it consists of

sounds, to be heard in public;

(c)	to broadcast the film;

(d) to cause the film to be transmitted

subscribers to a diffusion service."

- 11 -

It is

mterestlng

to note on the facts of the

present

case,

even

without

xpress

assignment of

the

production

agreement, the

5 .98

of the

Copvriqht Act.

Having regard to the provisions

of the Copvriqht

m, in applying the definition

the phrase "eligible

industrial property rights", in

so far as it applies

be read as the exclusive right	to do all or any of the
following acts:

(a) to make a copy of the film;

(b) to

cause

the

film, in so far as it

consists of visual images, to be seen in

publlc; or, in so

far as it consists of

sounds, to be heard in public;

(c)	to broadcast the film;
(d)	to cause the film to be transmitted to subscribers to a diffusion service.

It is to be stressed that the copyright

is the exclusive

right to do all or of the specified acts; emphasis added.

Section 30

of the Copvriqht Act recognises this and makes

provision for cases where different persons are the owners in respect of different rights of copyright in the same mark or thing.

- 12 -

In these circumstances, it is not necessary for me

consider

whether, industrial property rlghts" the words "rights in relation

the

definitlon

"eligible

t "

apply to or qualify the word "copyrlght".

In the present case, it does not seem

to be in

dispute

that

the

film

resulted

from

work performed In

Australia.

It is now necessary to consider

whether

any

exclusive rights to

do any of the acts lettered

(a) to

(d)

above, is	owned by Nomad under paragraph	4(1) (h) of	the
Grants Act.

Under the distribution agreement, Radial conferred certain rights and privileges upon Nomad. They are set out

in clauses 3 and 4

of the distribution agreement and

are as

follows :

" 3 .

Grant of Licence:

(a) The Manager

hereby

grants

to the

Distributor an exclusive

licence

distribute the film throughout the world.

(b) Without limiting the generality

the

foregoing, the licence shall confer upon

the

Distributor

exclusive

right

throughout the world-

(i)

exhibit,

distribute,

market,

reissue, transmit, perform and otherwise deal in and exploit the Film, in any and

all languages and versions and

any

form, in all media and	for all purposes;
and

- 13 -

(ii) to

exercise

the

rights

conferred

herein

relatlon

to television,

including any diffusion service, cable or other proprietary transmission networks,

and

any

other

means

exhlbition,

transmlssion or broadcasting.

for a period of

sixty

calendar

months

from

the

date

hereof.

4 . Riqhts of the Distributor:

The Distributor shall have the following additional rights:

to change the title of the

Film,

to grant sub-licences,

to enter into agency agreements,

make

coples

the

film in

its

original version, and in any other size,

or by way of transfer

to video tape, or

make dubbed, titled, cut-in, synchronized

and superimposed versions in any or

all

languages, or authorise sub-licencees

agents to do

so.

to use its name, and any trade mark

servlce mark on

copies of

the Film and

all publicity material relating thereto.

to make extracts or trailers of the Film,

protect

the

opyright

t e

Partnership in the Film."

It is not disputed that

at the least, Nomad is the

exclusive licensee of the rights and privileges referred to in those clauses and that some, if not all, of those rights

are rights referred to in

6 - 8 6 of the Copvrisht Act.

- 14 -

In the Copyrlqht Act intention appears, the phrase

1968, unless the contrary

"exclusive licence" means:-

"a licence in wrlting, signed by or

on behalf of

the

owner or prospective

owner

authorizing the licensee, to the exclusion of all

other persons,

to do an

act that, by virtue

this Act, the owner

the copyright would, but

for the licence, have the exclusive right to

do,

and

'exclusive

licensee'

has

acorresponding

meaning; Copyright is personal property transmissible by assignment.

" .

Any successor in title to the interest

the owner of

that

Interest

subject

any

existing

Part V of

the Copvriqht Act, comprising sections

115 to 135, Copyright". Division 2 of Part V is headed "Actions by Owner

headed

"Remedies

For

Infringements

of Copyright'' and comprises sections

115 and 116. Under

6.115, the owner of

a copyright may bring an action f o r

infringement of the copyright.

Division 3 of Part V

headed "Proceedings where Copyright is subject

Ezclusive

Licence" and comprises sections

117 to 125.

Section 119

confers rights or privileges on

an exclusive licensee

brlng an action

for an infringement

the

Paragraph (a) of that section is set out:-

"119. Subject to

the succeeding sections of this

Division-

(a) except against the owner

of the copyright,

the exclusive licensee

has the same rights of

action as he would have, and is entitled to

the same remedies

as he would be entitled to,

by virtue of section

115 If the licence had

been an

assignment, and those rights and

remedies are concurrent with the rlghts and

remedles of the owner of the copyright under

that section;

- 15 -

It should be noted that by reason of

s.117, the phrase

"if

the

licence

had

been

an assignment"

appearing

that

paragraph means:-

"if, instead of the licence, there had been granted

(subject to conditions corresponding as nearly

practicable with those subject o which the licence

was granted)

assignment of the copyrlght in

respect of its application

to the doing, at the

places and times authorized by the licence, of the

acts so authorized;

'I.

As a result

of the distribution agreement and

having regard to the provisions of the Copvrisht

Act 1968, it

follows that Nomad, except

as against Radlal, has the same

rights of action

if the exclusive licence had been

assignment. Nomad has contractual rights against Radlal, but as against all other persons, Nomad has rights of action with respect to copyright in the film, including the right to

bring an action for an infringement of the copyright in the

film. The procedural provisions of s.120 of the Copvriqht

1968 apply equally to Nomad and to Radial; see s.117

for

the meaning to be given

to the words "the other party".

Thus, Radial as owner of the copyright in the film by reason

of the Copvriqht Act

1968 cannot, except by leave

of the

Court, bring an action for

an infringement of the copyright

in the film unless Nomad

is joined as a party.

Likewise,

with respect

Nomad.

Those

procedural

provisions

are

similar to principles developed by the Courts with respect to

legal and equitable owners of copyright where the equitable

- 16 -

owner sought remedles; see Performinq Riqht Societv Ltd.

London Theatre of Varieties Ltd. C19243 A.C.

1 per Viscount

Cave L.C. at pp.13-15 and Merchant-Adventurers Ltd. v. pp.797-80.

Having regard to the provisions

of the Copvriqht

and the provlsions of the distribution agreement, can it be said that, for the purposes of

the Grants Act, Nomad is

the owner of eligible industrial property rights?

There is

no doubt that Nomad has the exclusive right to do some, if not all, of the acts specified in s.86 of the Copvriqht Act

1968. Nomad has the right and prlvilege

to enforce those

rights against the whole world namely by

way

of contract

against Radial and by way of

an action for infringement

the copyright against all other persons.

In my opinion, Nomad has all the attributes

ownership of eligible industrial property rights. Subject to

what may be said with respect to agency, Nomad has copyright

in the film which

has

resulted from work performed in

Australia.

Nomad has incurred

expenditure

primarily

and

principally for opportunities for the disposal for reward

the

purpose

creating

seeking

in the course

carrying on business in Australia to persons resident outside copyrlght in the film. For the purposes of the Grants Act,

Nomad is the

owner

that

This is so,

particularly having regard to the policy and purpose of the

- 17 -

Grants Act. There 1s nothlng unusual or exceptional in thls conclusion. One of the meanings attrlbuted by

The

Shorter

Oxford Engllsh Dictionary to the verb

"to own" is "to have or

hold as one's

own, possess". In the same dlctionary, the

word "owner" is defined as "one who

owns or holds somethlng;

one who has the rlghtful claim

or title to a thing".

There possession of copyright. Copyright in relation

can is the exclusive right to do specified acts. In the present

no question

of a person

havlng

to the film

case, Nomad has the exclusive right to do some, if not all, of those specified acts with respect to the film. Copyright is enforced by the bringing of legal action for an

infringement of the copyright. Nomad is

able to bring legal

action for any infringement

of the copyright in the film. It

can bring those legal proceedings

to enforce the copyright it

has in the film against the whole world.

For the purposes of

the Grants Act, It can in truth	be said that it is the owner
of the copyright in the film.

Accordingly,

aside the declsion of the Tribunal. It remains to consider

however what other orders, if any, should be made.

would allow the appeal and set

Because the Administrative Appeals Tribunal decided that Nomad was not the owner of eligible industrial property

rights In relation to the film "Sun Kosi

- River of

Gold",

the Tribunal did not consider whether the export earnings

received by Nomad with respect to that film were received by

- l e -

Nomad as agent for Radial. Accordlngly, the Tribunal did not

consider whether Nomad had satlsfled the requirements of

sub-sectlon 14(3) of the Grants Act. Likewlse, the Tribunal

did not determine whether the eligible expendlture incurred

by Nomad was incurred by Nomad

agent for Radial; see

paragraph 4(l)(h) of the Grants Act, nor

did

the Tribunal

determine the amount

of eligible expenditure so incurred.

It will be recalled that the Board,

in determining

that Nomad did not qualify for

grant entitlement under

sub-section 12(1) of the

Grants

Act,

held

that

export

earnings received by Nomad with respect to the fllm were

received as agent for Radial and accordingly, sub-section 14(3) of the Grants Act made Nomad ineligible	to receive the
grant.

Before the Court, counsel for the Board submitted

that sub-section relied upon sub-section 3(2)

14(3)

of the

Grants

Act

applied.

They

of the Grants Act and clause 8

of the distribution agreement.

In particular, they relied

upon the scheme set

up by that clause and the statement in

sub-clause 8(d) which

is as follows:-

"the Distributor (Nomad) shall be deemed

to receive

the gross proceeds

of the Film as the agent of the

Manager (Radial

) " .

In essence, under the prlnciples of law relating

principal

and

agent,

the

agent

1s only an intermediary

between the principal and other persons.

The true position

is stated in Halsbury, Laws of England,

4th Ed., paragraph

- 19 -

701. Agency is person has an authority or capacity to create legal relations

the

relationship

whlch

exists

where

one

between a person occupying the position of

principal

and

third persons.

The relationship arises wherever one person,

called "the agent", has

authority

act

behalf

another, called "the principal" and consents so to act.

The

words "agent" and "principal" appearing in sub-section

3(2)

the Grants Act are used in this sense.

Thus,

if Nomad

incurred eligible expenditure under paragraph 4(l)(h) of the Grants Act with respect to the film as agent of Radial, that

expenditure in law would have been expenditure by Radial.

addition, under sub-section

3(2) of the Grants Act, that

expenditure would be deemed

to have been expended by Radial.

Implicit in those propositions is the fact that expenditure incurred by Nomad, in reality, would have been expenditure

incurred by agreement, Nomad covenanted to use its best endeavours

Radial.

However,

under

the

distribution

promote, publicise and exploit the film.

In return, Radial

was to pay Nomad

$10,000 by way

of fees. No opinion is

expressed on whether that

$10,000 is

to be set-off against

the eligible expenditure incurred by Nomad in promotmg, publicising and exploiting the film outside Australia. What

is clear is agreement, Nomad is to bear all the costs and expenses

that

under

clause

7 of the

distribution

incurred in

in connection with the distribution and

exhibition of the film. In this context, clause

8 provides a

scheme for the distribution

the profits from the film.

Those profits are paid

to Nomad. In clause 8, the phrase

"gross proceeds of the

Fllm" has a defined meaning but,

- 20 -

consistent with the unprofessional standard of the drafting

of the two agreements, In that sub-clause the word "Manager"

should be read "Distributor", otherwise the defined meaning

of the phrase becomes meaningless. The purpose

of the scheme

is to ensure the orderly distribution of the gross profits of

the film between Radial and Nomad in a manner which can be

confirmed by reference to books of account. From moneys

received, Nomad is to

deduct certain taxes.

The balance is

to be paid into

a bank account under the control of Nomad.

From that amount,

$70,000 is to be paid to Radial and

thereafter 70% is to be paid	to Radial and 30% is to be paid
to Nomad.

It is in this context that sub-clause 8(d) must be

construed.

The substance of the submission made

on behalf of

the Board was that Nomad, in carrying out its obligations

under the distrlbution agreement, acted

as the agent

Radial and that sub-section

3 ( 2 ) of the Grants Act applies.

That submission must be considered having regard

to the fact

that, in my industrial property rights in the film for the purposes of

opinion,

Nomad

was the

owner

eligible

the Grants Act. Nomad had the exclusive right

to do all

some of the acts specified

in 6 . 8 6 of the Copvriqht Act 1968

in relation to the film. In exercising those rights, Nomad

was relying upon the exclusive licence granted

it by

Radial under the distribution agreement.

The

distribution

agreement contains no express provision that

In promoting,

publicising and exploiting the

film, Nomad was

to be the

agent of Radial in the sense

of acting on behalf of Radial

..@S

- 21 -

an intermediary between Radial and third parties. Under the distribution agreement, in promoting, publicising the exploitlng the film, Nomad was acting on its own behalf. It

was taking the financial risk. It

is true that Radial was to

pay Nomad $10,000

but Nomad

was to be

responsible for all

costs arlsing in

connection with

the promoting, publlshlng

and exploiting of the film.

There

is nothing in either of

the agreements to suggest that in so promoting, publicislng and exploiting the film, Nomad was acting as agent for Radial

in the sense discussed above and

in the sense of the meaning

of that word appearing in sub-section

3(2) of the Grants Act.

What then, is the meaning

to be given to sub-clause

B(d) of the

distribution agreement? Under clause

7 of that

agreement, Nomad is liable to pay all costs and expenses of

promoting, publicising and importing

the film other than the

specified withholding

certain taxes. Those costs and

expenses are not

a charge on any part of the gross proceeds

of the film.

In all the circumstances of this

case, in my

opinlon, the word

"agent" appearing in sub-clause 8(d)

of the

distribution agreement should not be given the same meaning

as the word

"agent" appearing in sub-section

3(2) of the

Grants Act.

In the sub-clause, the use of the word

"agent"

is not to be given the meaning of creating a relationship

where Nomad

is given authority or capacity to create legal

relations between Radial and third persons.

The word "agent"

is used in the

sense of establishing rights and obligations

as between Nomad and Radial only, there being

no third person

involved. In my opinion,

sub-clause

8(d)

the

distribution agreement, the word

“agent“ is used in the sense

of describing the position of Nomad when performlng Its

duties in relation to distributlng the gross proceeds of

the

film which it has received. above, paragraph 702 and in particular the following extract

In thls regard, see Halsbury,

from that paragraph

which is apposite to the present case:-

“The

word ‘agent’ is also

frequently

used

describe the position

of a person who is employed

by another to perform duties often of

a technical

or professional nature which

he discharges as that

other’s alter

ego

and

not

merely

intermediary between the principal and the third

party.

”

It follows therefore that in

my opinion, the Board

was in

error when it decided that Nomad did

not,

under

sub-section 14(3) of the Grants

Act, receive export earnings

in relation to the film

“Sun Kosi - River of Gold”.

The

amount of those export earnings

has not yet been determined.

In the result,

I would allow the appeal, set aside

the decision

of the Administrative Appeals

Tribunal and remit

the case to the Trlbunal to

be heard and decided according to

law after hearing such further evidence as

it may decide to

receive.

The Board should pay Nomad’s costs of the appeal.

[1986] FCA 214

30 Mar 1986